Goodbye Chevron: Supreme Court Strikes Down 40-Year Precedent Eliminating Deference to Federal Agencies in Statutory Interpretation

In a 6-3 ruling released this past Friday morning, the Supreme Court struck down Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984) [“Chevron”].  The forty-year-old precedent, one of the most frequently cited cases in American Law, required judges to adopt a federal agency’s interpretation of an ambiguous statute, provided that the agency articulated a “permissible construction of the statute.” Id. at 843.  Known as “Chevron Deference,” this legal doctrine afforded administrative agencies (across multiple administrations) the benefit of the doubt when defending against challenges to rules, regulations, and other final agency decisions for decades. Chevron has played an extraordinary role in the development of and jurisprudence behind administrative caselaw. For context, since it was decided, some 70 Supreme Court decisions have relied on Chevron, along with approximately 18,000 in the lower courts and countless legal briefs.

That doctrine, however, is no longer good law. Writing for the majority in Loper Bright Enterprises et al. v. Raimondo, et al. (“Loper”), Chief Justice Roberts criticized Chevron on several grounds, calling the doctrine, among other things, “unworkable.” The majority denounced Chevron as an encroachment on the role of the judiciary to interpret the law, and contrary to Section 706 of the Administrative Procedure Act (“APA”), which requires courts to decide “all relevant questions of law” arising on review of agency action.

The decision, which comes amidst the current administration’s efforts to leverage agency authority to fight climate change and increase environmental enforcement efforts, amongst other items, now presents a substantial obstacle for federal agencies. After Loper, courts will have the ability to play a larger role in the acceptance of statutory interpretations involving administrative decisions, without the need to just accept deference as the status quo unless Congress has stated otherwise.  As the opinion clearly states:

Chevron is overruled. Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as the APA requires.  Careful attention to the judgment of the Executive Branch may help inform that inquiry. And when a particular statute delegates authority to an agency consistent with constitutional limits, courts must respect the delegation, while ensuring that the agency acts within it.  But courts need not and under the APA may not defer to an agency interpretation of the law simply because a statute is ambiguous.

Loper Bright Enterprises et al. v. Raimondo, et al., 603 U. S. ____ (2024).

In light of this new framework, federal agencies will now have to take a closer look as to how legislative directives are implemented across various programs and areas of law, including environmental protection. And Congress may need to provide more explicit directives where agency interpretations once sufficed. Legal observers have recognized that Loper is likely to result in a wave of litigation challenging final rules and regulations, enforcement actions, and final agency decisions of every kind. Indeed, without the protection of Chevron, future administrative decisions are now more vulnerable to alternative interpretations of law. Previous decisions relying on Chevron, however, are not subject to challenge under Loper’s new framework. As the Chief Justice wrote, “[t]he holdings of those cases that specific agency actions are lawful—including the Clean Air Act holding of Chevron itself—are still subject to statutory stare decisis despite our change in interpretive methodology.” Id. 

Hodgson Russ Takeaways:

Even without challenges to previous Chevron-based decisions, there is likely to be an increase in the level and nature of challenges to federal agency decision-making. The first test in how lower courts will implement this new methodology will come from the D.C. and First Circuits, which have now been tasked with deciding the two commercial fishing-related cases that resulted in Chevron’s demise. As these cases (and others) work their way through the court system, litigants will gain critical insight into how Loper is applied to various agency decisions and statutory frameworks.

Notably, at this juncture, the Supreme Court’s determination is not likely to have a significant impact on state court rulings, where federal precedent is not binding. For the time being, we would not expect any major deviations in that regard, absent further legislative action. There may be circumstances where state implementation of federal programs raise questions allowing access to federal court for challenges to be raised though, and this is certainly something we will be keeping our eye on moving forward.

For questions regarding the Supreme Court’s decision in Loper, please contact Michael Hecker (716.848.1599), Jeffrey Stravino (716.848.1394), Matthew Liponis (518.433.2417), or any other member of the Hodgson Russ Environment & Energy Practice.

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