Washington — In a blockbuster ruling Friday, the Supreme Court a 40 year old decision overturned which directed federal courts to defer to agencies’ interpretation of ambiguous laws enacted by Congress.
The court’s landmark ruling, which split the vote 6-3 on ideological grounds, limits the regulatory power of federal agencies and is also expected to limit the government’s ability to impose rules in areas such as the environment, restrict healthcare and the workplace.
The ruling marks a major victory for the conservative legal movement, which has long advocated dismantling the framework that emerged from the 1984 ruling in Chevron v. National Resources Defense Council.
That’s exactly what the justices did in their rulings in two cases involving a 2020 federal regulation that required owners of vessels in the Atlantic herring fishery to pay for monitors while they were at sea.
This is why the ruling in these two cases is so important:
What is Chevron Deference?
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The concept of Chevron deference was born from the 1984 decision, whereby a regulation was issued by the Environmental Protection Agency under the Clean Air Act defining “stationary sources” of air pollution.
In that case four decades ago, the Supreme Court used a two-step approach to uphold the EPA’s definition. The first step was to decide whether Congress had directly addressed the issue. If Congress’s intent was clear, that was the end of the analysis. But if not, and the statute was ambiguous on the issue, the second step said courts should defer to the agency’s interpretation of the statute if it is reasonable.
That two-step test came to be called the Chevron deference. In practice, it has given federal agencies and state regulators broad latitude to interpret laws when there is a dispute about what the text of the law means. Lower courts have applied Chevron in thousands of cases, and the Supreme Court itself has upheld an agency’s reasonable interpretation of an ambiguous statute at least 70 times. But the Supreme Court has not applied the Chevron doctrine since 2016.
What did the Supreme Court do?
The Supreme Court on Friday ruled on two cases, Loper Bright Enterprises v. Raimondo and Relentless v. Department of Commerce, that explicitly overruled Chevron. Judge Ketanji Brown Jackson did not participate in the first case.
In its ruling, the court found that a federal law known as the Administrative Procedure Act, or APA, requires courts to exercise their own independent judgment in deciding whether an agency acted within its authority under the law. The majority holds that courts should not delay an agency’s interpretation of a law simply because it is unclear.
Writing for the majority, Roberts said Chevron was a “judicial invention that required judges to neglect their statutory duties.”
When a court considers whether an agency acted within its authority, the chief justice wrote, the executive branch’s discretion can help shape its analysis. And when a statute confers authority on an agency within constitutional limits, courts must respect that delegation, the Supreme Court held.
But “courts do not have to defer to a government agency’s interpretation of the law under the APA simply because a law is ambiguous,” the majority concluded.
Acknowledging that lower courts have long applied Chevron, Roberts said jettisoning the doctrine does not call into question these previous decisions.
What are the implications of the ruling and why is it important?
Chevron deferent advocates have raised alarms that a reversal of the 1984 ruling would hamper federal agencies’ ability to impose regulations that fill gaps in laws passed by Congress. The Biden administration called Chevron a “fundamental principle of administrative law” that gave weight to the expertise of federal agencies and warned that its reversal would cause an “upheaval.”
Legal scholars who disagree with the Supreme Court’s decision to overturn Chevron have already warned that it concentrates power in the courts, allowing judges to make decisions on policies previously determined by experts with deep experience in the field.
As Justice Elena Kagan put it in her dissent, “In one fell swoop, the majority today gives itself exclusive power over every open issue—however expertise-driven or policy-laden—concerning the meaning of regulatory law. did not have enough on its plate, the majority turns itself into the administrative czar of the country.”
Joined by Justices Sonia Sotomayor and Jackson, Kagan said abolishing Chevron will put the courts at the center of the administrative process on a range of issues because there are always holes in the law.
Kagan wrote, among other things: “What actions can be taken to address climate change or other environmental problems? What will the nation’s health care system look like in the coming decades? Or its financial or transportation systems? What regulations will limit the development of AI?”
What comes next?
Roberts wrote for the court that previous decisions relying on the Chevron framework will not be affected by its reversal, but Kagan and the other two dissenters still said the ruling will be “disruptive” because it raises new doubts about the actions of agencies interpreting statutes.
She warned that long-standing agency interpretations that were never challenged under Chevron could now be at the center of legal battles.
Some legal experts are already bracing for a flood of lawsuits against agencies like the FDA, warning that eliminating the Chevron settlement will impact how government departments run federal programs that serve large swaths of the population.
