Once upon a time, conservative jurists were the best friends to federal regulatory agencies such as the Surface Transportation Board (STB). When those agencies pushed the boundaries of their decision-making independence, federal courts considered them experts in their field and accordingly deferred to their interpretations of the statutes they administered.
Activist STB Chairman Martin J. Oberman and his colleagues, currently contemplating using the STB’s quasi-legislative authority to increase rail competition, may soon test the permanence of that judicial deference. The trigger would be STB imposition of a reciprocal switching mandate or the STB’s strengthening of an ambiguously worded statutory provision known as the common carrier responsibility. A railroad judicial appeal likely would follow.
To be tested is a 1984 Supreme Court decision, Chevron USA v. Natural Resources Defense Council, written by former Justice John Paul Stevens, then considered part of the Court’s liberal wing. The decision—creating what is known as the Chevron Doctrine—later was celebrated by one of the court’s more conservative justices, the late Antonin Scalia, and all seemed well for activist federal regulatory agencies.
That 1984 decision held that expert federal regulatory agencies such as the STB—not federal courts—should be the primary interpreters of statutes that Congress authorized those agencies to administer. Federal regulatory agencies, holds the Chevron Doctrine, should be afforded deference in their rulemakings even if they differ from what the court considers to be the best interpretation, except where the statutory language permits only one interpretation.
Such “broad delegation” by Congress of regulatory authority, wrote Scalia in a 1989 Duke Law Journal article (“Judicial Deference to Administrative Interpretations of Law”), “is the hallmark of the modern administrative state”—a recognition that society had grown so complex as to justify expert federal regulatory agencies filling in the details of congressional legislation.
An example of the courts’ so-called Chevron Deference being a best friend to rail regulators is a July 2000 decision of the District of Columbia Circuit Court of Appeals upholding the STB’s imposing of a 15-month moratorium on railroad mergers to give the agency time to write new merger rules.
In its brief to the court, the STB said, “Congress delegated to the Board exclusive and broad authority to determine whether rail mergers are in the public interest. In view of this broad delegation, Congress could not have intended to bar the Board from placing a temporary hold on applications for approval of mergers in the extraordinary circumstances the agency faced here.”
In considering whether the STB exceeded its congressionally delegated authority, the court majority ruled the STB was “within the bounds” and its merger moratorium “was neither arbitrary and capricious, nor otherwise improper”—that “regulatory agencies may defer actions mandated by statute [such as approving merger applications in a timely manner] when necessary to realize broader statutory objectives.”
Many conservative jurists previously supportive of Chevron Deference “now disavow” it, says Harvard Law Professor Cass R. Sunstein in a review of a new book by Columbia University Law Professor Thomas W. Merrill (The Chevron Doctrine: Its Rise and Fall, and the Future of the Administrative State). Merrill was once an attorney with the law firm Sidley & Austin (1979-1987) where he worked on railroad issues—his clients including Burlington Northern Railroad (now BNSF).
Conservatives nowadays, wrote Suntsein in the May 26 New York Review of Books, have adopted the view “that much of the modern administrative state is unconstitutional and that there is something seriously wrong with a situation in which major policy decisions are made by [federal regulatory] agencies instead of by Congress.”
George Washington University Public Interest Law Professor Jonathan Turley, in a 2013 Washington Post opinion column, calculated that “the vast majority” of federal government commands affecting society “are not passed by Congress but are issued as regulations, crafted largely by thousands of unnamed, unreachable bureaucrats. Although Congress retains oversight of regulatory agencies,” Turley wrote that “Capitol Hill’s relatively small staff is incapable of exerting oversight on more than a small percentage of agency actions.”
Actually, decision-making independence was slow in arriving for STB predecessor ICC. Between the 1887 creation of the ICC and into the early years of the 20th century, federal judges serially reversed ICC decisions after reinterpreting facts of individual cases, including the ICC’s interpretations of the very statute (Interstate Commerce Act) it was created to administer.
