What Does "New" Mean? Agency Action Post-Chevron

Edith Harold: Hello everyone and welcome to this Federalist Society virtual event. My name is Edith Harold and I'm an assistant Director of Practice Groups with the Federalist Society. Today we're excited to host this Fed Soc forum called "What Does ‘New’ Mean? Agency Action Post Chevron." Speaking on the panel today we have Professor Richard Epstein of NYU, Professor Andrew Mergen of Harvard, and Professor Robert Percival of University of Maryland. As our moderator today we have Jonathan Brightbill, who is a Partner at Winston and Strawn, and a former acting assistant Attorney General at the United States DOJ. If you'd like to learn more about today's moderator or speaker, their full bios can be viewed on our website fedsoc.org. Throughout the program, we may turn to the audience for questions. If you have a question, please enter it into the Q&A function at the bottom of your Zoom window and we will do our best to answer as many as we can. Finally, I'll note that as always, all expressions of opinion today are those of our guest speakers and not the Federalist Society. With that, Jonathan, thank you so much for joining us today, and I'll hand things over to you.

Jonathan Brightbill: Great, thank you very much Edith, and thank you to the Federalist Society and the Environmental Law and Property Rights Practice Group for sponsoring this event. Thank you to my colleague here at Winston Ken Steinberg for his assistance getting the research ready for this talk. And of course, thank you to our tremendous group of panelists here, who I will introduce shortly and whose full bios are available. During today's discussion I invite participants to please go ahead and put things in the Q&A in the chat for real time. And after opening remarks from our panelists, I plan to open the floor to audience questions and pose some questions on my own. And so with that background, let's get this started. I doubt that I need to explain to many of you listening that Chevron is overruled. So as everyone I imagine is aware and Loper Bright v. Raimondo, the Supreme Court relegated to history what case after case was previously calling the familiar two-step analysis for interpreting statutes delegated to federal agencies.

Now in the wake of the Supreme Court's formal announcement and endorsement of the "Major Questions doctrine" in West Virginia v. EPA, the Biden administration palpably began to pull back from some of its most aggressive proposed rules. But I think most observers believe that the overruling of Chevron promises to be even more consequential. For those of you who've never read the original Chevron case at issue was question of environmental law under the Clean Air Act and the interpretive question there was: "what Congress meant by a source of emissions." That's the key word source. Did Congress mean that every pollution emitting device at a single plant must have environmental controls? Or did source refer to a facility as a whole allowing operators some discretion to manage their overall facilities as long as they did not exceed total permitted emissions for the plant, as a whole? Supreme Court looked at the statute and actually EPA had bounced back and forth between originally the Nixon-Ford administration to the Carter administration, and then we're now back to calling a source the entire plant in the Reagan administration and ultimately the Supreme Court deferred to EPAs definition of source as meaning the facility as a whole.

So with Chevron gone, this suggests that agencies aren't just going to be denied deference on novel, aggressive new readings of longstanding statutes like EPAs 2015 Clean Power Plan. It now will be the case of litigants both the regulated community and as I think we can expect the environmental groups. As was the case in NRDC v. Chevron, we're going to expect these litigants to have more opportunity to challenge agency interpretation of words like "source", "cause", "ultimate consumer", and of course what we saw in the DC Circuit recent decision in the US Sugar case, the word "new" there, EPA said "new" meant new relative to the time that EPA had first began setting standards for the category of sources at issue there generally.

So for EPA, "new" meant "built after 2010" and the industry just agreed and said "new" meant new compared to when EPA first proposed the particular standards at issue, so new meant "new after 2020." In a per curiam decision, the DC circuit, a panel consisting of Judge Wilkins, Katsas, and Walker, recognized that EPAs quote, "reading of the statute is semantically plausible," but notwithstanding what they referred to as ambiguity in the statute, the DC circuit went on to search for its best reading and doing so ultimately agreed that the industry challenges had the better argument and set aside EPAs overbroad definition of the word new. So with that as an example and a bit of background, I'm now going to turn things over to Professor Bob Percival to give some opening remarks about the demise of Chevron and where he sees things going. Professor Perceval is the Robert F. Stanton professor of law and the director of the environmental law program at the University of Maryland School of Law, and he joined the Maryland faculty in 1997 after being a senior attorney from the Environmental Defense Fund. So he'll bring some perspective from there. Bob, please take it away.

Prof. Robert V. Percival: Thanks John. I wanted to start by going back to the actual 1984 decision. At the time I was a lawyer for the Environmental Defense Fund and David Doniger of NRDC had argued the case in the Supreme Court and I didn't attend the oral argument, but afterwards I saw Doniger and he said, 'Well, I think I did really well, I have a good shot at upholding the DC circuit's decision striking down the Reagan administration's efforts to essentially weaken the Clean Air Act." And I said, David, I know you're going to lose because this is the statute where there's exclusive venue in the DC circuit, so there's no possibility of a circuit conflict, and yet the court took the case. Now, I was a little naive. I didn't appreciate that the administration had lost the case and the solicitor general was asking for cert, which was probably why the court granted it.

But then when Justice Thurgood Marshall died, his papers became almost immediately available in the Library of Congress and I was really shocked because when I looked at the Chevron case, his paper showed that there had been no internal discussion in the memos about what a momentous step the Supreme Court was taking. Simply Steven circulated a draft opinion and within a week, bingo, it was unanimous. Now, when Justice Blackman died, it turned out he took very detailed notes about what was said at conference. So I looked at his papers and they revealed that the initial vote in the Supreme Court Justices Marshall and Rehnquist had been recused. So only seven justices were participating in the case. Initially there were three votes, Chief Justice Berger, Justice Brennan and Justice O'Connor to affirm the decision and only four votes to reverse. But each of those four votes, Blackman had a question mark next to it because the justice weren't firm and he himself said that he was not at rest about the case.

