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Explainer-US industry wants to see the 'Voldemort of administrative law' die

Published 06/11/2024, 06:21 AM
Updated 06/11/2024, 11:58 AM
© Reuters. A general view of the skyline of Manhattan as seen from the One World Trade Center Tower in New York City, New York, U.S., June 15, 2021. REUTERS/Mike Segar
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By Alexandra Alper and Jody Godoy

WASHINGTON (Reuters) - U.S. business interests are hoping the Supreme Court in the coming weeks will overturn a legal doctrine established four decades ago that has bolstered the federal government's position in thousands of legal battles concerning regulatory actions.

The doctrine, known as Chevron (NYSE:CVX) deference, calls for judges to defer to federal agency interpretations of U.S. laws that are deemed to be ambiguous. This doctrine, among the most important principles in administrative law, arose from a 1984 Supreme Court ruling involving oil company Chevron. It is opposed by conservatives and business interests but supported by liberals who favor robust corporate regulation.

The Supreme Court, which has a 6-3 conservative majority, could scale back or overturn it in a ruling expected by the end of June in a case in which fishing companies are seeking to avoid bearing costs associated with a government-run program to monitor for overfishing of herring off New England's coast. The suit is part of a broader conservative project to strip away regulatory power from federal agencies.

The justices heard arguments in the case on Jan. 17. Many legal scholars forecast that the court will end the doctrine.

Here is an explanation of various viewpoints on the issue.

THE CHAMBER OF COMMERCE

The U.S. Chamber of Commerce, which represents more than 300,000 businesses, has argued that Chevron deference has let Congress "outsource core policy decisions (particularly controversial ones) to agencies through broadly worded statutes." That has given the agencies, it added, "free rein to enact their own new regulatory requirements through sweeping rulemakings or after-the-fact enforcement actions."

The group said that, in turn, results in "onerous new burdens on businesses." The Chamber of Commerce sued the U.S. Federal Trade Commission to challenge a new rule barring noncompete clauses in employment contracts. Such rules "often raise major legal and policy questions on which Congress would be expected to have a view, without specific congressional authorization," it said.

The Democratic-led FTC banned the agreements in April, calling the action necessary to rein in the increasingly common practice of requiring workers to sign "noncompete" agreements, even in lower-paying service industries such as fast food and retail. In one well-known example, sandwich chain Jimmy John's agreed to stop enforcing such agreements in 2016.

That FTC rule and others could be at risk should the Supreme Court overhaul Chevron deference.

E-CIGARETTES

E-cigarette manufacturers, distributors and retailers want the Supreme court to rein in Chevron deference. They have accused the U.S. Food and Drug Administration of reaching "far beyond" its legal authority to essentially ban all non-tobacco flavored e-cigarettes, which these companies say have been used by millions of addicted cigarette smokers to transition away from traditional cigarettes.

In a brief, the group asked the Supreme Court to at least limit the scope of Chevron deference "to ensure lower courts properly discern congressional intent and enforce statutory provisions as written."

The FDA initially considered e-cigarettes as having some promise in helping adult smokers transition away from conventional cigarettes, but anti-smoking groups urged the agency to restrict flavored e-cigarettes amid a rise in youth vaping.

DEMOCRATIC SENATORS

Democratic U.S. Senators Sheldon Whitehouse, Mazie Hirono and Elizabeth Warren have issued a full-throated defense of the doctrine, describing it as key in allowing Congress to rely on agency "subject matter expertise" to help carry out the broad policy objectives of lawmakers as U.S. industries grow more complex.

© Reuters. A general view of the skyline of Manhattan as seen from the One World Trade Center Tower in New York City, New York, U.S., June 15, 2021. REUTERS/Mike Segar

"Administrative regulations reined in dangerous industry activities, and our society became safer and more prosperous," the senators said, describing the bid to overturn the doctrine as "a decades-long effort by pro-corporate interests to eviscerate the federal government's regulatory apparatus, to the detriment of the American people."

The senators also took aim at the "theatricality of the industry-funded campaign" against the doctrine. They cited a dissent written by a judge on the Denver-based 10th U.S. Circuit Court of Appeals who described Chevron deference as the "Lord Voldemort of administrative law," invoking the fictional wizard from the Harry Potter books who is so evil people that are afraid to utter his name.

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