Some background is necessary. A 1984 Supreme Court case, Chevron U.S.A. v. Natural Resources Defense Council, established a two-step procedure for deciding when courts should yield to executive branch agencies in interpreting regulatory statutes. First, the court should decide whether the statute is clear. If it is, then the agency has no room for interpretation. If it is not clear, then the court should to defer to the agency as long as the "the agency's answer is based on a permissible construction of the statute."
Many people expected King v. Burwell to be decided on Chevron grounds. Either the court would decide that the statute was clear and would invalidate the Internal Revenue Service (IRS) interpretation of the statute as allowing subsidies for people getting health insurance from the federal exchange. Or it would say the statute was not clear and that the IRS had a permissible (or non-permissible) construction of the statute. Roberts took neither of these approaches. Instead, he wrote that Chevron did not apply because the issue was of "deep economic and political significance." Such issues are not to be decided by agencies such as the IRS; instead, they were the purview of the courts.
Why does this matter? Several noted scholars of administrative law (see here and here) have noted that Roberts has signaled a general movement away from Chevron and judicial deference to regulatory agencies. If courts do not defer to agencies, then it will be easier for those looking to overturn agency regulations to find a receptive ear in court. Industries looking to overturn future regulations will be sure to cite King v. Burwell in their briefs and argue that the issue they are contesting is of deep significance.Breitbart reports:
In Michigan v. Environmental Protection Agency, the Court found 5-4 that the EPA could not exceed its regulatory authority by targeting certain emissions from coal plants. Justice Scalia, in his opinion, states that the authorization statute for the EPA in this case, the Clean Air Act, states that the EPA must consider whether regulation is “appropriate and necessary” – and that the language of the provision requires that the EPA consider cost when determining “appropriate and necessary.” The Agency, writes Scalia, did an analysis finding that power plants would have to absorb costs of $9.6 billion per year, and would generate benefits worth $4 to $6 million per year. Scalia concludes:One would not say that it is even rational, never mind ‘appropriate,’ to impose billions of dollars in economic costs in return for a few dollars in health or environmental benefits…EPA’s interpretation precludes the Agency from consideringany type of cost – including, for instance, harms that regulation might do to human health or the environment.Justice Thomas’ concurrence goes further: he suggests that the courts should not defer to executive agencies in terms of interpretation at all. Agencies, Thomas says, “are engaged in the ‘formulation of policy.’ Statutory ambiguity thus becomes an implicit delegation of rule-making authority, and that authority is used not to find the best meaning of the text, but to formulate legally binding rules to fill in gaps based on policy judgment made by the agency rather than Congress.” Justice Kagan, joining her leftist colleagues, wrote that the EPA had taken into account cost.