The Supreme Court has knocked the underpinnings out from under the federal courts’ traditional “Chevron” deference to agency interpretations of unclear statutes, which means it will be harder for the Federal Communications Commission to defend its regulatory decisions — like the return of network neutrality rules, for example — against legal challenges.

The court's conservative majority held that the Administrative Procedures Act “requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority.”

Further, the Supremes said, the court “may not defer to an agency interpretation of the law simply because a statute is ambiguous.”

The doctrine of Chevron deference, established by the Supreme Court in the 1984 case of Chevron U.S.A., Inc. vs. Natural Resources Defense Council, established the legal test for when courts should defer to the expertise of a regulatory agency. In case there was any question about the impact on Chevron, the court made it clear, saying, “Chevon is overruled.”

Also Read: Gorsuch No Fan of Chevron Deference

The fact that a statute is ambiguous does not necessarily mean Congress meant for the agency, rather than the court, to resolve the issue, the Supremes said.

Bottom line, the court said, was that the Chevron doctrine is misguided because federal agencies, like the FCC, have no special competence in resolving statutory ambiguity, while courts do.

While the Biden administration’s defense of the doctrine pointed to the traditional argument that agencies have subject matter expertise that courts do not, the majority of the justices said Chevron deference swept in decisions that had little to do with an agency’s subject matter expertise.

“Chevron was a judicial invention that required judges to disregard their statutory duties. And the only way to 'ensure that the law will not merely change erratically, but will develop in a principled and intelligible fashion,' is for us to leave Chevron behind," wrote Chief Justice John Roberts for the majority.

Writing in dissent, Justice Elena Kagan said that while the ruling says challenges to agency decisions will still have to find some “special justification” for challenging an agency interpretation [like what constitutes a non-neutral internet], “courts motivated to overrule an old Chevron-based decision can always come up with something to label a ‘special justification.’ ” 

A rule of judicial humility gives way to a rule of judicial hubris, Kagan added. "Because agencies are ‘experts in the field,’ ” she said. “And because they are part of a political branch, with a claim to making interstitial policy. And because Congress has charged them, not us, with administering the statutes containing the open questions. At its core, Chevron is about respecting that allocation of responsibility — the conferral of primary authority over regulatory matters to agencies, not courts. Today, the majority does not respect that judgment."

In the 2005 Brand X decision, which was about the classification of Internet access service, the Supreme Court ruled that Chevron deference trumped an appeals court decision because that court had found the statute vague and, in such cases, the agency is due deference. The FCC had concluded that Internet access was an information service, not a telecom service subject to mandatory access.

The FCC argued in defending its original Open Internet Order that its authority to regulate ISPs as it did in the net neutrality rules stemmed from Chevron deference. ISPs disagreed.

Now the Supreme Court has, too.

The Supreme Court has agreed to hear a case early next year that could impact how much regulatory discretion the FCC has over the communications industry.

The court agreed Friday to hear the case of Relentless Inc., et al. v. Dept. of Commerce, et al. The case is about a federal rule requiring fishing companies to pay for government monitoring of their herring catches.

The New Civil Liberties Alliance (NCLA) challenged the rule as beyond the regulatory scope Congress gave the U.S. Department of Commerce’s National Oceanic and Atmospheric Administration (NOAA) and its National Marine Fisheries Service (NOAA Fisheries), which implemented the rule.

While the case may be about fish monitors, it is also about the Chevron doctrine, which is a principle of administrative law that holds that courts should give deference to a regulatory agency’s subject matter expertise when it comes to interpreting unclear statutes.

The lack of clarity most germane to the communications industry is whether the Federal Communications Commission has the remit from Congress to decide whether broadband is a Title I information service, which is not subject to common carrier regulation, or a Title II telecommunications service, which is.

In the 2005 Brand X decision, which was about the classification of internet access service, the Supreme Court ruled that Chevron deference trumped an appeals court decision and that the appeals court should have given deference to the FCC's conclusion that internet access was an information service, not a telecom service subject to mandatory access.

The FCC argued in defending its original Open Internet Order that its authority to regulate ISPs as it did in the net neutrality rules stemmed from Chevron deference. ISPs disagreed.

According to Ballotpedia, all nine Supreme Court justices have signed on to cases that call into question the doctrine.

“Our clients have persevered in this suit relentlessly, you might say, and we are eager to reverse the error of the lower courts and remove the unfair and unnecessary thumb on the scale for bureaucracy against citizens that Chevron deference inflicts on them when they face their government in court,” John Vecchione, senior litigation counsel for NCLA, said.

WASHINGTON — Limited-government groups are taking aim at so-called Chevron deference, a legal principle that requires appeals courts to defer to a government agency’s interpretation of a legal statue that agency is tasked with enforcing, unless that interpretation is judged to be unreasonable.

The most recent such ruling regarding the Federal Communications Commission — which the groups targeted in a joint letter to Congress — was the U.S. Court of Appeals for the D.C. Circuit’s ruling upholding essentially all of the agency’s decisions in reclassifying broadband Internet access as a Title II service under the Communications Act, subject to common-carrier regulations.

In its 1984 decision in Chevron v. the Natural Resources Defense Council, the Supreme Court said that federal agencies were generally granted deference in interpreting ambiguous statutes given their subject matter expertise. In the case of the Open Internet order, the D.C. Circuit did not rule on the wisdom of that reclassification, only on whether the FCC had exceeded authority in interpreting its ability to regulate Internet access under the prevailing statute.

In their letter, more than a dozen groups including Tech Freedom, the Taxpayer Protection Alliance and the appropriately titled Less Government said they wanted Congress to check “regulatory overreach,” such as the FCC’s Open Internet order, by passing the Separation of Powers Restoration Act (SOPRA). The bill — of which there are House and Senate versions —is a Republican-backed effort to “clarify that the Administrative Procedure Act requires courts to conduct a new review of relevant questions of law when evaluating agency regulations — rather than simply deferring to the agency’s judgment.”

The APA is the law laying out how federal agencies can make their rulings. For instance, they can't be arbitrary and capricious.

“The FCC’s Open Internet Order is just one of many instances where Chevron deference has enabled gross regulatory overreach,” the groups said. “SOPRA would prevent administrative agencies from effectively rewriting legislation to suit their purposes — often driven by politics — and restore legislative power to the American people’s elected representatives in Congress.”

President Obama very publicly pushed the FCC to reclassify ISPs as common carriers at a time when the FCC still appeared to be leaning toward not doing so.