Federal courts The recent decision by the U.S. Supreme Court to overturn the Chevron doctrine has significant implications for the future of regulatory litigation in the United States. The Chevron doctrine, established in 1984, required courts to defer to agency interpretations of ambiguous statutes as long as they were reasonable. This decision marked a shift in power from the judiciary to administrative agencies, giving them more authority over interpreting and implementing regulations.
By overturning the Chevron doctrine, the Supreme Court has reshaped the landscape of regulatory litigation by placing more emphasis on judicial review and interpretation of statutes. This decision is likely to lead to increased scrutiny of agency actions and interpretations, as courts are now less inclined to defer automatically to agency decisions. This could result in greater clarity and consistency in regulatory enforcement.
Federal courts have long deferred to federal agencies to interpret laws that are unclear and need further clarification. In 1984, a shorthanded Supreme Court ruled in a unanimous decision that federal agencies have the final say on ambiguous policies, which allowed those agencies broad authority to make decisions without fear of judicial override.
In Supreme Court filings, the Biden administration said that overruling the Chevron deference would be a “convulsive shock to the legal system.”
Doing away with Chevron removes a framework that required judges to defer to agency experts when there is disagreement on the meaning of a federal statute. The doctrine originated in the 1984 case Chevron v. Natural Resources Defense Council, which upheld Reagan-era EPA air rules.
“What this case does is it massively deregulates courts,” James Goodwin, policy director at the Center for Progressive Reform, said of Friday’s decision. “So now that the Supreme Court has given the lower courts all this extra leash to second-guess agency decisions, the question is what do they do with it?”
He noted that former President Donald Trump prioritized stocking the federal courts with conservative judges — including three of the Supreme Court justices who voted to overturn Chevron.
David Doniger, senior attorney at the NRDC and the lawyer who made the losing argument in the 1984 Chevron case, said Loper Bright will make it harder for the federal government to function.
Friday’s ruling came in one of three cases during the 2023-24 term seeking to curtail the power of federal agencies – a conservative effort sometimes dubbed the “war on the administrative state.” In October, the court heard arguments in a challenge to the constitutionality of the mechanism used to fund the consumer watchdog Consumer Financial Protection Bureau. Last month the court upheld the CFPB’s funding by a 7-2 vote. And on Thursday, the justices pared back the power of the Securities and Exchange Commission and other administrative agencies, holding that the SEC cannot continue to use in-house proceedings to impose fines in securities fraud cases.
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