Giuseppe Giamundo Neto and Fernanda Leoni
Known in Brazil as the Chevron Doctrine, the case Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., decided by the US Supreme Court in 1984, established limits on judicial review of acts by regulatory agencies. In that precedent, which involved interpreting provisions of the Clean Air Act — environmental legislation on air pollutant emissions — the Supreme Court held that these agencies, as technical bodies, should give meaning to ambiguous provisions of the law, and that their decisions, backed by a certain reserve of specialized knowledge, should not be revisited by the Judiciary.
This idea of “judicial deference” practiced in the US judicial system was based on the agencies’ technical expertise, on partial legislative delegation to these bodies and on the need to preserve administrative efficiency, since their acts would, as a rule, not be invalidated by the courts.
Although the Brazilian judicial system is quite different from the precedent-based system, the Chevron Doctrine has always had some influence in Brazil, mainly because an essential part of the rules on regulatory agencies draws on this source. Even with a much broader openness to judicial review, the idea of the “administrative merits” or the presumption of legitimacy of administrative acts is usually observed by Brazilian courts when reviewing regulatory acts by such agencies.
Overruling of the doctrine
However, at the end of June, the US Supreme Court overruled this precedent in Loper Bright Enterprises et al. v. Raimondo, Secretary of Commerce, et al., holding that the Judiciary may review acts of independent agencies, which do not have a monopoly on filling legal gaps, even in technical matters.
The case involved fishing companies challenging the interpretation of federal legislation by the National Marine Fisheries Service, arguing that the agency had exceeded its regulatory authority. In its analysis, the Supreme Court held that courts should no longer grant automatic deference to administrative agencies’ interpretations in cases of statutory ambiguity, and that it is for the courts to interpret the law directly, without any special deference to the agencies’ positions.
Among the grounds for the decision, the separation of powers stands out, with emphasis on the fact that excessive deference to administrative agencies could result in an improper transfer of legislative power to the executive sphere. The Judiciary’s democratic accountability was also invoked, considering that statutory interpretation is an essential part of judicial activity.
The decision therefore directly affects US law regarding the idea of the “Administrative State”, opening a broad debate on the reduction of agency autonomy when courts are required to scrutinize their legal interpretations more rigorously, as well as expanding judicial review and giving the Judiciary a more active role.
Although it cannot be said that the US Supreme Court’s overruling of the Chevron doctrine in Loper Bright Enterprises v. Raimondo immediately limits the rulemaking powers of regulatory agencies [1], the tangible risk of less qualified court decisions on technical matters submitted to the courts — not necessarily made up for by legal knowledge — cannot be ruled out.
Impact
In the Brazilian context, this change may, in principle, prompt reflection on the relationship between administrative agencies and judicial review, fostering an ongoing dialogue on how best to balance administrative efficiency with the guarantee of other constitutional precepts.
Although the Chevron Doctrine is well known in Brazilian Public Law, and not infrequently invoked in court decisions on the subject, the powers of the Brazilian Judiciary, given a very broad reservation of jurisdiction and stricter judicial review, are not immediately and directly affected by this discussion, except in the field of academic debate.
Considering that Brazilian law already takes a less deferential approach to administrative interpretations than the US system under the Chevron doctrine, the Loper Bright decision does not seem to bring much that is new here, other than reinforcing the idea of broader judicial review, which, when deemed appropriate, relies on the principle of access to justice to decide technical matters inherent to regulation.
[1] In this regard, the position of Prof. Vera Monteiro, in an interview with Exame: “I think it is excessive to conclude that the overturning of the Chevron doctrine will lead to the end of the Administrative State and of the rulemaking activity of independent regulatory agencies. What the Supreme Court found is that it is an exaggeration to say that the judiciary must always respect the agency’s interpretation when the law is ambiguous. First, because ambiguity in the law may involve a legal question, and in that case the judiciary is the proper place to decide the dispute. Second, because there may be aspects of an agency decision approving sector regulation that should be subject to judicial review under another federal law, the Administrative Procedure Act (1946)”.
Originally published by Conjur (in Portuguese).
