Jul 1, 2024

Supreme Court Decides Judges, Not Agencies, Will Interpret the Law

In Loper Bright Enterprises v. Raimondo, 603 U.S. ____ (2024).  the Supreme Court overturned Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc.  467 U.S. 837 (1984). In so doing, the Court affirmed the fundamental principle that federal courts, not Executive Branch agencies, have final authority “to say what the law is.”  Marbury v. Madison, 1 Cranch 137, 177 (1803).

Since the New Deal era, Congress has relied upon Executive Branch agencies—like the Securities and Exchange Commission, the Environmental Protection Agency, or the Food and Drug Administration—to regulate American life and business. To accomplish this result, Congress passes so-called “organic” statutes that create federal agencies and empower them to discharge a mandate, such as regulating financial reporting, pollution, or drug and medical device safety.  Congress routinely empowers Executive Branch agencies to promulgate binding regulations that carry the same legal force as a congressional statute.

What if an Executive Branch regulation conflicts with a congressional statute?  Under the now-defunct doctrine of Chevron “deference,” if the underlying statute is ambiguous, then the agency’s regulation stands.  In this manner, Chevron granted Executive Branch agencies primary authority to interpret congressional statutes, even if a federal judge thought the agency’s interpretation was wrong.

A 2017 study evaluating more than 1,300 courts of appeals cases from 2003 to 2013 found that courts upheld agency regulations based on ambiguous status under the Chevron doctrine 94% of the time.  A 2022 study evaluating cases from 2021 to 2022 showed agency win rates falling to 77% in cases challenging regulation based on ambiguous statutes.

The Chevron doctrine is no more.  Now, when an Executive Branch regulation conflicts with a statute, the federal courts have full authority to strike down the offending regulation.

In practice, this change makes it easier to litigate against the federal government, and the trend of falling agency win rates is likely to continue. Without Chevron, agencies have substantially less discretion to promulgate regulations that depart from statutory text.  Agencies likewise have less authority to change regulations solely based on the results of a presidential election.  Regulations that have already survived judicial review based on Chevron generally are not subject to new challenges under the doctrine of “statutory stare decisis,” but new agency regulations, and new agency interpretations of existing regulations, are wide open to challenges in court.  Finally, state supreme courts likely will consider following the U.S. Supreme Court’s lead by similarly empowering state courts to overrule state regulations that stray from statutory text.

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