Relentless, Inc. v. Department of Commerce

Issues

Whether statutory silence constitutes an ambiguity under Chevron deference, and whether the court should overturn the landmark administrative law case Chevron v. NRDC.

Oral argument:

January 17, 2024

Court below:

United States Court of Appeals for the First Circuit

This case, along with its companion case Loper Bright Enterprises v. Raimondo, asks the Supreme Court to consider the government’s interpretation of the Magnuson-Stevens Fishery Conservation and Management Act and the reach and constitutionality of Chevron v. Natural Resources Defense Council. Under Chevron, courts defer to reasonable executive agency interpretations of ambiguous statutory language. Relentless, Inc. contends that the partial industry funding component of the government’s at-sea monitors program relies on a faulty interpretation of the governing statute, and that Chevron deference itself is an unconstitutional violation of separation of powers and an abdication of interpretive responsibility by the judiciary. The Department of Commerce counters that its interpretation of the statute is both correct and entitled to deference. The outcome of this case could have seismic consequences for administrative law, statutory interpretation, and the balance of power between the federal judiciary and the administrative state.

Questions as Framed for the Court by the Parties

Whether the court should overrule Chevron v. Natural Resources Defense Council, 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.

Facts

The Magnuson-Stevens Fishery Conservation and Management Act (“MSA”) regulates commercial fishing in the United States. Relentless v. Department of Commerce at 2-3. It establishes eight regional councils to draft fishery management plans and prevent overfishing. Id. All plans are reviewed and published by the Department of Commerce. However, the National Oceanic and Atmospheric Administration (“NOAA”) through the National Marine Fisheries Services (“NMFS”) manages this process. Id. The New England Fishery Management Council (“NEFMC”) oversees Atlantic herring fishing in New England. Id. at 4. For certain fisheries including herring, the NMFS requires government-funded monitors accompany vessels on fishing trips to gather data and implement management plans. Id.

The MSA permits the NMFS to require government monitors on fishing expeditions. Id. However, it is ambiguous on the funding mechanism for the monitors. Id. In 2017, the NEFMC adopted new rules which would provide for partial industry funding of government monitors, specifically daily salary and travel expenses. Id. During the notice and comment period, local fishing company Seafreeze Fleet LLC and its subsidiaries Seafleet Ltd. and Relentless, Inc. (“Relentless”), among other concerned parties, submitted comment letters criticizing the proposal. Id. at 6. Following the adoption of the new rule, Seafreeze and its subsidiaries challenged the regulations in federal district court in Rhode Island. Id.

Seafreeze takes part in the herring, mackerel, butterfish, and squid fisheries. Relentless v. Department of Commerce at 9. Unlike many other fishing ventures in the region, Seafreeze freezes its catch and thus makes significantly longer fishing trips. Id. Additionally, as Seafreeze uses small-mesh bottom trawl gear, it often declares into multiple fisheries before leaving dock. Id. Thus, Seafreeze may declare into the herring fishery on trips where they ultimately catch no herring. Id. Because of these unique aspects of its business model, Seafreeze claims to be uniquely burdened by new regulations that would require partial industry funding of government monitors. Id.

The district court granted summary judgment, finding that under Chevron deference the court must defer to the agency regarding the authorization of industry funding for government monitors. Id. at 10. In cases involving agency interpretation of statutory language, courts apply a “two-step analysis” from Chevron v. National Resources Defense Council. Id. First, the court decides whether statutory language is ambiguous or silent about the issue at hand. Id. at 11. If Congress’ intent is unclear, the court defers to the agency’s interpretation if it is a reasonable construction of the statute. Id. In this case, the court concluded deference was proper because the MSA is ambiguous on the funding question. Id. at 10. Seafreeze appealed this ruling to the Court of Appeals for the First Circuit, which affirmed. Id. at 25-26. Seafreeze then appealed to the United States Supreme Court, which granted certiorari on October 13, 2023. Brief for Petitioner, Relentless, Inc. at 1.

Analysis

CHEVRON’S CONSTITUTIONALITY

Petitioner Relentless argues that Chevron violates the Due Process Clause of the Fifth Amendment. Brief for Petitioner, Relentless, Inc. at 30. Relentless contends that the Due Process Clause requires courts to remain neutral in each case they decide. Id. Chevron violates court neutrality, Relentless explains, because the government is usually a party to cases where courts apply it. Id. Relentless argues that Chevron forces judges to “pre-commit” to rulings that favor the government, a powerful litigant, at the expense of all other parties. Id. at 31.

Relentless claims that Chevron deference allows one of the parties to decide a case, and thus the party’s own rights and obligations, which contravenes fundamental principles of fairness deeply rooted in the common law. Brief for Petitioner at 30. Furthermore, Relentless asserts, government agencies do not have a duty to exercise independent legal judgment like judges do when they interpret statutes. Id. Relentless argues that since the court must defer to the policy decisions of an executive agency, a citizen cannot obtain a fair trial like due process requires. Id. at 32.

