Those who follow the US Supreme Court do not have enough time to read the decisions it has made in the final days of its 2023-2024 session. Some celebrate the radical redefinition that this court has carried out in relation to a variety of issues that impact the economy, society, and the system of government of that country, while others, including this writer, watch with amazement as the high court has shattered numerous precedents that had been in place for decades simply because the majority of ultra-conservative judges, half of whom were appointed by Donald Trump, considered those precedents contrary to their ideological vision. This is pure and simple judicial activism that shamelessly ignores stare decisis, the basis of Anglo-Saxon law, to which is added a practice of accommodating political interests, as has just been evidenced in the case relating to presidential immunity.
One of those recent Supreme Court decisions will have a huge impact on the relationship between the state, the economy, and society in the United States. This is Loper Bright Enterprises v. Raimondo, which put an end to the so-called Chevron doctrine, also known as Chevron deference, which originated in the Chevron v. Natural Resources Defense Council case established by that court forty years ago. The latter case originated in a challenge by an environmental group, pitting the oil corporation Chevron against a regulation issued by the Environmental Protection Agency (EPA) during the administration of President Ronald Reagan. The Supreme Court’s decision in that case produced an approach to economic regulation that served as the basis for the powers of the administrative state in regulatory matters in the modern era in the United States and beyond.
In that case, the Supreme Court established a test of interpretation that had two essential components revolving around two questions: first, is the law that the state agency is applying ambiguous? Second, if it is ambiguous, is the agency’s interpretation of that law permissible and reasonable? If that is the case, judges must defer to the agency’s interpretation, even if they would have reached a different conclusion if they had been called upon to make the interpretation. In this way, the state, through its regulatory agencies, had broad discretion in interpreting and applying the law based on the experience and technical knowledge of those who make up those agencies.
This Chevron doctrine or deference did not exclude judicial review, but it did come into play when the interpretation made by administrative or regulatory agencies was, to put it one way, manifestly improper and unreasonable. Otherwise, judges had to remain on the sidelines and allow these agencies to apply regulations in accordance with their interpretation in a variety of areas where technical expertise is required, such as the environment, finance, food, medicine, civil aviation, energy, telecommunications, and the stock market, among many others. This judicial deference allowed administrative agencies to apply regulations without being constantly embroiled in litigation, as these regulations are considered vital for the state to protect people from excesses in the market and society in general.
The new doctrine just adopted by the Supreme Court radically changes this approach. There will no longer be deference in favor of administrative agencies, but rather judges and courts will directly and actively intervene to assert their own interpretations over those of regulatory agencies, which leads to two fundamental problems: first, the constant judicialization of the decisions of administrative and regulatory agencies, which will make their work extremely difficult in a society as litigious as the United States and with a highly politicized judicial system; and two, the weakening of the regulatory function of the state because the courts do not have the technical capacity to evaluate highly sophisticated regulations in an economy as complex as the US economy.
The relevance of this new judicial approach beyond the borders of the United States is that that country has been a pioneer in the development and application of state regulation through a variety of agencies, including the Environmental Protection Agency, the Federal Trade Commission, the Security and Exchange Commission, the Federal Telecommunications Commission, the Federal Energy Commission, and the Federal Insurance Office, to name just a few. In fact, it can be said that regulatory law is decisively marked by the evolution of regulation in the United States, with very limited original contributions from other legal systems that tend to follow the US model in this area. It is therefore not surprising that at some point this new judicial doctrine will begin to have an impact on other countries and call into question certain concepts (such as declaratory self-protection and executive self-protection of the administration) that derive, directly or indirectly, from a deferential approach to the administrative state, without, of course, renouncing judicial control when circumstances require it.
The main argument used by the conservative majority in the US Supreme Court to overturn the Chevron doctrine is that, according to them, it undermined the separation of powers by giving administrative agencies broad discretion. What that majority deliberately overlooked is that the legislation, approved by the legislative chambers, gives administrative or regulatory agencies the power to enforce regulations, which means that these are an intrinsic part of their powers. On the other hand, what will affect the separation of powers is giving judges the power to impose their interpretations on highly technical matters and issues that they simply do not master, but which is done with the purpose of undermining the regulatory capacity of the State. Ultimately, the aim is to promote, through the courts, deregulation or, at least, the weakening of the State’s regulatory capacity, one of the ideological obsessions of conservatism that it maintains at all costs despite the lessons that reality constantly teaches in this area.
(Published on July 5, 2024, in Diario Libre)