Chevron and Auer Deference – What Justice Gorsuch’s Nomination May Mean for Agency Interpretation

After weeks of contentious hearings and debate, the U.S. Senate this week confirmed Neil Gorsuch as the next Supreme Court Justice, replacing the late Justice Antonin Scalia.

In the area of administrative and environmental law, Justice Gorsuch could have a significant impact in deciding how much deference to provide federal agencies in interpreting statutes and regulations.

Chevron and Seminole Rock/Auer Deference

In a line of precedents, the U.S. Supreme Court over the past few decades has granted federal agencies broad deference in interpreting statutes and regulations.

Under the Chevron doctrine (Chevron U.S.A. Inc. v. Natural Resources Defense Council (1984)), when Congress enacts a law and its intent is clear, that is the end of the inquiry and the agency must apply the law as written. However, if Congress has not directly addressed the precise issue or the statute is ambiguous, the reviewing court may not impose its own construction. Instead, the court must decide whether the agency’s application of the law is based on “permissible construction of the statute.”

The Seminole Rock/Auer (Auer) doctrine involves agency interpretation of its own regulations. Under this line of precedents, an agency’s interpretation is controlling unless it is “plainly erroneous or inconsistent with the regulation.”

Both of these doctrines have given federal agency’s wide latitude in how they administer and interpret regulations. This has resulted in a few justices raising the idea of revisiting these doctrines.

Chevron deference in particular has received attention due to a recent opinion (Gutierrez-Brizuela v. Lynch) authored by Justice Gorsuch while he was an appellate judge on the 10th Circuit. In an immigration law case – in which he sided with the immigrant and against the government – then Judge Gorsuch had this to say about Chevron deference:

There’s an elephant in the room with us today. We have studiously attempted to work our way around it and even left it unremarked. But the fact is Chevron … permit[s] executive bureaucracies to swallow huge amounts of core judicial and legislative power and concentrate federal power in a way that seems more than a little difficult to square with the Constitution of the framers’ design. Maybe the time has come to face the behemoth.

Other Justices Question Chevron and Auer Deference

Legal commentators also point to recent opinions authored by Chief Justice John Roberts, along with Justices Clarence Thomas and Samuel Alito, indicating a potential willingness to revisit Chevron and Auer.

If the Supreme Court were to revisit these doctrines, it would be a potential sea change in administrative and environmental law and could have a significant impact on industry. Chevron deference cuts both ways, depending on who occupies the White House. Therefore, some within the industry have concerns with the Supreme Court overturning Chevron.

Other commentators argue that reining in agency statutory and regulatory interpretation will actually lead to greater certainty and reduce the drastic swings that often occur when there is a change of administrations.

But in order to overturn existing case law, the Supreme Court will need five justices willing to revisit those precedents and agree on a new doctrine. And even with the addition of Justice Gorsuch to the bench, it appears that there are still currently only four justices willing to revisit Chevron and Auer.

With weighty legal issues like these and others hanging in the balance, it is easy to see how the confirmation process has become so contentious. Expect even more dissension and opposition if there is another opening on the Supreme Court in the near future.



















      American Energy Consumption Rises in 2016 Despite Big Decline in Coal Use

      Primary energy consumption in the United States in 2016 totaled 97.4 quadrillion British thermal units (Btu), a slight increase from the 2015 level. Consumption of coal decreased by 9%, nearly offsetting increases in the consumption of renewables, petroleum, natural gas, and nuclear fuel.  Fossil fuels continue to account for the bulk of U.S. energy consumption, and the consumption of petroleum and natural gas both increased in 2016. However, those increases were more than offset by lower coal consumption. Overall, fossil fuels made up 81% of the United States’ total energy consumption in 2016, slightly lower than 2015 levels, but down from 86% in 2005.  Petroleum consumption increased to 19.6 million barrels per day in 2016, led by increases in the transportation sector. Natural gas consumption increased to 27.5 trillion cubic feet, led by higher demand in the electric power and industrial sectors. Natural gas consumption in the residential and commercial buildings sectors fell slightly, reflecting lower heating demand. Coal consumption fell to 730 million short tons in 2016, the third consecutive year of declining coal consumption. Coal consumption decreased in the electric power sector by 61 million short tons (8%), while industrial sector coal consumption fell by 6 million short tons (11%).




      Nuclear fuel consumption in the United States increased 1% in 2016. The number of total operable nuclear generating units briefly increased from 99 to 100 when Watts Bar Unit 2 in Tennessee came online. Later in the year, the retirement of Nebraska’s Fort Calhoun nuclear facility brought the number of nuclear units in the United States back to 99. Year-end 2016 nuclear capacity was slightly higher than in 2015 (99.3 gigawatts versus 98.7 gigawatts), and annual average nuclear capacity factors, which reflect the use of power plants, were also slightly higher, at 92.5% versus 92.3% in 2015.


      Renewable fuels had the largest increase in energy consumption in 2016. Wind generation increased by nearly 20%, making up almost half of all renewable consumption increases. Solar consumption also significantly increased, as considerable electric generating capacity was added for both wind and solar resources in 2016. Hydroelectric consumption increased by 7% as the West Coast recovered from severe drought conditions. Together, wind, hydro, and solar made up 91% of renewable consumption increases. Biomass consumption, which accounted for 47% of all renewable consumption in 2016, remained close to its 2015 level.





      Michael Best Strategies’ Energy Team

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