Early this week, the Supreme Court announced that it will hear a case aimed squarely at killing off the Chevron deference — the nearly-four-decade-old legal tool that gives federal agencies wide-ranging power to defend environmental rules in court.
But how did that case come about, and what could overruling the Chevron deference mean for government agencies, businesses, and us as citizens?
In this episode, Dylan breaks down Loper Bright Enterprises v. Raimondo (which explicitly asks whether the Supreme Court should overrule Chevron), the making of the Chevron deference, and where the Supreme Court’s ability to declare laws constitutional actually comes from.
- [02:24] The three branches of government
- [04:08] The fourth unconstitutional branch of government
- [08:56] How the Chevron deference came about
- [12:03] The two-step test to assess whether a federal agency has overstepped its legal authority
- [16:41] The implications of the Loper Bright Enterprises v. Raimondo case
- [18:54] How the Supreme Court got the ability to rule what’s constitutional or unconstitutional
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[00:00:00] Intro: Forget the civilized path. It’s time to break the chains of debt and dependency, take control of our financial lives, and live free. This is the Fiscally Savage Podcast.
[00:00:16] Dylan Bain: Hello and welcome to Fiscally Savage. I’m your host, Dylan Bain. Happy Friday, everybody. If you’re new here on these Friday shows, we always try to take something in the news and go one step deeper. And so today on this Friday on the 5th of May, I know that each and every single one of my listeners is burning to know what fishing, oil production, and a dispute over a warrant towards the justice of the peace all have to do with one another. And today, ladies and gentlemen, we’re gonna be answering that question because it’s relevant to our story as a nation today because we have gotten news this week that the Supreme Court of the United States is going to be taking up a case called Loper Bright Enterprises v. Raimondo, which will actually be striking at the heart of administrative law in the United States with attacking something known as the Chevron deference.
[00:01:12] Now, that’s a lot of words. So let’s just start off by explaining a few things. For starters, the case name in this case is Loper Bright Enterprises v. Raimondo, and that is the like legal name of the case that’s being brought to the Supreme Court. What’s at stake here is that Loper Bright is a family-owned herring fishing company in New England. They basically will have to go out and they harvest fish that then get packaged and sold. The problem here is is that the National Marine Fisheries Service has a regulation that requires these boats to allow an additional person on board to serve as a monitor and track that they are in fact fishing in compliance with federal regulations. The issue that Loper has with this is not necessarily the person, but the fact that they’re also then required to pay that person’s salary, which is about $700 a day or 20% of their net fishing profits. Obviously, Loper Bright has taken issue with this, so they’re suing the person in charge of the National Marine Fisheries Service, who in this case is Gina Raimondo, stating that she’s overstepped her constitutional authority and this case now has gone all the way up to the Supreme Court.
[00:02:24] And I think it’s important to understand — and to kind of go back to a high school civics lessons — to understand that there under the Constitution are only three branches of government: the legislative branch, the executive branch, and the judicial branch. The legislative branch writes the laws, the executive branch enforces the laws, and the judicial branch interprets the laws. And that is how the constitutional framework for the United States was roughly set up. And I say “roughly” because as with so many different things, the language in the Constitution is both unclear and archaic, which means that there’s a lot of room for wiggle in just about everything that’s written there. One of the things in modern politics that I think is always entertaining is when people point and be like, “But what does it say in the Constitution?” Well, the Constitution is riddled with contradictions and as are literally every law. A purely textual basis is no way to run literally anything from accounting standards to corporations to governments. And of course there’s always, within any organization, there are just different subsets of that organization that have their own rules and their own regulations that they’re going to abide by and to enforce. So for example, you might work in a corporation that’s governed by a set of corporate bylaws. But one of the business units within that corporation might have a completely different set that they then use to govern their operations and the operations of everyone who engages them for services. The United States federal government is no different, so it’s very common for people to say that there’s actually a fourth and in more hard-line viewpoint, an unconstitutional branch of government, which is the administrative branch of the government, also known as the administrative state.
