More emphasis on the wording of the regulations and less on their objectives

Federal respect for Chevron is dead. On June 28, 2024, the Supreme Court, by a 6-3 majority, overturned the 40-year-old legal principle that where a federal statute is silent or ambiguous with respect to a particular regulatory issue, courts should defer to a reasonable interpretation of the regulations by the executive branch of law.

This decision was reversed in the judgment in two fisheries 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 the ambiguous federal statute means. It is unclear whether most courts will continue to listen to federal agency experts to determine which interpretations make the most sense.

Although courts and judges will differ, as an environmental law scholar, I expect that the decline in deference to Chevron will make it easier for federal judges to focus on the precise meaning of Congress’s individual words rather than on Congress’s purposes or the actual-lifetime enforceability of federal law.

Who decides what the law means?

Chevron’s deference came in a 1984 case involving 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 containing multiple individual sources of air pollutant emissions. That meant, for example, that a factory with multiple 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 follow the interpretation of a statute administered by a federal agency.

In step 1, the court asks whether Congress directly addressed the issue in the statute. If so, both the court and the agency must follow Congress’ recommendations.

But if Congress is silent or unclear on Step 2, the court should defer to the agency’s interpretation if it is warranted, since agency staff are presumed to be experts on the subject. Justice John Paul Stevens reportedly told his colleagues, “When I’m that confused, I go to the agency.”

The central question in both the Loper Bright and Relentless cases was whether the U.S. Secretary of Commerce could require commercial fishermen to pay for on-board observers they were required to take on certain fishing trips to collect catch data. Lower courts in these cases referred to the agency’s interpretation that it could require fishermen to pay under the Magnuson-Stevens Fishery Conservation and Management Act.

However, in an opinion by Chief Justice John Roberts, a majority of the Supreme Court found that Chevron’s deference violated 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 apply in reviewing agency actions.

As the majority pointed out, under the Administrative Procedure Act, “courts must decide all relevant legal issues” – including clearly interpreting legal provisions.

Limitation of the administrative state

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

More importantly, thousands of lower federal court decisions — an average of more than 400 per year — have relied on Chevron principles on issues ranging from Social Security benefits, workplace safety standards, immigration eligibility and environmental protection requirements.

Chevron’s deference has given many federal agencies great flexibility in applying regulations to address new and emerging problems that Congress did not anticipate. However, some members of the current Supreme Court – as well as some federal appellate judges – have criticized this doctrine for two key reasons.

First, it empowered executive branch agencies to interpret federal law and forced courts to accept reasonable agency interpretations. But since the Supreme Court’s 1803 decision in Marbury v. Madison, it has been the responsibility of the courts – not federal agencies – to determine what the law is.

Second, Chevron’s compliance likely allowed federal agencies to assume greater regulatory authority than Congress intended to give them, thereby usurping the legislative branch’s responsibility for legislating and delegating authority.

How much does Loper Bright reverse?

The majority of the justices emphasized that prior court decisions upholding the agency’s interpretations based on Chevron’s deference could not be challenged on that ground alone. As Roberts wrote, these rulings “are still subject to statutory stare decisis.”

Stare decisis, or “the matter has been decided,” is a legal expression of why courts will respect previous decisions. In other words, no challenger can go back to the court that relied on Chevron’s deference and ask the court to reverse the original decision that the agency’s interpretation was correct.

So far so good. However, many agency interpretations of the laws can be challenged many 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 are covered by the act. People who disagree with this interpretation can attack the regulations directly and argue that the agencies’ interpretation of the law is wrong, as the fishing companies did in the Loper Bright cases.

However, under many laws, businesses and individuals can also challenge an agency’s interpretation once the agency decides that the general regulation applies specifically to them. These are so-called “in-applicability” contestability issues. After Loper Bright, each time an agency that benefited from a Chevron concession applies its interpretation to a new regulated entity, that regulated entity can challenge the agency’s interpretation – and this time the agency will not receive the Chevron concession.

Will federal courts continue to listen to regulators?

Eliminating Chevron deference is likely to deepen the existing divide among judges and justices over how to interpret statutes. It focuses on how much the purpose and context of a statute should matter — or, instead, how much a judge should focus on the “plain meaning” of the particular words Congress chose.

For example, suppose a federal court was faced with the definition of a vegetable in order to determine whether import taxes apply to imported tomato sauce. A simple approach would emphasize that Congress has chosen to tax vegetables and tomatoes are fruits; therefore, tomato sauce is not subject to import tax.

A congressional purpose-centered approach, by contrast, would emphasize that Congress wanted to tax all imports of spicy foods that society generally considers vegetables. Using this approach, the Supreme Court in 1893 actually ruled that tomatoes were vegetables subject to import taxes.

Federal agencies typically consider the purpose of Congress and the context in which regulators operate when deciding what a law means. For example, when the Food and Drug Administration had to distinguish between proteins, which qualify as biologics for regulatory purposes, and chains of amino acids, which qualify as drugs, it focused on why Congress created the two categories. Ultimately, the agency decided that a molecule made of amino acids had to have a certain level of complexity to qualify as a protein and therefore as a biologic.

By contrast, since the late Justice Antonin Scalia joined the Supreme Court in 1986, federal judges—and especially Supreme Court justices—have increasingly adopted a “plain meaning,” or textual, approach to statutory interpretation. The current Supreme Court, for example, would almost certainly never allow a tomato to be a vegetable.

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

How long will the APA be in force?

The ruling could also signal that the court plans to pay more attention to the primacy of the Administrative Procedure Act of 1946 in federal administrative law. That statute had been in effect for nearly 40 years when the Supreme Court ruled in Chevron in 1984, and the Chevron majority saw no problem with it at the time.

But now it has become a reason to disprove Chevron. Other court-created glosses on administrative law may also be dead doctrines.

Congress can and has created different standards of review in other laws, including the Clean Air Act, which led to the Chevron decision. What if a future Congress expressly mandates that an implementing agency take the lead in interpreting a particular statute?

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

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