This entry was authored by MGKF Summer Associate Karina Zakarian

On June 28, 2024, the United States Supreme Court overruled Chevron U.S.A., Inc. v. Natural Resources Defense Council to the extent that the earlier decision had instructed federal courts to defer to agencies’ reasonable interpretations of ambiguous statutes. See Loper Bright Enterprises v. Raimondo, 603 U.S. ___ (2024). The decision stems from a challenge to the Magnuson-Stevens Act by several fishery businesses, but the sole issue before the Court was whether Chevron should be overturned. In a divisive 6-3 decision, the Court’s conservative majority held in the affirmative, entombing Chevron deference based upon the Court’s interpretation of the Administrative Procedure Act (“APA”). As a result, federal agencies like the Environmental Protection Agency (“EPA”) are now deprived of a doctrine they had long relied upon to defend their regulatory agendas.

For forty years, federal courts applied the Chevron framework in cases involving an agency’s interpretation of a statute. Under what had become known as the “Chevron two step,” courts first considered whether the statute in question was ambiguous, and if so, whether the agency’s interpretation of the statute was reasonable. As long as the agency’s interpretation of the ambiguous statute was reasonable, the court was required to defer to the agency’s interpretation. The agency’s interpretation need not be the best to be upheld, but merely fall within the “permissible construction of the statute.” The Chevron decision itself related to the EPA’s interpretation of the Clean Air Act, and Chevron deference had long been relied upon by federal courts to uphold innumerable environmental regulatory rulemakings.

But Chevron, the majority ruled in Loper Bright, was incompatible with the responsibility of courts under Article III of the Constitution to decide cases and controversies and “to say what the law is.” As Chevron instructs courts to revert to agency interpretations for filling statutory gaps, the majority reasoned that this presumption favoring binding deference contradicts the judiciary’s “solemn duty” to rule on congressional acts and the rights of parties involved in legal matters. While the “longstanding practice of the government” can aid courts in interpreting the law and inform their judgment, agency interpretations of statutes, even enduring ones, may not supersede those of the judiciary.

Chevron deference also conflicted with the APA, which the Court found dispositive. The APA commands courts to rule on “all relevant questions of law” without qualification.  Accordingly, under the APA, courts alone are tasked with determining what authority Congress delegates, ensuring executive agencies have reasonably adhered to those delegations, and policing the power boundaries between government branches.

While the majority emphatically expressed that Chevron was overruled, the decision did not completely erase the legacy and spirit of forty years of Chevron. First, the Court repeatedly emphasized that the overruling of Chevron does not prevent courts from granting agencies significant leeway under statutes that, by their plain terms, delegate agencies wide discretion. Examples include statutes that use phrases such as “in the Administrator’s judgment,” or the like. Second, while “deference” went too far given the need for independent judgment, courts were still generally free to accord agency interpretations due respect. In other words, the experience executive agencies gain in niche subject matters and enforcement of the laws often make their interpretations of complex statutory provisions valuable to judicial review processes. This proves especially the case when those interpretations are “issued roughly contemporaneously with enactment of the statute and remained consistent over time.” Third, the Court was careful to note that past decisions that had relied upon Chevron deference were still valid law. Ruling based on a standard that contradicts current judicial methodology does not justify overturning prior cases.

In concurring opinions, Justices Thomas and Gorsuch expressed that the majority’s opinion in Loper Bright should have gone a step further and prevented Chevron from possibly being resurrected by Congress. They would have overruled Chevron deference explicitly on constitutional grounds. While the majority opinion suggested that Chevron may run afoul of the Constitution’s separation of powers, the Court did not go so far as the concurring opinions in this regard. It therefore remains to be seen whether Congress could “codify” Chevron deference in one or more statutes, or in an amendment to the APA.

In their dissenting opinion, Justices Kagan, Sotomayor, and Jackson highlighted the significant reliance interest on Chevron as a longstanding doctrine that remains deeply ingrained in society’s operations. The dissent focused on the subject matter expertise agencies possess, arguing that the judiciary is ill-equipped to interpret and rule on highly technical, policy-laden issues. Instead, administrative agencies already are tasked with enforcing statutes, creating a presumption that agencies, not courts, represent the “primary interpretive authority” when Congress has not spoken clearly. From the dissent’s vantage point, part of interpreting statutes involves “balancing competing goals and values,” a process agencies are better equipped to handle. Additionally, the dissent asserted that eliminating Chevron deference puts courts at the “apex of the administrative process,” thus threatening the separation of powers.

Loper Bright fits neatly into a procession of recent decisions from the Supreme Court that have shifted the balance of powers from agencies to federal courts. Agencies like EPA will need to devise creative, novel ways to defend their rules and actions. On the other hand, industry groups and states opposed to certain federal environmental laws and rulemakings are likely to be emboldened to pursue new and more frequent challenges to federal agency actions.

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