[00:04:08] What is the administrative state? Well, go back to your constitutional lesson and you’ll understand that there’s the legislative branch which writes laws. Now, if there’s one thing that I think we can all agree on Congress is that they’re full of a bunch of people who have no business leading anybody or anything because they cannot be trusted with anything and they’re all more interested in making themselves rich than they are in like, you know, doing good things for America. I mean, how corrupt and bad do you have to be that AOC and Matt Gaetz are co-sponsoring a bill that’s on the floor of the House of Representatives right now as I’m recording this to ban members of Congress from trading and owning individual stocks? Like holy shit. That is just incredible that you have gone and become so corrupt that you can get those two to agree on anything up to and including the necessity to continue to breathe. But I digress. When the legislative branch writes a law, it is rarely written in plain English, and oftentimes they have a general concept of what they’re trying to do but not necessarily specifics. The problem is is that once it passes both the House and the Senate and is signed into law by the president or the veto of the president is overridden, that then becomes the law of the land, which the executive branch is legally required to then enforce. When the executive branch has to enforce an ambiguous law, they typically will hand it off to the various cabinet-level departments in order for them to figure out what this law was supposed to mean, what was the intent of it, and how do we go about enforcing it. Those cabinet-level positions? That’s the administrative state.
[00:05:54] So we already mentioned the National Marine Fisheries Service. That’s one example. But the EPA is another really big, bad boogeyman that people like to trot out. The Consumer Financial Protection Bureau is another part of the administration state. Where the EPA is in theory protecting the environment, the CFPB is in theory protecting consumers against large financial institutions. The FDA, the Food and Drug Administration, are both examples of other different parts of the administrative state. So what each one of these are doing is they’re responding to a statute that was written by Congress that authorized their existence in the first place. And because they have ambiguous language, they have to go out and try to interpret something.
[00:06:37] So this case of Loper Bright versus Raimondo in front of the Supreme Court is challenging something called the Chevron deference, which is another Supreme Court ruling that applies to this administrative state. Because remember the case before the court is arguing that the government did not have the authority to make them actually have to pay the salaries of these observers that they’re forced to have on their boats. And they’re now pointing back and saying, no, no, no. This precedent, the Chevron deference, is in fact unconstitutional. We want you to reexamine it.
[00:07:10] Which then brings us to the obvious question: what the hell is the Chevron deference? So again, we’re kind of getting into these esoteric laws. But let’s just stop and think about this. This would overturn 40 years of precedent within the court systems. I mean, this would be a very big deal, and our current state is we have federal agencies that are passing rules and regulations that then are enforceable in administrative court that directly affect us as Americans. And you might say, well, I’ve never heard any of this, but here’s the reality: the Department of Transportation is one such agency. And when every time you get in your car, every aspect of the car, from the safety rating to the type of metal that’s used in, you know, the pipe that goes down to your fuel tank to your seat belts to the very radio waves themselves, if you are listening to the radio, or how your car is interacting on the highway — every single aspect of that is subject to the rules and regulations as put forth by the various entities that report up through the Department of Transportation. Every time you go to the grocery store, there is a menagerie of things that the United States Department of Agriculture and its attendant, you know, different administrative entities are all working in concert to deliver you food. So when you’re at the grocery store, your concern is, what am I going to have for dinner, not is this can of beans going to kill me. Because before the FDA, that was a realistic concern. And so this is the hidden part of so much that goes on in our lives. How do you know that the water you’re drinking is even safe or the air you’re breathing isn’t giving you cancer? The answer to that question lies in the administrative state of the United States government, which of course is subject to the Chevron deference.
