Chevron U.S.A. Inc. v. Natural Resources Defense Council 467 U.S. 837 (1984)
Under the Clean Air Act, nonattainment States were required to permit
"new or modified major stationary sources."
Prior to 1981, EPA defined
the word 'source' as any device in a plan that produced pollution.
In 1981, EPA changed this
definition to allow an existing plant to modify or install equipment that
did not meet standards, as long as the total pollution of the entire
plant did not increase.
aka the 'bubble concept.'
The National Resources Defense
Council (NRDC) sued EPA.
NRDC argued that the EPA
Administrator did not have the authority to change the standard.
As an affected party,
Chevron impleaded into the case on EPA's side.
The Appellate Court found for
NRDC and set aside the ruling. EPA appealed.
The Appellate Court found
that both the plain language of
the Clean Air Act and its legislative history were ambiguous.
The Court found that the
purpose of the Clean Air Act was
to improve air quality. Therefore the Administrator's decision to change
the definition of 'source' contradicted the purpose of the Act, and was
therefore contrary to law.
The US Supreme Court reversed.
The US Supreme Court found
that the courts must defer to the opinion of an Executive Agency (like
EPA) in certain cases.
In order to determine how
much deference the courts are to give to an Agency decision, the court
Whether the Statute is
ambiguous or there is a gap that Congress intended the Agency to fill.
Congress directly spoken, and is the intent clear?"
If so, then the Courts
must defer to Congressional intent.
If Congress' intent is not
clear, is the Agency's interpretation of a Statute is reasonable or
If an Agency's
interpretation is reasonable,
then the Court will defer to the agency's reading of the Statute.
"Reasonable" doesn't mean the way that the court
would decide the issue. Even if the court disagrees with the decision,
as long as the Agency can point to a reasonable reason why they made
the decision, even if it isn't completely persuasive, the court has to
affirm the Agency's judgment.
This process is now known
as the "Chevron two-step".
In this case, the Court
looked to the Clean Air Act and
found that it is ambiguous as to how to define 'source'. Also, the
Agency's interpretation wasn't the only possible interpretation, but it
was certain a reasonable interpretation. Therefore the Court would defer
to the Agency's decision.
The Court felt that if
Congress didn't want the Agency to make their interpretation, they would
have been more clear when writing the Statute.
The Court found that,
"the power of an Administrative Agency to administer a
congressionally created...program necessarily requires the formulation of
policy and the making of rules to fill any gap left, implicitly or
explicitly, by Congress."
Basically, this case said that
the courts need to defer to Administrative Agencies when interpreting
The reasoning is that the
Agency understands the technical specifics and possible implications much
better than the courts ever could, so their interpretation is going to be
This was a shift from the
Court's position in Skidmore v. Swift (323 U.S. 134 (1944)), which had said that an Agency's position
is a good reference point, but should not be considered controlling.
Another reason to defer to
the Agency is that in many cases, Congress simply didn't think about the
specific issue when the bill was written. Having the court make a
decision on what Congress meant, when they hadn't ever focused on the
issue is a legal fiction.
What right does a court
have to override an Agency based on what Congress meant, when it is
pretty likely that Congress never meant anything at all?
This case basically said
that if Congress didn't explicitly decide an issue by Statute, they implicitly
meant that the Agency should decide it for them.
Steps in Interpreting Agency
Statutes, based on the Chevron Doctrine:
Is the Congressional intent
If yes, what is the right
If Congress' intent is
Is the Agency's interpretation
If the Statute gives the
Agency express delegation, is the interpretation non-arbitrary?
If the Statute only
implicit delegation interpretation to the Agency, is the interpretation