Legal Definitions - Chevron deference

Chevron deference is a fundamental principle in U.S. administrative law that dictates how much respect, or "deference," courts should give to a federal government agency's interpretation of a law it is responsible for administering. This doctrine was established by the Supreme Court in the landmark 1984 case, Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.

At its core, Chevron deference means that if a law passed by Congress is unclear or "ambiguous" about a specific issue, and Congress has not directly addressed that issue, courts should generally accept a federal agency's reasonable interpretation of that law. The court's role is not to decide what it thinks the best interpretation is, but rather to determine if the agency's interpretation is a permissible and rational way to understand the statute.

For Chevron deference to apply, several conditions must be met:

• The law in question must be ambiguous or silent on the specific issue being interpreted.
• The interpretation must come from the federal agency that Congress has tasked with administering that particular law.
• The agency's interpretation must be reasonable and rational, even if it's not the only possible interpretation.
• The interpretation must have been reached through a formal process that carries the force of law, such as official rulemaking (where the public has a chance to comment) or formal adjudications (like a court hearing within the agency). It typically does not apply to informal guidance like policy statements or agency manuals.

Here are some examples illustrating Chevron deference:

• Example 1: Environmental Regulation and Emerging Technology

  Imagine Congress passed the Clean Water Act decades ago, broadly defining "pollutant" to include various chemical and biological substances. Years later, a new industrial process develops that releases microscopic plastic particles into waterways. The Act does not explicitly mention "microplastic particles." The Environmental Protection Agency (EPA), the agency responsible for enforcing the Clean Water Act, conducts a formal rulemaking process, gathers scientific evidence, and issues a regulation stating that these microplastic particles fall under the Act's definition of "pollutant" due to their potential harm to aquatic life. A company challenges this regulation in court, arguing that microplastics are not explicitly listed. Under Chevron deference, the court would likely uphold the EPA's interpretation because the original statute was ambiguous regarding novel pollutants like microplastics, and the EPA, as the expert agency, provided a reasonable interpretation through a formal process.

• Example 2: Financial Markets and Digital Assets

  Consider the Securities Act of 1933, which broadly defines what constitutes a "security" to protect investors. In the modern era, new types of digital assets emerge, such as certain complex cryptocurrencies that share characteristics with traditional investment contracts but are not explicitly named in the decades-old statute. The Securities and Exchange Commission (SEC), charged with regulating securities markets, conducts a thorough investigation and issues formal guidance, after public comment, classifying a specific type of digital asset as a "security" under the existing law. If an issuer of this digital asset challenges the SEC's classification in court, the court would likely apply Chevron deference. Given the ambiguity of applying an old law to new technology, and the SEC's expertise in financial markets, the court would defer to the SEC's reasonable interpretation, provided it was not arbitrary or contrary to the clear intent of Congress.

• Example 3: Public Health and Novel Food Products

  Suppose the Food, Drug, and Cosmetic Act defines "food additive" as any substance intended to become a component of food or affect its characteristics. A company develops a novel ingredient for processed foods derived from a genetically modified organism that has never been used before. The statute does not specifically address ingredients from genetically modified organisms. The Food and Drug Administration (FDA), responsible for ensuring food safety, conducts a formal review and issues a regulation requiring this new ingredient to undergo rigorous testing as a "food additive" before it can be used in products. The company argues it's a natural ingredient and not an "additive." A court reviewing this dispute would likely apply Chevron deference. The statute's definition of "food additive" is ambiguous when applied to entirely new, engineered ingredients. The FDA, with its scientific expertise in public health and food safety, made a reasonable interpretation through a formal process, which a court would generally respect.