[00:08:56] So what is the Chevron deference and why is it that people are so up in arms about it? For example, a lot of libertarians — and I am generally very libertarian-minded — are really cheering the fact that the Supreme Court might strike down the Chevron deference. The Chevron deference was a ruling in the case the Chevron U.S.A. versus the Natural Resources Defense Council. Essentially, what had happened here is that the EPA had made a ruling based upon the Clean Air Act. Now, if you remember, the Clean Air Act was passed under the Nixon administration and actually created agencies like the EPA, that is, the Environmental Protection Agency, to enforce Congress’ mandates as it applied to the act that they passed called the Clean Air Act. So what was it that Congress had written into the Clean Air Act that they were then looking at and saying, okay, we can use this part of the law to tell Chevron in this particular case how they’re allowed to pollute the air around their various oil refineries. And here is the phrase verbatim out of the Clean Air Act that the EPA was given as guidance from Congress in order to try to figure out what to do in terms of regulation of air quality for various polluting sources. And I quote. Quote, protect and enhance the quality of the nation’s air resources, end quote. Holy shit. Congress is more incompetent than even I thought. And that’s saying something.
[00:10:30] Anyway, this is what the EPA has to go on. And so that’s not clear at all because what constitutes “protect” and what constitutes “enhance” and what constitutes “quality” and what constitutes “the nation’s air resources” are all up for massive debate. And you might be sitting there going, well, it just means that people can’t put shit in the air. But I would argue that, well, does that ban camp fires or gas stoves, which is now suddenly a hot topic? What about lead gasoline, which was a thing for a long time? At what point do we balance out the economics of, well, that refinery is providing jobs to people versus it’s also poisoning our kids. So where is that balance? That’s nowhere in the statute. And so the EPA had come up with a rule that said, alright, we’re just gonna treat each plant as a total bubble, as one entity, and we’re gonna try to regulate that total plant. And the Natural Resources Defense Council said, no, no, no. Like Congress wanted you to protect the entire thing, so you gotta look at each and every individual emission pipe that was on that oil refinery. And they went to court, and the Supreme Court ended up issuing a ruling that became known as the Chevron deference. So what that ended up saying was that the courts would assess the law as it pertains to the rules and regulations that were created by these agencies ’cause remember the EPA was handed by Congress the phrase “protect and enhance the quality of the nation’s air resources,” and that was it. And now, they’re trying to make laws.
[00:12:03] And so the Supreme Court in the Chevron deference basically said that there’s a two-step test in assessing whether or not a federal agency has overstepped its legal authority. Step one was to determine whether the statute was clear and unambiguous. So in the case of the Clean Air Act, the phrase “protect and enhance the quality of the nation’s air resources” is extraordinarily ambiguous, and it is anything from clear as to what that even means. One of the things that’s popular right now to discuss is does the CO2 emissions actually constitute air pollution. Yes or no? I had — I have extremely mixed feelings on this, but let’s just say for the moment it’s not my place to actually decide. But this happens with Congress a lot because what would happen if they passed a food purity act that said that your food had to be free of benzene and this chemical and this chemical and this chemical and then other cancer-causing chemicals, right? So they listed — maybe they listed out three chemicals and then put a blanket term in there. Well, what constitutes cancer-causing? What threshold do we consider something a carcinogen or not? And what happens if something that at the time the law was passed we thought was completely safe, but only in the retrospect as our knowledge base has increased has shown to in fact cause cancer? And you can kind of see how this works because for businesses, they want to have certainty around what they’re doing. So if they say, all right, well, you know, the EPA has come in and the FDA has come in and they’ve said that this liner for this can of beans is completely safe. And they start using it and they use it for 15 years. And then in 15 years later, we’re like, oh, yeah. That liner actually causes stomach cancer. And then, they’ll come back and say, no, no, no. Like you’re just changing the rules and changing our operations and impacting our bottom line and blah, blah, blah. Fair enough. But what did the law say? So the court’s gonna go back and say, well, the law wasn’t exactly clear because it said the “other cancer-causing chemicals.”
