Supreme Court Throws Out Chevron Decision, Weakening Federal Regulators

Supreme Court Throws Out Chevron Decision, Weakening Federal Regulators

The 40-year-old precedent that directed courts to defer to federal agencies' interpretations of ambiguous laws.

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The U.S. Supreme Court has overturned a 40-year-old precedent that directed courts to defer to federal agencies' interpretations of ambiguous laws.

In Loper Bright Enterprises v. Raimondo, a 6-3 decision by Chief Justice John Roberts overruled the 1984 case of Chevron U.S.A. v. Natural Resources Defense Council. Justices Elena Kagan, Sonia Sotomayor and Ketanji Brown Jackson dissented.

The question before the court focused on the so-called Chevron deference, an administrative law concept that says courts should defer to a federal agency's reasonable interpretation of an ambiguous statute.

The court's holding relies on the Administrative Procedure Act, a 1940s statute that Congress passed to keep unelected federal agencies from overstepping their statutory mandate. Roberts wrote that the "Administrative Procedure Act requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous; Chevron is overruled." The court said that the Chevron doctrine cannot be reconciled with the APA and rejected the notion that "statutory ambiguities are implicit delegations to agencies."

The Loper case involved the Magnuson-Stevens Fishery Conservation and Management Act, which Congress passed in 1976 after determining that overfishing off the U.S. coasts threatened the "food supply, economy and health of the Nation." The statute directs the secretary of commerce and the National Marine Fisheries Service to develop a comprehensive fishery management program.

Pursuant to the act, the fisheries service required the Atlantic herring fishery to adopt an industry-funded monitoring program. A group of herring fishing companies, led by main plaintiff Loper Bright Enterprises of New Jersey, filed suit to challenge the service's rule as too expensive and overly burdensome, alleging they had very limited vessel space and financial resources. They said the service exceeded its statutory authority because the act does not specifically state that industry may be required to pay for the monitoring program, and asked the courts to overrule Chevron, or hold that where a statute does not expressly provide for the specific power exercised by the agency, no statutory ambiguity exists, and no agency deference should be provided.

The lower courts ruled in favor of the agency. Seventeen states filed an amicus brief in support of the herring fishing companies, stating that historically, courts have applied Chevron inconsistently, and "(t)he confused status quo has real costs for the people who live and work within our borders. … Regulation is costly; over-regulation and mercurial regulation even more so. Waiting longer to intervene forces painful tradeoffs, and they hurt the states and our residents."

A majority of the justices agreed with the states and reasoned that courts, not agencies decide "all relevant questions of law arising on review of agency action-even those involving ambiguous laws-and set aside any such action inconsistent with the law as they interpret it." The court also agreed with the position that the Chevron doctrine has promoted agency inconsistencies in statutory interpretation.

Dissenters See 'Judicial Hubris'

In a scathing dissent, Justice Elena Kagan castigated the majority for once again overturning longstanding precedent. She noted that the Chevron doctrine had supported regulatory efforts by giving agency experts the ability to make reasonable decisions where congressional law was unclear, and cited examples such as "keeping air and water clean, food and drugs safe, and financial markets honest."

Kagan said that the majority had taken the power to make complex decisions over regulatory matters away from federal agencies-and given it to themselves.

"As if it did not have enough on its plate, the majority turns itself into the country's administrative czar," she wrote. "A rule of judicial humility gives way to a rule of judicial hubris."

Susan Frederick is NCSL's senior federal affairs counsel.