Federal Chevron deference is dead. On June 28, 2024, in a 6-3 vote, the Supreme Court overturned the 40-year-old legal tenet that when a federal statute is silent or ambiguous about a particular regulatory issue, courts should defer to the implementing agency’s reasonable interpretation of the law.

The reversal came in a ruling on two fishery regulation cases, Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce.

This decision means that federal courts will have the final say on what an ambiguous federal statute means. What’s not clear is whether most courts will still listen to expert federal agencies in determining which interpretations make the most sense.

While courts and judges will vary, as a scholar in environmental law, I expect that the demise of Chevron deference will make it easier for federal judges to focus on the exact meaning of Congress’ individual words, rather than on Congress’ goals or the real-life workability of federal laws.

Defining the Law’s Meaning

Chevron deference emerged from a 1984 case that addressed the Environmental Protection Agency’s interpretation of the term “stationary source” in the Clean Air Act. The EPA asserted that a “source” could be a facility that contained many individual sources of air pollutant emissions. This meant, for example, that a factory with several smokestacks could be treated as a single source for regulatory purposes, as if it were enclosed in an imaginary bubble.

In upholding the EPA’s decision, the Supreme Court created a two-step test for deciding whether to defer to a federal agency’s interpretation of a statute that it administers.

In Step 1, the court asks whether Congress directly addressed the issue in the statute. If so, then both the court and the agency have to do what Congress directs.

In Step 2, however, if Congress is silent or unclear, then the court should defer to the agency’s interpretation if it is reasonable because agency staff is presumed to be experts on the issue. Justice John Paul Stevens reportedly told his colleagues, “When I am so confused, I go with the agency.”

The central question in both the Loper Bright and Relentless cases was whether the U.S. secretary of commerce could require commercial fishers to pay for onboard observers they were required to bring on some fishing voyages to collect catch data. Lower courts in these cases deferred to the agency’s interpretation that, under the Magnuson-Stevens Fishery Conservation and Management Act, it could require fishers to pay.

However, in an opinion by Chief Justice John Roberts, the Supreme Court majority concluded that Chevron deference contradicts the Administrative Procedure Act. This broad law governs both the procedures that federal agencies must follow and, more importantly, the standards that federal courts must use to review agency actions.

Curbing the Administrative State

Since 1984, Chevron deference has become pervasive in federal administrative law. By the Supreme Court’s count, 70 of its own decisions in that time have turned on Chevron deference.

Second, Chevron deference arguably allowed federal agencies to grab more regulatory authority than Congress intended them to have, usurping the legislative branch’s responsibility to make law and delegate authority.

Impact of Loper Bright on Previous Rulings

The court majority emphasized that prior court decisions upholding agency interpretations based on Chevron deference cannot be challenged solely because of that fact. As Roberts wrote, these holdings “are still subject to statutory stare decisis.”

Stare decisis, or “the thing is decided,” is legalese for why courts will respect prior decisions. In other words, no challenger can go back to a court that relied on Chevron deference and ask the court to change its original decision that the agency’s interpretation was OK.

That’s good so far as it goes. However, many agency interpretations of statutes can be challenged multiple times.

For example, the Clean Water Act protects “waters of the United States.” In 2023, the Biden administration issued new regulations interpreting which bodies of water the law covers. Challengers who disagree with that interpretation can attack the regulations directly and argue that the agencies’ reading of the law is wrong, as the fishing companies did in the Loper Bright cases.

Will Federal Courts Still Heed Regulators?

Suppose, for example, that a federal court faced the issue of how to define a vegetable for purposes of determining whether import taxes apply to imported tomato sauce. A plain meaning approach would emphasize that Congress decided to tax vegetables and that tomatoes are fruits; hence, tomato sauce is not subject to the import tax.

An approach focused on Congress’ purpose, in contrast, would emphasize that Congress wanted to tax all imports of savory foods that the public generally considers to be vegetables. Using this approach, the Supreme Court in 1893, in fact, decided that tomatoes were vegetables subject to import taxes.

Federal agencies typically take Congress’ purpose and the context in which regulators act very much into account when they decide what laws mean. For example, when the Food and Drug Administration had to distinguish proteins, which qualify as biologics for regulatory purposes, from chains of amino acids, which qualify as drugs, it focused on Congress’ reasons for creating the two categories. Ultimately, the agency decided that a molecule made up of amino acids had to have a certain level of complexity to qualify as a protein, and hence a biologic.

Dissenting Justices Elena Kagan, Sonia Sotomayor and Ketanji Brown-Jackson, along with many other legal experts, foresee serious problems for future cases that turn on highly technical issues. What will happen when a statute’s nonexpert plain meaning makes no practical sense in a highly technical or scientifically nuanced regulatory regime, such as the FDA classifying biologics and drugs?

Future of the Administrative Procedure Act

This ruling also may signal that the court plans to pay greater attention to the 1946 Administrative Procedure Act’s primacy in federal administrative law. This statute had been in place for almost 40 years when the Supreme Court decided Chevron in 1984, and the Chevron majority did not see it as a problem at the time.

Now, however, it has become a reason to overturn Chevron deference. Other court-created glosses on administrative law may also be dead doctrines walking.

Congress can and has created different standards of review in other statutes, including the Clean Air Act that led to the Chevron decision. What if a future Congress specifically directs that the implementing agency should take the lead in interpreting a particular statute?

I expect that the Supreme Court would reach for the Constitution and declare any such delegation unconstitutional. In other words, it is probably only a matter of time before Loper Bright’s overruling of Chevron deference becomes a matter of federal constitutional law.

This is an updated version of an article originally published January 17, 2024.

Headline:
Supreme Court Overturns Chevron Deference, Shifting Legal Interpretations Back to Courts
Summary:
In a landmark decision on June 28, 2024, the Supreme Court, by a 6-3 vote, overturned the longstanding Chevron deference, which allowed federal agencies to interpret ambiguous statutes. This ruling arose from two fishery regulation cases, Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce. The Court’s decision, penned by Chief Justice John Roberts, asserts that Chevron deference contradicts the Administrative Procedure Act, thus giving courts the ultimate authority to interpret ambiguous federal statutes. This shift could lead to increased judicial scrutiny on the exact wording of Congress rather than its broader goals, potentially diminishing the regulatory power of federal agencies. The decision has sparked concerns about its impact on complex regulatory domains, with dissenting Justices warning of future complications in cases involving highly technical issues.