In Loper Bright Enterprises v. Raimondo, the U.S. Supreme Court dealt a fatal blow to the Chevron doctrine, ushering in a new era of regulatory practice. On June 28, 2024, the Court handed down a 6-3 decision that overruled Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., which served as a cornerstone of administrative law for 40 years.
About the Chevron Doctrine
In 1984, the Court developed the Chevron doctrine, a two-step process to determine whether an agency applied a reasonable interpretation to an ambiguous statute. Chevron concerned a Clean Air Act (CAA) regulation passed by the U.S. Environmental Protection Agency (EPA) that involved the scope of a permit program. Specifically, the Court addressed whether EPA's interpretation of "stationary source" under the CAA should receive judicial deference. Courts applied the Chevron doctrine when an agency action carried the force of law, such as notice-and-comment rulemaking and formal adjudication, pursuant to the Administrative Procedure Act (APA).
Chevron review involved a two-step process. First, a reviewing court had to determine whether Congress directly addressed the precise question at issue. If congressional intent was clear, then the court applied de novo review, and no deference was warranted. Second, if the court found the statute was ambiguous, it deferred to the agency's interpretation only if it was "based on a permissible construction of the statute." The Chevron Court reasoned that ambiguous statutes constitute an implicit delegation of interpretation and policy discretion to agencies.
Sea Change under Loper Bright
Loper Bright overruled the Chevron doctrine and reestablished the requirement that courts independently review an agency's compliance with statutory mandates. In this case, commercial fishermen challenged a regulation that required them to pay a $710 daily cost for at-sea monitoring programs. The Court held that Section 706 of the APA requires courts to exercise independent judgment when discerning whether an agency's actions exceed its scope of statutory authority. As the final authority on issues of statutory interpretation, it is the responsibility of courts—not agencies—to interpret ambiguous statutory language.
Deference isn't Dead
Although Loper Bright serves as the death knell to Chevron and decades of agency statutory interpretation, the majority emphasized that deference under Skidmore v. Swift & Co. remains intact. Skidmore allows courts to use agency expertise as an aid during the statutory interpretation process. Courts may resort to such guidance by giving "respectful consideration" to an agency's interpretation if it is well-reasoned, longstanding, and grounded in the agency's specialized experience. Although Skidmore permits courts to consider the weight of an agency's judgment, courts can no longer shirk their role to interpret ambiguous statutes.
Ripple Effect on Regulatory Practice
In the wake of Chevron's demise, this new wave of administrative jurisprudence will have far-reaching consequences. While agencies may implement less stringent regulations, the regulated community will have greater opportunity to engage with agencies during the regulatory process. In addition, Congress may lean into drafting more precise statutory language to convey express intent to delegate authority to agencies. The likely near-term impact will be a flood of litigation in lower courts. Such challenges could substantially impact the development of new regulations. The Loper Bright decision indicated prior cases that relied on Chevron are still good law. However, future decisions may overrule such cases if (1) the reasoning was poor, (2) the decision was unworkable, or (3) the agency's interpretation was not entitled to the deference it previously received.
Many environmental policies and regulations may be impacted, including EPA's recent rules concerning the use of per- and polyfluoroalkyl substances (PFAS), also known as forever chemicals. If PFAS rules are challenged, courts may be less inclined to give deference to EPA's interpretations under Skidmore.
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