Litigation Update: Loper Bright Enterprises v. Raimondo

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Chayila Kleist:  Hello, and welcome to this Regulatory Transparency Project webinar call. My name is Chayila Kleist, and I’m an Assistant Director of the Regulatory Transparency Project here at The Federalist Society. Today, September 27, 2023, we’re excited to host a Litigation Update: Loper Bright Enterprises v. Raimondo, which is set to be heard by the Supreme Court later this term. 

As always, please note that all expressions of opinion are those of the experts on today’s program, as The Federalist Society takes no position on particular legal or public policy issues. Now, in the interest of time, as we introduce our guests today, we’ll keep those introductions brief, but if you’d like to know more about either of our guests, you can access their impressive full bios at regproject.org. 

Today, we’re pleased to have with us as our moderator, Eli Nachmany, who was most recently a law clerk to Judge Steven Menashi of the U.S. Court of Appeals for the Second Circuit. He graduated magna cum laude from Harvard Law School where he was editor-in-chief of the Harvard Journal of Law and Public Policy. 

Prior to law school, he served as a speechwriter at the U.S. Secretary of Interior and as a domestic policy aide in the White House Office of American Innovation. He graduated summa laude from New York University with a degree in sports management. And I’ll leave it to him to introduce other guests today. 

Throughout the panel—as a last note, and then I’ll get off your screens—if you have any questions, please submit them via the Question and Answer feature so that our speakers will have access to them in that portion of today’s webinar. With that, thank you all for being with us today. Mr. Nachmany, the floor is yours.

Eli Nachmany:  Thank you, Chayila. I appreciate the kind introduction. I’m honored to be moderating today, and great to be joined by Ryan Mulvey, who I’ll introduce now. For his full bio, you also can access it on the web. Ryan Mulvey is counsel at Cause of Action Institute, and he’s policy counsel and Americans for Prosperity Foundation. 

His practice touches on various aspects of government oversight, civic engagement, and administrative and constitutional law. He regularly lectures on public access law issues and litigates cases under the federal Freedom of Information Act as well as the Administrative Procedure Act. 

For the past eight years, Ryan has worked to challenge the legality of the National Marine Fisheries Service’s industry-funded monitoring requirements in the groundfish fishery and the herring fishery. He serves as Cause of Action Institute’s principal attorney in Loper Bright Enterprises v. Raimondo.

And, Ryan, I think that’s why you’re here today. We’re talking about Loper Bright, which is one of the big administrative law cases before the Supreme Court this term. So I’ll hand it over to you to give opening remarks. And if, in those opening remarks, you could give a little bit of background on the case itself, what’s going on before the Supreme Court, that would be greatly appreciated. I’ll hand it over to you.

Ryan Mulvey:  Thanks, Eli, and thank you for the opportunity to discuss what you have, I think, correctly identified as a case that’s likely to be quite consequential in the future of administrative law. And I’m particularly glad to have an opportunity to give a little more context of the statute under which this case arises. 

You know, obviously now, the case is really focused on the future of Chevron based on what the Supreme Court has accepted for review in terms of the questions presented. But understanding the law and the regulation here and the background, I think, really highlights why the Court probably took the case and why getting Chevron right is so important. 

So this this case is about the herring fishery, it’s about an industry funding requirement, and it’s about the Magnuson-Stevens Act. So the Magnuson-Stevens Act is the statute that concerns the regulation of domestic fisheries. It’s administered by the Department of Commerce, through NOAA, through the National Marine Fishery Service. 

So there’s a lot of government hands in pot, but interestingly enough, the MSA is very unique because it is not the Department of Commerce, it’s not NOAA, it’s not even nymphs NMFS that writes the regulations. The MSA sets up a system of regional councils. Those councils are composed of federal employees, state employees from state Departments of Environmental Protection or fish and game, and then private individuals nominated by their governor, or recommended to the Secretary of Commerce, who then nominates them. 

Those people tend to be commercial fishermen, but they can be academics, other people who have an interest and expertise in commercial fishing. So those councils actually write the regulations. The Secretary just puts them out and promulgates them with very little ability to edit what the councils have drafted. So it’s a very unique structure. 

The MSA itself contains a provision that allows these councils to require that fishermen, when they go out, as a condition of participating in the fishery, that they carry an observer for the purposes of data collection. What the statute doesn’t provide is a general authority to shift the costs of carrying that monitor or observer onto regulated parties. 

The statute does that in three instances explicitly for foreign fishing. It does it for what are called limited access privileged programs, which are certain types of special fisheries where the fishermen own a portion of the quota in a way that they don’t in other fisheries, and then it also exists for research plans in the North Pacific. So if you’ve ever seen any of the shows about Alaskan fishing, the boats going all over the icebergs and stuff, that’s where there’s also explicit authority for industry funding. 

Here in the herring fishery, the New England Fishery Management Council, which is responsible for the herring fishery, had long hoped to supplement the federally funded observing that’s statutorily required for bycatch review, keep keeping track of what other sorts of fish are being caught when fishermen go out, go out for herring. 

And, for years, the council and NOAA were trying to get through more monitoring. The problem was, they didn’t have the money to afford it. And, for years, there was this back and forth, and there just couldn’t be any increased monitoring. Eventually, the council came up with the idea of, instead of going to Congress and asking for more money to fund observing, they decided that they were going to create a regulatory requirement that the fishermen directly enter into contracts with third-party, at-sea monitoring service providers, and that they be required to pay directly the salary and the cost of travel and so forth, the costs associated with the monitoring. 

