In a landmark ruling, the Supreme Court issued a decision in Loper Bright Enterprises v. Raimondo on June 28, 2024 overruling long-standing precedent established in Chevron v. Natural Resources Defense Council. As a result, courts no longer have an obligation to defer to federal agencies when interpreting ambiguous statutes, which may have wide-ranging administrative law implications.
What Was Chevron Deference?
In Chevron v. Natural Resources Defense Council ("Chevron"), the Supreme Court set forth a "two-part framework" for resolving challenges to a federal agency's interpretation of a statute. Where Congress was ambiguous or silent on the issue, the Chevron doctrine stated that courts should defer to the agency's interpretation.
The rationale was that agencies were the best suited to make those policy choices that were left open because they were more experienced in their fields than courts.
Loper Bright Enters. v. Raimond
In Loper Bright Enters. v. Raimond ("Loper Bright"), fishing groups challenged the National Marine Fisheries Service's ("NMFS") final rule that required fishermen to pay costs of having federal compliance monitors on their ships. They argued that NMFS did not have statutory authority to mandate that they pay for observers required by a fishery management plan. Applying the Chevron doctrine, the lower courts found NMFS's regulations permissible.
The Supreme Court granted certiorari in these cases, limited to the question of whether Chevron should be overruled or clarified. Ultimately overruling Chevron, the Court characterized the doctrine as an unworkable and misguided framework.
Chief Justice Roberts, writing for the majority, emphasized it was the courts' traditional role to say what the law is. According to the Court, Chevron defies the command of the APA—that the reviewing court is to decide all relevant questions of law—by requiring a court to ignore that reading and defer to an agency's interpretation.
The Court held that courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and they may not discharge this duty of interpretation to an agency just because the statute is ambiguous or silent.
However, federal agencies are not left powerless. Although a reviewing court is not bound to an agency's interpretation when deciding legal questions, it may rely on it as guidance. Under Skidmore v. Swift ("Skidmore"), courts may consider the agency's "power to persuade" by weighing certain factors—the thoroughness of consideration, validity of its reasoning, and consistency with earlier and later pronouncements. Meaning that an agency's interpretation may still hold persuasive power, even though it lacks controlling power. Federal courts have long used this approach when reviewing informal, non-binding interpretations issued by agencies.
Further, where Congress expressly delegates authority to an agency in the statute, the reviewing court's role will be limited to ensuring the agency is acting within those boundaries.
The Court noted that this decision overturned Chevron itself, not judicial decisions made using Chevron deference. It further stated that mere reliance on Chevron cannot constitute a special justification for overruling such a holding.
Looking Ahead
The impact of Loper Bright's decision may not be immediate, leaving open a lot of uncertainty while the legal and regulatory landscapes adapt to the post-Chevron world.
Loper Bright calls for Congress to have a clear intent when enacting statutes. This may include specific directions to ensure statutes are sufficiently authorizing the desired agency action. Congress may also need to engage in looking back on previous legislation to fill existing legislative gaps or ambiguities.
For federal agencies, the removal of deference will make it easier for new regulations to be challenged, leading to more cautious rulemaking. However, the Court noted that Skidmore is still good law, meaning it can be expected that courts may continue to adopt agency rules and interpretations that are persuasive or backed up by significant experience.
Courts may see an uptick in litigation, either from challenges to new regulations, challenges to old rulings, or both. Absent explicit delegation of interpretative authority, there will be more opportunities to challenge inconsistent or unreasonable regulations without having to overcome automatic agency deference.
Now that judges must exercise independent legal judgment when faced with statutory ambiguity, this may lead to a legal patchwork of interpretations by geographical area. As a result, regulated entities will face heightened uncertainty regarding the validity of agency regulations. Without the Chevron doctrine, it will be difficult to predict whether a reviewing court will uphold an agency's construction of a statute.
For now, uncertainty about Loper Bright's full impact remains. Our team of attorneys can assist regulated entities with evaluating the potential impacts on their businesses and any legal and regulatory hurdles they may face following this decision.
McCarthy Lebit would like to thank law clerk Grace Warren for her effort in assisting with the preparation of this legal blog post for The More Report.
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