Supreme Court takeover overturns 40-year-old precedent, huge corporate victory

The Supreme Court’s conservative majority in a ruling Friday overturned decades of precedent governing federal agencies’ ability to make regulations.

The court’s decision, written by Chief Justice John Roberts, that overturns the 1984 findings in Chevron v. Natural Resources Defense Council will trigger a sea change in how federal agencies will be able to regulate everything from climate change to artificial intelligence to labor and workplace practices. It’s a huge victory for corporations because it will be much harder for the government to write the rules.

“Courts must exercise independent judgment in deciding whether an agency acted within its statutory authority,” Roberts wrote.

The decision also represents a major power grab by the judiciary, which will now play a greater role as the final arbiter over whom new regulations can apply and who will be invalidated.

The ruling concerns two cases: Loper Bright Enterprises v. Raimondo and Relentless Inc. v. Department of Commerce. Jackson joined her liberal colleagues Elena Kagan and Sonia Sotomayor in dissent in Relentless, which was a 6-3 decision but dissent from Loper Bright Enterprises.

The Chevron repeal issue came before the courts after two fishing companies — Relentless and Loper Bright Enterprises — challenged a 2020 rule introduced by the National Marine Fisheries Service that required fishing boats to pay the salaries of federal inspectors who sail on them. Lawyers for the fishing companies argued that the court should not only strike down the regulations but also eliminate the deference the court gave agencies to create such regulations under the Chevron precedent.

In Chevron, the Supreme Court created a doctrine that gave the federal government broad authority to enact regulations without judicial interference. In practice, it held that agencies have the authority to enact regulations without having to wait for the courts to decide, unless the regulations are an unreasonable interpretation of the underlying law enacted by Congress that delegated regulatory authority to that agency.

However, as Roberts wrote, “agencies have no special authority to resolve statutory ambiguities.”

“The courts do,” he added. “The Framers anticipated that courts would often encounter statutory ambiguities and expected the courts to resolve them by exercising independent legal judgment. Chevron was gravely mistaken in concluding that the investigation was materially different simply because an administrative interpretation was involved.”

Roberts also disagreed with “the notion that interpreting ambiguous statutory provisions amounts to shaping policy tailored to political actors rather than courts,” calling it a misconception of the role of judges.

“By forcing courts to pretend that ambiguities are necessarily delegations, Chevron makes it impossible for judges to rule,” Roberts wrote.

The court’s new doctrine gives far less deference to agencies while giving judges greater authority to strike down regulations if the court finds that Congress did not expressly delegate the authority to enact the specific regulation in question. That decision reflects the changing ideological and partisan makeup of the courts and the executive branch.

Still, Roberts noted that despite rejecting the Chevron ruling, “we do not take issue with prior cases that relied” on this framework.

“Determinations in cases that find that specific agency actions are lawful – including Chevron itself under the Clean Air Act – remain subject to statutory decision-making, despite our change in interpretive methodology,” he said.

When the court ruled in Chevron in 1984, conservatives were in the minority on the judiciary, especially in the district and appellate courts. The decision was a tribute to the Environmental Protection Agency, which had decided to relax environmental regulations at a time when Republicans dominated presidential elections and more often controlled federal agencies that issued regulations—a way of empowering the more conservative executive branch to issue deregulatory rules for corporations.

Today, the dynamic has reversed, with conservatives firmly in control of the judiciary and Democrats winning the presidential popular vote in eight of the last nine elections. By dismantling Chevron, the Supreme Court makes it harder for Democratic presidential administrations to pass regulations while placing the power to strike down those regulations in the hands of a much more conservative judiciary.

Conservative justices made this clear during arguments in Relentless and Loper Bright, when Justice Samuel Alito referred to the fact that conservative interpretations of the law are more prevalent in the judiciary today than at the time of the Chevron decision.

“Would you agree that one of the reasons Chevron was originally so popular was a concern that judges were allowing their political views, consciously or unconsciously, to influence their interpretation of the statutes?” Alito asked Roman Martinez, Relentless’ lawyer.

Martinez agreed, saying that the “fear” that judges would adopt more liberal ways of interpreting the law “has diminished over time” thanks to the “very salutary development” in how conservative judges have made originalism and textuality the dominant form of interpretation.

The court has already begun to move away from applying the Chevron doctrine to cases involving some important executive branch actions. In cases like West Virginia v. EPA in 2022 and Biden v. Nebraska in 2023, the court’s conservatives struck down new carbon regulations and student loan debt relief, respectively, for violating the so-called principal questions doctrine — which supposedly bars executive action on matters of great “economic and political significance” without express congressional approval.

Now the justice system will have even greater freedom to thwart any agency action. This decision will likely have monumental implications for the future of regulatory action across the economy, as courts will have greater discretion to strike down everything from climate change regulations issued by the EPA to competition rules issued by the Federal Trade Commission to net neutrality rules. issued by the Federal Communications Commission.

In her dissenting opinion, Kagan stated that overturning the Chevron decision effectively meant that the majority had “made themselves the administrative czar of the country.”

“The principle of judicial humility is giving way to the principle of judicial pride,” Kagan wrote in her dissenting opinion.

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