On June 28, 2024, in Loper Bright Enterprises v. Raimondo, the United States Supreme Court reversed its 40-year-old decision in Chevron v. Natural Resources Defense Council, thereby restoring the judiciary’s final authority to interpret statutes, a powerful check on administrative agency authority.
What You Need to Know:
- Federal agency interpretations of statutes are no longer entitled to binding deference.
- Expect more litigation over agency decisions.
In the 1984 Chevron case, the Supreme Court held that where a statute was ambiguous, courts must follow the statutory interpretation of the agency administering the statute, so long as the interpretation was plausible and even if the Court would have made a different interpretation. Chevron critics long claimed the Supreme Court’s decision violated both the Administrative Procedure Act’s (APA) and the Constitution’s separation of powers principles because both vest the courts, not administrative agencies (i.e., the executive branch) with the power to interpret statutes.
Drawing on the reasoning of those criticisms, the Supreme Court’s Loper Bright decision explicitly reversed Chevron, explaining: “Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as the APA requires.” Further, courts no longer need to “defer to an agency interpretation of the law . . . because a statute is ambiguous,” nor may they do so.
The Loper Bright case, and its companion case, Relentless v. U.S. Dept. of Commerce, both involved claims regarding the Magnuson-Stevens Fishery Conservation and Management Act, and the extent that the National Marine Fisheries Service could charge fishing vessels for observers on board the vessels to ensure compliance with applicable fishing limits. The Fisheries Service claimed that the legislation was ambiguous, but under its reasonable interpretation of the legislation (which the courts were dutybound to follow under Chevron), it was free to so charge. And so, the lower courts ruled for the Fisheries Service. Because it reversed Chevron, the Supreme Court vacated the lower court opinions and remanded the cases for further proceedings.
Here are the immediate takeaways:
1. Courts no longer need to give binding deference to Federal agency interpretations of the statutes they administer. Although the Loper Bright case pertained to one statute and one administrative agency, the decision governs all federal agencies and the statutes under which they operate. As a result, those disagreeing with an agency’s interpretation of a statute once again can obtain full judicial review and compel a federal agency to convince the reviewing court that it made a correct interpretation. Courts may still give “great weight” to agency interpretations or those that emanate from an agency’s specialized experience, but the judiciary makes the final interpretation. Further, not all agency actions involve interpretation of an ambiguous statute, such as factual determinations, and those actions will remain subject to more deferential standards.
2. The decision does not apply to state agencies. The Loper Bright decision hinges on the APA’s text, which does not apply to state agencies, although many states use APA standards in statutory interpretation. However, one cannot assume that all states will automatically adopt Loper Bright’s rationale, even among states that have applied Chevron deference to their state agencies’ decisions. Expect this issue to ripple across the courts of all fifty states with varying results.
3. More litigation—and perhaps more uncertainty—may result in the short term. Businesses and groups disagreeing with an agency’s “interpretation” of a statute will now be able to challenge such interpretation in court, leading, perhaps, to greater defenses to or grounds to reverse agency actions. At the same time, waiting for the judiciary to definitively resolve interpretation issues will take longer than an agency simply announcing its interpretation. Eliminating Chevron deference also increases the chance of circuit splits and inconsistent interpretations of ambiguous statutes unless and until the Supreme Court rules.
FOR MORE INFORMATION about the Loper Bright decision and its implications for the future, do not hesitate to reach out to one of the authors listed here or your regular Saul Ewing attorney.
