Chevron Overturned: How the Loper Decision is Likely to Affect the Power of Regulatory Agencies in the Near Future

Since the Supreme Court’s decision in Chevron USA v NRDC (1984), executive agencies have very loose restrictions in regard to the interpretation of ambiguous statutes. The term Chevron Deference was coined following the decision, creating a two part examination of federal statutes in which any piece of law that could be deemed unclear would be left up to the interpretation of the agency and not the judiciary [1]. At the time, this was seen by many legal experts to be in violation of the APA (Administrative Procedure Act), which outlined a series of rules that regulatory agencies were required to follow when interpreting federal legislation. For forty years, Chevron was the law of the land until a case was brought to the Supreme Court by Loper Bright Enterprises, a New England fishing company [2]. 

The National Marine Fisheries Service (NOAA) is responsible for protecting marine life and manages ocean conservation. While enforcing a statute aimed at preventing overfishing, the NOAA mandated that an observer be placed aboard boats fishing for herring. The observers, however, were to be funded by the owners of the boats, costing individuals around $700 per day. Placing an observer on each boat and forcing fishermen to bear the cost of those observers was never a part of the original statute that NOAA was tasked with enforcing [2].

Loper Bright Enterprises, a fishing company greatly affected by these regulations filed a lawsuit in 2020 challenging the regulations put in place by NOAA, claiming that they had overstepped their boundary and misinterpreted the statute regarding the overfishing of herring. Loper eventually made its way up to the Supreme Court after the lower courts repeatedly cited Chevron in their majority opinion against Loper [2]. 

On June 28th, 2024, the Supreme Court decided Loper Bright Enterprises v Raimondo in favor of Loper, overturning the landmark case Chevron USA vs NRDC. The APA was frequently cited in the John Roberts majority opinion as he described how Chevron neglected its clear guidelines for regulatory interpretation in cases of statutory ambiguity [2]. Following the Loper decision, courts now have the ability to overrule any agency regulation they deem to be an invalid interpretation of legal statute. The Supreme Court did, however, specify that they would not overrule any regulations that went into effect prior to the Loper Decision [2]. 

Now that Chevron has been overturned, there is widespread uncertainty on how agencies will adapt their statutory interpretations now that they will be under more constant judicial review. The main argument in favor of Chevron deference was that it let experts who were staffed by executive agencies have more power when creating effective regulations [3]. Now that courts are to resume their role acting as the decision maker on whether or not these agencies have acted within their legal authority, questions arise around the extent to which experts will be removed from the helm of regulatory decision making [4]. 

There are many theories on how lower courts will handle their newfound authority following the Loper decision, but there is widely expected to be a rush of new lawsuits challenging new regulations in the future [5]. One agency expected to see a number of lawsuits is the EPA. Over the past few years, it has implemented a number of controversial regulations in accordance with the Clean Water Act and National Environmental Policy Act. Energy regulations enacted by the Federal Energy Regulatory Commission targeting fossil fuel emissions are likely to be challenged as well [5]. 

Although there are set to be many consequences regarding the Executive and Judicial branches of government following this decision, the Legislature is likely to be affected by it as well. Congress will need to be much more deliberate and precise when giving executive agencies instructions on how they are specifically supposed to enforce regulations now that those agencies are unable to fill in the gaps of ambiguous legislation. Whether or not the outcome of the Loper decision is a positive one, it is inevitable that the increased strength of the judiciary will take some time to adjust to.

Sources:

1. Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837 (1984)
2. Loper Bright Enterprises v. Raimondo, 603 U.S. ___ (2024)
3. Thomas J. Kniesner & W. Kip Viscusi, What's next after Loper Bright?, 47 REGULATION 34 (2024).
4. Emily Hammond, Finding a Place for Expertise after Loper Bright, 31 GEO. MASON L. REV. 559 (2024).
5. What's Next for the Regulatory Landscape Post-Chevron? (July 2, 2024), https://www.hklaw.com/en/insights/publications/2024/07/whats-next-for-the-regulatory-landscape-post-chevron.