Analysis | Supreme Court Decision Could Make U.S. AI Regulation Nearly Impossible
“Everyone today is interested in AI and what its future holds for us as a society. A part of this conversation is the global AI regulation race. With a decision to overturn Chevron, the U.S. Supreme Court would ensure that any hope of overarching comprehensive regulation–which even those involved in AI development are advocating for–would be lost.”
Sophie al Mutawaly
A potential overturning of a Supreme Court case from the 1980s, Chevron U.S.A. Inc. v. Natural Resources Defense Council, could make AI governance and regulation nearly impossible in the United States. If the Supreme Court overturns its previous decision, it would shift power away from the federal agencies imperative for regulation. Instead, that power would be given to courts, which would exclude expert knowledge needed to navigate new technology. As the United States is attempting to be a global leader in AI and a leading voice in the ongoing AI governance conversation, this would undoubtedly have an impact on AI governance globally.
The United States must keep up with the global governance conversation to maintain its first-mover advantage. China and the E.U. have already rolled out AI governance plans, allowing them to play a larger role in shaping future applications of this groundbreaking technology. With that in mind, American technological diplomacy largely hinges on the outcome of this Supreme Court case.
Why could Chevron be overturned? Fishermen Cases
The appeal to overturn Chevron came from commercial fishermen, led by Loper Bright Enterprises in New Jersey and Relentless Inc. in Rhode Island, who are frustrated with how their federal overseer–the National Marine Fisheries Service–is impacting their work. The Loper Bright Enterprises v. Raimondo case and the Relentless v. The Department of Commerce case were argued in January 2024 and will likely be decided this year.
The fishermen are subject to a 1976 law that hangs over their businesses. The law requires the fishermen to take federal observers out on the water with them to monitor fishing quotas. While the fishermen understand the need for government oversight and quotas to keep fish levels healthy, they are frustrated by the new requirement that the fisherman pay for these outings from their own pockets. In 2020, the agency was low on funds, so having the fishermen bear these additional costs allowed the agency to expand its program. At a cost to the fisherman of $700 a day per weekly excursion, the fishermen lose out on their potential profits per outing, which takes away from individual earnings, while the government monitor earns thousands of dollars regardless of how well the catch is on any given trip. The fishermen argue that the Fishery Conservation and Management Act of 1976 requires there to be monitors overseeing their work to prevent overfishing, but the law does not specifically require the fisherman to bear the burden of the cost. They argue this should be decided by courts and not the agencies enforcing the oversight action.
Thus the question at the core of today’s dispute over the 1976 law is who has the power to interpret the federal law; the agency implementing it or a judge? Until now, this precedent was set in the influential 1984 Supreme Court Case: Chevron v. Natural Resources Defense Council.
The Chevron Case explained
The precedent the Chevron case set is known as “Chevron deference,” which gives federal agencies the power to interpret laws passed by Congress. Typically, Congress intentionally passes ambiguous laws that allow for them to be applicable across numerous industries and remain useful in the future. Congress cannot anticipate future developments, nor can they understand all industries. Therefore, according to the Chevron deference doctrine, judges should defer to interpretations of the law by expert federal agencies.
The political divide over Chevron
These fishermen cases fit more broadly into the ongoing debate about government overreach — brought forward by conservative politicians and justices who are concerned about federal agencies, like the Environmental Protection Agency, having too much power. The New Jersey and Rhode Island fishermen are represented by wealthy conservative groups, like Koch Industries, who have a broader economic interest in limiting government control on regulation.
It has also been argued that the Chevron deference doctrine incentivizes Congress to pass more ambiguous laws than is necessary. This makes Congress’ life easier, as they push the law-making responsibility onto the executive branch. In practice though, today’s divided Congress would be unlikely to pass very precise legislation.
