Chevron Deference on the Chopping Block? TDC Weighs in on Blockbuster Case for Next Supreme Court Term

This fall, the U.S. Supreme Court will hear arguments on what may be a landmark case to rein in the administrative state. Of course, we at the Taxpayer Defense Center are there to help.  Our amicus curiae (“friend of the court”) brief focuses on the worst error of the decision of Chevron U.S.A. v. National Resources Defense Council: that statutory silence can justify agency regulation. 

The case, Loper Bright Enterprises v. Raimondo, involves a law that requires fishing vessels carry federal observers onboard. The law explicitly requires foreign fisheries to pay fees to pay the salaries of these federal observers but is silent as to domestic fisheries. In 2020,  the National Marine Fisheries Service announced that it would require domestic fisheries to also  pay fees to cover the salaries of the federal observers. The lower court upheld the scheme, and the appeals court affirmed in 2 to 1 vote.

Now the case is before the Supreme Court. The Question Presented is bold, asking if the Supreme Court should overturn its central holding in Chevron U.S.A. v. National Resources Defense Council, Inc., 467 U.S. 837 (1984), or, in the alternative, “clarify that statutory silence concerning controversial powers expressly but narrowly granted elsewhere in the statute does not constitute an ambiguity requiring deference to the agency.” 

What is the central holding in Chevron? It is a rule that a court must defer to an agency’s reasonable interpretation of an ambiguous law. If a law has multiple possible meanings, the court has to go with what the agency says it means. The worst examples of “Chevron deference,” we argue in our brief, is when agencies use a law’s silence to create new rules, essentially legislating. (The matter has gotten so out of hand that courts now defer to an agency’s determination of the scope of the agency’s own jurisdiction!) “Statutory silence” is the issue in this case, where the law defining the powers of the National Marine Fisheries Service is silent on whether domestic fisheries can be required to pay the salaries of federal inspectors. 

Taxpayers know the potential for this kind of abuse all too well. The IRS has a long history of regulating based on “silence” in the Internal Revenue Code, even beyond an already detailed Internal Revenue Code and close congressional attention. As one recent example, the IRS created its own “fee” for registering tax preparers (people who prepare a client’s tax return for compensation). Even though the scheme was struck down by the D.C. Circuit, nonetheless the fee remained, thanks to Chevron deference. The Seventh Circuit upheld a Treasury regulation putting a 2-year limit on an innocent spouse asking to be held harmless from their spouse’s tax problems, even though the law is silent about any deadline to ask for such relief. When the tax laws are silent, the IRS tries to regulate anyway—all because of Chevron’s allowance of “silence” as a basis for judicial deference to agency “interpretation.”

Our brief reminds the Supreme Court that they and other courts have often refused to apply Chevron in statutory silence cases. In Central Bank of Denver, the Supreme Court refused to expand secondary civil liability when the statute was silent, and Congress responded by amending the law to give the agency the power it wanted. In another instance, a district court overturned a Federal Election Commission (FEC) regulation. The FEC retracted the offending regulation. Ending deference in cases of statutory silence will result in stronger judicial engagement in overseeing the administrative state, and better law and order. 

Applying these ideas to Loper Bright, Congress knows how to empower an agency to collect fees. Many agencies have specific language in their statutes allowing for the collection of fees. That the National Marine Fisheries Service has no such authority means something. And only Congress, which controls the taxing and spending powers of the federal government, should be able to authorize what the agency wants to do here. The Constitution’s careful balances of power are at stake in this case.

Watch this space for more case developments.