[00:14:10] Which then brings you to step two, which is assess whether the agency’s interpretation is reasonable. The other way you can say this is that is it reasonable to have constructed and construed the meaning of the legislation based upon everything that we know about how the legislation was passed and Congress’ intentions at that time? And so in the case of “other cancer-causing chemicals,” the Supreme Court would probably rule that like, okay, well, if we can prove that this is a carcinogen, then yes, this passes the step two test.
[00:14:42] But there’s a lot of ambiguity in this test still because at the end of the day, legal language is not exactly the world’s most precise thing. And this has profound impacts on everyday Americans, both in the positive, which is when, you know, these regulatory agencies actually protect the public interest, and then in the negative when they completely go off the rails and are doing things like, you know, distorting markets and putting, you know, otherwise honest places out of business or making it harder for them to operate if they’re a small operation in favor of large, faceless, soulless corporations. And you can kind of see the points on both of these sides because chances are good if you’re listening to me and you’re not 120 years old, you’ve never had the thought will this can of beans I’m buying at the grocery store kill me. But if you go back to when these regulations were first being written, when the FDA was first being created under Theodore Roosevelt, you would know that, well, that was actually not that uncommon for people to get horribly sick because of poor canning practices. And think about all of the blue-collar workers who provide us with our energy on the US electric grid and the people who are out there in the fields fracking to give us natural gas and oil that we then refine into gasoline that we use to power our automobiles so we can get around. Every single one of those people and the entire chain is ruled and regulated by the administrative state, and safety regulations that have massively pushed down worker fatalities were part of that. And at the same time, there’s a lot of regulations that are just completely bonkers and we’re not quite sure why we’re using them, but some unelected bureaucrat somewhere made the rule and everyone now has to go along with it.
[00:16:41] And so Loper Bright v. Raimondo could change this. And there are some people who say that, you know, the agencies should only regulate exactly what Congress has written into the statute, which is giving Congress way more credit than they actually deserve. And if you, ladies and gentlemen, think it’s so, so easy, I would encourage you just sit down and try to write clear instructions for literally anyone. And chances are good that if you hand off those instructions, they might actually do something very different. It’s a big case for sure. And whenever you have something that goes before the Supreme Court, there’s a temptation I think for us to take sides in our hyperpartisan world. And I think on the one hand, there’s the one side that says we should interpret this in the most broad way possible. And then, there’s another side that says we have to really just hem this in and it has to be exact letter of the law and the text is all that matters. And I actually think both opinions are completely wrong. Like on the one hand, you want no rules. On the other hand, you want far too many rules. And at the end of the day, everything is going to operate on some level on whatever the intent and interpretation of things are, and there’s no getting out of this. As I said at the top of the show, if you go and read the Constitution, it is not clear at all how a lot of things are supposed to run.
[00:18:10] And so, you know, while the Supreme Court is considering cases that will have a material impact on you personally, my dear listener, one question that should kind of go through your mind, especially if you’re one of those people who is, you know, a contextualist that really believes that only the written letter of the Constitution counts, my challenge to you would be: Why does the Supreme Court get to rule what’s constitutional or unconstitutional anyway? And they might say, well, it’s in the Constitution. And my question to you would be: Where? Because it’s not. I’ve read the document. It’s quite literally sitting on a shelf in a leather-bound book behind me as I record this.
[00:18:54] The ability for the Supreme Court to interpret the law as constitutional or unconstitutional and set precedent in the first place itself actually comes from a Supreme Court case in the early days of the Republic. And that case, ladies and gentlemen, is perhaps the most consequential case ever considered by the Supreme Court of the United States and that is Marbury versus Madison that was decided in 1801. This is like the foundational case of the Supreme Court of the United States. And so what ended up happening is that Thomas Jefferson’s Secretary of State, that is the future president James Madison, was denying the commission as a justice of the peace to William Marbury. Now, the case in this particular case was that Marbury’s appointment as a justice of the peace was approved by the Senate under the previous president, which was John Adams, but was not delivered before the inauguration of Thomas Jefferson. And so in this particular case, James Madison was arguing that Marbury was not entitled to get his justice of the peace.
