The Supreme Court ruling striking down “Chevron Deference” could have implications for regulation of commercial space activities. (credit: Joe Ravi, CC-BY-SA 3.0)

Taking the thumb off the scale: Chevron Deference, its repeal, and the effect on regulation of orbital debris

by Michael Listner
Monday, July 15, 2024

The US Supreme Court issued a seminal decision on the power of federal agencies to regulate in Loper Bright Enterprises v. Raimondo on June 28, 2024.[1] Loper challenged a regulation by the National Oceanographic and Atmospheric Administration that mandated fishers to pay for at-sea monitoring programs via the Magnuson-Stevens Act even though the act is silent on the matter. Loper also challenged whether the holding in Chevron v. Natural Resources Defense Council creates an ambiguity where a statute creates a requirement where the court under the Administrative Procedures Act (APA) must defer to an agency’s interpretation of the statute. The Court overruled Chevron when it held:

“The Administrative Procedure Act requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous.”[2]

This essay will briefly discuss the APA, concisely explain the Chevron Deference and elaborate on how the Chevron Deference might have figured into the issuance of regulations relating to orbital debris by two Outer Space Treaty Article VI agencies and how Chevron’s demise might affect those regulations.

The Administrative Procedures Act

The Administrative Procedures Act governs the procedures of administrative law. It also establishes how federal administrative agencies establish regulations and how those regulations are decided. The APA is codified in 5 U.S.C. Subchapter II (§§ 551-559). Federal district courts have subject matter jurisdiction over appeals of administrative decisions under the APA. [3] Final orders like those of the FCC may be directly appealed to US Court of Appeals.[4] The court’s review of administrative actions are de novo and governed by 5 U.S.C. Chapter 7 (§§ 701-706).[5] It is in the context of judicial review under the APA where the Chevron Deference comes into play.

The Chevron Deference

The holding in Chevron v. Natural Resources Defense Council created a standard of judicial review under the APA that replaces de novo review. Under Chevron, a court defers to the interpretation of the administrative agency instead of its own when it reviews a statute that is ambiguous or silent as to the authority of an administrative agency to implement the statute. In other words, when applied by the court under the APA, the Chevron Deference substitutes the court’s de novo review and defers its judgment to the interpretation of the agency. This makes the agency and not the court the arbiter of the interpretation of the statute and hence the judgment of the agency as to what the law says instead of the court.[6]

The threshold inquiry is whether the Chevron Deference applies or not and begins with the premise that the implementing agency in question has been given the authority by Congress to act as a surrogate to interpret ambiguity or silence in the statute they are authorized to implement.[7] The key question being whether Congress delegated authority in the statute to the agency to speak with the force of law.[8] The purview of the deference to the agency is broad, and it has been found to apply when an agency is acting within the scope of its statutory jurisdiction and when it is determining the scope and limits of that jurisdiction.[9]

Once the court determines the Chevron Deference applies to the statutory interpretation in question, a two-step analysis is applied.

Step 1 of the Chevron Deference requires the court to evaluate whether Congress “directly addressed” the precise question at issue and determine if the statute in question is ambiguous or silent.”[10] Step 1 analysis is accomplished using the traditional tools of statutory construction.[11] If the statute is unambiguous, then the court must apply the statute as Congress intended and not defer to the agency’s interpretation.[12] If statute is silent or ambiguous, Step 2 of the Chevron Deference is tripped.

