The Justice Department's Two Faces on the Chevron Two-Step

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There is a troubling disparity in how the Chevron doctrine operates (or does not) in the federal judiciary. Although the Supreme Court has seemingly shelved Chevron deference, lower courts continue to apply the doctrine as a first resort. Worse, the Justice Department is perpetuating the divide through an inconsistent litigation strategy. Before the Supreme Court, the government has been deemphasizing—and sometimes disavowing—the Chevron principle, which decreases the likelihood that the Supreme Court will employ (or even acknowledge) the doctrine. However, regarding these same controversies, government lawyers have pressed for deference in the courts below.

Regardless of whether these dichotomous deference arguments reflect a coordinated strategy, the effect is to drive a vertical split in the federal courts over the Chevron doctrine. At the Supreme Court, where the government has been muting its Chevron arguments, the majority has not applied the Chevron framework in six years. Meanwhile, the Chevron two-step doctrine flourishes in the lower courts, encouraged by the Justice Department. Depending on the venue, two versions of the Chevron framework exist.

In sum, we posit that the Justice Department is playing an influential role in maintaining Chevron deference, despite the Supreme Court’s evident skepticism. Our conclusions find support in recent scholarship on the doctrine’s evolution. According to Professor Thomas Merrill, who worked at the Justice Department during Chevron’s formative years, government lawyers were instrumental in transforming the pro-government Chevron principle from its roots in an unheralded case to the most far-reaching doctrine in administrative law. Then, as with now, the government was a driving force behind Chevron deference. However, the courts should be aware of the government’s two faces on the Chevron two-step doctrine, including how it fosters a vertical divide.

Almost forty years ago, in Chevron v. NRDC, the Supreme Court established a now-famous “two-step” process for the judicial review of a federal agency’s construction of a statute it administers.¹ At step one, a court asks whether the law is clear; if so, the matter is over, and the court must effectuate Congress’s unambiguous intent.² If not, the court proceeds to Chevron step two, asking “whether the agency’s [interpretation] is based on a permissible construction of the statute.”³

The benefit is that whenever Congress is unclear—an all-too-common occurrence—an agency’s interpretation has the force and effect of law unless it “exceeds the bounds of the permissible.”⁴ Over time, Chevron has become the most far-reaching doctrine in administrative law to the great benefit of the government.⁵

Today, of course, Chevron ranks among the most far-reaching—and most controversial—opinions ever handed down by the Supreme Court. According to one study, Chevron has become the most cited opinion in administrative law,⁶ mentioned in more than 13,000 law review articles.⁷

Despite the doctrine’s importance, there are now two versions of Chevron deference in the federal judiciary, depending on the venue. At the Supreme Court, the doctrine has “more or less fallen into desuetude,” in the words of Justice Neil Gorsuch.⁸ At least four current Justices have expressed reservations about applying Chevron deference,⁹ and this open skepticism is the readiest explanation for why the Court has not employed the famous “two-step” framework in six years.¹⁰

Although the Supreme Court has effectively—if silently—shelved Chevron, the doctrine remains a first resort in the courts below. In 2018, just days before retiring, Justice Anthony Kennedy announced his “concern” over how Chevron “has come to be applied” in the lower courts, where “cursory analysis” and “reflexive deference” prevail.¹¹ Alas, Justice Kennedy’s criticisms remain no less apt today than they were five years ago.

Empirical research confirms the Chevron divide in the federal judiciary. For example, Professors Kent Barnett and Chris Walker performed a study of Chevron deference in the circuit courts, and they concluded that there may be “a Chevron Supreme” and “a Chevron Regular,” meaning “Chevron [deference] may not have much of an effect on agency outcomes at the Supreme Court,” but “it seems to matter markedly in the circuit courts.”¹² More recently, the Cato Institute’s Isaiah McKinney reviewed the last three years of decisions in the Federal Reporter, finding that circuit courts applied the Chevron steps 84.5% of the time, with 59.2% of these cases proceeding to a deferential posture at Chevron step two.¹³

Perhaps the best evidence of the deference dichotomy is the growing list of Chevron cases that the Supreme Court has declined to review since last applying the doctrine. Over the past five years, the Court has denied the review of controversies, but the lower courts have:

• “bypassed any independent review of the relevant statutes” before deferring;¹⁴

• deferred to an agency rule promulgated through an adjudicative order with a retroactive effect;¹⁵

• accorded Chevron deference to a regulation with criminal sanctions;¹⁶

• deferred to an agency’s interpretation that conflicted with the court’s best reading of the statute;¹⁷

• applied the Chevron framework to a “procedurally defective” regulation;¹⁸ and

• granted deference to an agency’s “self-interested” interpretation.¹⁹

In these cases—and many others in which the regulated parties did not seek Supreme Court review—the lower courts applied versions of the Chevron doctrine that would be unrecognizable to the Supreme Court bar.