And they did that with the regulation here, the omnibus amendment. That rule creates a new 50 percent coverage target, which means herring boats have to carry monitors on 50 percent of their trips. And the government estimated, when they were preparing this rule, that that was going to cost roughly $710 a day that you had the monitor, and that overall, the impact would be a 20 percent reduction in annual net revenue. 

Those estimates are pretty conservative. They’re pre-pandemic. They’re pre-massive quota cuts. They’re from roughly 2016, 2017, so the cost of actually carrying a monitor now would be much higher. So the government knew this was controversial. They knew it was going to be expensive. The fishermen didn’t think it was necessary, that it was scientifically justified, but the agency pushed it through anyway. And when that was finalized at the beginning of 2020, that’s where we found ourselves with the fishermen in the DDC challenging the legality of the requirement. 

The parties here are four boats in Cape May, New Jersey where I am now, actually, very southern tip of New Jersey. It’s a local community that’s dependent on commercial fishing, on tourism in the summer, and on the Coast Guard. And you take away fishing, which is really what this industry and funding requirement would end up doing, and the downstream effects are going to be tremendous, and you’re going to kill a community here that’s otherwise pretty vibrant. 

Well, I should note also, interestingly enough, this case, it’s now about Chevron. I had mentioned that at the outset, but at the beginning, it really wasn’t. This was a case that was about an egregious instance of agency overreach and an instance where the economic livelihood of multigenerational small businesses was really threatened. 

Now that we’re at the Supreme Court on the question of Chevron, I think you can see why the case is such a great vehicle because it exposes the unchecked administrative state, the type of damage that it can do when it gets to decide what a what a statute means, particularly in a case of silence, which I know we’re going to get to. 

But I’ll close real quick by just giving, in terms of the procedural history, an overview of where the district court and the D.C. Circuit landed because, again, I think that helps to highlight some of the problems with Chevron that I’m sure we’re going to be discussing. 

So June 2021 is when Judge Emmett Sullivan came out with his opinion. He adopted Chevron, and he held that, on his reading of the statute, at step one, there was no ambiguity, there was no silence, and that there was, through the MSA’s necessary and appropriate clause—basically a necessary and proper clause for fisheries regulation—have to that provision delegated authority to require industry funding to the agency. He didn’t really get to step two except in a short paragraph and said, “Even if there was ambiguity or silence, I still find the agency’s interpretation reasonable.” 

Now, when we got to the D.C. Circuit, Judge Rogers — And I will note, actually, Justice Ketanji Brown Jackson was on the panel originally, and she heard oral argument. She’s obviously now on the Supreme Court. That’s why she’s recused from this case, in case anybody who’s noticed that didn’t understand why that might be the case. She didn’t participate in the opinion, but it’s pretty standard practice for a justice to recuse in that instance. 

Judge Rogers wrote the panel opinion, and she actually took a different view, she and Judge Srinivasan, that, unlike Judge Sullivan, they found the statute to be ambiguous, that the necessary and proper clause by itself, especially given other textual considerations, wasn’t enough to resolve the case on step one. But, moving to step two, they said, “This seems like a compliance cost, and so we’re going to find it reasonable.”

Interestingly enough, Judge Rogers started her opinion by talking about the major questions doctrine, which I’m sure we’re going to get to in today’s discussion, and she said, “I don’t think this is major questions. It doesn’t apply, but Supreme Court seems to be using that now, so we’re going to address it.” She also noted that she was going to leave it to the Supreme Court to overrule its own precedents, which I think is an interesting observation because obviously, in colloquy with the dissent by Judge Walker, she knew that there’s a fight a-brewing, as they say. 

Judge Walker, in his dissent, argued that he would resolve this case on step one and that Judge Sullivan got it wrong and that, taken together, the negative inference from the explicit provisions for industry funding, in very specific instances, meant that the silence as to a general authority for industry funding meant there was no need for deference. You could just read the statute and come to the conclusion that there is no authority to go beyond requiring the observer and to make the fishermen also pay for the observer.

Eli Nachmany:  Well, great. So now the case is before the Supreme Court. And just to give a little bit of background, how do we do administrative law? There’s this Chevron frame. And so when we say the Court applied Chevron, they’re talking about a 1984 precedent, Chevron v. The Natural Resources Defense Council. And at step one, we say, if Congress has spoken clearly to the issue, we apply what Congress says. 

But if there’s an ambiguity there and the agency has made an interpretation that is permissible or that’s reasonable—and Tom Merrill has a great book on this, where he mines what the Court might have meant when it used these phrases—we assume Congress has implicitly delegated the interpretation of that term to the agency, and we defer to the agency’s interpretation at step two of Chevron. And that’s what happened here. 

And so the question presented now before the Court is whether the Court should overrule that framework. Should the Court overrule Chevron—and I want to get into this in a moment—or at least 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. 

So we’re going to get into all that. I’ve got a good number of questions for you, but I also want to say to the audience, if you have a question, please drop it in the Q&A box. Probably at about the half-hour mark, we’ll turn to audience questions if we have sufficient ones to get to. But, Ryan, I’ve got a ton of questions for you, so no worries on that. I’ve got a girth of questions today. 