Once triggered, Step 2 of the Chevron Deference requires the court to consider whether the agency’s interpretation of the statute is “reasonable.”[13] Under Step 2 analysis, if Congress has given the agency statutory authority to fill in the blanks of an otherwise ambiguous or silent statute, the courts will give “controlling weight” to reasonable interpretations of the statute by an agency. This means the courts do not have authority to perform de novo review and cannot substitute their own interpretation for a statutory interpretation by an agency that is reasonable.[14]

This means if an inquiry reaches Step 2 analysis, the agency will have a stacked deck that will allow the agency to prevail in almost every instance. The crux of the Chevron Deference resides in its ability to sideline the judicial branch’s independent interpretation of an ambiguous statute for an interpretation that disproportionately benefits the agency and hobbles judicial independence. The Supreme Court recognized this in Loper noting:

“Perhaps most fundamentally, Chevron’s presumption is misguided because agencies have no special competence in resolving statutory ambiguities. Courts do. The Framers anticipated that courts would often confront statutory ambiguities and expected that courts would resolve them by exercising independent legal judgment. Chevron gravely erred in concluding that the inquiry is fundamentally different just because an administrative interpretation is in play. The very point of the traditional tools of statutory construction is to resolve statutory ambiguities. That is no less true when the ambiguity is about the scope of an agency’s own power—perhaps the occasion on which abdication in favor of the agency is least appropriate.”[15]

The overall effect of Loper is that the Court effectively put the weight of statutory construction and interpretation back in the hands of Congress and the judiciary and restored de novo review under the APA.[16] This shift will have substantial impact on all regulatory agencies, and it may have a significant impact on agencies who are Article VI authorizing agencies for non-governmental space activities.

The effect of Loper on non-governmental space activities

The ripples of Loper and the abolition of the Chevron Deference will be felt throughout administrative agencies, the courts, and Congress. Litigants appealing rulings from administrative agencies based on ambiguous statutes will no longer be disadvantaged by the thumb on the scales afforded by the Chevron Deference. Moreover, non-governmentals may seek to challenge regulations based on ambiguous statutory construction or even silence previously relied upon by agencies. Indeed, two agencies who are Article VI authorizing agencies for non-governmental space activities have taken advantage of the thumb-on-the-scale approach of the Chevron Deference may find challenge by non-governmentals to current and proposed regulations now that Chevron is overturned.

The FCC’s assumed authority over orbital debris

The Federal Communications Commission is one of the three Article VI authorizing agencies and perhaps the most significant as its authority over radio spectrum makes it a player in any non-governmental space activity.[17] The FCC receives its authority through the Communications Act of 1934 as amended found in 47 U.S.C. Chapter 5 (§§ 151-646). However, Chevron, through the Chevron Deference, has given the FCC latitude to interpret the act beyond the scope of Congress’ specific intent. This is glaringly obvious with the FCC’s assumed authority over orbital debris.

The FCC is the primary Article VI licensing authority for satellites (space stations) whose primary function is to receive and radiate in the electromagnetic spectrum. The FCC exercises its authority in 47 CFR Part 25 of the Code of Federal Regulations. As part of the licensing process, the FCC further assumes authority to regulate orbital debris over the satellites it licenses. The FCC’s authority to regulate orbital debris in 47 CFR § 25.114(14) is not explicitly granted by the Communications Act and is silent on the matter. The FCC reconciles this silence and ambiguity and justifies its authority using 47 U.S.C. § 303(g) of the Communications Act where:

“Except as otherwise provided in this chapter, the Commission from time to time, as public convenience, interest, or necessity requires, shall— Study new uses for radio, provide for experimental uses of frequencies, and generally encourage the larger and more effective use of radio in the public interest;”

The FCC exemplifies 47 U.S.C. § 303(g) and asserts its authority over orbital debris in its June 9, 2004, Report and Order: Mitigation of Orbital Debris.[18] The FCC has not only reaffirmed this position for the past 20 years but also used it to promote further regulations for orbital debris, including adopting a five-year disposal requirement in 2022 for inactive space stations in low-earth orbit.[19]

When formulating its legal rationale to regulate orbital debris, the FCC was doubtless cognizant that any challenge to its asserted authority would fail if challenged under the APA because of the Chevron Deference. Consider the following line of thinking that may have occurred when the FCC proposed its regulation on orbital debris:

A challenge to the FCC’s asserted authority over orbital debris would have led the court to examine as a preliminary matter whether the Chevron Deference applied, i.e. did the Congress intend in 47 U.S.C. § 303(g) for the FCC to speak with the force of law?[20] The court would likely find that was Congress’s intent and the court would be required to apply the Chevron Deference to the statute in place of de novo review.