Respondent Department of Commerce (“DOC”) argues that courts are inferring legislative intent from Congress rather than giving up their power to the executive when they use Chevron deference. Brief for Respondent, Department of Commerce at 12. When Congress leaves a statute ambiguous, the DOC explains, it impliedly trusts the agency to interpret the ambiguity. Id. The DOC explains that applying Chevron does not compromise a judge’s neutrality. Id. at 39. The DOC describes how the judge remains in charge of proceedings, so the agency does not take away judicial power. Id. As such, the DOC asserts, it does not matter if the law treats agencies favorably – legal schemes are often constructed to favor particular repeat players. Id. at 40.

The DOC likens Chevron to qualified immunity, another doctrine that tends to favor the government in litigation without violating due process or suggesting judge bias. Brief for Respondent at 40. In contrast to Relentless’ argument that Chevron is unfair to private litigants, the DOC argues that agencies are carrying out the will of the American people when they interpret statutes. Id.

JUDICIAL INDEPENDENCE AND LIMITATION

Relentless explains that each branch of government possesses exclusive control over its unique powers. Brief for Petitioner at 15. Relentless concludes that this structure is meant to contrast the intermingled legislative and judicial powers the Founders experienced under British rule. Id. Relentless urges that judges must apply their own independent judgment to each case to remain consistent with their duty to carry out the judicial functions of the federal government. Id. Relentless asserts that Chevron deference improperly delegates judicial power to the executive branch, so it contravenes Article III of the Constitution. Id.

Relentless emphasizes that this independence is what allows the judiciary to be an effective check on the other branches. Id. at 18. During the founding, Relentless explains, no judicial practice similar to Chevron deference ever existed. Id. at 20. Relentless concedes that traditional canons of interpretation include respect for governmental interpretations but maintains that this canon is not deference. Id. at 21. Relentless concludes that Chevron deference violates the judicial duty to exercise independent judgment because it forces judges to uphold governmental interpretations even if they believe the law means something different. Id. at 28.

Rather than overriding judicial independence, the DOC argues, Chevron provides an appropriate framework for judicial decision-making in the agency context. Brief for Respondent at 10. The DOC describes that courts must use their independent judgment to determine whether a statute is ambiguous, and only then do they look to the agency’s interpretation in Chevron step two. Id. at 10. The DOC emphasizes that courts do not rely on Chevron at the first sign of interpretive difficulty – even difficult conundrums can first be solved with the traditional canons of construction. Id. at 14.

The DOC also points out that courts only give Chevron deference to agency decisions that are sufficiently formal, which usually requires a full notice and comment process. Brief for Respondent at 14. Courts still have the power to declare agency interpretations unreasonable if they are incorrect, the DOC continues. Id. Finally, the DOC describes how the major questions doctrine from King v. Burwell limits Congress’ ability to impliedly authorize agency action that would be of huge economic or political significance. Id. The DOC argues that these limits demonstrate that the judiciary does not give up too much power or independence by continuing to grant agency interpretations Chevron deference. Id.

CHEVRON AND STARE DECISIS

Relentless maintains that stare decisis, the principle that requires courts to defer to past decisions, does not bind the Court to adhere to Chevron. Brief for Petitioner at 40. Chevron is a case about the interpretive method that judges use, Relentless explains, rather than a case where an interpretive method is used to create a substantive ruling. Id. Relentless argues that this kind of interpretive case does not have controlling effect on the Court in future cases. Id. Relentless also contends that Chevron undermines the very values that stare decisis is grounded on and thus must be overturned. Brief for Petitioner at 41.

Relentless argues that stare decisis serves the “constitutional ideal” of stability in the rule of law. Id. Chevron damages the law’s stability, Relentless asserts, because it lets agencies decide and change the meaning of ambiguous statutes. Id. Relentless stresses that agencies can disrupt the orderly development of the law by changing their interpretation of statutes and incorrectly interpreting statutory language. Id. This also makes the law less certain, Relentless argues, since an agency’s interpretation in any court case is unpredictable. Id. at 43. Relentless concludes that Chevron’s breadth of application means it is destabilizing many industries and areas of law across all federal government agencies. Id.

The DOC, in contrast, argues that Chevron is so central to administrative law that overruling it would be disruptive and would upset expectations in virtually all fields of regulation. Brief for Respondent at 9. Government agencies have operated under Chevron for decades, the DOC explains, so overruling it could substantially upset federal programs like Social Security. Id. at 10. The DOC points out that Congress has drafted laws for 40 years assuming the agency would be able to interpret them, so overruling Chevron would change the agencies’ ability to apply the statutes according to Congressional intent. Id. at 13. The DOC claims that Congress has been free to alter Chevron at any time since its passage but has not done so. Id. at 10. Because it impliedly has Congressional approval, the DOC contends, stare decisis strongly applies to Chevron. Id.

