Chevron v. NRDC Case Brief: Two-Step Framework and Overruling

Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), was the Supreme Court decision that, for forty years, required federal courts to defer to any reasonable agency interpretation of an ambiguous statute the agency was charged with administering. Decided 6-0 on June 25, 1984, the case created the two-step framework known as “Chevron deference” and became the most-cited decision in American administrative law, referenced by federal courts more than 18,000 times.¹ The Supreme Court overruled it in June 2024, so the doctrine no longer controls how courts read regulatory statutes, but the case still matters because it shaped four decades of federal law and its overruling reshaped the balance among Congress, agencies, and the courts.

The Dispute That Produced the Case

The case grew out of the Clean Air Act Amendments of 1977. Those amendments required states that had not met national air quality standards to set up permit programs for “new or modified major stationary sources” of pollution in nonattainment areas. The statute did not define what counted as a single “stationary source.”

On October 14, 1981, the EPA under the Reagan administration issued a regulation letting states adopt a plantwide definition. Under this “bubble concept,” an entire industrial facility counted as one source. A company could install or modify individual pieces of equipment without triggering new-source permit review, as long as the plant’s total emissions did not increase.²

The Natural Resources Defense Council sued, arguing that the bubble concept undermined the Clean Air Act’s purpose of cleaning up already-polluted areas. Chevron U.S.A. and the American Iron and Steel Institute intervened alongside the EPA.³ The D.C. Circuit sided with NRDC in 1982, striking down the plantwide definition on the ground that emissions trading was “inappropriate” for a program designed to improve air quality.⁴

What the Supreme Court Held

On June 25, 1984, the Supreme Court reversed. Justice John Paul Stevens wrote for a unanimous six-justice majority; Justices Marshall and Rehnquist were absent due to illness and did not participate, and Justice O’Connor recused because her late father’s estate held stock in one of the parties.²⁵

The Court found that neither the text of the Clean Air Act nor its legislative history addressed whether the bubble concept could be used in nonattainment areas. Because Congress had not resolved the question, the EPA was free to fill the gap with a reasonable interpretation. The plantwide definition, the Court concluded, was a reasonable accommodation of the competing interests in economic growth and air quality.³

The Chevron Two-Step Framework

What made the case a landmark was not the bubble concept itself but the general test the Court set out for reviewing any agency’s reading of a statute it administers.

Step One. A court first asks whether Congress “has directly spoken to the precise question at issue.” If the statute is clear, that is the end of the matter: the agency and the court must follow what Congress said.

Step Two. If the statute is silent or ambiguous on the point, the court does not substitute its own preferred reading. It asks only whether the agency’s interpretation is “a permissible construction of the statute.” If the answer is yes, the court must defer, even if it would have read the law differently on its own.²

Justice Stevens grounded the framework in institutional competence and democratic accountability. Federal agencies bring technical expertise and answer to an elected President, which he treated as reasons to prefer their policy judgments to those of life-tenured judges. Policy arguments about a rule like the bubble concept, he wrote, “are more properly addressed to legislators or administrators, not to judges.”³

How the Doctrine Was Narrowed Over Time

Chevron did not stay put. Later decisions added a threshold inquiry and carved out categories of cases where deference did not apply.

Chevron Step Zero

In United States v. Mead Corp. (2001), the Court held that Chevron applies only when Congress has delegated authority to the agency to make rules “carrying the force of law” and the agency exercised that authority in producing the interpretation at issue. Formal rulemaking and formal adjudication generally qualify; informal guidance and letter rulings generally do not. Where Chevron did not apply, an agency’s view could still receive weight under the older Skidmore v. Swift & Co. standard, which looks to the thoroughness of the agency’s reasoning, its consistency, and its expertise.⁶⁷ A year later, in Barnhart v. Walton (2002), the Court eased Mead’s emphasis on procedural formality, saying that the availability of Chevron deference depends on factors including the nature of the question, agency expertise, its importance to the statutory scheme, and the care the agency had shown over time.⁸

The Major Questions Doctrine

A separate limit developed in cases involving regulations of extraordinary economic or political significance. In FDA v. Brown & Williamson Tobacco Corp. (2000), the Court refused to defer to the FDA’s claim of authority to regulate tobacco, reasoning that Congress would not have delegated so sweeping a question in ambiguous terms.⁹ In King v. Burwell (2015), the Court declined to apply Chevron to the IRS’s reading of Affordable Care Act tax credits, holding that Chevron does not govern questions of “deep economic and political significance” central to a statutory scheme.¹⁰ This “major questions doctrine” grew into a significant restraint on agency authority in the years before Chevron was overruled outright.