First one I want to ask you is, at a 40,000-foot level, what are the main arguments for and against overruling this Chevron framework, or at least rejecting the reasoning of the Chevron case and saying we don’t do the two-step framework anymore? 

Ryan Mulvey:  Sure. So obviously, we’ll give a very broad overview of the generalized arguments. You know, Chevron, for decades has gotten increasingly complex, and there’s lots of nuanced arguments. There’s a lot of academic literature out there, as I’m sure many of the viewers realize, so let’s just give, as you said, a very broad overview. 

So for those who want to overturn Chevron, what the fishermen are arguing here, first and foremost, is that Chevron doctrine—Chevron, as its evolved, at least—wrests from the Courts the ultimate interpretive authority to tell us what the law is, and it basically puts it into the hands of the executive branch, into agencies. 

And that is seen as presenting a threat to separation of powers. And, arguably, it’s also an application of the judiciary’s role under Article III, constitutionally and statutorily, under the Administrative Procedure Act, you know, the requirement for de novo review and the Court resolving questions of law, all of that is arguably out the door. 

And it creates an incentive. Chevron, as it’s come to be, has created an incentive for agencies to kind of push the line with their interpretations in the hope that they’re going to get deference and they’re going to have a permissible construction of the statute. And that also then creates a disincentive for Congress to take seriously its role under Article I to actually write laws. 

I think proponents of overruling Chevron would also say that Chevron gives us a certain level of unpredictability and long-term instability in administrative law. You know, as we go from one party to the other occupying the White House, we can see a ping-pong effect in regulation, in both large scale and small scale in terms of how agencies prioritize their policy agenda and how they interpret the law. 

And now, with Brand X, at least, when you’re dealing at step two statutes that have been found to be ambiguous, you can have agencies going back and forth as long as they’re going back and forth between reasonable interpretations. And so that’s not predictable, right? There’s no predictability there. 

And then I think, finally, courts are not applying Chevron consistently. So you have this phenomenon of reflexive deference in some instances. Judges, for whatever reasons, decide they just need to defer to the agency. I mean, that’s a simplification of what their justification might be, I recognize, but you have that phenomenon. 

You also have what you might call a zombification of Chevron at the Supreme Court where it’s not been using — the Solicitor has not been raising Chevron before the Supreme Court, even in cases where it was key below. And then you have the Court not resolving cases that could or should be resolved under Chevron if it’s such an important precedent, and instead, we’ve seen this development of the major questions doctrine. 

And that sort of inconsistency is very clear in this case because we had a judge — The district judge said ambiguity is step one, reasonableness step two — or, excuse me. No ambiguities. Clear cut at step one. The D.C. Circuit panel, the majority said, “No, there’s ambiguity, but this is reasonable as to compliance costs.” Judge Walker said the other, “No, step one, very clear, no authority.”

And then, believe it or not, there’s a parallel case challenging the same regulation that came out of the District of Rhode Island, and the First Circuit said, “No, this is permissible. It’s a permissible construction. There may also be statutory authorization. We think this passes muster under Chevron, but we’re not even really going to identify whether this is a step one or a step two case. We don’t have to tell you that. Government wins.” And I’m not even joking that that’s basically the tenor of the opinion. 

On the other side, here, the Solicitor General had a strong brief, I think it’s fair to say, and their principal argument was that Chevron is a “bedrock principle in administrative law.” We’ve had it for 40 years. It provides a flexible framework in some people’s view of their theory of how our government is supposed to work. It provides the executive branch and administrative agencies with the space that they need to pass regulations and deal with evolving circumstances in a way that Congress can. 

The Solicitor also interestingly recognized the major questions doctrine and its development as a sort of — I think they described it as a built-in check against Chevron being abused. There’s a whole host of means that we could go into on that point. There’s also this argument that Chevron allows courts to respect the scientific and technical expertise of agencies in very complex regulatory regimes where courts may not know what they’re doing and where Congress may not be able to legislate with the required specificity. You know, the regulations get us there instead. 

And then the Solicitor General made a big point about the stare decisis effect that favors retaining Chevron. Congress has never reformed how Chevron works. It hasn’t told the Court it has to abandon it. It’s never amended the APA 706. And government agencies have — We can talk about whether the government can have a reliance interest in the stare decisis analysis, but at least the government is arguing here that agencies expect the sort of treatment that they get under Chevron, and that it would be unfair at this point to take it away. 

And then, finally, I think the government’s position is that Chevron doesn’t raise separation of powers issues, and it doesn’t necessarily involve a judicial abdication of the independent judgment required by Article III. Obviously, we take a different view on that, but I would say those are the main arguments for keeping Chevron.

Eli Nachmany:  And to underscore just how fundamental a shift it would be in administrative law, the idea for, at least 40 years and potentially dating back prior to that, that agencies, when there’s an ambiguity, get to set the policy direction as opposed to an individual case’s judges making that determination really is a bedrock principle of administrative law. It has been for a little while. 

