NAHB Urges SCOTUS to Restrain Federal Agencies’ Power to Interpret Regulations

NAHB is continuing its ongoing battle to rein in excessive regulations and overzealous federal regulators. Most recently on the legal front, NAHB has filed a friend-of-the-court brief in an upcoming Supreme Court case that seeks to overturn a previous Supreme Court decision made decades ago that gives the government an unfair advantage when someone challenges a regulation in court.

In 1984, the Supreme Court issued an opinion in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. That opinion created the “Chevron Doctrine,” which requires courts to abide by a statute if it is “clear,” but also requires courts to defer to a federal agency’s interpretation of an unclear statute if the interpretation is “reasonable,” even if it is not the best interpretation. In other words, Chevron gives federal agencies wide latitude to interpret the scope of regulations.

The Supreme Court will hear oral arguments next term in Loper Bright Enterprises v. Raimondo, where the court has been asked to overturn the Chevron ruling. The Loper case involves a group of commercial fishermen who challenged a National Marine Fisheries Service regulation that requires the fishing industry to pay for the costs of observers who monitor compliance with fishery management plans.

Relying on Chevron, the U.S. Court of Appeals for the District of Columbia Circuit rejected the companies’ challenge to the rule. The court explained that federal fishery law is clear that the government can require fishing boats to carry observers. However, the statute is silent on who must pay for the observers. The court deferred to NMFS’s interpretation of the law that required the fishermen to pay for the observers because it was “reasonable.”

The Supreme Court agreed to hear the fishermen’s challenge in May, and NAHB filed an amicus brief in the case calling for Chevron to be overturned.

Over the past 40 years, numerous problems have been uncovered due to Chevron.

First, it clearly is biased toward federal agencies by granting them broad leeway to interpret and implement regulations.

Second, Chevron puts too much power in the hands of the unelected agencies. As part of the executive branch, the federal agencies must enforce the laws. However, because Congress also delegates its authority to write the regulations, the agencies both create and enforce many laws. Chevron adds to that problem by putting a “thumb on the scale” in court. Thus, the power of the legislature, executive and judicial branches are merged in the hands of unelected bureaucrats.

Finally, Chevron gives Congress an incentive to write ambiguous laws. Lawmakers want to get statutes passed. Chevron, however, allows Congress to forgo doing the difficult work of drafting clear laws by letting it pass the work off to the agencies. The agencies can then continuously change the law – and the intent of Congress – by implementing their own interpretation as long as they are “reasonable.”