Supreme Court Strikes Down Chevron Deference Rule

In a historic decision, the Supreme Court struck down the forty-year-old agency deference rule established in Chevron v. Natural Resources Defense Council.  In two separate decisions, the Supreme Court ruled in Loper Bright  Enterprises v. Raimondo and Relentless, Inc. v. U.S. Department of Commerce, the Court ruled that that § 706 of the Administrative Procedure Act (APA) gives courts the ultimate authority to interpret statutes without granting deference to the agency’s reading.

Chief Justice Roberts wrote for the majority, stating that there is always a single best interpretation of statutory language, and the courts legitimately have the power to determine what exactly the best interpretation of a statute should be.  However, the Court was quick to add that agency expertise, while no longer binding, can still be persuasive in guiding courts’ decisions.

Moreover, the Court went out of its way to hold that its decision in these cases would only impact cases going forward and could not be used to overturn previous cases which relied on the Chevron doctrine. As Chief Justice Roberts wrote: “The holdings of those cases that specific agency actions are lawful…are still subject to statutory stare decisis despite our change in interpretive methodology.” In other words, the June 28th decision does not retroactively invalidate every past case in which courts deferred to agency expertise.

The Chevron interpretation rule has for nearly forty years operated to afford significant weight to agency interpretations when courts must interpret ambiguous or unclear statutory terms.  As a result, courts were obliged to defer to agencies’ reasonable interpretations of broad or otherwise unclear statutory language.  In recent years, the Chevron doctrine was cited by courts to uphold  a variety of agency rules emanating from the Dodd-Frank Act, the Affordable Care Act, and the Inflation Reduction Act.

In striking down the Chevron doctrine, the Court concluded that the doctrine was inconsistent with the general rule that courts “say what the law is,” citing Marbury v. Madison.  The Court went on to cite the negative impact that court deference to agency interpretations has had “simply because a statute is ambiguous.” Instead the Court cited Section 706 of the Administrative Procedures Act which provides that courts, not agencies, decide “all relevant questions of law.”  As the Court explained, the courts may consider the agency’s perspective or interpretation of a statute, they should not defer to it.  Instead, courts “must exercise their independent judgment in deciding whether an agency has acted within its statutory authority.”

The Court strongly disagreed with arguments that agency expertise warrants judicial deference because agencies may be more capable of interpreting highly technical, agency-specific subject matter: “[E]ven when an ambiguity happens to implicate a technical matter, it does not follow that Congress has taken the power to authoritatively interpret the statute from the courts and given it to the agency. Congress expects courts to handle technical statutory questions.”

The Court was careful to limit the impact of its decision to overrule the Chevron doctrine. Specifically, the Court stated that its decision would not overrule any past decisions where a court relied on the Chevron doctrine to uphold an agency rule or ordder deference, the Court cautioned that the decision does not overrule prior decisions where a court relied on the Chevron doctrine to uphold an agency rule or order. But, in reality the Court has invited new challenges or fresh court proceedings to challenge administrative rules.  This will be the new battlefield over agency regulations going forward.

In the end, while there may be fresh challenges to agency rulemaking, I am not so sure that the decision will have as much impact as everyone is claiming — both the right and the left may be claiming more of an impact than is likely. In many cases, courts may not necessarily “defer” to agencies’ positions but instead will consider and may then rely on agency views because of their “experience and informed judgment to which courts and litigants may properly resort for guidance consistent with the APA.”

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