And so there are some who say, “Well, maybe the Court will be hesitant to overrule Chevron.” And this is where I think there was a fascinating element to this case that some commentators have picked up on. The question presented before the Supreme Court is not just whether the court should overrule Chevron be an RDC. It’s whether the court should overrule Chevron be an RDC or at least clarify that statutory silence. And then there’s a whole formulation about statutory silence concerning controversial powers expressly been narrowly granted elsewhere, yadda yadda, is not an ambiguity. 

I’m wondering if you could talk a little bit about the nuance there in that question presented, that it’s not just a straightforward, should the Supreme Court overrule Chevron; there’s something else going on there. 

And I’m wondering if you could talk about whether I’m right. It seems like it relates a little bit to the Court’s recent recognition in a case called West Virginia v. EPA of the major questions doctrine, which is now itself a principle both of statutory interpretation and of deference to agency interpretations, that there are some interpretations where we’re not going to defer to the agency. You know, this is West Virginia. It’s also King v. Burwell. Talk me through that second part of that question presented. It’s fascinating.

Ryan Mulvey:  Yeah. So all the extra language, right? Silence concerning controversial power that’s expressly addressed in one part of the statute and narrowly granted there, but then not discussed more generally. This case is a great example of that. We have explicit provisions dealing with industry-funded monitoring in three fisheries, and then no general provision for industry funding, despite the fact that there’s a general provision allowing the councils to require that fishermen carry an observer. 

And I think a lot of it gets to, if we’re going to still have Chevron, how step one is really supposed to be done and what it actually means to exhaust all the canons in your toolbox of statutory interpretation and that, here, pointing to silence — Well, let me back up. 

Judge Rogers, in her opinion, in addressing Judge Walker’s dissent, basically said that, “Well, Chevron itself says ambiguity or silence,” and that Judge Walker is kind of throwing out the silence part because, here, we have silence, obviously. And I think that that’s mistaken because it confuses what silence means in context in Chevron and that silence goes together with ambiguity. 

There’s a difference between a statute that expressly authorizes regulation while remaining silent on the details, sort of silence qua ambiguity. You see that in the original Chevron case itself. We have a statutory term. It’s there, but there’s silence as to what it’s supposed to mean, and that silence is what gives us the ambiguity. 

But there’s a difference there than a silence where we’re saying, “Well, there’s no on-point provision, and we’re going to see that as silence, despite the fact that there may be other relevant provisions in the statute where, read together in context, we can draw all sorts of inferences and apply expressio unius and the canon against the superfluidity and we can come up with a better reading of the statute.” 

You know, in that sense, you can read this sort of way out, if you want to describe it that, from overruling Chevron as a way of inviting the Court to say, “Hey, we really need better clarity on how courts are doing step one.” 

And really, as I recall, that’s one of the reasons the lack of direction on how to do step one that helped Justice Scalia, towards the end of his time on the Court, towards the end of his life, come to realize that whatever endorsement he had at the beginning, in 1984 when Chevron came out, whatever sort of endorsement he had for that approach to reading towards administrative law and dealing with judicial review of agency interpretations of statutes, he recognized that not everybody is going to be as serious a textualist as Scalia. And that had helped let the Chevron doctrine get away from the case itself. 

Eli Nachmany:  Yeah. I wanted to ask you to talk about the canons of interpretation. Some, like Justice Thomas, have suggested maybe Chevron is just a canon of statutory interpretation, and maybe that impacts the way that the Court thinks about stare decisis in the Chevron case. So now we have the Solicitor General talking about stare decisis. 

Should Chevron at least be thought of as a holding that’s entitled to stare decisis weight, or is it just a way that courts are to decide administrative law cases and do those kinds of rules — Are those kinds of rules entitled to less stare decisis?

Ryan Mulvey:  Yeah. Yeah. Yeah, Justice Thomas has mused about that. Justice Kavanaugh, too, has written about it, and there’s a lot of academic literature. Obviously, the name that comes straight to mind—I think we’ve cited it—is Professor Hickman’s article on how do we categorize a Chevron because that does have important implications for the sort of precedential weight it’s supposed to be given. 

So as I understand it — I’m just a practitioner, but as I understand the academic literature, canons of interpretation really aren’t entitled to any sort of deference. And here, let’s look at Chevron. What is the substantive holding of Chevron? The substantive holding of Chevron is what a stationary source is.

It’s not the interpretive framework that the Court — And we’re not even talking about Chevron doctrine as it stands. Let’s just talk about the Chevron case itself. Justice Stevens, his interpretive methodology for addressing the EPA’s an understanding of the statutory term, that’s a methodology. That’s not the substantive holding. Substantive holdings, judicial rulings on statutory interpretations, those have precedential weight. Interpretive methodologies, they don’t. 

And, in a certain respect, two points further, the Supreme Court itself doesn’t seem to have felt that it is bound to employ Chevron. It hasn’t been recently. Now, obviously, the Supreme Court is the Supreme Court and maybe they can do whatever they want, but if Chevron is supposed to be the framework for dealing with questions of agency interpretation of law, then why hasn’t the Court been using it? I think that speaks to stare decisis effect. 

There’s also the fact that the brand X tolerance of agencies switching back and forth, how can you have any sort of reliance interests when agencies are allowed to switch, when you have statutes that have been recognized as ambiguous? And, more generally, if Chevron really is just the framework, more broadly, you can’t have any reliance interests because, unless you’re going to — 

Particularly, if you don’t buy into the Chevron bias argument that Professor Hamburger, I think, has quite well articulated, if you don’t think you know how the Court is going to come out, always deferring to the government, then you can’t have a reliance interest. You can’t plan how the regulation in your industry is going to go in that space because who knows what the Court — how it’s going to come out? It’s just a framework. There’s no substance to the holding.

