The Supreme Court will consider a case – Loper Bright Enterprises v. Raimondo – through which it could overturn decades-long precedent providing agencies broad regulatory authority, with major potential consequences for the administrative state. The Court could nullify Chevron deference, which generally requires courts to defer to federal agencies on interpretations of unclear laws. Getting rid of Chevron deference would severely limit an agency’s ability to issue wide-reaching regulations.
Chevron deference explained: In 1984, the Supreme Court ruled in Chevron v. Natural Resources Defense Council that courts must generally defer to administrative agencies on agency interpretations of unclear statutes, provided they are reasonable. In the decades since, Chevron deference has empowered agencies such as the Environmental Protection Agency or the Department of Labor to institute far-reaching regulations on the basis of arguably murky statutory authority, and limited judicial review of such activity.
The current conservative majority Court has already chipped away at agency authority in its decision in West Virginia v. EPA, which enshrined the major questions doctrine under which agencies must have clear Congressional authorization when regulating “major questions.” Overturning Chevron deference would constitute perhaps the final nail in the coffin of the administrative state, and potentially limit agency rulemaking to activity expressly authorized by Congress. A world without Chevron and with the major questions doctrine would give judges greater ability to restrict agency regulatory activity.
Better for the business community? Proponents for getting rid of Chevron deference argue that doing so will reduce or even eliminate the regulatory whiplash employers have faced over the last decade in which the regulatory philosophy varies with the party in the White House. Agencies would potentially be more limited to their explicit statutory authority, and therefore prevented from issuing more sweeping regulations.
A return to the Hill? Constraints on agency rulemaking authority could pressure Congress into more action on policy issues and potentially free up the partisan deadlock that has prevented significant lawmaking for years – by necessity. For much of the last decade – and perhaps longer – the legislative branch has taken a back seat to the executive and judicial branches in the policymaking arena. Greater limits on agency authority, coupled with potential elimination of the Senate filibuster after the 2024 election, could open the floodgates for actual legislation.
Outlook: It remains to be seen how the Court will rule in Loper, although the Court’s current conservative bent, and recent anti-agency rulings would indicate that Chevron deference is in severe jeopardy. Eliminating or reducing Chevron deference could be the start of an enormous shift in how policymaking is conducted at the federal level in the next few years, for better or worse.