What’s going on here? What explains the stark approaches to the Chevron framework in the Supreme Court and lower courts? In part, the answer is that the lower courts have every incentive to ignore the high court’s silence on Chevron. Faced with comparatively more caseloads, “It is much easier for a judge to apply the relatively simple Chevron standard and to uphold an agency interpretation of a statute as reasonable than it is to write a lengthy opinion” that elucidates the law, as Professor Richard Pierce explained.²⁰

Yet there is more to the story. American law is grounded in an adversarial system of justice, one that relies on opposing parties to provide the courts with the information and arguments to decide both the meaning of the law and its application. To be sure, the development of legal rules is also shaped by outside intellectual currents and by decision-makers’ values, but these sorts of factors operate only when triggered by the parties’ arguments.

Simply put, the law’s development is necessarily influenced by what the opposing parties argue, and recently, the Justice Department has been making significantly different Chevron arguments in and out of the Supreme Court. When addressing the lower courts, the government fights for Chevron deference, but when the government comes before the Supreme Court, it pulls punches on deference.

These dichotomous arguments have created a divide over Chevron in the judiciary. By minimizing Chevron arguments, the Justice Department has decreased the likelihood that the Supreme Court will disrupt the status quo, so Chevron persists. Meanwhile, government lawyers continue to encourage overbroad readings of Chevron in the lower courts.

The government’s disparate Chevron strategy was evident last term in American Hospital Association v. Becerra.²¹ Arguing before the D.C. Circuit, the government invoked Chevron, and the court ruled in favor of the agency based on deference.²² Yet, when the Supreme Court granted review, the government started to treat Chevron as a liability. During the oral argument, the Justice Department went so far as to say, “I do not think Chevron is necessary in this case,” even though the court below had decided in the government’s favor on the strength of deference alone.²³ Ultimately, the Court omitted the Chevron doctrine in ruling against the government.

A similar situation occurred last term in Becerra v. Empire Health Foundation.²⁴ At the Ninth Circuit, the government’s brief led with an argument for “heightened deference” under the Chevron framework.²⁵ In the Supreme Court, however, the Justice Department muted its Chevron claim, focusing instead on how the Court should “uphold [the agency’s] interpretation simply because it is the better one, without addressing the additional weight due under Chevron.”²⁶

The government’s Janus-faced Chevron claims were further evident last term in National Federation of Independent Business v. Occupational Safety & Health Administration.²⁷ At the Supreme Court, the Solicitor General’s brief mentioned neither Chevron nor deference,²⁸ but before the Sixth Circuit, the Justice Department sought “substantial [Chevron] deference” in arguing the government was likely to win on merits.²⁹

In Barton v. Barr, announced in 2020, the Justice Department informed the Supreme Court that the government “does not claim Chevron deference on the question presented.”³⁰ However, at the Eleventh Circuit, the government argued that its interpretation “is entitled to Chevron deference.”³¹

Further, County of Maui, Hawaii v. Hawaii Wildlife Fund, decided the same day as Barton v. Barr, is another controversy in which the government committed an about-face in its Chevron arguments.³² As amicus, the Justice Department told the Ninth Circuit that the agency’s interpretation “is entitled to Chevron deference,”³³ yet before the Supreme Court, the government’s amicus brief completely overlooked the deference doctrine.³⁴

A year prior, in Preap v. Johnson, the Justice Department argued to the Ninth Circuit that the statutory text “is ambiguous” and the agency’s interpretation “is entitled to Chevron deference because it is a permissible interpretation of the statute.”³⁵ However, after the Supreme Court took the case, the Department pivoted, arguing that the agency’s “interpretation is unambiguously correct,” and an ancillary claim for Chevron deference was crammed into the brief’s final few pages.³⁶

A troubling pattern has emerged. In the lower courts, Justice Department lawyers abet overbroad readings of Chevron;³⁷ yet, if one of these Chevron controversies is granted a hearing by the Supreme Court, the Department tries to restrict the deference option. This strategy, in turn, increases the likelihood that the doctrine will remain unchecked in the lower courts, where judges remain receptive to calls for generous Chevron deference. Thus, the government aids deference in running amok in the lower courts.