Right. And you mentioned both Brand X and Chevron bias. And I just want to make clear for the audience — So Brand X is a principle from another Supreme Court case that came down after Chevron where the Court says, even if the judicial branch has interpreted a statute, as long as it says, “We think maybe the statute is ambiguous. This seems to be the best reading as opposed to the only reading,” an agency can come along later and say, “Well, actually, we have a different interpretation of the statute now.”

And the agency can, some have said, effectively overrule the Court’s understanding of what the statute means, and so strike some is inconsistent with the separation of powers. That’s kind of the Brand X corollary to the Chevron principle. And you mentioned Chevron bias, which is a fascinating article by Professor Hamburger and, I think, an important one in this discourse, where Professor Hamburger adds his voice to the, the Chevron skeptical movement and says another argument against Chevron is, it creates a systemic bias on behalf of the government in litigation that’s otherwise supposed to be neutral. 

You know, we usually don’t say, “Oh, in certain cases, this party will win, but that’s Chevron‘s rule as pertaining to when the government agency is one of the parties to litigation. 

Ryan Mulvey:  If I may, I would just add further, let’s accept, for the sake of argument, that Chevron isn’t just a canon of interpretation. It’s not just a framework. Maybe it’s a substantive holding. Maybe it’s a standard of review, and that gets a little more deferential treatment. I think, Professor Hickman, that’s her take on what Chevron actually is. 

Even there, we can still look at the traditional factors that we consider when trying to figure out if there’s stare decisis effect. And let’s look first, is Chevron as it’s developed just wrong?  Was it wrongly decided on day one? You know, one of the best — It’s very telling. Professor Cass Sunstein says that Chevron is supposed to be a counter Marbury for the administrative state, that it’s a direction to courts to accept what the government says the law is. 

That’s just wrong. And, again, to raise a Professor Hamburger’s Chevron bias theory, Chevron, if we take Sunstein’s position seriously, requires a pre-commitment to accepting, in cases of ambiguity, the government’s position, and that’s just not how courts are supposed to operate. 

And then we also look at workability. Has Chevron, in practice, worked? And, well, I’ve highlighted how, in this particular case, we have one legal standard, one framework for interpretation, and we have four different ways it’s come out. 

That doesn’t seem like the sort of — Obviously, the government makes a big point in its briefs that reasonable jurists can disagree about what statutes are supposed to mean. And that much is true, but the extent to which they’re disagreeing in this instance, it doesn’t seem right. And we’ve just seen — From Chevron in 1984 to where it stands now, it’s the bane of any law student who takes administrative law, trying to figure out what is Chevron.

I’m sure there’s administrative law professors who specialize in Chevron and this their whole field of research, and it’s a worthy one, but if we have such complexity we’ve had to add step zero and we have professors who argue that there’s a step one and a half in the D.C. Circuit, that’s not workable. That’s not the way the law is supposed to operate, in my view. And I think that that kind of cuts, then, against any sort of serious appreciation of Chevron having strong stare decisis effect. 

Eli Nachmany:  Yeah, and I think these are all excellent points. I note that we have now past the half-hour mark, so I do want to start incorporating audience questions. And just a reminder to all viewers today, please feel free to drop your questions into the Q&A function, and we’ll take a look. 

So the first question we have is — An audience members interested if you have — You’ve sort of gone into it with respect to the governments, but any reactions to Respondent’s briefing and those of amicus supporting Chevron.

Ryan Mulvey:  Yeah. So I think it’s very fair for us to recognize that the Solicitor General’s briefs were very strong. The case is very well argued. It’s going to be really interesting to see the Solicitor General go up against Paul Clement, who’s the lead counsel now that we’re at the Supreme Court and who we’re very excited to be working with. He’s probably the best in his field, I think it’s fair to say. 

So she had a very strong brief. At the same time, as I think we’ve discussed, there was a lot of focus on stare decisis, and I don’t think we find it very convincing. And then, in the government’s briefs, both with the petition and now on the merits, I think their discussion of the actual underlying statute here—which I recognize is not at issue, but they’re kind of avoiding the significance of the sort of power that the agency is trying to take upon itself here—is rather telling and just highlights how untolerable the outcome below is if Chevron really is appropriate. 

In terms of the amici who supported the government, I don’t think that there was anything terribly unexpected in those briefs. I thought, at least with respect, — Because, obviously, my specialty is in the Magnuson-Stevens Act. I think the brief that addressed the proper reading of the Magnuson-Stevens Act and the sort history of industry funding in the fisheries was simply wrong and that there was a lot of conflation between authority to carry observers and the remarkable authority to require that the fishermen pay for them. 

And that just gets to the point of this, in my mind, is not a reasonable compliance cost. It’s not the sort of — And definitely under a reading of what necessary and appropriate is supposed to mean, those sorts of catch-all provisions that are thrown at the end of a list of authorities in a statute, it needs to be read in context. It needs to be read in light of the other sorts of powers that are given to the agency. 

