Corporate lobbyists are eyeing new lawsuits after the Supreme Court limited federal power

The legal bombshell came Friday when six conservatives on the Supreme Court overturned decades-old legal precedent that federal judges should defer to regulatory agencies when the law is ambiguous or Congress fails to state its intentions. Writing for the majority, Chief Justice John G. Roberts Jr. described the framework as “unworkable,” at one point arguing in his opinion that it “prevents judges from making judgments.”

Many conservatives and entrepreneurs have long been irritated by a legal doctrine known as Chevron respect after a case involving the oil giant in the 1980s. They urged the Supreme Court to overturn the precedent in a flood of legal filings over the past year, then cheered when the nation’s highest judicial panel sided with them this week — paving the way for the industry to launch a renewed assault on the power and reach of the executive branch.

“This means that agencies will have difficulty defending their legal position,” said Daryl Joseffer, executive vice president and general counsel at the U.S. Chamber of Commerce Litigation Center, which filed an amicus brief in the case. “This means that challenging some regulations will be easier than before. This, of course, has a real impact on whether it is worth initiating certain cases.”

Some of the most powerful corporations under government control anticipated this decision could help in their ongoing legal battles with the Biden administration over its policies to cancel student debt, improve overtime pay, ensure net neutrality, protect waterways from pollution and increase investor protections, including the government’s nascent work to regulate cryptocurrency.

“I think a lot of people in industry and business associations are thinking about this right now,” said Beth Milito, executive director of the legal department at the National Federation of Independent Business, an advocacy group. Washington-based lobbying group. “Should we reexamine any ongoing litigation or aggressive investigations in light of this decision? Are there new areas of attack that we can now raise?”

The NFIB has already filed or joined multiple lawsuits against the Biden administration, including two recent cases over federal rules that could expand employee benefits and increase overtime pay. The group expects lawyers to “raise the decision” in the case in the future. Chevron with judges considering whether the Labor Department repeatedly overstepped its authority, Milito said.

But she predicted that the most lasting effect of the Supreme Court’s ruling may be that it discourages some federal agencies from issuing regulations, perhaps prompting them to “put down their pen and think twice.”

“We want agencies to stick to their principles,” Milito said.

Overcoming ChevronConservative policymakers and corporate lobbyists have won the most significant legal victory in an aggressive, decades-long campaign to limit the reach of the federal government. Earlier this week, the Court’s conservatives also issued rulings that weakened federal climate regulations and made it more difficult for agencies, including the Securities and Exchange Commission, to take enforcement actions, prompting further complacency from industries subject to such scrutiny.

“I think it means a level playing field for anyone who is sued by a federal agency or who sues a federal agency,” said Mark Chenoweth, president of the New Civil Liberties Alliance, who represented one of the plaintiffs in the Supreme Court case that was overturned. ChevronThe group has received millions of dollars from the conservative political network of billionaire Charles Koch and his late brother David, and also represents clients in other lawsuits that seek to invalidate federal regulations.

Chenoweth said it was a waste Chevronspecifically, it means that “people will be able to count on an impartial, independent court to assess whether their arguments or their interpretation of the law are superior to the agency’s interpretation of the law.”

While the exact legal implications could take years to clear up, conservative advocates and industry lobbyists — some tied to the Supreme Court fight — have signaled they are eager to use it or file new lawsuits.

The National Association of Manufacturers, a lobbying group whose board includes top executives from Dow, Caterpillar, ExxonMobil and Johnson & Johnson, took particular notice of what it described as excessive enforcement at the SEC and the Environmental Protection Agency. The group’s president, Jay Timmons, said in a statement that NAM will soon “be on the ground… to fight the new regulations we face today, as well as anything that may come our way in the next administration.”

The American Bankers Association, meanwhile, said it “will continue to fight to ensure that banking regulators uphold the law whenever they exercise their authority.” The group, which includes Bank of America, JPMorgan Chase and Wells Fargo, sued the Biden administration in recent months over rules aimed at limiting the fees they can charge customers who overdraft their bank accounts. (It did not respond to a request for comment.)

And the National Association of Home Builders, which represents thousands of construction companies and suppliers in the housing industry, said it could benefit from the judges’ decision in its fight against the federal government over new environmental regulations. NAHB, along with other housing groups, sued the EPA over its small waterways pollution regulations, arguing that its approach exceeds the agency’s authority and makes it harder to build new housing.

Tom Ward, the association’s vice president of legal advocacy, said he expects the NAHB will “send this opinion” to the judge hearing the Texas water case to “remind the court that the agency is no longer being deferential.”

The legal tussle ultimately served to underscore a stark reality in Washington: Federal agencies are increasingly taking a more active role in policymaking because of partisan gridlock in Congress. Political divisions have often prevented lawmakers from fully addressing the nation’s most difficult problems, creating a void that a sprawling regulatory bureaucracy has sought to fill, sometimes in ways that have drawn fierce opposition.

“I sat in this room when the regulations were changed, and the way regulations are often passed is by intentionally imprecise language,” said Tom Wheeler, the former Democratic chairman of the Federal Communications Commission, who faced a legal onslaught from internet service providers over his agency’s work during the Obama administration on interpreting a basic 1930s telecommunications law.

Wheeler said regulatory gaps are particularly stark in technology because Congress has failed to formulate clear new rules on some of the most novel issues of the digital era. Without guidance from the legislature or deference from the courts, federal agencies may now find it difficult to respond to new challenges – such as the rise of artificial intelligence – because they have found they are unable to “get on with anything unless Congress deals with it” – he said.

Many legal experts, consumer advocates and Democratic lawmakers fear that the loss of a key line of defense by federal agencies could have far-reaching consequences.

The American Cancer Society joined a broad range of public health groups this week to warn of the prospect of “significant disruptions” to insurance programs, the federal food and drug review system and patient health. Tax experts had previously predicted the end Chevron could “create a real mess” for the Internal Revenue Service as it tries to implement the latest congressionally mandated changes to the tax code. Some climate advocates, including the nonprofit Climate Power, worried that the Supreme Court “has made it harder to protect our air and water.”

“Every time the court has taken a step in this direction, we’ve seen more (lawsuits),” said Sharon Block, a Harvard Law School professor who previously served as administrator of Biden’s Office of Information and Regulatory Affairs. “They’re just invitations everywhere now to challenge federal agencies when they’re trying to help people.”

Meanwhile, on Capitol Hill, some Republican lawmakers expressed hope of hastening what they see as “the beginning of the end of the administrative state.” In a joint statement, House Speaker Mike Johnson (La.) joined other GOP leaders in promising that House committees will soon “conduct oversight to ensure that agencies comply with the Court’s ruling and no longer engage in excessive discretion.” interpretation in the application of laws under their jurisdiction.”

Before the Supreme Court issued its ruling, Johnson and other Republicans formally filed a legal brief urging the justices to overturn the precedent set in Chevron vs. Natural Resources Defense Councilarguing last July that federal agencies should “have only the powers that Congress has granted them.” On Friday, some GOP lawmakers even sent out a menu of Biden-era policies they hoped to examine, including the administration’s work on “energy and agricultural production,” as well as Title IX, the sex discrimination anti-discrimination law that the Department of Education recently expanded to protect transgender students.

“It’s time for lawmakers to take over our legislative power,” said Rep. Kevin Hern (R-Okla.), author of the policy list and chairman of the Republican Study Committee, the largest bloc of GOP legislators in the chamber. “This is an opportunity for us to be better legislators and make sure unelected bureaucrats don’t do this job for us.”