Our research suggests that the government plays an important role in perpetuating Chevron deference in the lower courts, even as the Supreme Court has backed off the doctrine. This pattern raises a troubling follow-up question: has the Justice Department always been a driving force behind the most consequential pro-government principles in administrative law?

Professor Thomas Merrill, for example, argued that Justice Department lawyers were instrumental in expanding the reach of the Chevron doctrine, and he was well positioned to know, having served as Deputy Solicitor General during Chevron’s formative years. When it first came out, Chevron seemed unremarkable. Neither the briefing nor the Supreme Court’s internal documents indicated that those involved saw the case going beyond the question presented.³⁸ Only in time did Chevron come to stand for a profound shift in administrative law, resulting in a strong presumption in favor of mandatory deference to the government’s minimally rational agency interpretations of ambiguous statutes.

How, then, did Chevron become an “accidental landmark?” According to Merrill, “Chevron was regarded as a godsend by Executive Branch lawyers” because “the opinion seemed to say that deference was the default rule in any case where Congress has not spoken to the precise issue in controversy,” which “describes (or can be made to seem to describe) virtually every case.”³⁹ In other words, Chevron could create a situation where “the government should nearly always win.”⁴⁰ Seeing its potential, Chevron “was quickly seized on as a kind of mantra by lawyers in the Justice Department, who pushed relentlessly to capitalize on the perceived advantages the decision presented.”⁴¹

As government lawyers “urged that Chevron serve as the relevant standard of review at nearly every turn,” a receptive audience grew in the D.C. Circuit, which hears more administrative law cases than any other circuit.⁴² After becoming a leading case at the D.C. Circuit, Chevron then “migrated back to the Supreme Court along with personnel who had previously served in the D.C. Circuit.”⁴³ This “reverse migration” was “reinforced” by the Solicitor General’s relentless promotion of Chevron.⁴⁴

In Professor Merrill’s first-hand account, the government played a pivotal role in making Chevron a blockbuster. By demonstrating the Justice Department’s role in influencing the doctrine’s evolution, Professor Merrill corroborates our finding that the government’s inconsistent Chevron arguments are driving a vertical split. That is, the government has done this before.

Further, our understanding of the government’s ongoing role in shaping the Chevron doctrine is at least consistent with findings reached by Professor William Eskridge and Lauren Baer in their well-known survey of deference doctrines at the Supreme Court.⁴⁵ Specifically, Eskridge and Baer argued that the Solicitor General’s “failure” to raise Chevron deference is the “most important” explanation for why the Courts fail to invoke deference regimes when they otherwise should apply (which occurs almost 75 percent of the time when Chevron should apply, according to the authors).⁴⁶ Yet, while they do not read into the Justice Department’s litigation strategy, Professors Natalie Salmanowitz and Holger Spamann, in their critical replication of the Eskridge and Baer study, argued that the absence of Chevron claims in the Solicitor General’s brief “is a good indication that the Supreme Court did not have to address Chevron.”⁴⁷

More broadly, our conclusions find support in socio-legal scholarship regarding how the adversarial American legal system is shaped by “institutional litigants.”⁴⁸ These “repeat players” possess certain structural and strategic advantages, including resources, access, and expertise.⁴⁹ Thus, these endowed, institutional litigants can pursue their long-term interests by working to influence the authoritative body of precedents and principles on which impartial judging rests. That is, they are “playing for rules.”⁵⁰

Of course, the government is the most powerful institutional litigant and has “played for” the ultimate pro-government rule: the Chevron doctrine. Decades ago, the Justice Department led the transformation of Chevron from an unremarkable case into the most far-reaching holding in administrative law. Today, the government maintains the use of the deference doctrine in the lower courts, even as the Supreme Court phased out Chevron.

Although it is clearly suboptimal to have two different Chevron doctrines in the judiciary, there are deeper concerns at play. Under black letter law, Chevron deference is grounded in the theory that Congress intends for agencies to resolve uncertainties in the law because agencies are more knowledgeable and accountable than courts. But this paper argues that the Chevron framework is rooted less in congressional intent and more in the Justice Department’s strategy. To the extent that the pro-government Chevron doctrine results from the government (the ultimate institutional litigant) “playing for rules,” it vitiates one of the famed framework’s theoretical justifications. At the least, the courts should be aware of the government’s ongoing role in maintaining deference, including how this strategy leads to a vertical split in the courts over the Chevron doctrine.

