The case of Chevron U.S.A. v. Natural Resources Defense Council (NRDC) is considered a landmark case in U.S. administrative law. It involved authorities available to and limitations on government agencies, particularly when underlying statutes are ambiguous with regard to the boundaries beyond which such agencies are not expressly permitted to go.
Understanding law is more complicated than a superficial review of federal statutes would seem to indicate. When Congress passes legislation that is signed into law by the president, enforcement of those laws does not begin immediately. In fact, several years can pass before the laws are enforced. This is because of the requirement on the part of the federal agencies responsible for administration and enforcement of the newly-passed laws to draft and implement the regulations that provide much of the substance and requirements that are supposed to reflect the intent of the congressionally-passed laws. These regulations are compiled in the Code of Federal Regulations (CFR) and carry the force of law, even though they are agency interpretations of laws passed by the legislative branch of government.
A second reason why it can be difficult to understand how the law works in practice is the issue of congressional intent. When Congress passes a bill, it is almost always accompanied by a report issued by the Senate and/or House of Representatives committees that enjoyed jurisdiction over the underlying issue. Those committee reports express the intent of Congress in drafting and passing the legislation. The final Conference Report that results from the negotiating process between the two chambers of Congress can be more detailed, and more important for potential future judicial proceedings, than the straight-forward statute.
The reason all of this is relevant is because it goes to the heart of what Chevron v. NRDC was all about, and why it remains important today. The 1977 Clean Air Act was intended to close loopholes in earlier variations of the Act that allowed individual states to skirt the requirements set forth in the law, which is administered by the U.S. Environmental Protection Agency. During the Administration of President Carter (1977-1981), the EPA, reflecting the agenda of the new president, interpreted the Clean Air Act in a particularly stringent manner. The subsequent Reagan Administration EPA interpreted the Clean Air Act’s mandates for reduction of industrial emissions more loosely, allowing for recapitalization of the manufacturing plant without a corresponding decrease in the net amount of emissions involved. In short, the same agency had issued two different standards that American manufacturers were required to meet. The NRDC, a nongovernmental environmental organization, sued in federal court over the new EPA guidelines. The court ruled in the NRDC’s favor. Chevron, an affected party, appealed the court’s decision.
The case eventually made its way to the U.S. Supreme Court, which sided with the EPA as an administrative agency authorized to interpret statutes consistent with the policies of the Administration they serve. Absent greater clarity on the part of Congress, the federal agency in question was free to interpret the law as it saw fit. The significance of Chevron U.S.A. v. Natural Resources Defense Council, then, lies in its ramifications for how federal agencies interpret and administer laws passed by the legislative branch.