The US Supreme Court seems determined to eliminate the administrative state.

• In recent rulings, the U.S. Supreme Court has limited the regulatory authority of federal agencies.
• One legal expert said the Supreme Court was clearly “determined” to dismantle the administrative state.
• As a result of these rulings, regulation of virtually all major industries will become more stringent.

In two separate rulings issued within 48 hours last week, the conservative majority of the U.S. Supreme Court overturned a 40-year-old precedent that has long been attacked by the right and limited some of the Securities and Exchange Commission’s ability to enforce financial fraud laws.

The conservative majority made it easier to challenge government regulations in another 6-3 ruling Monday.

“As this momentous term comes to a close, one thing is clear: the tsunami of lawsuits against agencies that the Court’s rulings in this case and Loper Bright have authorized has the potential to cripple the functioning of the federal government,” wrote Judge Ketanji Brown Jackson in her dissent to Monday’s ruling in Corner Post v. Board of Governors of the Federal Reserve System.

Justice Elena Kagan, in her dissent from Friday’s decision to overturn the legal precedent known as the “chevron deference” in Loper Bright Enterprises v. Raimondo, called Friday’s ruling “yet another example of the Court’s determination to roll back agency authority despite Congress’s contrary guidance.”

Legal experts and regulatory advocates told Business Insider they largely agree, with one law professor saying the nation’s highest court is clearly “determined to dismantle the entire regulatory apparatus put in place over the course of the 20th century.”

“These rulings prevent congressionally mandated agencies from responding quickly and effectively to emerging problems,” said Robert Hockett, a professor of law and finance at Cornell University.

Following recent Supreme Court rulings, regulation of virtually every major industry, from the environment to finance and public health, will become much more stringent, potentially further overwhelming the judicial system.

Before Friday’s ruling, for example, if the Environmental Protection Agency had identified a practice by an oil company that had wrongly exposed an oil spill, it would first have issued a cease and desist letter. The oil company could then argue that the EPA was misrepresenting the facts or lacked regulatory authority to address the practice, Hockett said.

Then, Hockett said, the case will be heard by an administrative judge. If the oil company disagrees with the administrative judge’s ruling, it can appeal and ultimately go to court — but it won’t do so unless it can point to a clear error by the administrative judge, Hockett said.

Now, according to the ruling, the case will go directly to federal court.

“No ALJ (administrative law judge). Straight to federal court. A courthouse with a jam-packed docket scheduled for 2035. Oil leaking everywhere and making North America uninhabitable while we wait,” Hockett said, giving an extreme example.

“As a result, every major company in the country, across every major industry, will remain effectively unregulated or de facto unregulated because Congress and the courts will be unable to keep up with the pace of change in our economy,” Hockett said.

A legal expert compared the case to “a robber baron’s dream.”

“These two rulings largely amputate the two most important arms that our regulatory agencies use every day to oversee our industrial economy,” Hockett said, referring to the Chevron and SEC rulings.

By striking down the Chevron Doctrine in a 6-3 majority decision, the Supreme Court limited the regulatory authority of federal agencies.

The doctrine, established in the 1984 Supreme Court case Chevron USA v. Natural Resources Defense Council, called on courts to defer to federal agencies’ interpretations of ambiguous federal laws and statutes. It has been repeatedly applied by the federal government in a wide range of cases.

Supreme Court Justice John Roberts wrote in his opinion that the Chevron doctrine “has proven to be fundamentally flawed.”

“Perhaps most fundamentally, the Chevron presumption is flawed because agencies have no special authority to resolve statutory ambiguities. Courts do,” Roberts wrote.

The Supreme Court judge continued: “The courts must exercise their independent discretion in deciding whether an agency acted within its statutory authority.”

The overturning of the Chevron precedent and Thursday’s SEC v. Jarkesy decision involve cuts to the regulatory powers of federal agencies, “which means reducing the powers of the executive branch of government and increasing the powers of the judicial branch,” said Jonathan Siegel, a law professor at George Washington University.

As a result, in the long run, Siegel said, “It will be harder for the government to enforce many of the laws, and as a result, there will be more violations.”

“Particularly for businesses, they are making decisions about what to do not just based on what is legal and what is illegal, but also based on how likely they are to be punished if they do something illegal,” he said.

Siegel explained that the decision in SEC v. Jarkesy has “potential implications for countless agency proceedings.”

Until Thursday, the SEC had two ways to prosecute fraud cases. It could sue in federal court or it could file an “administrative proceeding” in its own internal court, where it appointed its own judges and the cases did not have juries.

Roberts wrote in his ruling that the latter method violates the Seventh Amendment to the U.S. Constitution, which protects the right to a jury trial.

“It is certainly the case that the court, and even some individual justices, have expressed even more strongly their disapproval of the scope of power that administrative agencies have, and several decisions that the court has issued over the last few years seek to limit that power and increase the power of the courts,” Siegel said.

Rachel Weintraub, executive director of the advocacy group Coalition for Sensible Safeguards, said the common denominator in the decisions “is that it is a manifestation of a conservative desire to minimize the role of the federal government.”

“The public expects the government to do certain things. They expect the government to make sure the roads are safe, and toasters don’t explode, and the water that comes out of our taps doesn’t harm our families, and there are protections in the workplace, and our markets are fair, and there are consequences if entities cheat us,” Weintraub said.

Those factors, Weintraub said, “may be at risk if judges substitute their own positions for agency expertise.”

In Corner Post v. Board of Governors of the Federal Reserve System, the Supreme Court held that the six-year statute of limitations for challenging federal agency actions under the Administrative Procedure Act begins “when the plaintiff is harmed by a final agency action.”

“Last week, the Supreme Court made it virtually impossible for federal agencies to assume future rulemaking authority from Congress by reversing its own 40-year-old decision in the Chevron case,” Hockett said.

“Today effectively makes it retroactive, allowing any newly formed corporation to challenge a regulation that has been in place for decades,” Hockett said, explaining that before Monday’s decision, the statute of limitations passed by Congress “ensures that a regulation that has not been challenged for six years becomes settled law.”

Now, Hockett said, “any rule, no matter how long it has been in effect and as long as corporations have operated with established knowledge of it, will be up for grabs.”

Jesse Panuccio, who served as deputy U.S. attorney general in the Trump administration, was less concerned about the recent SCOTUS decisions, saying that “agencies still have enormous delegations of authority.”

Panuccio told Business Insider that he represents private entities that are in lawsuits against the government and believes it is important that there are three branches of government “with interdependent functions.”

Panuccio said he supported the Supreme Court’s decisions in Loper Bright and Jarkesy and called them “important checks on administrative power.”

There is never a “level playing field” between the government and a private entity, and having such a ruling is a way to ensure that the parties will be standing before a neutral judge, he said.

“And I think we’ve gone too far, no matter who the president is, the executive branch has more power than I think the Constitution provides for,” he said. “And those opinions are important.”