And yet when you looked at the things, he also took notes about what the justices said at conference and it turns out there was a memo from Justice O'Connor a few days a month or so later her father had died and she'd inherited stock in a trust that own stock and Chevron are one of the parties. And so she had to recuse herself. So there were only six justices participating. Two had voted to Affirm, four had voted to reverse. And Justice Stevens is quoted as saying at the conference that he's so confused about this complicated Clean Air Act and when he is so confused, I just go with the agency and that's the draft opinion. He ultimately wrote, let's just defer to the agency. And then both Chief Justice Berger and Justice Brennan shifted their votes. So you had a six to nothing decision that then became the most cited case in the history of administrative law.

Now that was a great defeat for the environmentalists because it meant that it was going to be easier for air polluters to pollute right up to the max even if they were in a nonattainment area. But we saw that eventually when you had an administration that was being aggressive about implementing the environmental laws, positions changed. So suddenly Chevron became a cause to overturn for industry groups and the right wing, whereas David Doniger and NRDC actually filed a brief and Loper Bright taking the diametrically opposed position to what they had taken before because it meant that now EPA was going to be on a shorter leash. Now what will the impact of Loper Bright and Relentless be? Well, it kind of depends on what administration's in power. If President Trump wins the election next week and he wants to adopt all these new interpretations to cut back on environmental regulation, he's no longer going to be able to cite Chevron deference as a reason for courts to defer to those interpretations.

I've often thought that Chevron was actually more a convenient label that if judges wanted to rule against the agency, they would say, well, I don't think the statute's ambiguous, so Chevron doesn't apply. If they wanted to rule for the agency, they would say, well, Chevron deference decides it and we should rule in favor of the agency. Now I'm told one aspect of it that Justice Gorsuch, he actually, one of the reasons he was such a hot candidate to be added to the Supreme Court was in his opinions as the 10th Circuit judge, he had railed against Chevron. And so I think that contributed to his appointment by President Trump, but he actually had oral argument in Loper Bright pointed out something that my colleagues who practice immigration law had pointed out, and that is that the demise of Chevron might actually help those who are in immigration cases where the immigration courts who are vastly overworked were likely to just defer to whatever INS said in its interpretation of statutes.

And so Gorsuch made the point at oral argument in Loper Bright that actually Chevron may work to the benefit of the government when they're dealing with individuals instead of just government agencies and my immigration law colleagues actually are kind of excited to see Chevron overturned. And so it kind of depends on which foot your shoe is on as to how you feel about it. And this may come back to bite a future Trump administration because agencies will no longer get deference. I've long been a Chevron skeptic. I do however think that the impact is greatly overblown. You see, Steven Vladeck's wife said their rabbi mentioned Loper Bright in a sermon, and I see Mitch McConnell was telling Chambers of Commerce in Kentucky, this is one of the greatest things he ever did. I always thought Chevron was kind of dead man walking. It hadn't been cited in the Supreme Court for six years because it was clear the majority of the justice were hostile to it. So it wasn't a good litigation strategy to rely upon it on their briefs. It may have more impact on the lower courts who were regularly citing Chevron right up until the time of Loper Bright. And now as Jonathan pointed out in the US Sugar case, we're citing Loper Bright as a reason not to defer.

Jonathan Brightbill: Great. Well thank you. Thank you Professor Percival. I'm now going to hand things over to Professor Epstein. Professor Epstein is the Laurence A. Tisch professor of law at New York University and the Peter and Kirsten Senior Fellow at the Hoover Institution and the James Parker Hall Distinguished Service Professor Emeritus and senior lecturer at the University of Chicago. Richard is also a prolific legal commentator appearing regularly on two of my favorite podcasts, Law Talk and The Libertarian. So go check those out if you're not familiar with those. Professor Epstein, I hand things over to you.

Prof. Richard A. Epstein: Okay, thank you so much. I think where Bob began is a good place to begin, which is what is your reaction to the initial decision associated with Chevron? And I think the first thing I would want to say is as a legal matter, it was kind of a tour de force because the central position of the Administrative Procedure Act seems to make it pretty clear that all questions of law should be decided de novo by the Supreme Court and the administrative agencies should defer to them as it were on these matters. So the way in which I've always understood the correct regime was that the administrative agency basically is the substitute for a trial court. And when you start thinking about that way, it should get a lot of deference when it comes to finding particular facts as to who did what. When it comes to figuring out whether or not something is or is not a substantial impairment, the kind of middle fact and law question, I think it basically could be subject to substantial evidence and it passes it, but on pure questions of law, I think it has to go the other way.

And so I've always been from day one an opponent to Chevron and one of the reasons is I don't quite understand whether you're talking about strengthening or weakening statutes. Bob mentioned that if you took Chevron seriously in this case and the smokestack, that the fact that they basically put restrictions on them made it more difficult to change your thing. My view is that hurts environmental law. That is the bubble concept which had been invented by the Reagan administration struck me as being eminently good sense. You have a bunch of pipes or smoke stacks which very close proximity to another, and it turns out that the smoke that comes from one is pretty much in terms of its path of movement and so forth, same as one that comes next door if you have Chevron. But that means you can't put things back and forth between smokestack.

You're going to find it more difficult to increase output at the same level of pollution and that's going to hurt the environmental situation. So when you start looking at these things, you have to look more closely at the way in which the configuration's taking place before you decide that it's going to be a situation in which you help or hurt. And I think that's always true. I think in many cases government discretion on environmental issues actually hurts things. And the Sackett case for example, where they now spend close to 20 years deciding whether you can build a house which is 600 feet from Lake Priest and the only thing you have there is dry rubble that doesn't help the environment. It was just a complete mistake. Then the second question is, well what did Chevron mean? And Bob didn't quite say this, but I think he hinted at it and I agree with him, is there's a huge amount of ambiguity as to what we think ambiguity means.

