In a blow to executive power, SCOTUS nullifies Chevron

For the past 40 years, federal administrative agencies have enjoyed wide latitude in interpreting laws passed by Congress. Known as the “Chevron “deference,” courts have routinely indulged in often politically motivated and even self-authorizing agency interpretations of otherwise ambiguous statutes. This has led to a significant delegation (indeed, some would say, surrender) of authority from the legislative and judicial branches to the executive branch, resulting in an increase in administrative regulation that affects every aspect of American society like kudzu.

This phenomenon ended abruptly last Friday when the Supreme Court reversed its own opinion in the case Chevron and dealt a serious blow to the executive power in a 6-3 majority decision Loper Bright Enterprises v. RaimondoWriting for the majority, Chief Justice John Roberts noted that “…agencies have no special authority to resolve statutory ambiguities. The courts do.” Thus, courts (not administrative agencies) must be the final authority for statutory interpretation.

Though Loper Light concerned a relatively niche dispute over the regulation of Atlantic herring fishermen, the practical and political implications of the decision are staggering. A shift of power from the executive to the judiciary, Loper Light exposes many of the agency’s rules to a whole range of potential legal challenges. Given the extent to which Chevron respect played a role in constructing the modern administrative state, it is impossible to say exactly how many of the hundreds of thousands of pages of federal regulations might ultimately be covered Loper Light decision.

From an employment perspective, the federal government has proposed numerous laws in recent years regarding COVID-19-related leave, overtime pay and non-compete agreements, to name a few. (More on this topic Loper Light(For the impact on the National Labor Relations Board and its oversight of union-management relations, see our related blog post here .) Because federal agencies have taken control of nearly every aspect of American life, other regulations that could be relevant include those governing food and drugs, banking and finance, health care, the environment, taxes—the list is as long as the imagination allows.

Although this new “Loper Light The doctrine (remember its name!) may make existing federal regulations vulnerable to attack, but it does not automatically invalidate any of them. Potential attacks on the validity of various regulations will only arise if parties interested in challenging their treatment by federal regulatory agencies take legal action, as fishermen did in Loper Light.

What is significant is that in the decision taken immediately after each other Loper Lightthis morning the Supreme Court ruled in Corner Post vs. Federal Reserve Board of Governors that a plaintiff injured by a federal regulation may bring a lawsuit challenging the validity of that regulation up to six years after the plaintiff was injured. Previously, the statute of limitations for filing a lawsuit challenging a federal regulation was six years from the enactment of the regulation—regardless of whether the regulation actually caused any injury on that date.

This Corner post The ruling also has enormous implications for employers and other businesses that want to challenge administrative regulations, because it now opens a window to do so for entities that did not exist when the rule was promulgated but were nonetheless harmed by the rule at the time. Given the relative propensity for litigation in contemporary American society, it should not take long for challengers to begin the process of seeking to dismantle and potentially rewrite broad swaths of administrative law that affect nearly every aspect of the economy and society.

Summer Associate Cooper Halpern assisted in writing this post.