July 8, 2024
RIP Chevron: So What?
Meredith blogged last week about the demise of the Chevron doctrine and some of its potential implications for the SEC. The conventional wisdom seems to be that the SCOTUS’s Loper decision is a “gut punch” to federal regulatory authority, and the decision has prompted wailing & gnashing of teeth on the Left and jubilation on the Right. However, a recent Law360 article by Dan Berkovitz says that the SCOTUS’s decision isn’t likely to have much of a practical impact on the SEC. Here’s the intro:
The demise of Chevron deference in Loper Bright Enterprises v. Raimondo will not make much of a difference for either the US Securities and Exchange Commission or the Commodity and Futures Trading Commission. The federal courts have a long history, both pre- and post- Chevron, of interpreting the federal securities and commodities laws without deference to the views of the SEC or the CFTC. These interpretations have ebbed and flowed between restrictive and expansive, depending on the philosophical composition of the courts.
In almost all major cases over at least the past two decades, especially in reviews of agency rulemaking, the courts have not granted Chevron deference to these agencies. Rather than charting a new approach, the court’s opinion in Loper reflects the current reality of judicial review for these agencies.
Dan Berkovitz isn’t alone in his assessment. This excerpt from a blog on the decision from the conservative think tank R Street Institute says that there was always less to Chevron deference than meets the eye:
There is also what you might call the dirty secret of judicial deference. Under Chevron, if a judge didn’t like an agency rule, they could usually just say that the rule was unreasonable (or that the statute wasn’t ambiguous) and achieve the same result as if there had been no deference. By contrast, even with the formal Chevron doctrine gone, it’s likely that judges will tend to implicitly defer to an agency’s interpretation more than they would if they had to come up with an interpretation of the rule from scratch.
– John Jenkins