Doomsayers blasted the Supreme Court last month when it overturned “Chevron deference,” a doctrine that gave federal agencies wide latitude to create and enforce regulations. Critics have claimed the court’s decision will hamper the government’s ability to protect the public.
What these critics ignore is that unelected bureaucrats can go too far. Lonnie Thompson and his wife experienced this firsthand.
Acting as a supreme authority with three-in-one power to enact, enforce, and adjudicate laws, state health officials in North Dakota banned hundreds of home businesses from selling food to their neighbors at farmers markets and similar venues. The Thompsons, who relied on the income for survival, suddenly could not make money on their bell pepper relish, fresh salsa, spicy asparagus, and other homemade foods.
“We will be shut down,” Thompson warned in 2020 when the regulations took effect. “People will have to buy their products in a grocery store, where they come from a factory and have all of these food colorings and other chemicals.”
The Thompsons and other families launched their businesses after state lawmakers passed the Cottage Food Act in 2017, allowing people to sell nearly all types of homemade food. Nobody got sick, but state health officials tried to gut the reform anyway.
Initially, state health officials lobbied for repeal at the state Capitol. When this failed, they switched tactics and used the administrative rulemaking process to impose their will. By the time they were done, people such as the Thompsons could sell only a few types of foods off a set list that did not include relishes, salsas, and canned goods.
Rather than quit, North Dakota homemade food producers fought back in state court. Our public interest law firm, the Institute for Justice, represented them. The judge in the case carefully examined the Cottage Food Act and decided the agency’s rules defied legislative intent. As a result, Thompson and hundreds of other entrepreneurs were allowed to reopen.
If the judge had applied Chevron deference, these businesses would have stayed closed. That’s because Chevron made it almost impossible for people to challenge administrative rules in court.
Chevron v. Natural Resources Defense Council, a misguided 1984 Supreme Court decision, forced courts to defer to agency interpretations of laws, so long as those interpretations were plausible. So, even when a mountain of evidence showed an agency was misinterpreting the law, courts had to side with the agency anyway.
The damage was not limited to federal agencies. Courts in 14 states and Washington, D.C., also adopted the doctrine, allowing state agencies to get away with similar overreach.
Loper Bright Enterprises v. Raimondo, the Supreme Court’s new landmark decision, sweeps Chevron into the dustbin. The decision allows judges to use their judgment, just like the court did in North Dakota. If the evidence shows an agency is enforcing a reasonable law, then the rule stays. But if the evidence shows the agency’s interpretation does not make sense, then the rule gets struck down.
This is what happened in Loper Bright Enterprises. There, a family-owned fishing company in New Jersey fought against a rule that forced the business to pay for federal monitoring of its boats—an expense that topped $700 per day and pushed some companies toward bankruptcy.
The National Marine Fisheries Service passed the rule after Congress enacted a monitoring program without specifying who would pay for it. The agency plugged this hole by deciding that fishing companies should cover the expense. The Supreme Court called this an overreach.
This is how checks and balances are supposed to work. One branch of government should not dominate.
Yet this is what frequently happens. Louisiana regulators force African-style hair braiders to complete hundreds of hours of unnecessary training. New Jersey regulators keep baby blood samples collected in hospital maternity wards without parental consent. And Oregon regulators impose Big Dairy regulations on the state’s smallest farms.
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In all of these cases, unelected bureaucrats acted on their own with three-in-one power. They wrote, interpreted, and enforced their own laws. The Supreme Court now recognizes the harm of this.
Champions of the administrative state are upset, but government works best with accountability. The outcome of the Thompsons’ case proves this. North Dakota legislators wrote the Cottage Food Act. Regulators applied it. And the courts kept everyone honest.
Now that Chevron is gone, other jurisdictions can follow.
Erica Smith Ewing is a senior attorney and Daryl James is a writer at the Institute for Justice in Arlington, Va.