An idea that paying $700 a day, the salary of the third-party government inspector on your boat, is incidental to data collection. There’s no other context in the federal regulatory space that I’m really aware of—and the government hasn’t identified one—where there’s a similar regime of industry having to pay to have the inspectors in the workplace. It’s very intrusive.

Eli Nachmany:  I think you discussed this statutory provision before, and we’re talking about APA 706 But an audience member has now walked into what really is a minefield of scholarship about this part of the Administrative Procedure Act that some argue forecloses Chevron‘s rule. 

And I’m reading now from the question. I’m assuming this is this is a correct transcription of 706, but it basically says, “The reviewing Court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action.” Doesn’t that foreclose Chevron?

Cass Sunstein and I think Kristin Hickman might say no. I believe there are some other scholars, including, I think, Aditya Bamzai who have said yes. Where are you at on that question? Is Chevron consistent with the Administrative Procedure Act?

Ryan Mulvey:  Yeah. So there are definitely — I think Professor Ken Burnett and Professor Christopher Walker filed a brief in support of neither party here where they also delved into this. The other scholars that you identified, I think you’ve properly categorized them in terms of their take here. 

I think our reading of 706 and what a de novo review is supposed to mean coincides with the view expressed by Justice Gorsuch in his denial from cert in Buffington that de novo review is supposed to mean not the reflexive deference and the bias and pre-commitment to government interpretations of the law — executive branch interpretations of the law that we have actually seen. 

If you look at the rest of 706, Congress addresses when courts are supposed to defer to agencies. They obviously didn’t do that at the beginning of the provision when they talk about deducing the meaning of legal questions, both constitutional and statutory. So Congress knows how to tell courts to defer. 

My reading of the provision is that Chevron is not consistent with de novo review, but as you’ve mentioned, there are people way smarter than me working in law schools who have extensively discussed this. And it’s a very interesting area of the law, but at the end of the day, I just don’t think that accommodating Chevron as it’s developed, as it is today, is consistent with the constitutional structure of our government or how the APA is really supposed to function and what courts are supposed to do. 

Eli Nachmany:  Yeah. There really is some great scholarship on this question, particularly in the statutory context. I do want to go back to the statute in particular that’s at issue in this case because in the Chevron cases—and you’ve talked about it—courts often will justify the deference to agency statutory interpretations on the basis of the agency having a particular kind of expertise. 

I’m wondering, what exactly is the Commerce Department or, I guess, the National Marine Fisheries Service expert about here with respect to a funding structure for a regulatory program? Is there any colorable justification for expertise-based deference in this case?

Ryan Mulvey:  No, I don’t think so. So, obviously in the district court, we ran into a lot of case law that doubles down on the idea that, when it comes to fisheries management, there’s supposed to be a lot of deference because there’s a lot of science and technical expertise that goes into some of the ways that fisheries are managed. 

And let’s set aside whether or not Chevron is appropriate. I think it’s true that you do have fisheries regulations that are very technical. This is not one of those examples. We’re not talking about whether a certain length of boat or a certain depth of net or a certain geographic region needs to be regulated in a particular way. 

We’re not talking about, there’s lots of fishery cases where fishermen have challenged regulations dealing with how particular species are treated or whether the science supports a particular management measure. None of that is at issue here. This case has never been about science. It’s never been about the data needs of the fishery. This is about the agency’s authority to impose the funding requirement on the regulated industry. 

That a pure legal question. That doesn’t require any sort of scientific expertise or technical expertise. It’s just straightforward. Does the statute give the agency this authority or not? And so I don’t think the justification that you might hear in some cases where you have — like the Chevron decision itself, stationary sources and bubble theory, and there’s a lot of science there. 

This case is not about a regulation that was written by NOAA scientists. This was written by people on the New England Council who wanted to increase monitoring, and the agency told them, “We don’t have the money to do it. Figure out a different way.” And their solution was to just, rather creatively, I suppose—I’m surprised they didn’t come up with it sooner—to order the fishermen to pay for it.

Eli Nachmany:  Another question here, and this is very particular to this case is — You know, you mentioned before, you have a legend who is on this brief and who’s going to be arguing before the Supreme Court, Paul Clement. Can you talk a little bit about how Paul Clement became involved in what really seems like—at least maybe the court thinks so—the perfect vehicle to hear this kind of question?  

Ryan Mulvey:  Yeah. So Paul Clement, obviously, we recognize him. We’re very excited to be working with him, and he’s going to be a great advocate for the fishermen—already has been—in the briefing before the Supreme Court. He didn’t get involved in the case until after the D.C. Circuit had issued their opinion. 

So, as I think I mentioned at the outset, we didn’t imagine that this case would end up where it is now in the posture that it is now with this question presented. At Causes of Action Institute, part of our mission is to fight against egregious instances of agency overreach. We previously represented fishermen in the groundfish fishery in New England starting in 2015. 

If you’ve ever seen the movie Coda that won the Academy Award, I think, in 2022 or 2021, that movie is about industry funding in the groundfish fishery. We lost the First Circuit on procedural grounds, and so, when we saw this, we said, “We need another bite at the apple. We got to make it right for the fishermen.”

And after the D.C. Circuit opinion, after Judge Walker’s dissent, and we had just had the Buffington dissent from Justice Gorsuch, we thought that this is an opportunity now. This case presents a vehicle for addressing Chevron and the proper approach that courts should take to reviewing agency interpretations of law. And we thought there was no better person to partner with than Paul Clement. 

