SCOTUS restricts federal agencies in Loper Bright and Corner Post

When the Clean Air Act refers to “major stationary sources” of air pollution, does the term mean each of the polluting units in a single plant or the entire plant as a whole? Forty years ago, the United States Supreme Court ruled in Chevron USA Inc. v. Natural Resources Defense Council, Inc. that both interpretations were permissible and that the EPA could therefore choose one or the other. The ambiguity, it explained, constituted a “legislative delegation to the agency” that triggered the “rule of deference to administrative interpretations.” That is, the Court held that courts must defer to reasonable agency interpretations of ambiguous statutory provisions.

The Supreme Court has now overturned this principle of deference in its opinion in Loper Bright Enterprises v. Raimondo issued June 28. The opinion by Chief Justice John Roberts states that Chevron deference was ill-conceived from the outset and raises two fundamental points. First, the Court’s decision underscores that the Administrative Procedure Act (APA), which is the legal basis for the vast majority of judicial review of federal agency actions, provides that “the reviewing court shall decide all substantive questions of law” and “interpret constitutional and statutory provisions” — and thus codifies the long-standing proposition “that courts shall decide questions of law by exercising their own judgment.”

Secondly, the Court’s decision invalidates Chevronpresumption that “statutory ambiguities are implied delegations to agencies,” explaining that “ambiguities may result from Congress’s inability to answer unequivocally the question at issue or from its failure even to ‘consider the issue’ with the requisite precision”—and “in neither case does the ambiguity necessarily reflect Congress’s intent that an agency, rather than a court, should resolve the resulting interpretive issue.”

As noted in the Court’s ruling, “The Court initially did not treat (Chevron) as the landmark decision it was to become,” but “within a few years both this Court and the appellate courts routinely invoked its two-step framework as the governing norm in such cases.” Indeed, Chevron has been applied in thousands of cases, large and small, in virtually every area of ​​federal law—environmental regulations, drug regulations, education regulations, immigration laws, grant and benefit programs, and more.

Abolition Chevron deference is certain to have significant and wide-ranging consequences—including for pending cases, which is why many parties with ongoing challenges to the agency’s rules will file notices of additional authorization Loper LightIn this context, it is worth noting that the Court’s decision explicitly states that its opinion “does not overturn” rulings in prior “cases that found certain agency actions to be lawful — including rulings in the Clean Air Act Chevron itself.”

One of the main questions in future cases Loper Light will concern the distinction the Court’s ruling makes between 1) statutory provisions that are simply ambiguous and do not impliedly delegate authority (which courts will now interpret de novo) and 2) provisions that authorize an agency to “exercise some degree of discretion,” such as provisions that give an agency the authority “to regulate subject to the limitations imposed by a term or phrase that allows agencies flexibility, such as `appropriate’ or `reasonable.'” While some provisions clearly fall into the first category (e.g., the Clean Air Act provision in Chevron itself), categorizing the remaining provisions will be more difficult.

Loper Light takes on even greater significance in the light of the Court’s opinion in the case Corner Post, Inc. v. Board of Governorsissued a few days later, on July 1, the last day of the Court’s term. The Court’s decision in the case was authored by Judge Amy Coney Barrett. Corner post holds that the APA’s default six-year statute of limitations begins to run only when a plaintiff “suffers an injury as a result of a final agency action” – not when the agency first promulgated the challenged regulation. In Corner postThe company, which began operations in 2018, filed a lawsuit in 2021 challenging the 2011 regulation; the court found that the complaint was timely because the company filed the lawsuit within six years of being harmed by the regulation.

Corner post This means that companies that have recently suffered as a result of the long-announced regulations will be able to challenge them – also on the grounds that the regulation contradicts the statutory provision under which the agency currently receives no respect Loper LightWhat is important though, Corner post will not apply to agency regulations that are subject to more specific statutes of limitations – such as the Hobbs Act, which requires that appeals of certain agency regulations must be filed within 60 days of the date the regulation is issued.

In short, the Court’s opinions on Loper Light AND Corner post will be cited in numerous challenges to agency rules across the federal regulatory landscape. Businesses in all types of industries should be prepared.