The court would begin its analysis with Step 1 where it would evaluate whether the language of 47 U.S.C. § 303(g) was silent or ambiguous on the issue of orbital debris. The court would certainly find 47 U.S.C. § 303(g) is silent on the issue of orbital debris, which would trigger Step 2. In Step 2, the court would quash its own interpretation of 47 U.S.C. § 303(g) and determine whether the FCC’s interpretation was “reasonable”. The FCC would demonstrate its interpretation of 47 U.S.C. § 303(g) was reasonable and the court would in all probability agree. This would compel the court under Chevron to defer to the FCC’s interpretation of the silence in the statute and rule in the agency’s favor.

In summation, the FCC may have considered the Chevron Deference would allow it to prevail in any potential challenge to its interpretation of 47 U.S.C. § 303(g) and thus act as a deterrent, which would discourage non-governmentals from challenging the legality of the FCC’s interpretation of the Communications Act with respect to orbital debris. Even if a challenge was mounted, the FCC certainly concluded that Chevron would permit it to fend off any challenges made through the APA.

With Chevron overruled and de novo review restored with the abrogation of the Chevron Deference for reviews under the APA, future orders from the FCC regarding orbital debris and interpretations of 47 U.S.C. § 303(g) could be challenged under the APA with a result not favorable to the FCC’s interpretation of the Communications Act. Furthermore, the restoration of de novo review in APA reviews by Loper will clear the path for the holding in West Virginia v. EPA and the major questions doctrine to be brought to bear, which means a challenge to a future order on orbital debris regulations could strike at the heart of FCC’s interpretation of 47 U.S.C. § 303(g) and the FCC’s claim of on-orbit authority and its regulation of orbital debris.

All this presumes a non-governmental operator would risk rocking the boat with the FCC. Still, with Chevron overturned, the legal atmosphere is ripe for a challenge. The question is whether the political risk would justify and support a business case to pursue an action to challenge if not the current regulations in Part 25 relating to orbital debris, then future regulations proposed by the FCC.[21]

FAA proposed rule regulating upper stages

The Federal Aviation Administration issued a notice of proposed rulemaking (NPRM) on September 26, 2023. The proposed regulation seeks to require non-governmental launch providers who will perform a launch or reentry that will have an altitude greater than 150 kilometers to submit an Orbital Debris Assessment Plan (ODAP), which would include physical evidence, test results, and analyses to demonstrate removal activities prior to each operation.[22]

The proposed rule would apply to spent upper stages and other components that are released during launch or reentry, during on-orbit aspects of launch or reentry, or during disposal operations. Any pieces greater than five millimeters in size would be required to be removed from highly used regions within 25 years. However, the FAA does not have explicit authorization as Title 51, Chapter 509 does not mention orbital debris.

The FAA’s authority to “authorize” non-governmental space activities is limited to launch and reentry as Congress has not given the FAA “on-orbit” authority to “continually supervise” non-governmental space activities that occur between launch and reentry. Thus lies the problem with proposed rule: orbital debris is a created between launch and reentry and falls into the category of “continuing supervision” under Article VI of the OST. Title 51, Chapter 509 does not give the FAA on-orbit authority to continually supervise non-governmental space activities, which means it cannot regulate orbital space debris regardless of whether a launch and reentry license is involved.

The FAA tries to get around this and cites Title 51, Chapter 509 of the U.S. Code and emphasizes 51 U.S.C. § 50905(b)(2)(B) to try and use the ambiguity within to amplify its authority to license launch and reentries under 51 U.S.C. § 50905:

“The Secretary may prescribe — any additional requirement necessary to protect the public health and safety, safety of property, national security interests, and foreign policy interests of the United States;”

This assertion of authority is dubious at best, especially since the House Committee on Committee on Science, Space, and Technology and specifically the Subcommittee on Space and Aeronautics is the body that can grant the FAA “on-orbit” authority.[23]

It appears the FAA is using 51 U.S.C. § 50905(b)(2)(B) to mimic the FCC’s exercise of “on-orbit-authority” and by extension its authority over orbital debris using 47 U.S.C. § 303(g) of the Communications Act of 1934 as amended.

