I’m not a lawyer, but I do love saying chevron deference, even if I barely know what it means. I do know that the Supreme Court on Friday agreed to hear arguments in a second case this term that will tackle the topic of chevron deference, which is making me learn more about it, because it has application to the accounts receivable management industry.
Considered to be one of the most important principles of administrative law, chevron deference refers back to a Supreme Court case — Chevron U.S.A., Inc. v. National Resources Defense Council, Inc. — from 1984. In that ruling, the Supreme Court adopted a two-part test to determine when a court should defer to the answer or interpretation of a federal agency (regulator). In essence (I think), Congress enacts laws and empowers federal agencies to enforce them. Those agencies then enact regulations intended to interpret what Congress has told them to do. Chevron deference is the court’s test for determining if the agency has overstepped its authority or if the court should defer (get it) to the agency’s interpretation of the statute.
I’m a collector, you say. What does this have to do with me? Well, let me give you an example. The Consumer Financial Protection Bureau enacted Regulation F as an interpretation of the Fair Debt Collection Practices Act. Under Regulation F, the CFPB created the Model Validation Notice, which is supposed to offer a safe harbor to collectors who use it. But we are seeing judges determine that the fact that the Model Validation Notice does not contain a date is a potential violation of the FDCPA. Those judges are not giving deference to the CFPB’s interpretation of the FDCPA. Again, I’m not a lawyer, but I think I’m in the ballpark on this.
The Supreme Court had already agreed to hear arguments in one case — Loper Bright Enterprises v. Raimondo — which dealt with chevron deference, but one of the Supreme Court justices — Justice Ketanji Brown Jackson — had to recuse herself from that case. Now, the Supreme Court will hear arguments in Relentless, Inc. v. U.S. Department of Commerce, in tandem with Loper, and all nine judges will be able to participate.
If the Supreme Court overturns Chevron