The DOC also emphasizes the long line of precedent that relies on Chevron. Brief for Respondent at 27. The DOC argues that Relentless must show a particularly strong reason to overrule Chevron because of this increased deference, which it has failed to do. Id. at 10. Furthermore, the DOC claims these interpretive decisions are best left to political institutions, and that forcing courts to start deciding them would disturb government expectations and legal stability. Id. The DOC concludes that Chevron respects agency expertise, promotes national uniformity in administrative law’s application, and makes agency regulations more politically accountable. Id. at 11. The DOC warns that without Chevron, different federal courts across the country could interpret statutory language in disparate ways, which would hinder national agency action. Id. at 17.

Discussion

FISHERIES MANAGEMENT AND REGULATION

The New England Fishermen’s Stewardship Association (“Association”), in support of Relentless, contends that accepting the NMFS’s interpretation of the statute would foist an unreasonable economic burden on the fishing industry. Brief of Amici Curiae New England Fishermen’s Stewardship Association, in Support of Petitioners at 3. Additionally, the Association warns that the NMFS’s implementation creates dangers for both at-sea monitors and fishing vessel crews due to the minimal training at-sea observers are required to receive. Id. at 9-11.

The Conservation Law Foundation (“Foundation”), briefing as amici curiae in the companion case Loper Bright Enterprises v. Raimondo, counters that the NMFS’ regulatory regime is essential to protecting fisheries from overfishing. Brief of Amici Curiae Conservation Law Foundation, in Support of Respondents in Loper Bright Enterprises v. Raimondo, at 3. As the Foundation argues, the express intent of the MSA was to provide for precisely the sort of data collection that the at-sea monitors provide. Id. at 8-9. The Foundation further contends that the industry funding model is not unreasonable and that similar models have been implemented by fishery management councils across the country for decades. Id. at 15-17. As the Foundation argues, the regulatory regime crafted by the NMFS takes pains to ensure that costs shouldered by the industry are reasonable and affordable. Id. at 27-28.

SEPARATION OF POWERS AND THE REACH OF CHEVRON DEFERENCE

The Ohio Chamber of Commerce, in support of Relentless, argues that Chevron was originally conceived as an extension of statutory construction and an application of Congressional intent, but that courts now invoke it far too frequently. Brief of Amici Curiae Ohio Chamber of Commerce, in Support of Petitioners at 9-10. The Chamber of Commerce claims, although truly ambiguous statutes should be rare, courts found statutory ambiguity in a concerning 70% of one sample of cases in which Chevron was applied. Id. at 10. The Chamber of Commerce argues that the extent of deference under Chevron raises normative concerns about who wields “ultimate interpretive authority” within the American constitutional framework under Chevron’s framework. Id. at 10-11.

A group of several former state supreme court justices (“Justices”) build on this explanation of Chevron as implemented, calling it an abdication of judicial responsibility that raises significant separation of powers concerns. Brief of Amici Curiae Former State Supreme Court Justices, in Support of Petitioners at 17-18. The Justices contend, citing to the Framers and the Federalist Papers for support, that institutions frequently favor their own interests and that to allow agencies such interpretative discretion is to allow the “foxes to guard the henhouses.” Id.

The DOC defends Chevron deference as long-standing precedent and, in the words of prior Supreme Court precedent, a “stable background rule against which Congress can legislate.” Brief for Respondent, Department of Commerce at 13. The DOC explains that, in centralizing these interpretations, Chevron preserves uniformity, lessening the confusion that circuit splits may cause and allowing for greater accountability during the notice and comment process. Id. at 17-18. Finally, the DOC rejects the separation of powers concerns that Seafreeze and the amici have raised, arguing that Chevron not only preserves proper separation of powers but also shields judicial decision-making from ideological perversion and politicization when policy questions rooted in broad statutory language are at play. Id. 19-20.

A group of U.S. Senators (“Senators”), briefing as amici curiae in Relentless’s companion case Loper Bright Enterprises v. Raimondo, suggest that the attack on Chevron comes as part of an “industry-driven deregulatory agenda.” Brief of Amici Curiae US Senators, in Support of Respondents in Loper Bright Enterprises v. Raimondo, at 18. Senators contend that Chevron is critical to the continued functioning of the regulatory state which protects the health and safety of millions of Americans. Id. at 7-9. Senators argue that eliminating Chevron would remove critical technical expertise from interpretative decisions present in administrative agencies and would result in static and inflexible implementation of statutes unable to adapt appropriately to changes in the world and our understanding of regulatory needs. Id. at 8-11.