Supreme Court Overturns Chevron Decision, Knee-Breaking on Federal Regulators

The Supreme Court on Friday overturned a long-standing legal doctrine in the US, issuing a transformative ruling that could hamper federal agencies’ ability to regulate all types of industry. Six Republican-appointed justices voted to overturn a doctrine known as Chevron deference, a decision that could affect everything from pollution limits to consumer protections in the US.

Chevron’s deference allows courts to defer to federal agencies in disputes over the interpretation of ambiguous language in legislation passed by Congress. This is expected to lead to more informed decisions based on the expertise of these agencies. Overturning the Chevron doctrine, the conservative-dominated SCOTUS decided that judges, not agency experts, should make the ruling.

“Perhaps Chevron’s assumption is fundamentally wrong because agencies have no special authority to resolve statutory ambiguities. The courts do,” writes Chief Justice John Roberts in his opinion.

The decision effectively deprives federal agencies of a tool to act on pressing issues while Congress tries to catch up on new regulations. For example, Chevron has expressed deference to efforts to use the 1970 Clean Air Act to prevent emissions of climate-changing greenhouse gases. Overturning that decision is a major win for lobbyists and anyone else who might want to make it harder to crack down on the industry with federal regulations.

“It would really create a kind of chaotic period of time as federal courts decide what they think all of these laws mean. And that could lead to a lot of inconsistency and confusion for agencies and regulated parties,” Jody Freeman, director of Harvard’s Environmental and Energy Law Program, previously told Vergwhen the U.S. Supreme Court heard oral arguments on Chevron’s compliance in January.

It’s called the Chevron deference because of a 1984 ruling Chevron USA, Inc. v. Natural Resources Defense Council (NRDC). In this case, the Supreme Court sided with Chevron over the environmental group NRDC — allowing the then-industry-friendly Environmental Protection Agency under President Ronald Reagan to stick with a more lenient interpretation of the Clean Air Act. This shows how Chevron’s deference has been politically agnostic in the past, even though recent pushes for its repeal have been consistent with a deregulatory agenda.

In her dissenting opinion, Justice Elena Kagan wrote that deference to Chevron “has been the backdrop against which Congress, the courts, and the agencies—and the regulated parties and the public—have operated for decades. It has been applied in thousands of judicial decisions. It has become part of the warp and weft of modern government, supporting regulatory actions of all kinds—keeping our air and water clean, our food and medicine safe, and our financial markets fair, to name a few.” Justices Sonia Sotomayor and Ketanji Brown Jackson joined the dissenting opinion. (In a complicated little detail that is unimportant given the vast majority, Justice Jackson’s dissent applies only to Unyieldingbecause she withdrew from Loper Bright.)

“If they throw Chevron out, the Supreme Court will be inviting irresponsible judges to freely impose their policy preferences on those of political authorities — which is exactly what Chevron wanted to stop,” said David Doniger, senior counsel for the NRDC Action Fund and the lawyer who handled the 1984 case at a press conference earlier this month.

This year, the U.S. Supreme Court took Chevron’s position in response to two cases brought by the fishing industry: Loper Bright Enterprises v. Raimondo AND Relentless, Inc. v. Department of Commerce. The plaintiffs challenged a federal rule that requires fishing companies to pay for the costs of observers on vessels monitoring their activities, arguing that the National Marine Fisheries Service does not actually have the authority to force them to pay because it is not expressly written in the Fisheries Protection Act. The lower courts upheld the injunction, applying the Chevron deference principle.

But these cases are about much more than fishing boats. Trade groups representing a wide range of interests, from American gun owners to e-cigarette companies, have pushed to overturn or limit Chevron’s deference.

For example, the fate of net neutrality in the US was tied to Chevron’s compliance. Courts have previously deferred to the FCC on its definition of broadband Internet access. Is this considered a telecommunications or information service? If it is telecommunications, it is subject to “common carrier” regulation and restrictions placed on utility companies to ensure fair access. The FCC has changed its mind on this issue between the Obama, Trump and Biden administrations – the FCC decided in April to restore net neutrality rules.

The Supreme Court’s decision threatens to burden the courts with all these nitty-gritty questions. They used to be able to offload most of it to federal agencies, which is now out of the question.