If this is the case, the FAA may be attempting to use 51 U.S.C. § 50905(b)(2)(B) to assert “on-orbit authority” to orbital debris. If successful, the FAA could theoretically use 51 U.S.C. § 50905(b)(2)(B) to expand “on-orbit authority” to other non-governmental space activities. Yet, the proposed application of 51 U.S.C. § 50905(b)(2)(B) to orbital debris and other on-orbit non-governmental activities may be moot considering the decision in Loper.

The FAA may have relied on Chevron when formulating the proposed regulation, and like the FCC, may have included in its calculus the deterrent effect of Chevron to discourage a legal challenge via the APA using the Chevron Deference to extend its authority through 51 U.S.C. § 50905(b)(2)(B). The FAA’s consideration of the effect of Chevron may have included modeling a hypothetical future challenge to the FAA’s proposed regulation. Consider, with the Chevron Deference intact a hypothetical challenge would allow the FAA to show the court in an APA challenge that as a preliminary matter Congress intended the FAA to speak to 51 U.S.C. § 50905(b)(2)(B) with the force of law, which means the court would find the Chevron Deference applies.[24]

In the hypothetical, the court would move to Step 1 and undoubtedly determine 51 U.S.C. § 50905(b)(2)(B) is silent on the issue of orbital debris. This would trigger Step 2, and the court would be required to set aside de novo review and would hear arguments from the FAA that a reasonable interpretation of 51 U.S.C. § 50905(b)(2)(B) permits the agency to regulate orbital debris and gain de facto on-orbit authority. The court, stripped of de novo review would almost certainly agree the FAA’s interpretation is “reasonable” and Chevron’s thumb on the scale would require the court to rule for the FAA.

It is notable that the FAA announced the proposed rule before the Supreme Court heard oral arguments on Loper, but it was doubtless aware that briefing was well underway even though oral arguments were not scheduled on the docket until November 17, 2023. The question is whether the FAA’s decision to publish the proposed regulation in the Federal Register before oral arguments reflects the FAA’s confidence Chevron would not be overturned or it was a gamble that the proposed regulation could be implemented despite the outcome of Loper.

With Chevron overturned, the deterrent factor of the Chevron Deference no longer exists. The FAA faces the prospect that implementing the proposed rule with Title 51, Chapter 509 as is will invite a future challenge via the APA under de novo review that the FAA could lose, especially with West Virginia v. EPA as an arrow in the quiver of a future petitioner to invoke the major question doctrine. What remains to be seen is whether the FAA can reconcile the proposed rule without further input from the Committee on Science, Space, and Technology or amendment from Congress, implement the rule despite Loper, and survive de novo review under the APA if it is challenged.

Closing thoughts

The decision in Loper is in the books and is the supreme law of the land.[25] The defeat of Chevron and the abolition of the Chevron Deference will have wide-ranging impacts on administrative law on all federal agencies and not just the FCC, the FAA, and the future of the regulation of orbital debris. However, those changes will not appear overnight and will take petitioner employing Loper via the APA to give it solid legs.

Some will use political arguments to invoke the specter of orbital debris and denigrate the Court’s decision in Loper and this author’s analysis of the FCC’s regulation and the FAA’s proposed regulation as not being sensitive to the issue of orbital debris. To that the author offers the following:

First, the issue of orbital debris is a logistical problem, not an emotional issue. Thus, it must be addressed logically and in the context of proper regulations promulgated through explicit Congressional authorization. The emotional argument of an impending Kessler Syndrome and the threat to sustainability compels any means necessary to prevent that end will amount to little more than a temporary feel-good fix that will have little long-term benefits and result in little more than positive political optics without contributing to a long-term solution. Proper regulations that have legislative backing and will survive judicial scrutiny will not only start to address the logistical issue of orbital debris but also preserve the means to create regulations for non-governmental space activities moving forward. In that regard, the decisions in Loper and West Virginia are positive steps in that direction.

