A family fishing operation just changed the way the federal government regulates, well, everything, including emerging technologies. Last month the United States Supreme Court ruled 6-3 on the case of Loper Bright Enterprises v. Raimondo, which questions whether the court must defer to a federal agency’s reasonable interpretation of an ambiguous law. While this case overturns a 1980s case, over time the law should stabilize and make operating in emerging technology easier.
Loper Bright
Loper Bright concerned whether the National Marine Fisheries Service could force US fishing vessels to pay the salaries of federal observers despite the lack of a congressionally approved law requiring it. Congress created an inspection program, but years later quit paying the inspectors. The federal agency then started making the fishermen pay for the inspectors to sit on the fishing boats–but no law passed by Congress authorized such a draconian measure.
Chevron Deference
Prior to the Loper Bright case, something called “Chevron deference,” named after the 1984 decision in Chevron v. Natural Resources Defense Council, compelled courts to defer to an agency’s interpretation of any arguably ambiguous statute. The worst example of “Chevron deference,” is when agencies use a law’s silence to create new rules, essentially legislating. “Statutory silence” was the issue for Loper Brights’ fishermen, because no law said how the federal fish inspectors would be paid if Congress failed to appropriate money (and no inspector works for free).
Chevron deference led to all sorts of federal agency meddling in technology, such as Net Neutrality, the taxation of crypto, laying fiber in cities, and other new ideas. Worse, as presidential administrations changed, the rules could change with it. Net Neutrality, for example, is in vogue when Democrats control the Federal Communications Commission, but is reversed by Republicans. The underlying statutes passed by Congress rarely change, only the policies and interpretations by the agencies drive this pendulum swing. That’s bad for innovation and creativity.
What a Post-Chevron World Means for Tech
But in a post-Chevron world, now the agencies will have to justify how their interpretations are supported by the Congress’ laws. Since many technologies are far younger than the statutes the agencies rely upon to regulate them, that will be a battle and should help stop the pendulum swing between administrations. Either the Communications Act administered by the FCC allows for Net Neutrality or it does not. Similarly, there will be a determination if Congress authorized the IRS to tax and regulate cryptocurrencies, or if the Securities and Exchange Commission should do so, or both.
Obviously, many in the tech world will want one policy or another. But what matters most is certainty. Innovators, venture capital, and industry leaders can begin to plan for longer time horizons because, over time, the law should become more stable. As more and more cases determine the “right” approach to the scope of an agency’s power, those operating in that space will know that only Congress can fundamentally change the rules of conduct. This will particularly benefit broadband and other capital-intensive industries.
Tyler Martinez is a senior attorney at National Taxpayers Union Foundation, which filed an amicus curiae brief in support of Netchoice before Supreme Court. In law school Tyler served as Executive Editor of the Journal on Telecommunications and High Technology Law (now the Colorado Tech Journal).