Not until 1906 (Hepburn Act) were federal courts instructed by Congress to enforce ICC orders “properly made and duly served.” A step backwards was taken in 1910 when Congress created a ill-fated Commerce Court to review ICC decisions. The court reconsidered factual questions already decided by the ICC and acted more as a trial court than an appellate tribunal. The Commerce Court was dissolved by Congress three years following its creation.
In 1928, the Supreme Court reinforced ICC decision-making independence, ruling (J.W. Hampton v. U.S.) that congressional delegation of administrative powers is constitutional so long as Congress provides “intelligible” guidance “according to common sense and the inherent necessities of government coordination.”
ICC decision-making independence was reinforced in 1946 by the Administrative Procedure Act, providing that an order of a federal regulatory agency is presumed valid unless shown to be arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law. Federal regulatory agencies also were required to solicit and consider public comment prior to promulgating new rules.
Then came the Supreme Court’s 1984 Chevron Doctrine, butressed by a 1989 decision (Mistretta v. U.S) that Congress “simply cannot do its job absent an ability to delegate power under broad general directives.”
Yet the Court’s current conservative majority may be poised to curtail and even overturn the Chevron Doctrine—being of the opinion that federal regulatory agencies, despite their expertise, do not know best. Three of those justices are Clarence Thomas, Neil M. Gorsuch and Bret Kavanaugh.
In 2015, Thomas wrote in a concurring opinion (Michigan v. EPA) that there are “serious questions about the constitutionality of our broader practice to deferring to agency interpretations of federal statutes.”
In 2016, while a judge on the 10th Circuit Court of Appeals, now-Justice Gorsuch wrote (Gutierrez-Brizuela v. Lynch), “Maybe the time has come to face the behemoth.”
As for Kavanaugh, Stanford University Law Professor Michael W. McConnell wrote in the July 2018 Hoover Institution Defining Ideas (“Kavanaugh and the Chevron Doctrine”) that Kavanaugh (along with Gorsuch) considers Chevron Deference “an abdication of the Court’s [Constitutional] duty to independently interpret the law.”
And writing in the September 2018 Regulatory Review, University of Georgia Law Professors Kent Barnett and Christina L. Boyd, and Ohio State University Law Professor Christopher J. Walker (“Judge Kavanaugh, Chevron Deference and the Supreme Court”), reported that as a federal judge, Kavanaugh “expressed support” for “reining in” Chevron Deference.
Of the remaining six justices, there are three other conservatives perhaps poised to curtail or overturn the Chevron Doctrine—Chief Justice John Roberts, Samuel Alito and Amy Coney Barrett.
In a dissent to a 2013 decision written by Scalia (Arlington v. FCC), Roberts and Alito said, “The danger posed by the growing power of the administrative state cannot be dismissed.” In a separate 2018 dissent (Pereira v. Sessions), Alito referred to Chevron Deference as “an important, frequently invoked, once celebrated [but] now increasingly maligned precedent.”
Writing in the February 2021 Duke Law Journal (“The Future of Chevron Deference”) University of Minnesota Law Professor Kristin E. Hickman and Brigham Young University Law Professor Aaron L. Nielson said, “Both the upsurge of ‘anti-administrativist’ rhetoric in recent years and the elevation of Justice Amy Coney Barrett—whose exact views are unknown, but who many predict will be less pro-Chevron than the late Justice Ruth Bader Ginsburg—have left some wondering whether Chevron is long for this world.”
The STB and shippers can be sure that railroads are aware of the threat an increasingly conservative judiciary poses to Chevron Deference, and are already planning their court appeals of anticipated STB rulemakings they oppose.
Railway Age Capitol Hill Contributing Editor Frank N. Wilner is a former assistant vice president for policy at the Association of American Railroads, a former STB chief of staff and a former president of the STB bar association. His latest book, “Railroads & Economic Regulation,” delayed by COVID-related production issues, is now scheduled for publication by late summer.