^*William Yeatman is a Senior Legal Fellow at the Pacific Legal Foundation’s Center for the Separation of Powers. He holds a BA in environmental sciences from the University of Virginia, an MA in international studies from Denver University, and a JD from the Georgetown University Law Center.

^**Aditya Dynar is an Attorney with the Pacific Legal Foundation. He earned his JD from the University of Toledo College of Law. He holds bachelor’s and master’s degrees in accounting, finance, and economics.

¹Chevron U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984).

²Id. at 842–43.

³Id. at 843.

⁴Barnhart v. Walton, 535 U.S. 212, 218 (2002).

⁵See Kent Barnett & Christopher J. Walker, Chevron in the Circuit Courts, 116 Mich. L. Rev. 1, 2 (2017) (“Chevron deference has been a cornerstone of judicial review of agency action for more than thirty years, and the decision itself is one of the most cited Supreme Court decisions of all time.”).

⁶Peter M. Shane & Christopher J. Walker, Chevron at 30: Looking Back and Looking Forward, 83 Fordham L. Rev. 475, 475 n.2 (2014).

⁷According to a Westlaw search, Chevron v. NRDC has been cited in 13,353 law review articles as of the writing of this paper.

⁸Buffington v. McDonough, 143 S. Ct. 14, 22 (2022) (Gorsuch, J., dissenting from the denial of certiorari).

⁹Id.; Michigan v. EPA, 135 S. Ct. 2699, 2712 (2015) (Thomas, J., concurring); Brett M. Kavanaugh, Book Review: Fixing Statutory Interpretation, 129 Harv. L. Rev. 2118, 2150–54 (2016) (expressing concerns with Chevron deference); City of Arlington v. FCC, 569 U.S. 290, 315 (2013) (Roberts, C.J., dissenting) (“[T]he citizen confronting thousands of pages of regulations—promulgated by an agency directed by Congress to regulate, say, ‘in the public interest’—can perhaps be excused for thinking that it is the agency really doing the legislating.”).

¹⁰Cuozzo Speed Technologies, LCC v. Lee is the last Supreme Court decision to apply the “two-step” Chevron framework. See 579 U.S. 261, 262–63 (2016).

¹¹Pereira v. Sessions, 138 S. Ct. 2105, 2120 (2018) (Kennedy, J. concurring).

¹²Barnett, supra note 5, at 9.

¹³Isaiah McKinney, The Chevron Ball Ended at Midnight, but the Circuits are Still Two-Stepping by Themselves, Notice & Comment (Dec. 18, 2022), https://www.yalejreg.com/nc/chevron-ended/.

¹⁴Buffington, 143 S. Ct. at 14 (Gorsuch, J., dissenting from the denial of certiorari).

¹⁵Szonyi v. Barr, 141 S. Ct. 444 (2020) (denying certiorari).

¹⁶See Guedes v. ATF, 140 S. Ct. 789 (2020); id. at 790 (Gorsuch, J., statement respecting the denial of certiorari) (“[Chevron] has no role to play when liberty is at stake.”).

¹⁷See Baldwin v. United States, 921 F.3d 836, 843 (9th Cir. 2019), cert. denied, 140 S. Ct. 690 (2020); see also 140 S. Ct. at 692 (Thomas, J., dissenting) (“Perhaps worst of all, Chevron deference undermines the ability of the Judiciary to perform its checking function on the other branches.”).

¹⁸Altera Corp. & Subsidiaries v. Comm’r, 926 F.3d 1061, 1075–79 (9th Cir. 2019), cert. denied, 141 S. Ct. 131 (2020) (applying Chevron to the Treasury’s rule interpreting a statute). The majority conceded that Chevron does not apply to procedurally defective regulations but found the regulation in question was not procedurally defective. Id. at 1079–80. However, the dissent found the regulation to be defective and argued Chevron should not apply. Id. at 1100 (O’Malley, J., dissenting); see also Altera Corp. & Subsidiaries v. Comm’r, 941 F.3d 1200, 1210 (9th Cir. 2019) (Smith, J., dissenting from denial of en banc rehearing) (objecting to the court’s recourse to Chevron).

¹⁹Scenic Am., Inc. v. Dep’t of Transp., 138 S. Ct. 2, 3 (2017) (Gorsuch, J., statement respecting denial of certiorari).

²⁰Richard J. Pierce Jr., Is Chevron Deference Still Alive?, Regul. Rev. (July 14, 2022), https://www.theregreview.org/2022/07/14/pierce-chevron-deference/.

