Supreme Court Opens Door for Challenging Federal Regulations
How does the recent SCOTUS decision in Loper,? (curtailing the 1984 Chevron ?decision) impact the US Customs Compliance industry specifically?
Background:?
In 1984 Chevron established that courts should defer to federal agencies' interpretations of general or ambiguous laws with a “presumption of correctness” given to the agency which was administering the law.? This has meant that if a law was not written specifically enough, it could be interpreted by the agency through regulations, and deference was given to the agency in court on points of interpretation of law.? This deference resulted in agencies, rather than courts, interpreting “ambiguities" in relevant federal law, with only the low bar of “reasonableness” required to survive court review.? The Chevron ruling expanded the deference to government beyond the 1946 Administrative Procedure Act which allowed that such deference should be given the agency in areas of "policy and factual determinations” but only the courts had the responsibility of ? "interpretation of the law.”
Most often, under Chevron, a private sector litigant would lose its argument if the government could reasonably assume? "good faith efforts" to uphold an ambiguous law. However, in other recent holdings, the Supreme Court has been returning interpretive power back to the courts from the agencies.
In Loper, the most recent case handed down this session, the majority writes that “courts" must exercise "independent judgment" as to whether a statute was properly “interpreted," rather than deferring to “reasonable agency interpretation." With this statement, the Loper decision effectively overturned the Chevron deference as it related to interpretation of the law. (Link to Loper case is below.)
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Reaction:?
Since1984, the deference given by the courts to the administrative state has put the importing community at a disadvantage when arguing a position, law, or regulation with Customs (CBP) and other agencies. The "presumption of correctness" to the agencies enabled the growth of governmental agencies and the proliferation of regulations and actions which, although detrimental to the importing community, have gone unchallenged.? After Chevron, deference became legal precedent, and private sector court challenges reduced in volume while agency regulations increased.? It was thought to be disadvantageous to take a disagreement with CBP or other agency to court? because of the deference, especially where "legal interpretation” by the agency might be encountered.??
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Now:?
It is possible that CBP will be challenged more frequently with the Chevron deference recently overturned by SCOTUS.? As Chief Justice Roberts noted,? “Even when an ambiguity happens to implicate a technical matter, it does not follow that Congress has taken the power to authoritatively interpret the statute from the courts and given it to the agency."?
Taking Action:?
Under the current court powers doctrine, now may be the time to take another look at agency regulations, rulings, and decisions that importers and private litigants may not have challenged in the past with the Chevron deference in place, especially with respect to classification and valuation rulings where ambiguities in statute exist and the interpretation of the law might be at issue.??
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