6th Circuit Wrestles with Interpreting Loper in Tennessee v. Becerra

In Loper Bright Enterprises v. Raimondo, the Supreme Court squarely held that “Chevron is overruled” and “[c]ourts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority.”  After Loper Bright, federal courts may no longer “defer to an agency interpretation of the law simply because a statute is ambiguous.”  Nonetheless, in Tennessee v. Becerra, a Sixth Circuit panel recently granted a 2021 HHS regulation Chevron deference in disguise.  The panel justified this deference based on Supreme Court and Sixth Circuit precedents that upheld different, now-repealed regulations, but which had determined the same underlying statute purportedly authorizing such regulations to be “ambiguous.”  The Tennessee court misapplied Loper Bright and got the law wrong.

Under Loper Bright, courts must identify a statute’s single “best reading” with one important, but limited, caveat.  To guard against disruptive consequences that might flow from upending specific preexisting regulations that have been upheld against legal challenges during the forty-year Chevron regime, the Loper Bright court clarified “[t]he holdings of those cases that specific agency actions are lawful . . . are still subject to statutory stare decisis[.]”  Loper Bright thus tethered the scope of statutory stare decisis to the many, specific regulations upheld under Chevron—not the underlying statutes that courts previously deemed ambiguous at Chevron Step One.

The Tennessee panel majority concluded a 2021 HHS regulation was entitled to statutory stare decisis—i.e., Chevron deference on steroids—because previous judicial decisions held the same underlying statute ambiguous.  The court reasoned that Loper Bright could not dictate abandonment those older cases—specifically, Rust v. Sullivan or Ohio v. Becerra—because Loper Bright “does not ‘call into question prior cases that relied on Chevron.’”  Yet, as Judge Kethledge explained in dissent, such cases were not only “Chevron case[s] down to [their] bones,” but the specific agency actions at issue in those precedents had “since been rescinded.”  There was therefore “no occasion to defer” to these earlier holdings, no basis for statutory decisis, and no reason to avoid engaging in independent construction of the law at issue.

The Tennessee court’s misapplication of Loper Bright inadvertently rolls out the red carpet for agency abuse, overreach, and regulatory ping pong in a host of contexts.  The panel majority mistakenly overread a single, passing sentence in Loper Bright to effectively insulate a wide swath of statutory provisions from Loper Bright’s key teaching: statutes “have a single, best meaning,” and “courts need not and under the APA may not defer to an agency interpretation of the law simply because a statute is ambiguous.”  Tennessee creates a vessel through which Chevron’s ghost may continue to haunt private parties harmed by agency regulations flowing from statutory provisions deemed ambiguous under its now-rejected deference regime.  This must be nipped in the bud.

Tennessee has asked the full Sixth Circuit to rehear the case.  The court should do so to bring its precedent in line with what Loper Bright requires.