Loper Bright Enterprises v. Raimondo is no longer the only Chevron case that the Supreme Court will consider this term. The Court just granted certiorari in a new case—Relentless, Inc. v. Department of Commerce—that will be argued in tandem with Loper Bright. Alongside resolving a recusal issue, adding Relentless to the mix could impact the way the Court approaches writing its opinion. That is because the lower-court opinion in Relentless differs in certain ways from the lower-court opinion in Loper Bright.

The Court is poised to have a monumental administrative law term—on the docket are cases concerning the Consumer Financial Protection Bureau’s funding mechanism, the Securities and Exchange Commission’s adjudicative process, and Chevron deference. For those who are unfamiliar, Chevron deference is a rule of statutory interpretation in cases concerning ambiguous statutes that federal agencies have interpreted. Deriving its name from Chevron v. NRDC (a 1984 case that stands for the principle), Chevron deference requires courts to defer to reasonable agency interpretations of ambiguous statutes.

Earlier this year, the Court granted certiorari in a case called Loper Bright Enterprises v. Raimondo on the following question: Whether the court should overrule Chevron 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. Loper Bright is a case about the Magnuson-Stevens Act and it comes up from the D.C. Circuit. There, a D.C. Circuit panel deferred to the Department of Commerce’s interpretation of the Act: the government may require certain fishing vessels to pay for federal monitoring staff on their boats. (Judge Walker dissented.) Many expected that the Court would use Loper Bright to reject the reasoning of Chevron or at least limit Chevron’s reach. But recent developments have shifted the landscape a bit.

Writing for SCOTUSblog this week, John Elwood highlighted a fascinating piece of news in another Chevron case that could impact Loper Bright: The Court moved up its consideration of Relentless, Inc. v. Department of Commerce to today’s conference. Moving up a case is rare, and it suggested that the Court might have been about to do something unusual. In Relentless, the First Circuit confronted the same statutory interpretation question that the D.C. Circuit did. Like the D.C. Circuit, the First Circuit ruled in the agency’s favor.

Elwood was on to something. Just now, the Court granted certiorari in Relentless on the same Question Presented that it granted in Loper Bright. (The petition for a writ of certiorari in Relentless had submitted another Question Presented—which the Court declined to grant—about the meaning of a term in the Magnuson-Stevens Act.) The Court will now establish a briefing schedule for Relentless that will allow the case to be argued in tandem with Loper Bright.

As Elwood pointed out, granting Relentless has an immediate benefit: the full Court should now get to participate in the case. Because of her recent service on the D.C. Circuit, Justice Jackson is recused from Loper Bright. And while the Court decided Chevron unanimously back in 1984 with just six Justices participating in the case, the Justices may want to have the full Court participate if they are going to do something as momentous as departing from Chevron would now be. In a JREG post earlier today, Donald L.R. Goodson recommended that the Court grant Relentless for this reason.

Still, Relentless is distinguishable from Loper Bright in other respects. In Relentless, the Court now gets to review an entirely new lower court opinion. Writing for two other judges, Judge Kayatta approached the interpretive question a bit differently in Relentless than the D.C. Circuit did in Loper Bright. Two elements of the Relentless opinion merit attention. First, the opinion did not come down cleanly on the question of whether it was applying Chevron Step One or Step Two. Second, Judge Kayatta took a strong view of the burdens that regulated parties are assumed to bear under regulatory schemes. Now that the First Circuit’s opinion is also under review at the Supreme Court as part of the case, the differences between Relentless and Loper Bright’s lower-court opinions could impact the way that the Court writes its own opinion.

Chevron Step One and Step Two

Beginning with the first issue, concerning the Step One/Step Two distinction, the Supreme Court in Chevron set forth a two-step framework for judicial review of agency statutory interpretations. At Step One, courts must give effect to the will of Congress if the statute is clear. Courts progress to Chevron Step Two “if the statute is silent or ambiguous with respect to the specific issue,” at which point the court defers if “the agency’s answer is based on a permissible construction of the statute.”

In Relentless, Judge Kayatta determined that the agency’s interpretation of the Magnuson-Stevens Act was permissible. But the court’s opinion did “not decide whether [to] classify this conclusion as a product of Chevron step one or step two.” By contrast, the D.C. Circuit panel in Loper Bright affirmatively grounded its decision in Step-Two deference after deciding that there may be “some question as to Congress’s intent.” While the First Circuit’s opinion reads like Step-Two deference, the process of formally proceeding past Chevron Step One plays a pivotal role in statutory interpretation in agency cases.

Chevron has come to stand for a deferential review posture in agency statutory interpretation cases, but a close reading of Chevron suggests that Step Two’s deference is supposed to be a last resort. In Footnote Nine of the Chevron opinion, the Court explained that “[t]he judiciary is the final authority on issues of statutory construction and must reject administrative constructions which are contrary to clear congressional intent.” To that end, the Court wrote, “[i]f a court, employing traditional tools of statutory construction, ascertains that Congress had an intention on the precise question at issue, that intention is the law and must be given effect.” As Justice Gorsuch has explained, this footnote constituted a restatement of the traditional rule.