Why Critics Attacked Chevron

Chevron drew objections from the start, and they grew louder over time. The core constitutional argument was that the framework transferred the judicial task of statutory interpretation to executive-branch agencies, in tension with Article III and with the principle from Marbury v. Madison that courts say what the law is. Directing judges to accept a reasonable agency reading rather than the best reading, critics said, was an abdication of that duty.¹¹

Related complaints focused on Congress. Treating statutory ambiguity as an implicit delegation of policymaking power, some scholars and judges argued, let Congress avoid hard choices and fueled the growth of the administrative state.¹² Practical criticisms followed. Because agencies won whenever their reading was merely permissible, the doctrine gave the government a built-in litigation advantage. It also allowed agencies to switch positions from one administration to the next. Justice Kavanaugh called the threshold ambiguity inquiry “inconsistently applied and prone to judicial manipulation.”¹¹

How Chevron Was Overruled

On June 28, 2024, the Supreme Court overruled Chevron in Loper Bright Enterprises v. Raimondo, decided together with Relentless, Inc. v. Department of Commerce. The cases challenged a National Marine Fisheries Service rule requiring Atlantic herring fishermen to pay for at-sea monitors. Chief Justice Roberts wrote the 6-3 majority opinion, joined by Justices Thomas, Alito, Gorsuch, Kavanaugh, and Barrett. Justices Kagan, Sotomayor, and Jackson dissented.¹³

The majority held that the Administrative Procedure Act requires courts to exercise independent judgment in deciding whether an agency has acted within its statutory authority. Courts may not defer to an agency’s reading of a statute simply because the text is ambiguous. The APA, the Court said, directs that “the reviewing court” shall decide “all relevant questions of law,” and Chevron could not be squared with that command. The Court also rejected the premise that ambiguity operates as an implicit delegation of interpretive authority to agencies and concluded that the doctrine had proven unworkable because “ambiguity” was too malleable a concept to reliably allocate interpretive power.¹³

Justice Kagan’s dissent called the decision a judicial “power grab” that strips expert agencies of authority Congress meant them to exercise and gives courts “exclusive power over every open issue—no matter how expertise-driven or policy-laden—involving the meaning of regulatory law.”¹⁴

What Replaces Chevron

Under Loper Bright, courts must determine the single best reading of a statute using the traditional tools of statutory interpretation. Agency views no longer bind courts, but they are not thrown out entirely. Skidmore respect survives: an agency’s interpretation may still carry weight based on its thoroughness, reasoning, consistency, and expertise. Courts also continue to defer to agency factual findings under the substantial evidence standard and to respect agency discretion when Congress has explicitly delegated it.¹³

One important boundary: the Court said that prior decisions upholding specific agency actions under Chevron remain good law under statutory stare decisis and are not automatically open to relitigation. A party seeking to overturn such a precedent must show a “special justification” beyond the fact that Chevron itself is gone.¹³ A companion decision issued days later, Corner Post, Inc. v. Board of Governors, expanded the window for challenging agency rules by holding that the statute of limitations begins when a plaintiff is injured, not when the rule was first adopted.¹⁵

Federal courts have already begun applying the new standard, and lower courts have split on how much of Skidmore’s lighter form of respect survives in practice.¹⁶ Agencies are expected to build stronger administrative records, press Congress for more explicit grants of authority, and defend their interpretive choices under closer judicial review than Chevron ever demanded.¹⁷

1
SCOTUSblog. Supreme Court Strikes Down Chevron, Curtailing Power of Federal Agencies
2
Justia. Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984)
3
Cornell Law Institute. Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc.
4
Environmental Law Reporter. NRDC v. Gorsuch: D.C. Circuit Bursts EPA’s Nonattainment Area Bubble
5
CNN. Sandra Day O’Connor and the Chevron Case
6
Justia. United States v. Mead Corp., 533 U.S. 218 (2001)
7
Cornell Law Institute. United States v. Mead Corp.
8
Justia. Barnhart v. Walton, 535 U.S. 212 (2002)
9
Justia. FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000)
10
Justia. King v. Burwell, 576 U.S. 473 (2015)
11
Harvard Law Review. The Demise of Deference and the Rise of Delegation to Interpret
12
Congressional Research Service. Chevron Deference: Court Treatment of Agency Interpretations of Ambiguous Statutes
13
Supreme Court of the United States. Loper Bright Enterprises v. Raimondo
14
American Bar Association. End of Chevron Deference: What Does It Mean, What Comes Next
15
Cleary Gottlieb. After Chevron: What the Supreme Court’s Loper Bright Decision Changed and What It Didn’t
16
SCOTUSblog. A Year After Loper Bright: Textualism, Shadow Skidmore, and a New Major Questions Exception
17
Brookings Institution. Life After Chevron: How Will Congress and Federal Agencies Adapt