The U.S. Supreme Court’s decision in Loper Bright Enterprises v. Raimondo definitively overturned Chevron deference.
On June 28, 2024, the court held that, when reviewing agency action under the Administrative Procedure Act, federal judges “must exercise their independent judgment.” Courts “may not defer to an agency interpretation of the law simple because a statute is ambiguous,” the Supreme Court said.
Chevron deference, based on the Court’s decision in Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., laid out a procedure for courts to follow in cases involving judicial review of agency decisions under the Administrative Procedure Act (APA).
It involved a two-step analysis. In “step one,” a court would consider “whether Congress ha[d] directly spoken to the precise question at issue” in its statutes delegating power to the relevant agency. If unambiguous language did answer the question at issue, that language controlled.
However, Chevron articulated a second step if the answer to “step one” was “no” — i.e., if “the statute [was] silent or ambiguous with respect to the specific issue” in the case. In this context, a court would be required to defer to the agency’s construction of the relevant statute if that construction was “permissible.”
Such deference was required even if the court, using its own interpretive ability, would have construed the statute differently. The decision was justified on the grounds of agency expertise in technical regulatory schemes and on a principle of judicial deference to the Executive Branch.
In the recently decided case Loper Bright Enterprises v. Raimondo, the Supreme Court reversed Chevron. The Loper Bright decision called for courts to reassume their role as interpreters of the law.
Loper Bright is a review of a D.C. Circuit decision. A group of commercial fishing companies challenged a rule promulgated by the National Marine Fisheries Service. The rule is based on a provision of the Magnuson-Stevens Act, which states that federal regulators have the authority to place “observers” on fishermen’s boats.
But the Act is silent on who should pay for the costs of the observers. The D.C. circuit found in a 2-1 opinion that although the statute is ambiguous, the agency’s interpretation of the statute to require the fisher cover the cost of the observer was “reasonable” under Chevron.
Chief Justice John Roberts, writing for a six-justice majority, criticized Chevron for fostering “unwarranted instability in the law”, creating “an eternal fog of uncertainty” for those attempting to plan around agency action, and for becoming “an impediment, rather than an aid, to accomplishing the basic judicial task of saying what the law is.”
The Supreme Court found that Chevron was incompatible with the APA.
The federal statute requires reviewing courts to “decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action,” Roberts wrote. Under the APA and the new precedent established by the Supreme Court in Loper Bright, “agency interpretation of statutes … are not entitled to deference.”
What this means in practice is that a federal judge is not required to give weight to an agency’s interpretation. Reviewing courts must instead “exercise independent judgment in determining the meaning of statutory provisions.”
But courts may still rely on agency expertise in exercising that independent judgment under other deference doctrines, such as so called, “Skidmore Deference.” In fact, SCOTUS frequently cited the principles of Skidmore in its opinion, including that agencies can supply “a body of experience and informed judgment to which courts and litigants may properly resort for guidance.”
Chevron deference focused on an agency’s statutory authority and did not expressly address the level of deference owed to an agency’s interpretation of its own regulations.
The difference is important. For instance, now, a court is not required to provide Chevron deference to the federal Environmental Protection Agency’s (EPA’s) interpretation of a Clean Air Act provision in the promulgation of a regulation or otherwise.
However, this decision does not address the level of deference owed to EPA’s interpretation of its own regulations promulgated under the Clean Air Act. Under the Federal Administrative Procedure Act, those types of regulatory actions are considered, generally, under the arbitrary and capricious standard.
The federal APA instructs a reviewing court to hold unlawful and set aside an agency action if it meets one of six criteria, including that the decision was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.” See 5 U.S.C. §706(2)(A).
In any case, the Loper Bright decision is a death knell to prescribed agency deference in statutory interpretation and clearly signals that courts should serve as a check on agency authority.
Authors: Lauren J. Rucinski, Josiah M. Kollmeyer, Daniel W. Bosch, Jr. & Andre P. Bellefontaine (Kean Miller LLP)