The Supreme Court is split 5–3 along political lines. Conservative justices seem to side with the fishermen, while the liberal justices have asserted the importance that the Chevron deference plays in thousands of cases throughout U.S. legal history to allow effective, necessary regulation. Justice Kavanaugh has cautioned that the Chevron deference doctrine “ushers in shocks to the system every four or eight years when a new administration comes in.” He argues that for this reason, Chevron does not provide stability and that cases should be looked at individually by courts, rather than at the agency level. On the other hand, Justice Kagan pointed to complex industries such as AI as potential losers if Chevron were overturned. She claimed that Congress would prefer people “who actually know about AI and are accountable to the political process to make decisions [about AI]”. Courts, she emphasized, “don’t even know what the questions are about AI, much less the answers.” However, with a conservative-majority Supreme Court, the Chevron decision will likely be overturned.
Overturning Chevron would decrease agency power and simultaneously increase judicial power, which today’s Supreme Court seems to enjoy. After overturning Roe v. Wade and Affirmative Action, Chevron could be yet another addition to the growing list of victories for today’s conservative legal movement. If Chevron is overturned, conservatives would celebrate an open opportunity for extensive deregulation across America.
Implications for AI regulation domestically
So what does today’s case regarding fisherman rights based on a 1980s doctrine have to do with AI regulation specifically? Just about everything. If the Chevron decision is overturned by today’s Supreme Court, then regulation cases would be taken to the courts for interpretation, rather than to the experts within federal agencies. This would lead to differentiation at the state level; what would be deemed permissible in Texas would be very different from what would be deemed permissible in California, making consistent AI regulation impossible. AI in particular is a very complex topic that knows no borders. Therefore, a regulatory framework that varies from state to state would be extremely problematic and incompatible with AI.
This would have lasting impacts on international trade and the attractiveness and safety of the U.S. market, as regulation directly impacts how companies can do business within U.S. borders. If it is unclear what is permitted, this could harm Americans who may no longer be protected under regulatory law designed to protect their data, privacy, and safe internet usage — limiting measures to combat disinformation, for example. Alternatively, countries may favor some regions of the United States over others, based on what regulatory practices fit their business model best, leading to an uneven experience causing issues for consumers and businesses, and making some regions more susceptible to harmful applications of AI.
There have been plenty of bills introduced to Congress by state legislatures on AI regulation and some state-level regulation on AI thus far. If Congress passes some of these proposed bills into law and federal agencies no longer have the power to enforce those laws, state courts can interpret the laws to apply to their state as they please. This would mean that if, for example, Senator Klobuchar’s Protect Elections from Deceptive AI Act passes, it may not be enforced by each state equally for a federal election, thereby undermining the law’s efficacy. Additionally, if federal agencies, which fall under the executive branch, are weakened, then the goals set out by Biden’s October 2023 Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence will be harder to achieve.
Implications for AI regulation globally
Technology and diplomacy have been intertwined, especially in recent years. The U.S. Department of State appointed its first-ever Digital Ambassador in 2022, Nate Fick, to head the U.S. Bureau of Cyberspace and Digital Policy and conduct technology diplomacy globally. A big reason for his appointment was to keep up with other countries in the global digital competition. Fick himself said at his confirmation hearing: “Countries such as the People’s Republic of China and Russia have a very different vision for cyberspace and the use of digital technologies, which is why American leadership matters in this arena alongside like-minded allies and partners.” The European Union passed the world’s first comprehensive AI law at the end of 2023: the E.U. AI Act. It is meant to be a part of their digital strategy to transform the digital space to prepare Europe for what they hope is their “digital decade” driven by European standards, rather than another nation’s framework. China’s AI heavy-handed regulatory framework targets specific use cases of AI, such as the use of deepfakes.
Given the geopolitical implications of global technological competition, Chevron must be kept in place so that the United States can keep up in its regulatory race to shape the future of global AI use. Additionally, suppose the United States wants to engage with China on AI policy, which it should. In that case, the United States will need to show that regulation is possible domestically to have a leg to stand on when debating internationally.
Everyone today is interested in AI and what its future holds for us as a society. A part of this conversation is the global AI regulation race. With a decision to overturn Chevron, the U.S. Supreme Court would ensure that any hope of overarching comprehensive regulation–which even those involved in AI development are advocating for–would be lost.
Sophie al Mutawaly is a graduate student in the M.A. in European Studies program in the Walsh School of Foreign Service focusing on technology policy and international business.
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