And so that what happens is when you actually kind of apply this doctrine, you can be Chevron strong or Chevron weak, and it turns out there's no way in which we're going to get consensus given the hundreds of cases and that the Supreme Court has heard, or in the lower courts have heard, to get anybody to agree on what it is that that particular thing means. And so what happens is it turns out chevron's in all favors and sometimes you even cite it and then you kind of say, but it doesn't work. Or sometimes you sit and say it does work, it's an absolute pastiche, a confused sort of situation and there's nothing that you can do to stop them. And so then you come to Loper Bright and of course that cleans everything up until the second case comes down. And you mentioned what do we mean by new?

Is it new? Is it newer, right? 2010, 2020? Well, my instinct is that newer means new, but they don't have the comparative in there. They don't give a specified date. And what's going to happen is you're going to see cases like this replicate themselves time after time. So what's going on here is there will certainly be a shift in terms of the way in which things are done and some things will be taken off the agenda. And it's not clear whether these are things I like or don't like and I think you have to be kind of content neutral on this sort of stuff. But I think there's another factor, which is every bit is important, which is what's going to happen is everybody and his uncle is going to adapt to Chevron and they won't do things as much through regulation. We've already seen this very much in the Biden administration.

They had never found the topic for which they don't like using executive orders. And God knows exactly the way in which these things are going to be subject to various kinds of situations. And not only that, if they lose once they're willing to try it second time, third time, just look at what has happened with respect to the student loan type situation where I think they just completely butchered the statute. They get repudiated by courts of Democrats and Republicans, but it lives on and fights again. And so what you really have to understand is that a chevron is something which tells you what's going to happen at the review process, but it doesn't tell you what's going to happen inside an administration, whether it be Democratic or Republican. And it turns out outright defiance is certainly one of the possible responses that you can have.

We've already seen it happen once and I'm sure we'll see it another. And the other thing I think that will happen is all of a sudden statutes, which seem to be unclear and therefore you want it to have deference applied to them all of a sudden become crystal clear one way or the other. And my favorite illustration of this is you take Title VII and whether it covers gay sex, transgender stuff and so forth, and back in the Chevron days, nobody said the statute was clear, but they all said there's a little bit of ambiguity in there,  we're going to run with Chevron and basically say that these things are covered. Well, you can't do that. And so who did it, but none other than Justice Gorsuch, he found the statute clear, right, clear in the wrong way. I might add as far as I was concerned.

But you're going to see that happen all the time is that what people will do is change the nature of their arguments. And it turns out if you were for or against this before Chevron was overruled, you'll for or against it after Chevron's overruled and you won't see much of a substantive change in position. So that then leaves you to the question of what's going to happen next? And the first thing which Bob said, and I think it's kind of right, is we don't know nothing yet until we see the way in which the new doctrine is going to be applied. And it turns out that there'll be many twists here just as they were on the other ways. And it also I think is going to be the case that there'll be other mechanisms that will be introduced and used in order to achieve executive dominance of one kind or another.

And it's also the case, I think that if the statutes you want to get through, you can't do it through administrative delegation, it may well be that Congress will now be much clearer as to what it means by a point source and so forth. So all the parts of this stuff are going to be moved and there're going to be other kinds of complications as, for example, in Loper Bright, one of the things that I thought really mattered didn't seem to get much attention, which is that revenue bills are supposed to begin in the house. And that seems to me pretty clear to say that you can't let an administrative agency decide to attack various kinds of revenues on its own. Well they didn't pick that up. And so the question you're going to ask is all the things that might've been hidden in Loper Bright, which weren't said, are they going to come back to haunt us in some particular way?

I think the answer is we really do not know that. So I'll end on this note is I have always been a traditionalist on these issues and I think that the rule of law requires that discretion be confined to those cases in which they're "genuine, deep and unavoidable ambiguity". There're always going to be such cases and that you do, as Justice Roberts said, the very best that you can do in order to make it. But so long as we do not have any statute or any version of language, which is so crystal clear that in every case it dictates one result, we will still continue to fight on this battle. But we may not be fighting at the 38th parallel. We may be fighting at the 36th or the 40th parallel to take a warlike image and so forth, and we will see which way it starts to play out.

But anybody who kind of believes that this case any more than Chevron is going to put an end to a great debate is mistaken. The real changes that I think have to be made in many cases are on the substantive standards. And so to give you what I regard as a crushing defeat of the "74 Pinehurst case, which spurred all the attacks that were made against rent control statutes in New York, is a huge disaster. And nothing about Chevron one way or another is going to be able to solve what I regard as a fundamental problem. And that's the problem having very weak substantive rights with respect to property protection and similar issues. So there it is.

Jonathan Brightbill: Great. Thank you very much, Richard. Okay, and now I'm going to turn it over to Andrew Mergen. Professor Mergen is the visiting assistant clinical professor of law and faculty director of the Emmett Environmental Law and Policy Clinic at the Harvard Law School. Prior to that, I had the privilege of working with Professor Mergen for a number of years where at the Department of Justice where he ultimately served as chief of the appellate section of the Environment and Natural Resources Division. So, Andy, take it away please.

Prof. Andrew Mergen: Yeah, I find myself agreeing with so much of what Bob and Richard had to say. I think I'll make three points here really quickly. The first to pick up on a point that Professor Epstein made very clearly, which is that anybody who thinks we know where the law is going is just wrong. Loper Bright was decided, as we all know this term, this past term, and we don't know exactly how the doctrine's going to develop. We have cases that I think give us some data points like the US Sugar case, but it's important to remember that a lot of those cases that we're looking at that are being decided most recently really weren't briefed under the Loper Bright regime. And there may have been supplemental 28(j) type letters that were submitted to apprise the court of how the change in law might affect how the court looks at things.

But the agency decisions at issue for instance, were not developed in line with the language in Loper Bright. So we're a year or so at least I think from really knowing what is left of deference, like doctrines after Loper Bright, it's really just too soon to say at the end of September, Justice Kavanaugh gave a speech at a Catholic University and he spoke specifically about Loper Bright and he said it's really important that we not overread it, that it's a course correction, I think is sort of what he indicated. And it's a hard decision to parse because, and I'll try to put a little detail on what I'm going to say in a second, but there's a lot of mixed messages here. There's a very strong message that says Chevron is overruled, right? It's overruled, as Professor Epstein sort of indicated on APA grounds not on constitutional grounds, it's not a constitutional decision, it's a statutory decision sort of suggesting that Chevron deference was well finding the Chevron deference was inconsistent with the APA language.

