In a recent case, the D.C. Circuit showed us how the U.S. Supreme Court's decision in Loper Bright Enterprises v. Raimondo could affect a swath of regulatory enforcement matters.
The case is Amazon Services v. U.S. Department of Agriculture, No. 22-1052 (July 26, 2024). There, a set of federal statutes authorized the Department of Agriculture to penalize companies that "aid, abet, cause, or induce" the unlawful importation of certain products. Overseas sellers were shipping those products to Amazon fulfillment centers in the United States for further distribution. The Department determined that Amazon, by making its fulfillment centers available and providing fulfilment services, had aided, abetted, caused, or induced the sellers' unlawful importations. The Department fined Amazon $1 million.
Litigation ensued. Amazon maintained that the statutory phrase "aid, abet, cause, or induce" requires conscious and culpable participation in unlawful conduct. The Department, in turn, argued that aiding-and-abetting liability may be found on a strict-liability basis. This was apparently consistent with prior agency action in which the Department had "liberally interpreted" the statutory phrase such "that neither bad intent nor any mens rea at all were required to find liability." (Internal quotation marks omitted.)
The D.C. Circuit sided with Amazon, concluding that the statutory text requires "conscious, voluntary, and culpable participation in another's wrongdoing." But the Department had one "final argument for its strict-liability interpretation of aiding-and-abetting liability": "an appeal for deference under the Chevron framework."
The court made quick work of this argument, observing: "The Supreme Court . . . recently overruled Chevron, holding that 'courts need not and under the APA may not defer to an agency interpretation of the law simply because a statute is ambiguous.' Loper Bright Enters. v. Raimondo, 144 S. Ct. 2244, 2273 (2024). That holding governs here and precludes us from deferring to the Department's interpretation under the now-overruled Chevron framework."
The civil (and even criminal) enforcement landscape is full of federal statutes like this, and it's not uncommon for regulators to "liberally interpret" statutory text toward the end of achieving one agency goal or another. But post-Loper Bright, courts may not accord Chevron deference to such interpretations. Parties facing agency enforcement action should take heed.
This article is presented for informational purposes only and is not intended to constitute legal advice.