Chevron USA Inc v Natural Resources Defense Council: The Birth of Chevron Deference

Decided in 1984, Chevron USA Inc v Natural Resources Defense Council Inc, 467 U.S. 837 (1984), is one of the U.S. Supreme Court’s most frequently cited administrative law decisions. The case outlines the test employed by courts when considering a government agency’s own interpretation of a statute that it is charged with administering.

Facts of Chevron USA Inc v Natural Resources Defense Council

The Clean Air Act Amendments of 1977 imposed certain requirements on States that failed to achieve the national air quality standards established by the Environmental Protection Agency (EPA) in prior legislation, including the requirement that such “nonattainment” States establish a permit program regulating “new or modified major stationary sources” of air pollution. EPA regulations promulgated in 1981 to implement the permit requirement allowed a State to adopt a plantwide definition of the term “stationary source,” under which an existing plant that contains several pollution-emitting devices may install or modify one piece of equipment without meeting the permit conditions if the alteration will not increase the total emissions from the plant, thus allowing a State to treat all of the pollution-emitting devices within the same industrial grouping as though they were encased within a single “bubble.”

Natural Resources Defense Council, Inc. filed a petition for review in the Court of Appeals, which set aside the regulations embodying the “bubble concept” as contrary to law. Although recognizing that the amended Clean Air Act does not explicitly define what Congress envisioned as a “stationary source” to which the permit program should apply, and that the issue was not squarely addressed in the legislative history, the court concluded that, in view of the purpose of the nonattainment program to improve, rather than merely maintain, air quality, a plantwide definition was “inappropriate,” while stating it was mandatory in programs designed to maintain existing air quality. 

Supreme Court’s Decision in Chevron USA Inc v Natural Resources Defense Council

The Supreme Court upheld the EPA’s interpretation, concluding that the EPA’s plantwide definition was a permissible construction of the statutory term “stationary source.” Justice John Paul Stevens wrote on behalf of the Court.

In reaching its decision, the Court clarified when courts must defer to administrative agency interpretations of the authority granted to them by Congress. As Justice Stevens explained, courts must conduct a two-part analysis:

First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute…Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.

While the Supreme Court has fine-tuned the so-called Chevron doctrine, it remains a key tenant of U.S. administrative law. The decision, however, is not without critics, including Justice Neil Gorsuch.