But at the same time, the court, especially in the language around footnotes five and six of Loper Bright identifies three buckets of where agency discretion as opposed to deference must be recognized. And the first bucket is where Congress has sort of expressly delegated authority to the agency to define a term. And the second bucket is where it's empowered the agency to prescribe rules to fill up the details. The first bucket is a little bit easier to understand. That's where define a type of employee under the Fair Labor Standards Act or something like that. The second really seems to deal with broad delegations, and I think it's the hardest of the three buckets that the court identified in Loper Bright to understand. And the third is one that I think Justice Kavanaugh has spoken about previously. He did a review of Judge Katzmann's book and the Harvard Law Review where he talked about some of this, but he sort of says, Congress can empower agencies to- leave agencies flexibility, appropriate, reasonable as the administrator shall determine, right?

These are languages, this is language, all that occurs in statutes and would give the agency an enormous amount of discretion to sort of make decisions presumably informed by its expertise. So there's three buckets that the court has expressly said are open. They look sort of Chevron-like in some regards, although I think there is a big difference between deference and discretion for sure. And then there's the court's reference to Skidmore and this power to persuade and how much life, what that really means is yet to be determined. So there's a lot going on here and the agencies haven't really, the agencies have been thinking about this for a while. We knew, I think even when John, when you and I were working together, we understood that there was a lot of hostility to Chevron. We nonetheless made Chevron arguments. Oftentimes we made them as sort of second arguments, right?

First we're going to argue step one, and then we might say, well, if you're not buying that Chevron deference has a role to play. But I think probably for the last decade or so, DOJ has been focused on using the traditional statutory terms in most of the cases in the lower courts, there are outliers. It's a big government, not everybody gets the same memos about how to proceed or has the same comfort with making these arguments. But now we have some additional guidance. And I agree with Professor Epstein again that probably it's going to take us a while to shake out sort of what Loper means, but the agencies will give it their best shot and we'll know more as that, as they work with this language to sort of fit things in and really work in the first instance in terms of showing the reader and their regulatory initiatives and their orders that their interpretation of terms is really the best, the best interpretation using the tools that the court would use.

The thing that I'm most interested in seeing what happens next. And this also relates to something that Professor Epstein said, which is that people are going to have- feel about these issues as they feel about them. And one of the criticisms of overturning Chevron was what's better, right? This is a point I think that Chris Walker and Kent Barnett scholars who will be familiar to FedSoc viewers and listeners, they filed a brief in Loper Bright saying, if you're going to get rid of Chevron, you have to have something better. And I don't think anything better has really been identified. And they said one of the things that they think the strength of Chevron is, was that it had a leveling effect in terms of preventing maybe some decisions from being hyper-partisan. I think the notion that both tools of construction, standard tools of construction and when you're going to apply deference can be are all in the eye of beholder.

I am sort of concerned though that the demise of Chevron will only increase sort of the venue and forum shopping that has all long been a part of the law, right? And the Trump administration, you wanted to sue in Hawaii, you wanted to sue in NDCal, you wanted to sue SDNY and in the Harrison administration, you want to sue in Louisiana, you want to sue in Texas, you want to be in the Fifth Circuit. One of my concerns is are we just going to see more heightened forum and venue shopping as a result of the demise of Chevron? And that's one of the things I'm really looking for as we sort of sort out what the world looks like going forward. And I'll stop talking. Thanks.

Jonathan Brightbill: Thank you very much. So I was going to take this conversation in one direction, which was, is Loper Bright and the fall of Chevron necessarily a good thing for a putative president Trump to be coming in? But I think you all already addressed that. I want to take things in a little different direction, which is I agree with some of the comments made that Chevron was very often just a tool that judges used to use as a backstop the result that they would've otherwise reached and gotten to anyway. And that the number of Chevron cases that were out there where there was true, honest to goodness deference going on were pretty far and few between. But now that Chevron is gone, I'd like someone to comment on what this means, not to cases, but what this means is the incentives to our overall government and in particular to the Congress, Richard, you suggested, okay, well maybe they're going to write clearer, right? But there's some suggestion that particularly during the second term of the Obama administration, that rather than try to work through the legislative process, the two parties began to go down this road of, well, we're going to use the agencies to try to accomplish our objectives, notwithstanding the statutes and respond to their inability to reach legislative compromise that way. Do any of you see that as a credible argument and see this as a salutatory development in terms of one that may actually not, to your point, Andy, that it could prove divisive, that it could actually prove to be something that forces compromise and work together again?

Prof. Richard A. Epstein: No. I mean the Biden administration is not a compromising administration, they may be a right or wrong, but I think one of the ways in which you can understand that is to figure out, as Andy said, the difference between discretion and deference. And Bob said the same point, look at some of the earlier cases and what is going to happen to them. So one of the cases is deference with respect to the definition of an employee under the Fair Labor Standards Act. And the decision that was made by Justice Scalia no less was just patently absurd. What he said is, anybody who turns out to be a simple, a low level employee can be subject to any discipline. And so that meant that if you were a captain in the police force, you were arguably an employee when the statutory definition meant that to cover patrolmen and not even to cover basically sergeants and commanders of any sort.

And I think that that kind of decision under Loper Bright will no longer sustain itself. I think a second problem that is interesting is what's going to happen to Skidmore. Skidmore is basically a giant cop out. The statute was crazy, and what it did is it said that what we're going to do is to pay you an overtime wage. And the employer before that statute passed, had developed this following strategy. If you are sitting around sleeping or playing checkers, I'm going to give you a very low wage and a lot of food and stuff to eat, but if we call you out for something, we're going to pay you a lot of money because you're now doing some work. And what happens is the guy said, under the Fair Labor Standards Act, you have to decide whether everybody's in and everybody's out. That system was actually an accurate pricing system.