The obligation to employ the traditional tools of statutory interpretation is a serious one. Justice Kavanaugh has described himself as a “footnote 9 Chevron person,” noting that application of the traditional tools often yields an answer to the statutory question. Judge Kethledge has opined that doing hard work at Step One (to determine whether a statute is truly ambiguous) has independent value. Likening statutory interpretation to the tough task of clearing out undergrowth when hunting for grouse, Judge Kethledge writes that “in agency cases it often seems that the court pauses only briefly at step one, without much effort to hack through the undergrowth, before proceeding straightaway down the cleared path of step two.” In Judge Kethledge’s view, a less rigorous approach at Step One might lead to agencies doing sloppier work, to say nothing of judges failing to give effect to the statute’s true (if sometimes difficult to ascertain) meaning.

Wherever the Court comes out on the Chevron question, the blurring of the line between Step One and Step Two in Relentless offers the Supreme Court an opportunity to laud the values of hacking through the undergrowth when doing statutory interpretation. Some scholars have suggested that Chevron only has one step, but even if Chevron survives this Term, requiring at least a threshold determination of genuine ambiguity at Step One is a bulwark against defaulting too quickly to the agency’s view. Resorting to Step Two only when absolutely necessary helps to stem the tide of what one scholar has called “Chevron Bias”—the idea that Chevron deference effectuates a systematic judicial bias in favor of the government.

The Presumption of Regulated Parties Bearing Their Own Costs

Moving onto a second distinction between the First Circuit in Relentless and the D.C. Circuit in Loper Bright, one element of the First Circuit’s approach to regulatory statutes merits further consideration. Recall that the issue in Relentless—as in Loper Bright—is whether the Magnuson-Stevens Act authorizes the government to make the fishing industry pay for the federal monitoring staff on fishing boats. On this precise question, the statute is silent.

In attempting to determine the answer to the question, the First Circuit mentioned a “default presumption that a regulated party presumably bears its own costs.” To be sure, Judge Kayatta’s opinion noted that “this is not a case in which the agency need rely only on [that] default presumption,” concluding that “the statutory text provides affirmative confirmation that Congress presumed that vessel owners would bear the cost of complying with monitoring requirements.” But the First Circuit’s phrasing of the presumption differs from that of the D.C. Circuit—as the D.C. Circuit put it in Loper Bright, “[w]hen an agency establishes regulatory requirements, regulated parties generally bear the costs of complying with them.”

The discrepancy between the two opinions on this issue concerns the scope of compliance costs. Citing Michigan v. EPA’s understanding of such costs, the D.C. Circuit noted that “[n]othing in the record definitively establishes whether at-sea monitors are the type of regulatory compliance cost that might fall on fishing vessels by default or whether Congress would have legislated with that assumption.” Meanwhile, the First Circuit rejected the plaintiffs’ argument “that the requirement to pay for a monitor … is not a ‘traditional regulatory cost’ and differs from an ordinary instance of requiring a regulated party to bear its own costs.” The plaintiffs had attempted to draw a line between “[t]he daily salary of a monitor” and “the cost inflicted by other regulatory requirements, such as those mandating permits or particular fishing equipment.”

The First Circuit’s broad understanding of the scope of compliance costs would give the government significant latitude to impose substantial burdens on regulated entities when a statute is silent. Analogizing the salary-payment requirement to “an SEC requirement to submit independently audited financials impos[ing] on the regulated entity the cost of paying an independent accountant,” the First Circuit declined to distinguish between paying monitors’ salaries and paying for such things as gear or permits. Giving the government such flexibility could explode regulatory costs; if the government can shift away the cost of employing enforcement personnel, carrying out burdensome regulatory programs is less of a double-edged sword for the state.

If the Court ends up sending back Relentless with instructions to interpret the statute sans deference, perhaps the Court could give some indication whether this default regulatory-cost presumption is an appropriate part of the statutory-interpretation toolbox in cases involving monitors’ salaries. While the First Circuit did not base its decision entirely on the presumption, it did note that the agency was not relying only on the presumption, suggesting that the presumption may have played some role in the court’s interpretive process.

What’s Next

The Court has indicated that Relentless will be argued in tandem with Loper Bright in the January 2024 argument session. Keep an eye on whether the briefing highlights some of the differences between the lower-court opinions in Relentless and Loper Bright in spite of the identical Question Presented in the two cases. While these developments might not change the outcome of the case, they could impact the way that the opinion is ultimately written. And given the push for a rigorous judicial approach to statutory interpretation in agency cases, a shift from “Chevron deference” to “Relentless review” could now end up being the upshot of October Term 2023 for administrative law.

Eli Nachmany recently completed a clerkship for Judge Steven J. Menashi on the U.S. Court of Appeals for the Second Circuit. He graduated magna cum laude from Harvard Law School, where he served as Editor-in-Chief of the Harvard Journal of Law & Public Policy.