The US Supreme Court has overturned the Chevron doctrine, a pillar of US administrative law for 40 years. The six-to-three judgment handed down in the consolidated cases Loper Bright Enterprises v Raimondo and Relentless, Inc v Dep’t of Commerce (hereafter, ‘Loper Bright’) near the end of the Supreme Court’s 2023-24 term shifts policymaking power from regulatory agencies to the judiciary.

Practitioners now expect a flood of new litigation challenging federal rules on everything from climate to clean water, healthcare, finance, transportation and the emerging field of artificial intelligence. The implications of the changing legal landscape for companies, interest groups and the public are potentially far-reaching.

The Chevron doctrine was a legal test used by the Supreme Court to decide a 1984 case involving US Environmental Protection Agency (EPA) regulations. The Court held that, if a statute was ambiguous and a regulatory agency’s interpretation was reasonable, courts should broadly defer to the agency. ‘Chevron deference was a tool that said, if there’s a gap in a statute or an ambiguity, courts are going to trust the agencies to implement these statutes,’ Showalter explains.
 
‘At the time the [original] case was decided, it wasn’t necessarily viewed as the seminal thing it later became,’ he adds. ‘Agencies eventually said, “look, courts, you’ve got to defer to our conclusions here because we’re entitled to this and we're relying on Chevron.”’

Over the decades, the Supreme Court upheld agency rules as reasonable more than 70 times and lower courts applied the Chevron framework in thousands of cases, according to Justice Elena Kagan, who wrote the dissent for the Court’s minority in Loper Bright. ‘The majority’s decision today will cause a massive shock to the legal system,’ she said. ‘Given Chevron’s pervasiveness,’ the Court’s abandonment of it ‘is likely to produce large-scale disruption.’

For many of Chevron’s critics, the doctrine was a fixture of an unaccountable administrative state imposing costs on business and industry without congressional mandates. ‘The administrative state, as it is called, has been around in a real way for 90 years since at least the New Deal and this has been a target for conservative think tanks,’ says Don C Smith, Editor of the IBA’s Journal of Energy & Natural Resources Law and Associate Professor of the Practice at Sturm College of Law, part of the University of Denver. For them, the administrative state ‘is not fair’ or doesn’t reflect their values, Smith says.

Indeed, former US President Donald Trump had made opposition to the administrative state a litmus test for his three nominees to the Supreme Court: Justices Neil Gorsuch, Brett Kavanaugh and Amy Coney Barrett, who all joined in the judgment in Loper Bright.

These three Trump nominees are part of a heavily conservative-leaning Supreme Court, one that Smith calls ‘activist’ in its approach. ‘We see this Supreme Court overturning decisions on a regular basis’, he says. ‘The Court has taken a very muscular approach to changing the law.’

On its face the majority opinion in Loper Bright, written by Chief Justice John Roberts, appears quite reasonable. The case involved complaints by fishing companies operating in the North Atlantic that the US National Marine Fisheries Service was requiring them to pay the cost of employing onboard federal monitoring agents without specific statutory authority. Lower courts, applying Chevron deference, sided with the government. 

But the Supreme Court ruled that the US Administrative Procedure Act requires courts to exercise independent judgment and sent the case back down for re-adjudication. Agency interpretations are entitled to ‘respect’ but not ‘deference’, Roberts wrote. Courts, not agencies, are to decide all relevant points of law.

‘It certainly means an increase in the number of challenges to agency actions that are based upon statutory interpretations,’ says Robert L Glicksman, the J B & Maurice C Shapiro Professor of Environmental Law and Faculty Director of the Environmental and Energy Law Program at The George Washington University Law School. Glicksman believes the judgment will probably ‘provide a green light for courts that are so inclined to reverse agency decisions.’ 

Already citing Loper Bright, the US Air Force has for example notified the EPA that it opposes an order to clean up forever chemicals in the public water supply of Tucson, Arizona. Other groups are now challenging established law on multiple fronts.

Loper Bright also means that ‘agencies will not push the envelope as much as they did before’, adds Glicksman. ‘They’re going to shy away from the most aggressive interpretations for fear of being reversed by courts.’
 

Nok/adobestock.com