And under Chevron rather under Skidmore, what they said is, well, if you're playing checkers, you basically get the higher wages, but if you're sleeping, you get the lower ones, right? At which point do you have all sorts of crazy assumptions? And the problem that I think you have to face with a statute like that is if the underlying administrative law statute, the substantive of statute is largely incoherent, and then you're never going to be able to cure through administrative meaning. And if you give respect like you did in the Skidmore case, what you're doing is just saying all sorts of crazy and arbitrary distinctions that should doom the statute in some sense are now going to be kept alive under a form of Desmond. But why are you giving him respect? Only because he was an agent guy. There's not a single word in Chevron by Justice Jackson - not Chevron - Skidmore, which said this is a better decision than the alternative before.

It was pure deference on that. And I do think that what I hope would happen is that Congress will basically tighten up the statutes on substantive ground and that where the statutes are clear, like an hour, you should have the response that Justice Calia had when he was pointed out to him seven years later. He said, who wrote that nutty decision? And somebody said, you did, sir, and it was a nutty decision. So I think cases like that will go, but I'm not sure what's going to happen with the Skidmore stuff. I regard what Andy said as being very much an open wedge. That one has to be able to fill more concretely.

Jonathan Brightbill: Andy, Bob, any comments on incentives how this may change them?

Prof. Andrew Mergen: Well this is a point that Paul Clement made at argument in Loper Bright, right? He said that if you go with me here, Congress is going to work better. They haven't taken responsibility for the appropriate legislative drafting. They prefer to just let the agencies run amuck. That's that's a shorthand for part of the argument that he made. And Loper Bright, I am not at all convinced that we're going to see any sort of bipartisanship accrue out of this Chevron decision, not withstanding that, as someone said to me to pick up on Bob's point, they were discussing Chevron with their airline pilot the other day, not withstanding the notion that Chevron is part of the American vernacular as a result of the last term in a way that it has never been before. I think it very unlikely in our very partisan era where so few house seats are truly contested, that we are going to see any bipartisanship.

And as an environmental lawyer and someone who feels strongly that we're at the brink of all manner of environmental catastrophe, this saddens me. I want to be clear that I think Congress should step in. I think the IRA is a good piece of legislation, but it's insufficient. And I know that there'll be strong opinions about that, but I am looking for Congress to do more and I'm not very sanguine that that is going to happen. Now, one thing that people say is that this is going to have a chilling effect on the agencies. And I think that is a legitimate concern that the agencies are going to proceed more carefully and be less ambitious. And I think that is part by the people who brought these challenges is what they intended. I also though, I've spent the last few months talking to people in agencies and what I see is a vigor to really try to get this right to use the tools that they have appropriately to address these major problems we have, whether it's AI or environmental problems. And I think they have the talent and the tools to be able to continue to appropriately regulate across a wide variety of activities. And I'll stop there.

Prof. Richard A. Epstein: Look, I want to comment on the environmental stuff. First of all. I mean the relationship of greenhouse gas, the global warming at the end-alls we're talking about is tricky, much trickier than is commonly proposed. I've actually done a lot of reading about it and find I don't understand it and I don't think I'm alone, but the responses of trying to go all EV is to me a disastrous response. What you need to do is never go to a corner. You've got to find some solution in which you preserve some degree of flexibility and some variability. And I think it by every measure, the hybrid card dominates the electronic vehicle.

 And I think that's a congressional decision to make. And one of the things that bothers me is you start seeing all sorts of executive orders trying to talk about what the mix should be thoroughly inappropriate. And look, one of the- you say you're concerned with the environment, it does not insulate you from the question of means to end, have you picked the statute that's actually going to help achieve the goals that you want? And we haven't done that in many cases. So in California for example, we get more pollution from needless forest fires that are not protected because we don't clear out undergrowth on public land. And you could change all of that stuff. So before I start signing onto anything, I think that there really has to be, not the administrative law debate, but the substantive debate as to whether or not what you're doing is good or wrong. And on these issues, for the most part, I become having studied this more than I care to mention, much more skeptical about what the current administration is trying to do and much more interested in trying to find more modulated solutions that are incremental in design, relying on steady improvements in such things as fossil fuel and correction and fracking and all the rest of that stuff.

Then this complete farce, which is going to fail. I mean the one little article on it in the Wall Street Journal by a man named Judge the other day said, how can you basically have everybody go an electric vehicle when you won't build the stations? Because it turns out you don't care so much about the environment as you do about union protections, equity development, childcare, and all sorts of other stuff. And the question I'm going to actually ask to Bob and Andy, I think it's a good question, when you have an environmental statute like that, is there any kind of thing that the unconstitutional conditions doctrine does to say that you can't lard it over with stuff which is going to slow down the process so that we are now in a complete disjunction, you'll have cause galore and no station. So I'm just curious as to what you both think about that technique of the Biden administration.

Prof. Robert V. Percival: Well, I am not going to take the bait and try to turn this into an environmental debate.

Prof. Richard A. Epstein: No, this is a constitutional debate.

Prof. Robert V. Percival:  I've driven a fully electric car now for 13 years. My second Tesla S, there are five Tesla superchargers between home and work and Baltimore. I live on Capitol Hill in DC, the one at Route 50 and the BW Parkway charges at 1,100 miles an hour. So I have to sprint across the parking lot to go to Starbucks so I can get back in time when my car is fully charged. But what I do want to note is the basic problem, it's a pipe dream to think that Congress is going to solve this. It's been in complete legislative gridlock for so long, particularly on environmental issues. And that's why that's just not going to be a solution. And that's why so much of activism has been devoted to, well, if we can't change the statutes in Congress, let's try to change them in the courts.

