Chevron U.S.A., Inc. v. Natural Resources Defense Council
Citation: 467 U.S. 837 (U.S. Supreme Court, 1984); overruled by Loper Bright Enterprises v. Raimondo, 603 U.S. ___ (2024)
Facts
The EPA under the Reagan administration adopted a “bubble policy” that defined “stationary source” under the Clean Air Act to encompass an entire industrial plant as if it were under an imaginary bubble, allowing increases in pollution from one source within the plant if offset by decreases at another. The NRDC challenged the definition as contrary to the statute.
Issue
When a statute is ambiguous and an administrative agency has construed it, must courts defer to the agency’s interpretation?
Holding
The Supreme Court unanimously upheld the EPA’s bubble policy and articulated the two-step framework for judicial review of agency statutory interpretations that became the governing standard for forty years.
Rule
The Chevron two-step test: (1) Has Congress directly spoken to the precise question at issue? If yes, the court and agency must give effect to Congress’s unambiguously expressed intent. (2) If the statute is silent or ambiguous, the court must defer to the agency’s interpretation as long as it is reasonable (i.e., a permissible construction of the statute), even if the court would have construed it differently. The rationale is that agencies have expertise and political accountability that courts lack.
Significance
Chevron was the most-cited administrative law case in history and the cornerstone of the administrative state’s interpretive authority for four decades. It was overruled in Loper Bright Enterprises v. Raimondo (2024), in which the Court held that courts must exercise their own independent judgment in interpreting statutes, even ambiguous ones, rather than deferring to agency interpretations. Chevron remains essential to study as the backdrop against which Loper Bright and current administrative law operate.