Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. Totally Explained

Everything about Chevron U S A Inc V Natural Resources Defense Council Inc totally explained

Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), was a case in which the United States Supreme Court set forth the legal analysis for determining whether to grant deference to a government agency's interpretation of its own statutory mandate. Chevron is the Court's clearest articulation of the doctrine of "administrative deference," to the point that the Court itself has used the phrase "Chevron deference" in more recent cases.

Background

Under the Supreme Court's ruling in Marbury v. Madison, 5 U.S. (1 Cranch) 137 (1803), United States federal courts have the authority to judicially review the statutes enacted by Congress, and declare a statute invalid if it violates the Constitution. But the Constitution sets no express limits on how much federal authority can be delegated to a government agency. Rather, limits on the authority granted to a federal agency occur within the statutes enacted by Congress.

Facts

Congress amended the Clean Air Act in 1977 to address states that had failed to attain the air quality standards established by the Environmental Protection Agency (EPA) (Defendant). "The amended Clean Air Act required these 'nonattainment' States to establish a permit program regulating 'new or modified major stationary sources' of air pollution." 467 U.S. at 840. During the Carter administration, the EPA defined a source as any device in a plant that produced pollution. In 1981, after Ronald Reagan's election, the EPA adopted a new definition that allowed an existing plant to get permits for new equipment that didn't meet standards as long as the total emissions from the plant itself didn't increase. The Natural Resources Defense Council (NRDC), an environmental protection group, challenged the EPA regulation in federal court. Chevron, an affected party, appealed the lower court's decision.

Issue

The issue facing the Chevron court, therefore, was what standard of review should be applied by a court to a government agency's own reading of a statute that gives that agency its authority to act.

Holding

The Court, in an opinion by Justice John Paul Stevens, upheld the EPA's interpretation. A two-part analysis was born from the Chevron decision (called the "Chevron two-step test"), where a reviewing court determines:
(1) Whether the statute is ambiguous or there's a gap that Congress intended the agency to fill.
(2) If so, whether the agency's interpretation of a statute is reasonable or permissible. If an agency's interpretation is reasonable, then the court will defer to the agency's reading of the statute.

Importance

Chevron is probably the most frequently cited case in American administrative law, though some scholars suggest that the decision has had little impact on the Supreme Court jurisprudence. An October 2007 citation check on the LexisNexis Shepard's citation service revealed that Chevron has been cited over 16,260 times in court opinions, law review articles, and other secondary sources.
Note that three recent decisions of the Supreme Court may limit the scope of administrative agency actions that receive Chevron deference to agency decisions that have the "force of law." This new doctrine is sometimes referred to as "Chevron step zero." Thus, for example, an agency that uses the formal "notice and comment" provisions of § 553 of the Administrative Procedure Act would be likely to receive Chevron deference, while an informal letter sent by an agency, such as an SEC "no-action" letter, would not.. However, an agency action that doesn't receive Chevron deference may still receive deference under the old standard of Skidmore v. Swift & Co., 323 U.S. 134 (1944).

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