Particularly now that we have kind of an activist anti-environmental judiciary in certain particular circuits. The Justice Kavanaugh at oral argument kept harping that one of his major criticisms of Chevron was that it led to frequent flip flops because if you defer to the agencies and a new administration, you defer to them and they go exactly in the opposite direction. And the other Justice kind of made fun of the Brand X decision that Justice Thomas had authored because it said, that's perfectly fine. We'll defer in both cases. That's now pretty much out the window, and I think that's probably a good thing. So we don't know what the implications are going to be for the future, but we'll see what happens.

Jonathan Brightbill: Okay. Well, thank you all very much. I want to start mixing in some questions from our audience. And Edith, I don't know if we have the ability to allow people to join and comment. No, just read all or just read. But I've got a question here from Charles Carin. In RFRA cases seeking exemptions from statutes, an agency takes the role of defending government action against a claim of substantial burden. After Gonzales v. O Centro , the DEA takes that role in cases seeking exemption from the Controlled Substances Act and disputes the religious sincerities of the applicants. This made sense in Hobby Lobby because HHS had the authority to promulgate the regs at issue. However, DES has no congressional authorization or expertise in matters of religion and its guidance for submitting exemption requests has been repeatedly held unenforceable. Is there any hope for a Sackett attack on DEA's jurisdiction? And does Loper Bright help or otherwise affect this issue?

Prof. Richard A. Epstein: I'm completely puzzled about this question and all of it. I mean, when you're trying to talk about various kinds of accommodations that are said to be required by the statute, I think what Andy said is correct. If they're basically delegating you a fact determination on those individual cases, there's going to be no cure to getting those individual cases and it's going to be very difficult to find uniformity. My own instinct about all this stuff, I mean, the point that somebody made earlier that immigration was and is and always will be a quagmire, I think is actually true because if you actually look at the standards, even if you have no discretion, you have no deference whatsoever, it's still very hard to figure out what you're supposed to do. And there'll be large numbers of cases in which there'll be a very deep disagreement. And we know that the organization there is somewhat pathological, at least according to many people who've had to endure rather absurdities. I have no direct contact with them, but that's certainly the reputation.

Jonathan Brightbill: Okay. Another question here is about the impact of Loper Bright regarding deference to administrative agencies at the state level. Obviously, states have their own statutes, but have any of you thought about and looked at all whether the principles are transferable and whether or not we might expect to see some movement in state administrative agency actions and their interpretation by state courts?

Prof. Andrew Mergen: I mean, the reality is that many states have long since dispensed with a deference, a deference like doctrine like Chevron. So I think I going to take a guess, and I may be wrong, but I think Wisconsin, for instance, has been living without Chevron, Chevron-like deference for a long while. It varies state by state. There's actually not in substantial legal law review literature on this point looking to the state examples on some of these issues. I'll stop there because Bob and Richard may know more about this.

Prof. Richard A. Epstein: Yeah, I mean, Jeff Sutton is the man who spends more time on this than anybody else alive. He's on the sixth circuit. But I think the basic lesson that you get is that the dynamics about the role of expertise as opposed to the role of judicial consistency is exactly the same at the state level as it is at the federal level. So I'd be very hard to think that you could come up with a set of arguments that are state specific as opposed to the same arguments that go on both sides of this particular situation. I do think, and I think this is something that's important, is that generally if I had to predict based on political affiliation, whether it would be for or against Chevron, I would say blue for, and I would say red against. And the reason I would say that is I think for the most part, if you want to expand judicial authority, Chevron is a much more powerful tool than if you want a limited judicial authority.

And so therefore, as far as I can see, if I were a Democrat, I would support it. And I think that's probably the way the politics have played out thus far. Certainly if you listen to the public reaction, I think it divides along those blue red lines. And my view is blue states will be very eager to do this, and red states will not. On environmental issues for example, in New York, it's just impossible to get a pipeline through because of the extremely aggressive deference that those state officials take with respect to it. And there's a real movement to try to see if you could rest some of the power back to the federal government where of course you have a much more conflicted situation.

Jonathan Brightbill: So over the long term then, right, Justice Scalia famously moved back and forth from one of Chevron's biggest advocates to then a skeptic at the end of his career and time on the bench. And there were policy arguments that have flowed back and forth. It's more democratic on the other side, it's more consistent with the constitution, due process, the rule of law, and the APA on balance. Where do you all land on whether or not this will be a salutary thing going forward in the future, and that having courts begin to reach single best decisions and then close the books on certain statutes or regulations, and then we move on with that world or having agencies have more discretion and to change policies, where do the three of you all land on the balance or even name something else that weighs in the balance to you?

Prof. Robert V. Percival: Well, I would just return to my original point, which was initially, Chevron was not a blue thing. It was a very red thing, allowing the Reagan administration to weaken air pollution control standards. Because what it did was it permitted a loophole that you could increase pollution in one part of a plant that otherwise would've required you to install state-of-the-art, new air pollution controls, and by creating the bubble policy that no longer was possible. And I made the very same argument, well, doesn't the APA say that all questions of law to be decided by the courts. And Chevron seems to be inconsistent with that, which ultimately is what the Supreme Court endorsed in Loper Bright. So I don't think it necessarily cuts one way or the other. Ideologically, we all know that we live in a world where Congress is in gridlock and it's very difficult to get anything done there. Although they love to spend money, which I guess when you got Manchin's vote meant, we got the Inflation Reduction Act, which has taken a non-regulatory approach to incentivizing a transition to a green economy. So once again, I'm kind of agnostic as to what the long-term impact of this will be.

Prof. Richard A. Epstein: Look, I just want to make one statement. The Chevron doctrine doesn't say you could increase pollution at one site. It says only if you offset it with an equal reduction in pollution at another part. And so the total cap is constant. And then the question, you get higher productivity. And so I think the doctrine is defensible on the merits on that particular ground. There are other statutes where I think the environmental stuff is downright, perverse. I've mentioned some of them with respect to green mandates and so forth. I agree with Bob that if you are sitting there in a very dense area in DC, highly privileged and protected, you're going to find very good EV service. But one of the things to remember is try the rental market. And everybody in the rental market has given up on their EV cars. And I can tell you from family experiences, my son, there's two children are sitting there in a car which runs out when they're on a trip somewhere in the middle of the world and they go to a charging station.

