U.S. Supreme Court overrules Chevron, and Reshapes Future of Regulatory Litigation

In Loper Bright V. Raimondo, the U.S. Supreme Court released its much-anticipated ruling.
Relentless v. Department of Commerce, a pair of consolidated case asking the Court reverse its seminal ruling in Chevron v. NRDC. was expecting this after the oral argument. The Court accepted and overruled . The majority of the court wrote that under the Loper Bright theory, courts must use their own independent judgment to determine whether an agency acted within the statutory authority as required by the Administrative Procedure Act.

The Chevron framework for judicial review has been in place since more than 40 years. The courts were instructed to accept the interpretation of the agency if it wasn’t “reasonable.” As broad statutes are interpreted differently by different administrations, their meaning can change. This does not stop creative agencies from implementing their ideas, since broad statutes are interpreted in different ways. Chevron has been cited more than 18,000 times by federal courts and hundreds of agency actions were supported.

In Loper Bright, the Supreme Court ruled Chevron was incompatible with both the APA and the primary duty of courts to interpret laws passed in Congress. They reached this conclusion based on language in the APA that gives federal courts the authority to “decide on any relevant question or law, interpret constitutional and statutory provisions, and determine the meaning or the application of a term of an agency action”. The majority also referred back to pre-New Deal decisions that stressed the importance not only of respecting agency decision, but also not blind loyalty.

The Court found that star decisis did not require that Chevron be adhered to. It also concluded that Chevron was not only “wrong,” but “fundamentally flawed,” and “unworkable.” They still haven’t come up with an exact definition of “ambiguity,” or to use Justice Scalia’s words from a recent article in the law review: “How clear can one be?” The Court also disagreed with this dissent, and said that Chevron had not created substantial reliance. Because the Court was constantly re-Loper-Bright, instead of continuing chipping away at Chevron’s excessiveness, the doctrine has been thrown out.

Loper-Bright is the end of an era. It is not yet clear whether its impact will be gradual or revolutionary. If a court does not consider the legal arguments in a deference to the agency, it may also undermine the force of stare decisis.

Deference is not a thing of the past because Chevron has died. As the majority opinion acknowledges, Congress can (subject only to certain constitutional limitations, such as the Non-Delegation Doctrine), expressly delegate discretionary power to agencies. The decision in Loper Bright simply holds that courts cannot “pretend”, that statutory ambiguity or silence constitutes a delegation. Further, the Court describes its expertise solely in the interpretation of laws; there remains substantial room under the arbitrary-and-capricious standard for agencies to apply their deference in the application of law to new facts. Justice Barrett, at oral argument, gave an example of the difference in a drug and supplement under the Federal Food, Drug, and Cosmetic Act, suggesting “the definition of drug or dietary supplement might be something that is a matter of statutory interpretation, but which category a thing fell into might be a policy question for the agency. “

Some predictions, that Chevron will lead to the rapid decline of the regulatory state, may turn out to be false. The decision will change the way Congress drafts laws and courts interpret them. The decision could also change the internal decision making process within agencies.