We are writing to inform you about a significant decision by the U.S. Supreme Court that will profoundly impact how courts handle rulemaking litigation. On June 28, 2024, in a 6-3 ruling, the Supreme Court overturned the decades-old precedent established in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. This landmark decision, issued in the case of Loper Bright Enterprises et al. v. Raimondo, Secretary of Commerce, et al., eliminates the principle of Chevron deference, which instructed courts to defer to federal agencies’ interpretations of ambiguous statutes.
Summary of the Supreme Court Opinion
The Supreme Court’s decision marks a departure from the Chevron framework that has been a cornerstone of administrative law since 1984. The ruling, written by Chief Justice John Roberts, emphasizes that courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as required by the Administrative Procedure Act (APA).
Chief Justice Roberts stated, “Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as the APA requires.”
He further explained that while courts may respect the executive branch’s judgment, they “need not and under the APA may not defer to an agency interpretation of the law simply because a statute is ambiguous.”
Implications of the Decision
The overturning of Chevron deference introduces significant uncertainty about how lower courts will handle rulemaking litigation going forward. The ruling hands a victory to plaintiffs in the cases of Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce, who argued that the National Marine Fisheries Service (NMFS) overstepped its authority by requiring fishers to pay part of the cost of federal compliance monitors aboard their ships.
Majority Opinion
The majority opinion, delivered by Chief Justice Roberts, harkens back to the foundational principles of judicial review established by the Framers of the U.S. Constitution. He cited Marbury v. Madison, emphasizing that it is “emphatically the province and duty of the judicial department to say what the law is.” Roberts criticized Chevron for requiring courts to defer to agencies’ interpretations even when those interpretations diverged from what the court would independently determine.
Chief Justice Roberts wrote, “The only way to ‘ensure that the law will not merely change erratically, but will develop in a principled and intelligible fashion’ is for us to leave Chevron behind.” He acknowledged that while Chevron was intended to provide a framework for judicial review of agency interpretations, it ultimately led to inconsistencies and overreliance on agency discretion.
Dissenting Opinion
In a dissenting opinion, Justice Elena Kagan, joined by Justices Sonia Sotomayor and Ketanji Brown Jackson, argued that Chevron deference had served as a cornerstone of administrative law for 40 years, effectively allocating responsibility for statutory construction between courts and agencies. Justice Kagan maintained that Chevron reflected congressional intent to delegate interpretive authority to agencies equipped with subject matter expertise.
Broader Context and Future Impact
This decision represents a significant shift in the balance of power between federal agencies and the judiciary. By eliminating Chevron deference, the Court has potentially opened the door to increased litigation and challenges to agency rules, as courts will no longer defer to agencies’ interpretations of ambiguous statutes. This shift could lead to greater scrutiny of agency actions and require agencies to provide more robust justifications for their regulatory decisions.
Read about possible long-term implications of the Court’s decision to overturn Chevron deference in the most recent installment of our firm’s managing partner’s “Tele-Tech Talk” opinion piece, available here.
Conclusion
The Supreme Court’s decision to overturn Chevron deference marks a pivotal moment in administrative law. We encourage all clients to consider the implications of this ruling on their regulatory compliance and legal strategies.
For more detailed information or to discuss the potential impacts on your operations, please do not hesitate to contact us.
