Congress Moves to Increase Judicial Oversight of Federal Agencies

On January 17, 2017, the United States House of Representatives passed H.R. 5, the “Regulatory Accountability Act of 2017.”  Buried deep within its pages is Title II, the “Separation of Powers Restoration Act.”  That title, although only two sections long, dramatically changes the legal landscape for challenges to the actions of federal regulatory agencies.  Currently, in adjudicating challenges to administrative rulemaking and implementing actions, the federal courts invoke the precedent established in Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 844 (1984).  In that case, the Supreme Court held: “We have long recognized that considerable weight should be accorded to an executive department's construction of a statutory scheme it is entrusted to administer...”  In adopting Chevron, the Supreme Court effectively gives administrative agencies almost complete deference, not only in the interpretation of the regulations they implemented, but also, and more controversially, in the way the agencies carry out the mandates of those regulations.  Thus, challengers seeking to use the judicial system to point out and rectify what are perceived as misapplication of the regulations, butt up against the reluctance of the courts to question or interfere with the agency’s construction of the regulation or the evidence and its application in carrying out the agency’s order.  In Title II, the Congress has stood the current deferential standard on its head. 

In an apparent attempt to reduce the power of federal agencies, Congress has rejected the Supreme Court’s construct in Chevron and replaced the currently awarded deference with a charge to the courts to 

“decide de novo all relevant questions of law, including the interpretation of constitutional and statutory provisions, and rules made by agencies. If the reviewing court determines that a statutory or regulatory provision relevant to its decision contains a gap or ambiguity, the court shall not interpret that gap or ambiguity as an implicit delegation to the agency of legislative rule making authority and shall not rely on such gap or ambiguity as a justification either for interpreting agency authority expansively or for deferring to the agency’s interpretation on the question of law.”
Title II, § 202.
 
As a consequence, the courts will have to independently explore the meaning and applicability of, as well as the agency’s compliance with, applicable laws and rules, based on the facts adduced in the case.  This change is momentous because it levels the playing field in an arena that has, traditionally, been dramatically tipped in favor of governmental agencies’ interpretation and implementation of regulations.  
 
In summary, the legislative process has not yet run its course.  It is of course possible that H.R. 5 will be gutted and Title II deleted.  However, given the composition and disposition of the current Congress, it is likely that the Separation of Powers Restoration Act will be the reality in the arena of challenges to governmental rulemaking in the very near future.