This is in North Carolina, and one is occupied and two are broken. I mean, that's a serious kind of problem, and it's an aggregate problem that one has to face. So I think it's really dangerous to sort of assume that what works in one place works in another. And remember, I'm not trying to ban EVs. I'm just simply saying I don't want to subsidize them. And that if I had to pick a better mix, I would think that improvements in internal combustion engines and the hybrids are a dominant solution. And what happens, I don't want to be yelled out of the table on that stuff. And I do think that Congress can do something like that. After all, they did pass the Inflation Reduction Act, which is a massive statute. That's not a statute with gridlock. It was a statute in which the vote was 51 to 50, isn't that correct?

So it's a different problem there, which is whether or not you're prepared to make major changes without a comfortable majority. And in polarized countries, you certainly are today. And so I would expect the flip flop argument to come back again. My guess is the Republicans, no matter what happens at the presidential level, are going to take the Senate. I think that seems pretty clear given who's up and who's not. And if there's a Trump situation, I do think you're going to see a vengeance on that. They're going to be regulation after regulation that are put into place that are going to be summarily dispensed with, I'm pretty sure on this stuff. And my view is I'll look at them. My presumption is that probably fewer regulations, better targeted, better than more regulations, which I regarded as in many cases ill designed and counterproductive. You're quiet, Andrew. Jonathan. Jonathan, you're not

Jonathan Brightbill: Richard, what did you mean by if there's another President Trump term that you're going to see regulation after regulation?

Prof. Richard A. Epstein: No, I don't mean, I think we'll see a lot of repeals of environmental stuff and orders that were put into place by Biden. I mean, remember, the executive order has the effect. You can do it easily, but it could be easily undone by the next generation. And look, my own view about this is I'm comfortable with executive orders whose major substantive impact is in the term of the President who's currently in place. But I'm very upset about any president, Republican or Democrat who thinks I'm going to do my executive order something to take effect in 2030 or 2035. I think that's just absolutely an effort to circumvent the entire process of congressional control. And I look at all of those things simply by their dates as essentially illegitimate. And going back to the 1930s, I think most people forget about all of the regulations that were held up or struck down.

They were all for very short periods of time. They were all regulations that delegated to Roosevelt so long as Roosevelt were president, but for the next term, you would have to start over again. And we have a very different pattern, very long delegation that are purporting to be non reversible and they will be reversed. And then the flip flop will come there. How do you design a car which is going to have to take 10 years in production if you get three interim changes in the rules between now and that date is the question. I mean, the Kavanaugh point I think is fair. I did a little piece in the National Review with Mario Loyola and which we stressed that point, not original, but nonetheless important.

Jonathan Brightbill: So Andy, looking five years, ten years down the road, what do you think Loper Bright versus Chevron salutatory effect, Justice Kavanaugh was correct, that we're going to get consistency or you'd see problems?

Prof. Andrew Mergen: I guess a lot of people, I'm not a real professor, I'm a clinician, but a lot of people in the academy, and I tend to agree with them, that you can't- deference in some form is not going away because really it makes a lot of sense in some instances to just let the agency with the expertise- I mean, professor Epstein talked about facts and agencies find facts, and some agencies are really good at finding facts. And when they make a decision based on facts, then courts are going to defer to that decision. And so this isn't the end of sort of deference, five years down the line or ten years down the line, they'll still be something for sure. I don't think there's any doubt about that. I am concerned about the near term where there's a lot of confusion because I suspect that the one thing we may all have in common here is a commitment to rule of law values to the notion that we shouldn't, courts shouldn't be hyper-partisan courts shouldn't be polarized.

We should be able to feel like we're going to get the same decision in San Francisco that we're going to get in Amarillo. And I worry that in the short term, this decision is going to create more uncertainty, more polarization and more sort of venue and forum shopping that I think causes the American public to look poorly on our courts and accordingly poorly on our institutions, which are already, like we've talked about, congressional gridlock. I mean, I think we can also all agree that Congress should do its job. And I don't see any effort. And I can remember times, I mean, of bipartisanship. I can remember times where Senator Hatch and Senator Kennedy were able to accomplish things-

Prof. Richard A. Epstein: Hatch-Waxman.

Prof. Andrew Mergen: Yeah, and we don't live in that world anymore. And I think that probably all of the viewers and all of us agree that we need to get back to that.

Jonathan Brightbill: Well, I guess, so none of you took the bait. None of you seem to agree with me that there is - I guess I kind of believe in the all climate argument that this creates incentives for Congress to potentially work together. But -

Prof. Richard A. Epstein: Why would they work together if it's a 51-50 vote? It would create Congress a lot of incentives to pass something, but there's no part, every piece of legislation passes completely partisan that one vote majority.

Jonathan Brightbill: But what I'd like to direct you to though Richard and Bob and Andy is the incentives, not just for Congress, but now the incentives for the agencies and then how that ultimately reflects back on the incentives of Congress, right? Because certainly one of the concerns that we inherited when I came in with the Trump administration in 2017 and looking at things was there was certainly a perception that the existence of the Chevron doctrine had created a perverse incentives on behalf of agencies to not just: "Hey, here's a gap. We're going to color between the lines. We're going to try to come up with a workable rule and get some deference here," but to actually begin to reverse engineer policies trying to take full advantage of potential ambiguities, or at least things that could be argued that could be ambiguous to create wholly new programs or to take things in expansive new ways that were not what Congress intended.

And certainly that resulted in the major questions doctrine to handle some really big things. But do you accept at all that there could be a salutatory effect on agencies now taking a step back, looking at their own authority and paying a little bit more due respect to the rule of law and due process, which is we're going to follow these things more tightly, more closely and not propose big expansive things. That's for the Congress. It's for our executives to work with the Congress, and we're going to stay within our lines and change the incentive structure that way. Do none of you think that that's a point?