Second, the decision in Loper is not the end of any chance of regulatory authority to address orbital debris. Rather, it is a rebalancing of the separation of powers between the three branches that will permit pragmatic regulation to evolve. With that balance restored through Loper and with the decision of West Virginia to complement that balance, the ball falls back to Congress to legislate and provide the explicit regulatory authority to address orbital debris. While some lament that Congress is slow to act, consider the National Oceanographic and Atmospheric Administration issued a Request for Information regarding its intent to seek guidance or initiate rulemaking for the disposal of spacecraft licensed under NOAA’s Article VI jurisdiction.[26] Unlike the FAA and the FCC, NOAA has explicit legislative authority to require disposal of spacecraft upon termination of operations.[27] If the statutory authority for regulating orbital debris can be granted legislatively for one agency, it can be granted legislatively for others.

Finally, as the domestic governance of non-governmental space activities matures the need to implement regulations will become increasingly debated. Think tanks, academia, and NGOs will all play a part in promoting the future of regulation, including its scope and form. That does not diminish the necessity of clear legislative authorization to the agencies tasked to promulgate regulations nor does it diminish the importance of agencies to work within that authorization. Loper and West Virginia have restored the responsibility of both Congress and the judiciary in their respective roles as authorizers and umpires of the administrative agencies who will implement future regulations. With all in their proper place, there is a fair chance to get future regulation right and based on national interests instead of political and ideological preferences. This will provide a balanced and effective regulatory environment to promote non-governmental space activities in the years and decades to come.

