Chevron Decision Will Impact Privacy and AI Regulations
The Supreme Court has issued a 6-3 decision in two long-awaited cases – Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce – overturning the legal doctrine of “Chevron deference.” While the decision will impact a wide range of federal rules, it is particularly salient for ongoing privacy, data protection, and artificial intelligence regulations across the federal government.
As a resource, today, Future of Privacy Forum also releases for the public an Issue Brief: The Role of Chevron Deference in Federal Privacy Regulation (read it here). In this Issue Brief, we highlight the current role that agency deference plays in data protection, privacy, and AI-related efforts across the federal government. These include major ongoing efforts such as the FTC’s Commercial Surveillance and Data Security Rulemaking, updates to the Child Online Privacy Protection Act (COPPA), and inter-agency efforts to prevent the use of discriminatory automated systems in the housing market and workplace.
For the last forty years, the Chevron doctrine (Chevron v. NRDC) has provided an analytical framework for courts to use when examining agency interpretations of ambiguous or deferential statutes. In situations where a statute is ambiguous or provides direction for further agency interpretation, courts have deferred to federal agency expertise. This analytical framework is now overruled. The majority opinion calls the doctrine “fundamentally misguided” and “unworkable,” emphasizing the separation of powers and the unique role of judicial review. Specifically, the decision held that the doctrine is incongruous with Article III of the U.S. Constitution, which delegates statutory interpretation to courts, as well as with the Administrative Procedure Act (APA), which governs administrative processes and specifies that courts must decide “all relevant questions of law.”
In contrast, courts will now be expected to exercise independent legal judgment, even when the statutes are ambiguous or silent on an issue, without deferring to the agency’s interpretation in place of their own. Courts can still respect and be informed by agency expertise (a lower standard known as Skidmore deference).
In privacy and AI, fields in which technology and business practices are evolving rapidly, this decision is especially important. Statutes must contain enough flexibility to remain effective over time, and inevitable ambiguities are likely to arise. Notably, several Justices brought up AI during oral arguments, with Justice Kagan noting that AI was likely to be “the next big piece of legislation on the horizon,” and that “Congress can hardly see a week in the future with respect to this subject, let alone a year or a decade.” The dissenting opinion expresses these same reservations about long-term workability, emphasizing highly technical and expertise-driven statutory questions that occur and the potential that courts will be ill-equipped to address them (“A rule of judicial humility gives way to a rule of judicial hubris.”). Furthermore, as Congress grapples with passing a comprehensive privacy law, the decision adds a new challenge of ensuring flexible, future-proof language that simultaneously contains enough specificity to avoid as many ambiguities as possible – sure to be a unique challenge for technology regulation in years to come.