²¹142 S. Ct. 1896 (2022).

²²See Am. Hosp. Ass’n v. Azar, 967 F.3d 818, 828 (D.C. Cir. 2020) (“HHS is entitled to Chevron deference, which it has invoked here (although it did not do so expressly until a post-argument letter submitted to the Court).”).

²³Transcript of Oral Argument at 69, Am. Hospital Ass’n, 142 S. Ct. 1896 (No. 20-1114).

²⁴142 S. Ct. 2354 (2022).

²⁵Cross-Appellee Response/Appellant Reply Brief for Appellant/Cross-Appellee Alex M. Azar II at 14, Empire Health Found. v. Azar, 958 F. 3d 873 (9th Cir. 2020) (No. 18-35872), ECF No. 25.

²⁶Brief for Petitioner at 26, Empire Health Found., 142 S. Ct. 2354 (No. 20-1312).

²⁷142 S. Ct. 661 (2022).

²⁸See Response in Opposition to the Applications for a Stay, Nat’l Fed’n Indep. Bus., 142 S. Ct. 661 (No. 21A244).

²⁹Respondents’ Emergency Motion to Dissolve Stay at 17, In re MCP No. 165, 21 F.4th 357 (6th Cir. 2021) (No. 21-7000).

³⁰Brief for the Respondent at 39 n.2, Barton v. Barr, 140 S. Ct. 1442 (2020) (No. 18-725).

³¹Barton v. U.S. Att’y Gen., 904 F.3d 1294, 1302 n.5 (11th Cir. 2018), aff'd sub nom. Barton v. Barr, 140 S. Ct. 1442 (2020) (expressing doubt about the government’s Chevron claim without deciding the matter).

³²Cnty. of Maui v. Haw. Wildlife Fund, 140 S. Ct. 1462 (2020).

³³Brief for the United States as Amicus Curiae in Support of Plaintiffs-Appellees at 12, Haw. Wildlife Fund v. Cnty. of Maui, 886 F.3d 737 (9th Cir. 2018), vacated and remanded sub nom. Haw. Wildlife Fund, 140 S. Ct. 1462.

³⁴See Brief for the United States as Amicus Curiae Supporting Petitioner at 10–12, Haw. Wildlife Fund, 140 S. Ct. 1462.

³⁵Consolidated Opening Brief for Defendants-Appellants at 17–18, Preap v. Johnson, 831 F.3d 1193 (9th Cir. 2016), rev’d and remanded sub nom. Nielsen v. Preap, 139 S. Ct. 954 (2019), and vacated sub nom. Preap v. McAleenan, 922 F.3d 1013 (9th Cir. 2019).

³⁶Brief for the Petitioners at 12, 38–41, Nielson, 139 S. Ct. 954 (No. 16-1363).

³⁷See Abbe R. Gluck & Richard A. Posner, Statutory Interpretation on the Bench: A Survey of Forty-Two Judges on the Federal Courts of Appeals, 131 Harv. L. Rev. 1298, 1348–49, 1351 (2018) (noting the general receptivity of circuit judges to government-made deference arguments).

³⁸Thomas W. Merrill, The Story of Chevron: The Making of an Accidental Landmark, 66 Admin. L. Rev. 253, 268–74 (2014).

³⁹Id. at 281.

⁴⁰Id.

⁴¹Id.

⁴²Id. at 282.

⁴³Id. at 277.

⁴⁴Id. at 282.

⁴⁵William M. Eskridge, Jr. & Lauren E. Baer, The Continuum of Deference: Supreme Court Treatment of Agency Statutory Interpretations from Chevron to Hamdan, 96 Geo. L. J. 1083 (2008).

⁴⁶Id. at 1119, 1125.

⁴⁷Natalie Salmanowitz & Holger Spamann, Does the Supreme Court Really Not Apply Chevron When It Should?, 57 Int’l Rev. L. & Econ. 81, 85 (2019).

⁴⁸See Marc Galanter, Why the “Haves” Come out Ahead: Speculations on the Limits of Legal Change?, 9 L. & Soc’y Rev. 95, 151–52 (1974).

⁴⁹Id. at 98.

⁵⁰Id. at 98–103 (identifying eight “structural advantages” enjoyed by “repeat players” in legal rule-development, including “ready access to specialists,” “economies of scale,” and “opportunities to develop facilitative informal relations with institutional incumbents”).

W. Yeatman et al.June 17, 2023