Endnotes

1. Loper Bright Enterprises v. Raimondo, 603 U. S. ____ (2024) (slip).
2. Id. at 5-7.
3. 28 U.S.C. §1331.
4. 47 U.S.C. § 402. 28 U.S.C. § 2342(1).
5. “When a court hears a case “de novo,” it is deciding the issues without reference to any legal conclusion or assumption made by the previous court to hear the case. An appellate court hearing a case “de novo” may refer to the lower court’s record to determine the facts but will rule on the evidence and matters of law without deferring to that court’s findings.” Cornell Law School, Legal Information Institute.
6. “It is emphatically the duty of the Judicial Department to say what the law is. Those who apply the rule to particular cases must, of necessity, expound and interpret the rule.” Marbury v. Madison 5 U.S. 137 (1803).
7. CRS Report R44954, Chevron Deference: A Primer, p. 3, May 18, 2023. (citing Adams Fruit Co. v. Barrett, 494 U.S. 638, 649 (1990) (“A precondition to deference under Chevron is a congressional delegation of administrative authority.”); Envirocare of Utah, Inc. v. Nuclear Regulatory Comm’n, 194 F.3d 72, 79 n.7 (D.C. Cir. 1999) (noting that “when it comes to statutes administered by several different agencies—statutes, that is, like the APA and unlike the standing provision of the Atomic Energy Act—courts do not defer to any one agency’s particular interpretation”).
8. CRS Report R44954, Chevron Deference: A Primer, p. 5, May 18, 2023.
9. CRS Report R44954, Chevron Deference: A Primer, p. 7, May 18, 2023, citing City of Arlington v. FCC, 569 U.S. 290, 295 (2013).
10. CRS Report R44954, Chevron Deference: A Primer, p. 8-9, May 18, 2023, citing Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 843 (1984).
11. CRS Report R44954, Chevron Deference: A Primer, p. 9, May 18, 2023, citing Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 843 (1984).
12. CRS Report R44954, Chevron Deference: A Primer, p. 9, May 18, 2023, citing Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 843 (1984).
13. CRS Report R44954, Chevron Deference: A Primer, p. 12, May 18, 2023, citing Chevron U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 844 (1984).
14. CRS Report R44954, Chevron Deference: A Primer, p. 12, May 18, 2023, citing Young v. Cmty. Nutrition Inst., 476 U.S. 974, 981 (1986).
15. Loper Bright Enterprises v. Raimondo, 603 U. S. ____, pp. 21-22 (2024) (slip).
16. The Court’s ruling in West Virginia v. EPA is complemented by its decision in Loper. West Virginia requires administrative agencies “to point to “‘clear congressional authorization’” when they claim the power to make decisions of vast “‘economic and political significance.”
17. See Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, Including the Moon and Other Celestial Bodies, October 10, 1967, art. vi, 18 UST 2410.
18. Mitigation of Orbital Debris, Second Report and Order, 19 FCC Rcd 11575 (2004) (2004 Orbital Debris Order), para. 14.
19. The FCC’s interpretation of 47 U.S.C. § 303(g) grants it “on-orbit authority” and thus “continuing supervision” over non-governmental space activities that it licenses as the primary Article VI authority. See Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, Including the Moon and Other Celestial Bodies, October 10, 1967, art. vi, 18 UST 2410.
20. CRS Report R44954, Chevron Deference: A Primer, p. 5, May 18, 2023.
21. Another opportunity to challenge the FCC’s authority over orbital debris lies in the Supreme Court’s decision in West Virginia v. EPA. Theoretically, a non-governmental could file a declaratory judgment posturing that the Communications Act does not grant the FCC authority to regulate orbital debris.
22. This NPRM is likely inspired by a Report required by the 2021 Transportation, Housing, and Urban Development explanatory statement for the Consolidated Appropriations Act of 2021 “the Committee observes that the exponential rise of non-geostationary satellites, particularly those in low earth orbit, poses an increased risk due to reentering debris. Therefore, the Committee directs the FAA to provide a report to the House and Senate Committees on Appropriations within 270 days of enactment of this act assessing how the FAA launch and reentry licensing process can be leveraged to address this risk.” The Report was submitted to Congress on September 22, 2023.
23. Rule VI(b)(4) of the Rules of the Committee on Science, Space, and Technology U.S. House of Representatives For the One Hundred Eighteenth Congress states: “(4) Subcommittee on Space and Aeronautics. Shall have jurisdiction over the following subject matters: all matters relating to astronautical and aeronautical research and development; national space policy, including access to space; sub‐orbital access and applications; National Aeronautics and Space Administration and its contractor and government‐operated labs; space commercialization, including commercial space activities relating to the Department of Transportation and the Department of Commerce; exploration and use of outer space; international space cooperation; the National Space Council; space applications, space communications and related matters; Earth remote sensing policy; civil aviation research, development, and demonstration; research, development, and demonstration programs of the Federal Aviation Administration; space law; other appropriate matters as referred by the Chair; and relevant oversight.”
24. CRS Report R44954, Chevron Deference: A Primer, p. 5, May 18, 2023.
25. “It is emphatically the duty of the Judicial Department to say what the law is. Those who apply the rule to particular cases must, of necessity, expound and interpret the rule.” Marbury v. Madison 5 U.S. 137 (1803).
26. See Title 51 U.S.C. §§ 60101-60162.
27. 51 U.S. Code § 60122(b)(4) - Any license issued pursuant to this subchapter shall specify that the licensee shall comply with all of the requirements of this chapter and shall—upon termination of operations under the license, make disposition of any satellites in space in a manner satisfactory to the President.

Michael J. Listner is an attorney and the founder and principal of Space Law & Policy Solutions. He is a subject matter expert and practitioner in outer space law, policy and security and an authority on hybrid warfare and lawfare strategy. He is also the General Counsel (pro tem) and Senior Advisor, of Lesath International. The views expressed here are those of the author in his personal capacity and do not constitute legal advice.

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