[00:20:07] Now, this is one of these things where like I kind of start to believe that fuckery is eternal because what would actually happen here is that if you know your history, you had George Washington and then you had John Adams, and John Adams was, you know, objectively a really bad president. And if you’ve seen the musical “Hamilton,” you know that Alexander Hamilton, the famous federalist leader and enemy of Thomas Jefferson, he made the deciding vote to give the presidency to Thomas Jefferson. But there was massive animosity between the political party that was led by Thomas Jefferson, which was the Democratic Republicans, and the Federalists as then led by John Adams and Alexander Hamilton. And so on the last days of John Adams’ presidency, he was issuing a whole bunch of these justice of the peace writs to people he viewed as anti-Jeffersonian that would then keep him in check and in line. And so Jefferson said, well, these are midnight judges that were just put there to try to stop my agenda. And so anything that wasn’t delivered before I became president is considered void, thus the instruction to Madison, thus the case before the Supreme Court.
[00:21:21] The problem here is is that that exact scenario had not been enumerated in the Constitution. So that is to say, we had nothing to go on. The Founding Fathers created an amazing document, but they are just humans. And so we didn’t as a nation know what to do. And what this ended up leading to is it going into the Supreme Court and the Supreme Court now finding itself backed into a corner and on the verge of a constitutional crisis because the Constitution itself was silent on what to do. And so the question was should Marbury get his writ as a justice of the peace? And if he was, was there a legal remedy in order for him to get it? And did the court even have the authority to do it? And the court found itself tied by the Judiciary Act of 1789, which basically stated that the Supreme Court did not actually have a jurisdiction over these types of writs and therefore could not act. And this put people into a tizzy because at this particular point in time, you can imagine the Federalists are crying foul and the Democratic-Republicans are, you know, acting smug and the nation is teetering on tearing apart.
[00:22:42] And so what the Supreme Court decided to do is that Chief Justice John Marshall decided that the Judiciary Act was in fact in violation of the Constitution and so took it upon himself to conduct something called a judicial review and struck down Section 13 of the Judiciary Act in order to clear the way by declaring that the Act and that part of it was in fact unconstitutional. And then, went further to state that it was in fact an inherent part of America’s judicial role to create and do these types of judicial reviews. And so at this particular point in time, what we suddenly have is a Supreme Court in 1801 that steps in and grants itself power by referencing the US Constitution, which is silent on whether or not it has this power, to strike down a law that was designed to tie its hands so that it can grant a judgeship, which is a justice of the peace, to a particular person.
[00:23:50] That’s right, ladies and gentlemen. Because of the ambiguity of the US Constitution, the Supreme Court literally made up its job description. And so every time something goes before the Supreme Court and there’s a discussion of is it constitutional or is it not, I always have to laugh. Because the narrow text interpretation of the Constitution doesn’t allow the Supreme Court to decide if something’s constitutional or not. Judicial review is not actually in the US Constitution because the section of the Constitution that they referenced doesn’t talk about judicial review. It talks about jurisdiction. And of course, they didn’t define necessarily what jurisdiction meant.
[00:24:36] And I guess at the end of the day when I’m always looking at the news, I’m always conscious of the weight of history behind it. After all, history in terms of academic pursuits is my first love. And I do believe that for us to know and understand history on a deep level is to better understand the world around us.
[00:24:57] And so today, ladies and gentlemen, I hope that I’ve given you an insight into what’s going on in the news around the case that’s going before the Supreme Court and how it might affect your life and what the historical background for it all is. With that, ladies and gentlemen, thank you so much for listening. If you liked this episode, please share it with a friend or a fellow history buff. I would really love it if you come on over to Instagram and, you know, chat me up about how this episode was and what your thoughts and feelings are, and any questions, comments, concerns, or worries you had. And until Tuesday, ladies and gentlemen, go out there, have yourself a lovely weekend, take control of your financial lives, and live free.
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