Chevron Reversal Has 'Modest Pro-State' Effects, NARUC Told

WEST PALM BEACH, Fla. -- State utility commissioners at the NARUC conference grappled Tuesday with the U.S. Supreme Court reversal of the Chevron doctrine. Loper Bright, “though not framed as a federalist decision," has "modest pro-state implications,” Wilkinson Barker’s Daniel Kahn said during a panel of telecom law experts. Earlier, an NTCA official told the NARUC Telecom Committee that his association plans to seek reconsideration of an FCC order on next-generation 911 if commissioners approve it at their Thursday meeting.

The new SCOTUS decision will govern how courts approach federal agencies' decision-making, Kahn said. “States remain free to determine the best way to approach interpretation of state law, including what role agencies should play in that process.” About one-third of states follow a “Chevron-like model,” while another third give no deference and the remaining are “somewhere in-between,” he said.

Since the doctrine became an increasingly partisan issue, some states retreated on that style of deference, Kahn said. For example, Florida adopted a constitutional amendment a few years ago barring deference, he said. “Loper may lead to some states pulling more away from deference, but that would be a matter of its soft influence on policy discussions as opposed to any sort of legal effect.”

The SCOTUS decision has a “direct impact” on state-federal relations, said Kahn. “At the margins, it probably leaves a little bit more room for states to determine the right policy approach in any given area.” For example, an FCC data breach order removed states’ ability to decide what should be included in customer notifications because the federal agency set a floor. “That might no longer be in bounds.” The SCOTUS decision “also makes preemption marginally less likely” in cases where the agency might have received Chevron deference, he said.

“There has been a trend in the last two years” of states moving away from deferring to agencies, Taft attorney Kay Pashos said. This year, the Indiana legislature changed the state’s administrative procedure act to pull back court deference to state agencies’ interpretations of ambiguous statutes and factual findings, she said. The twist is that the state APA never covered the Indiana Utility Regulatory Commission, so the deference change doesn't affect that agency, said Pashos.

Indiana URC Commissioner Sarah Freeman asked if Loper would result in more stability and less flip-flopping on policies, as supporters of the decision have argued. “Are the appellate courts sufficiently depoliticized?” Michael Santorelli, director of the New York Law School Advanced Communications Law and Policy Institute, said that the Supreme Court's ruling seemed “overly optimistic about courts being objective." Pashos said different courts will have various interpretations of the best decision. Kahn predicted parties that lose in one court will probably just go to another. There could be more circuit splits, leading to more SCOTUS decisions ultimately, he said.

South Dakota Commissioner Chris Nelson (R) asked if it’s fair to expect courts will reverse every agency decision “180 degrees” under the new standard. Not necessarily, said Pashos. “It's a different process, and it may lead to a different result, but it may not."

Illinois Commissioner Conrad Reddick asked if Loper meant the Supreme Court or Congress would make “technical decisions” that agencies decided previously. Congress might become more prescriptive in laws, said Pashos. However, she noted Loper ruled on only implicit delegation of authority to agencies in cases where a law is ambiguous. Congress could still explicitly delegate authority, she said.

Earlier in the day, state commissioners heard NTCA concerns about the FCC’s draft NG-911 order. Set for a Thursday vote, the draft includes setting a 12- to 24-month deadline for the NG-911 transition (see 2406270068).

NTCA Vice President-Regulatory Brian Ford raised concerns that the draft "tramples on state commissions' authority to deal with some of the interconnection arrangements that are necessary” to advance the NG-911 transition. The FCC is setting aside a process in sections 251 and 252 of the Communications Act “that gives state commissions a significant role in the rates, terms and conditions of interconnection, particularly setting points of interconnection and cost responsibilities,” Ford said. The draft would shift a lot of authority to state 911 offices, leaving commissions with the power to raise end-user rates only, he said.

There isn’t much NARUC can do days before an FCC vote, said Karen Charles, Massachusetts Department of Telecom and Cable commissioner. The association would have to pass a resolution before it could support NTCA’s cause, she said. True, replied Ford, but “once the order comes out, my almost already drafted petition for reconsideration would be a vehicle for you to step in.”