COURTS 
The Business & Industry Association, along with leading national organizations like the National Association of Manufacturers and U.S. Chamber, have long argued for business regulations that are clear, concise and consistent. The U.S. Supreme Court’s recent decision overturning the “Chevron deference” precedent represents a major shift in the regulatory landscape for businesses, especially manufacturers, going forward.
The Supreme Court in a 6-3 decision June 28 overturned its 1984 landmark law precedent, officially known as “Chevron v. Natural Resources Defense Council.” Chevron essentially instructs the courts to defer rulings to a specific agency’s reasonable interpretation of an ambiguous statute. Over the last 40 years, Chevron has been cited more than 18,000 times by federal courts, the most-cited administrative law decision ever.
Why did the Supreme Court overturn such precedence?
The fact it was cited 18,000 times is one reason. Chevron was designed to respect the U.S. Constitution’s separation of powers by requiring courts to defer to federal agencies, so policy decisions are made by politically accountable branches. However, businesses and industry groups grew frustrated with a continued drift from Chevron’s intent and the resulting agency overreach. A steady rise in regulations included a problematic increase in ambiguous rules requiring frequent gray-area interpretations by agencies.
NAM Chief Legal Officer Linda Kelly called the ruling a game-changer for manufacturers, saying Chevron “was at least partly to blame for the unpredictability and overreach synonymous with the modern regulatory state.”
U.S. Chamber President and CEO Suzanne P. Clark called the decision “an important course correction that will help create a more predictable and stable regulatory environment.” Clark added that Chevron had allowed each new presidential administration to advance political agendas through flip-flopping regulations, causing inconsistent rules for businesses.
BIA is the statewide chamber of commerce and New Hampshire affiliate of the NAM. We regularly hear from our members, many of whom are manufacturers, about how a consistent and stable regulatory environment is important to sound investment and planning decisions. Businesses need to know their legal obligations in advance, and those that change by the year have a chilling effect on productivity, investment and innovation.
The Supreme Court’s dissenting opinion argued that Chevron supported regulatory efforts by giving agency experts who are more likely to have technical and scientific expertise the ability to make reasonable decisions where congressional law is ambiguous. Regulations designed to keep air and water clean, food and drugs safe, and financial markets honest were cited.
Proponents of overturning Chevron, however, say the ruling sends a message that regulatory statutes passed by Congress should have the least ambiguity possible to avoid agency overreach and clearly state their enforcement authority. Courts retain the ability to consider agency recommendations in making their decisions. This is increasingly important as NAM reports it’s following more than 100 new or revised regulations under consideration by Congress.
NAM’s Kelly says the onus is now on Congress to provide clear guidelines to ensure laws are implemented in a way that achieves their goal. “Manufacturers are eager to work with lawmakers to develop policies that promote innovation, job creation, economic growth and improved quality of life for all Americans,” she said.
Business leaders are not adversarial, but do prefer limited and focused regulations that are achievable without impractical financial burdens. A pragmatic regulatory framework allows companies and industries to thrive and grow. This is important as the U.S. sees growth in domestic manufacturing perhaps unimaginable 10 years ago.
Today’s technology-driven manufacturing is much cleaner and provides well-paying jobs for American workers. So, while it’s important for Congress to establish regulatory safeguards that protect human health and the environment, it’s equally important to avoid overreach and a restraining of the U.S. manufacturing renaissance.
NAM President and CEO Jay Timmons said the Supreme Court’s ruling will help rein in regulations holding back manufacturers from improving lives, adding, “For anyone who wants to see manufacturing grow and succeed in America, (the ruling) heralds the possibility for a much brighter future.”
The expansion of America’s modern manufacturing sector will create hundreds of thousands of well-paying jobs and a streamlined regulatory framework that doesn’t stagnate economic growth is necessary for long-term growth. The nuances of the Chevron decision can be debated, but it shouldn’t overshadow the opportunity to create the type of well-paying jobs that have moved generations of Americans into greater prosperity.
Michael Skelton is president and CEO of the Business & Industry Association.