Eli Nachmany:  We have another audience question, and it relates to something we discussed prior to getting on here. The Chamber of Commerce filed a brief, and they talk about modern Chevron. Other people—Tom Merrill, for example—have called this the Chevron doctrine as opposed to Chevron itself. I’m wondering what you think of even Justice Gorsuch and his dissent from denial in this case called Buffington. 

Some have argued that maybe courts are overreading Chevron. Maybe it’s the case that Chevron, properly understood like the original Chevron, is not so bad, or at least, simply recognized, a longstanding rule of interpretation that does not mean wholesale deference to agency interpretations. Do you think that the Court would be shifting gears if it announced it was merely returning to the original regime as announced in the actual Chevron case?

Ryan Mulvey:  Yeah. So I think Justice Gorsuch is — I mean, we’ve already discussed — I thought that dissent in Buffington from the denial of cert was very well stated and Justice Gorsuch articulated very well how Chevron has gotten away from the Court. At the same time, the way I read his conclusion — I mean, he ends it by saying, “At this late hour, is there anything we can do to fix Chevron? It deserves a tombstone that no one can miss.” 

I’m not convinced that we can really fix Chevron. I don’t think the sort of Kaiser v. Wilkie outcome here would be necessarily workable long term. You know, it’s one thing to say, take step one very, very, very seriously. Do more textuals and apply the canons of interpretation stronger. 

As long as there’s that step two, as long as there’s a way out for a Court — You know, we’ve talked about reflexive deference. As long as there’s a way to get to a sort of permissible interpretation standard, I’m not quite sure long term will end up fixing and getting out of where we are now. 

You mentioned Professor Merrill’s book. I think I spied it on the bookshelf before you at one point. You know, it’s a good book. Professor Merrill filed a brief here in support of neither party. We’ve had amici who support our position and who argue for a more moderate position, I think, as you described it. We can call it that. 

And I think that’s all fair, but at the end of the day, I don’t think that’s going to be enough. I think we need to really get back to courts taking very seriously their duty to provide an independent judgment, and that they have to tell us what the law is, and we can’t allow that sort of step two out for them.

Eli Nachmany:  There’s another terrific audience question, and it relates to an idea that has been floating around at the Court for at least a year or two now. So the audience member asks, “Why don’t you focus on the power of the purse being exercised by the agency?” There was an inquiry, I think Justice Gorsuch made, in the Empire Health Foundation argument from a couple of years ago—and there’s a good Yale Journal and Regulation blog post about this by Damonta Morgan—where it’s this idea, maybe we should have a Chevron carve-out for interpretations that implicate the agency’s pecuniary interest.

If it would relate to the government saving money or maybe the government making money, then that’s a particular class of interpretations where courts should be loath to assume that deference is warranted. I’m wondering what you think about — Is there a quirk in this case where, number one, should it distinguish itself from the ordinary Chevron cases or, number two, is it just of importance on its own that the agency does seem to be, you might call it exercising the power of the purse without first asking Congress for an appropriation as you mentioned before?

Ryan Mulvey:  Yeah. So I don’t think — So we certainly have discussed this idea, and we’ve had amici file on our support who specifically focused on appropriations and power of the purse. And we have consistently, throughout this case, raised the point that, when agency appropriations run out, agency programs don’t move forward, and the agency can’t get around that by forcing industry to pay. 

And we’ve raised that — We had, in the district court, other claims that we didn’t raise on appeal then and that we had lost on that deal with some of the agency financing statutes like Anti-Deficiency Act that more explicitly dealt with this idea of power of the purse. But, just as a general principle, the controversiality of the agency’s interpretation here and why it can’t be implicitly delegated — the authority for industry funding can’t be implicitly delegated by silence and why, even at step two, it can’t possibly be a reasonable interpretation of the statute is because the agency literally is trying to get around Congress and the appropriations process. 

As I stated, for years, they’ve had this problem where they’ve wanted more monitoring. They haven’t been able to pay for it. The agency kept telling them, “We can’t commit to funding increased monitoring, because it would implicate Anti-Deficiency Act concerns.” The solution was the industry funding. 

So we have raised that in the merits brief. It is raised in light of the — or, rather, in the context of some of the other constitutional implications that the power asserted here. It hasn’t had its own primetime moment, I suppose, but it’s definitely something that we have argued and we do think is right to raise. 

Eli Nachmany:  Something that I find interesting about this case — You know, we were talking about Chevron itself earlier and some of the other Chevron cases. There’s an interpretation of a term. So you might say, “What’s the meaning of something like stationary source? Does it allow for what EPA, I think, called the bubble concept?” That’s not exactly what’s going on here.

There’s no term at issue. So I’m wondering, even taking out all the extra the verbiage from the part two question presented about controversial powers expressly but narrowly granted elsewhere and the like, is silence even ambiguity in the ordinary Chevron formulation? Should it be thought of that way?

Ryan Mulvey:  No, I don’t think so. I think, as we had addressed before, treating ambiguity and silence as completely separated from one another is probably a misreading of the Chevron decision that it’s silence as a type of ambiguity that really matters. And the best example of that is the undefined statutory term, the sort of classic example. 