Prof. Richard A. Epstein: Not a chance in hell, is my view, because it all depends on who you appoint. Lena Kahn, you look at what's done at the SEC, what's what and what's done with Gensler and done there and done at the FTC and the EPA. Every agency that I have seen, essentially the three, two majority situation is the three just moves. And there's always one or two dissenters. What Gensler did with respect to the global warming disclosure, it's been put on hold. What?

Jonathan Brightbill: That's my point, Richard, right?

Prof. Richard A. Epstein: No, but she's not going to change. Some of these decisions are post what's going on. And so you look at the situation now with Lena Khan, do you think she's going to take back her view that all covenants not to compete are, per se illegal? A position that nobody has ever held in the history of the world, which is so crazy that, I mean, it's just hard to believe, but she's willing to overthrow six or seven hundred years of history, whatever the length of time is, and I just think that it's exactly the opposite. If she thinks Congress is in gridlock, she's going to take it and run as far as she can, and she'll take a three member majority and push it as far as she can. And so I don't see Chevron stopping that in the slightest. She'll say, "Go after me, I'm going to sue Amazon."

Somebody put a piece out there. You take the top a hundred corporations in the United States, 70 of them faced with antitrust violations before the FTC or the DOJ. This is all post-Chevron. I just don't see it. I mean, these are people, the reason why, I mean, the danger of Biden is he made such horrible appointments on all of these things. And whatever you think about Trump, God knows there are a lot to say against him, but that's what is, and what's going to happen is exactly more of that. If there is no Chevron deference, these agencies are going to do individual suits against big players and try to ground them down that way. And if they announce like they're doing the DOJ and the FTC, the more mergers we stop, the better we are. Particularly if we don't have to litigate any of them. That's madness. But that's their position.

Jonathan Brightbill: Andy, Bob, you think this is going to have any effect on agency incentives in the first instance?

Prof. Robert V. Percival: Well, no, I agree with Richard. It'll depend on who's appointed to the agencies in the next administration, and we will have a change of administration regardless of who wins the presidential election.

Prof. Richard A. Epstein: Yeah.

Prof. Andrew Mergen: I guess I just reject sort of the premise of your question, Jonathan. I guess I spent a lot of time in the federal government, and by and large, I just don't, I mean, I'm sure there are outliers, but in terms of career agency staff, I really do think they're dutifully trying to operate within the confines of the authority that Congress has delegated to them, and they're not engaged in overreach, but things change over time. I think- let's talk about a Trump rule, like the Bump stock rule, the Cargill case after the disaster in Las Vegas, the administration, many people, I think you and I know Jonathan worked on those regulations within the Department of Justice, and they made a good faith attempt to respond with regulations to what they considered to be a significant problem. And I think it was a good faith effort. I don't think it was overreach. I think the decision is like if you want to talk about first the principles of statutory construction, I think you read that decision and you're like, this is crazy. You have judges acting like gunsmiths to reach a decision. Is this really where you want to land on this?

Prof. Richard A. Epstein: Let me make a different comment on it. I think they read this statute correctly on the mechanism, but what happened is the way this took place, it was the Chevron problem. Everybody in both parties had a perfect consensus that they should do something about this. And then there was some small screw ups with respect to legislation. And so what the other folks said is: "okay, we all have Chevron, so we'll use that." And if in fact this had gone through the correct process and they had passed the correct statute, I don't think there was anybody who was against what Andy said as the right rule, because they're just too close substitutes for one another. Even if the physical mechanism is different, the social effect is the same, but that's what happened in that particular case. And so ironically, if there was no Chevron deference, they would've had a legislation. So that's the case in which I think given the huge consensus, both things would work. I see, Edith, you're coming after us.

Edith Harold: You're welcome to all give closing statements if you still would like to finish up.

Jonathan Brightbill: Well, I for one, want to thank Richard for wrapping up there with an example that proved one of my points earlier, which was that the lack of Chevron actually may mean that Congress has to work together to get some things right, but for the existence of Chevron might've had. I wish they would have done so in the context of the bump stock thing rather than produced a couple years of litigation. But...

Prof. Richard A. Epstein: Look, I am going to say one thing. I wish everybody well on this stuff, but I'm going to say it again, even if you were to fix all of the stuff, having to administrative law, which I think as Andy and Bob have said, you can't quite do. The huge substantive gaps that exist are going to make it very difficult to have a consensus no matter what the administrative law situation is true. We've mentioned a couple of issues, securities regulation, antitrust regulation, property rights, and environmental law, and you could probably add 10 more to that list. So I think we're in for very exciting and very rough times.

Jonathan Brightbill: Bob, Andy, unless you have anything?

Prof. Robert V. Percival: Well, just I want to thank everyone and mention that the environmental statutes are sort of the, they were passed by overwhelming bipartisan majorities and they authorized agencies to issue regulations of vast economic and political significance, which almost everything EPA does on a national basis could be now considered a major question. When West Virginia v. EPA came down, then it was like the hammer that sees everything as a nail. Everyone was saying: "Oh, this is a major questions doctrine case." I think it's proving not to be true. Same thing with Loper Bright now. There's been a flood of efforts to use that to say: "oh, my case now has to be decided differently in the future." I think it's all overblown. There's going to be tons of litigation, but will there be any real major substantive changes? I'm more skeptical.

Prof. Richard A. Epstein: Okay. Thank you.

Jonathan Brightbill: Great. Thank you. Alright, well, thank you to our panelists and thank you, Edith.

Edith Harold: Yeah, exactly. On behalf of the Federal Society, thank you so much to Professors Epstein, Mergen, and Perceval for speaking, and Jonathan for moderating. We're so grateful for your time and expertise today. And thank you also to our audience for joining us, we really appreciate your participation. You can stay up to date with announcements and upcoming webinars on our website FedSoc.org or on all major social media platforms. Thank you once more for tuning in and we are adjourned.