Online Class Explores Effects of SCOTUS Decision on Chevron Doctrine for Agency Regulatory Powers

June 28, 2024: In a 6-3 decision in Loper Bright Enterprises v. Raimondo, the U.S. Supreme Court overturned the Chevron Doctrine, a 40-year-old precedent requiring federal courts to give deference to government agencies' interpretations of ambiguous statutes. The decision allows judges to interpret laws more freely, without unevenly weighting the assertions of agencies, which are often perceived as driven by politics as much as by policy.

Gibson Dunn partner Lucas Townsend delivered a presentation on the history of Chevron, its four-decade impact on legislation and regulations, and its implications for regulated parties - in this case, engineering firms, which Townsend noted are subject to "an alphabet soup of agencies," including DOT, EPA, OSHA, and others, all of them with the power to issue guidance and directives. Many statutes - including those that impact the engineering industry - are either unclear or silent, meaning they don't specifically address the particular issue. Chevron and Loper Bright are about those silent or unclear statutes, and whose interpretation of those statutes prevail. Said Townsend: "The federal government has had its thumb on the scale."

The Court's decision "is a huge event in administrative law that will reverberate for years." One potential benefit may be to make agencies more accountable now that the judicial dice are no longer loaded. That said, the Loper Bright decision isn't the end of the regulatory battle - just a shift in fronts. Townsend predicts that agencies won't cede power without a fight, and that they will invoke new language to assert their authority. "We should expect agencies not to go quietly," he said. But, he added, they can no longer take for granted a deferential judicial audience.

"Courts are going to ask tougher questions going forward, and parties will come into court on equal footing," said Townsend. "We are looking at a much more level playing field for regulated parties having their readings [of statutes] upheld."

During Q&A, one attendee asked whether there is potential for the decision to trickle down to state courts. Townsend prefaced his response with a reminder that Loper Bright is specific to federal agencies. He then continued. "But…the same logic behind the Loper decision applies in a state proceeding. I would be very tempted to argue at the state level that Loper gives parties equal footing. They're not bound, but it's a compelling argument."

For more on the implications of the Loper Bright decision and the end of the Chevron Doctrine, check out the replay of the full online class, available here on demand.