Chevron deference

In an amicus brief in PDR Network, LLC v. Carlton & Harris Chiropractic Inc. the State and Local Legal Center (SLLC) argues that federal courts should be able to refuse to apply federal agency orders which they deem inapplicable even if the orders are covered by the Hobbs Act. While case sounds obscure, numerous Federal Communications Commission (FCC) orders are covered by the Hobbs Act including the small cell order, which preempt local regulations to facilitate the deployment of small cells for 5G.

The Hobbs Act vests the federal courts of appeals with “exclusive jurisdiction” to “enjoin, set aside, suspend (in whole or in part), or to determine the validity of” certain orders made by the FCC and orders of the Secretary of Agriculture, Secretary of Transportation, Federal Maritime Commission, Atomic Energy Commission, and others.

According to one lower court the Hobbs Act “promotes judicial efficiency, vests an appellate panel rather than a single district judge with the power of agency review, and allows uniform, nationwide interpretation of the federal statute by the centralized expert agency.”

States and local governments have long been skeptical of the requirement that courts defer to agency interpretations of statutes because such deference gives unelected agencies a lot of power. In PDR Network, LLC v. Carlton & Harris Chiropractic Inc. the lower court required something worse: blind adherence to an agency order.

The Hobbs Act vests the federal courts of appeals with “exclusive jurisdiction” to “enjoin, set aside, suspend (in whole or in part), or to determine the validity of” certain orders made by the Federal Communications Commission (FCC) and orders of the Secretary of Agriculture, Secretary of Transportation, Federal Maritime Commission, Atomic Energy Commission, and others.

According to one lower court the Hobbs Act “promotes judicial efficiency, vests an appellate panel rather than a single district judge with the power of agency review, and allows uniform, nationwide interpretation of the federal statute by the centralized expert agency.”

In Coventry Health Care of Missouri v. Nevils the State and Local Legal Center (SLLC) asked the Supreme Court in its amicus brief to rule that Chevron deference does not apply when an agency is construing the scope of a statute’s preemption provision, absent Congress’s assent. The Court didn’t rule on (or even discuss) this issue in its brief, unanimous opinion.

The Court held that the Federal Employees Health Benefits Act (FEHBA) preemption clause overrides state laws prohibiting subrogation and reimbursement and that the preemption clause is consistent with the Supremacy Clause.    

State and local governments would not be disappointed if the Supreme Court overturned Chevron v. NRDC (1984). While overturning Chevron isn’t on the table in Coventry Health Care of Missouri v. Nevils, limiting it is. The State and Local Legal Center (SLLC) asked the Court in its amicus brief to rule that Chevron deference does not apply when an agency is construing the scope of a statute’s preemption provision, absent Congress’s assent.   

In Chevron v. NRDC the Supreme Court held that courts should defer to reasonable agency interpretations of ambiguous statutes. States and local governments generally prefer that courts not defer to federal agency regulations because this deference gives federal agencies a lot of power. 

Every time a federal agency thinks the scope of a preemption clause in federal law is too narrow may it just write a regulation expanding it? That is the heart of the matter in Coventry Health Care of Missouri v. Nevils.

The question of most interest to state and local governments in this case, more technically, is whether Chevron deference applies to an agency’s regulation construing the scope of a statute’s express-preemption provision.