You can also think of — I think Justice Kavanaugh has talked about where you might have — And Justice Walker, too, I think, recently, in some opinions has discussed, you could have a statutory provision that tells an agency, “Create reasonable procedures for XYZ.” And reasonableness, by its very nature, has to be ambiguous. 

If Congress went on to specify what reasonableness really, really means, well, then you’re not really imposing a reasonableness standard; you’re defining what the standard actually is in a way that isn’t tied up in the meaning of what is reasonable. So, in those instances, I can see the sort of ambiguity that might — if we accept that we want to keep Chevron, moving to step two. 

But here, where you don’t have that undefined term, you don’t have the silences ambiguity, and then you have, further in the context, explicit provisions in the statute that address the very issue at hand. 

And then, thirdly, on top of it all, the cherry on top is that this is such an extraordinarily unprecedented power that the agency is trying to take upon itself that then also has all these other constitutional implications, like the power of the purse and so forth and taxation, Congress’s power to tax. You know, all of that there, at least—and we go back to then the wording of the question presented—you can see that sort of silence definitely can’t get us to deference.

Eli Nachmany:  I wanted to ask — There’s this excellent Yale Law Journal article that Professor Aditya Bamzai wrote where he suggests there is a history of respect—maybe not deference, but respect—for executive interpretations that are contemporaneous with the passage of the statute, maybe just as evidence of a contemporaneous understanding of the law. 

I wonder if you could talk maybe just in particular about the MSA. Is there any evidence or argument to be made, at least, here of contemporaneity of this agency’s interpretation of the statute and, oh, they made that interpretation when the law was passed; that must be what everyone understood it to mean at the time?   

Ryan Mulvey:  Sure. Yeah, Professor Bamzai, he filed an amicus brief in support of neither party here where he elaborated on those canons of contemporary and customariness, and I don’t think, in this context, either of those canons would get us to the government’s position. So, in this instance, the government has cited the necessary and appropriate clause in the MSA. And the only other instance of an agency’s attempt to impose industry funding outside of the explicit instances describing the statute of foreign fishing, the North Pacific and limited access privilege programs. 

The only other example that I can think of is the groundfish fishery. And when they passed the regulation at issue there, they didn’t cite any statutory authority. They simply just did it. In the 30 years that we have had an MSA provision providing for general authority to require vessels to carry monitors, we have never had an industry-funded monitoring scheme except for those that were explicitly authorized under the North Pacific provision, which was passed in the same set of amendments as the provision giving general authority to require the boats to carry the observers.

We’ve just never seen it outside of those three examples. While the 1990 amendments were pending in the North Pacific, the council and the agency there, they ordered industry funding, but then Congress passed the explicit provision. And I think, in that sense, there’s a sort of cure, but even then, there was no provision yet that the agency was latching onto. So there’s nothing contemporaneous to argue. 

And as our clients have continually said, whenever they tell people about their case, they’ve had monitors for 30 years. They’re always federally funded. They still have federally funded monitors. This is just a novel requirement for a novel type of monitoring above and beyond what the agency has already been doing for a long time.

Eli Nachmany:  I see you using the word novel in there. That’s one that the Court latched onto in West Virginia v. EPA. I have one final question that from the audience here, and it kind of relates to this power of the first question. Audience member asks, “Aren’t these user fees across the federal agencies a form of taxation must originate in the House?” What’s your take on that one?

Ryan Mulvey:  So the user fee issue and the taxation issue, we had raised in the district court. Both in the district court and on appeal, the D.C. Circuit said, “Well, these, these aren’t user fees, and this isn’t a tax because the money isn’t going into the Treasury.” 

And that’s also why they said none of the other agency finance statutes really matter because the agency isn’t collecting anything and then paying out anything to the monitoring service providers. Instead, what’s happening is the agency has created a requirement that you go and you enter into contracts and you pay them directly. 

Now, I think the law should look past that sort of artificial — The agency has set it up. They know that. So they’ve just designed it in a way to bypass all of the rules that would prevent them from doing what they’re doing now if they collected the money directly. 

So I think the Court should have kind of looked beyond that and said, “You can’t get around all of these requirements simply by saying, ‘Oh, we’re not actually collecting the money.'” If it weren’t for the regulation, the monitoring service provider wouldn’t be getting paid. 

And in all of the instances where there’s explicit authority for industry funding, the money is all going through the agency. So the agency knows when it can do this, how it’s supposed to be structured, and they’re just trying to be extra smart and hope that nobody catches them, but hopefully, the Supreme Court holds them to account. 

Eli Nachmany:  Great. Well, thank you, Ryan. This has been a fascinating discussion, and I look forward to seeing what the Supreme Court does. I will hand it over to Chayila from The Federalist Society to close us out. 

Ryan Mulvey:  Thanks for having me.

Chayila Kleist:  Thanks so much. On behalf of both myself and the Regulatory Transparency Project, thanks to Ryan and Ellie for joining us today for this discussion. We really appreciate you taking a section of your afternoon, lending it to us, and lending us your expertise. 

Thank you also to our audience for joining and participating. We welcome listener feedback by email at [email protected]. And, as always, if you’re interested in more from us at RTP, you can continue to follow us at regproject.org or find us in any of the major social media platforms. With that, thank you all for joining us today. We’re adjourned.

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