June 28, 2024

U.S. Supreme Court overturns 1984 Chevron decision; federal agency power of statutory interpretation curtailed


The U.S. Supreme Court on Friday June 28 decided Loper Bright Enterprises v. Raimondo, overruling the “Chevron doctrine,” a 40-year-old precedent requiring courts to defer to reasonable agency interpretations of statutes, even where the court disagreed with that interpretation. Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) required courts to first determine whether the statute directly spoke to the issue and congressional intent was clear. If not, and the statute is either silent on the issue or ambiguous, then courts were to defer to an agency’s interpretation if it was “based on a permissible construction of the statute,” Id., at 843.

Justice Roberts, writing for the majority in Loper Bright, relied on the Administrative Procedures Act (“APA”) in overruling Chevron, as the APA “specifies that courts, not agencies, will 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.” Roberts found that the APA “prescribes no differential standard” that courts are permitted to use when assessing such questions of law. Where a statute delegates power to an agency to give meaning to a statutory term, then it is still “the role of the reviewing court under the APA .  . . to independently interpret the statute and effectuate the will of Congress subject to congressional limits.”

There are scores of cases over the past 40 years that have been decided based on Chevron doctrine, and still more pending before various courts. While prior cases that relied on the Chevron doctrine are settled law, the Supreme Court’s decision in Loper Bright will undoubtedly result in a surge of new cases seeking to challenge an agency’s interpretation of an ambiguous statute now that courts may not simply defer such interpretation. Loper Bright puts the power to interpret the law back in the hands of the judicial branch to exercise its independent judgments in construing statutes, where, the majority opines, it has always belonged under the APA.

Jordan Ramis will have additional analysis related to this decision in the coming days, including the impact on an agency’s interpretation of its own regulations.

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