On June 28, 2024, the Supreme Court of the United States issued its decision in the cases Loper Bright Enterprises, et al. v. Raimondo, et al. and Relentless Inc. et al. v. Department of Commerce, et al., overruling its 1984 landmark decision in Chevron U.S.A. v. Natural Resources Defense Council. For the past forty years, what is commonly referred to as the “Chevron doctrine” or “Chevron deference” has required courts to defer to a regulatory agency’s interpretation of the statutes it administers if those interpretations were “permissible.”
Under Chevron, a court reviewing an agency’s interpretation of a statute was required to engage in a two-part analysis. First, the court had to determine whether Congress had directly spoken on the issue. If Congress had done so, courts would apply the statute as directed by its plain language. However, if the statute was silent or ambiguous, courts were required to defer to the implementing agency’s interpretation of the statute if it was “based on a permissible construction of the statute” even if that interpretation was different than, or even contrary to, what the court would have ruled in the absence of agency guidance.
In analyzing the issue, the Supreme Court provided a history of the judiciary’s role in interpreting statutes beginning with the Federalist Papers, through the Court’s early decision in Marbury v. Madison, the rapid expansion of the administrative process which took place during the New Deal era, and ultimately the adoption of the Administrative Procedures Act (APA). That history demonstrates that while courts should provide “due respect” to the executive branch’s interpretation of federal statutes, no specific deference to that interpretation was required, or expected, prior to the Chevron decision.
While this history helped form the Supreme Court’s decision, its primary focus was on the incongruence between the APA and the holding in Chevron. Pursuant to the APA, a “reviewing court” is required to “decide all relevant questions of law” and “interpret . . . statutory provisions.” The Court found that the APA requires courts to exercise independent judgment to determine the best interpretation of the statute, and that this obligation could not be reconciled with Chevron’s directive to defer to “permissible” agency interpretations. As the Court noted, “[i]n the business of statutory interpretation, if it is not the best, it is not permissible.”
Ultimately, the Court overruled Chevron, finding that it “was a judicial invention that required judges to disregard their statutory duties.” Under the new standard of review, “court’s must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as the APA requires.” While the Court acknowledged that “[c]areful attention to the judgment of the executive branch, may help inform that inquiry,” that judgment is provided with no more significant weight than any other rule of statutory interpretation.
Nevertheless, the Court acknowledged that Congress may delegate authority to agencies in the statutes it adopts, and where it has done so, within constitutional limits, courts must respect that delegation, while ensuring that the agency acts within it. In such circumstances, courts must fix the boundaries of the authority delegated and determine whether the agency, acting within the scope of that delegation, engaged in “reasoned decision making.” However, in the absence of such a delegation, courts must exercise their own independent judgment when interpreting statutes.
The Loper Bright decision represents a seismic shift in how courts will review agency action. Courts are no longer bound by the decisions of the implementing agency. Rather, courts are free, and indeed obligated, to determine for themselves what Congress intended when it adopted the statute. The decision will likely lead to an influx of litigation challenging agency action, as the arguments raised by the regulated public regarding the best interpretation of the statutes implemented by the agencies will be placed on equal footing with the interpretations asserted by the agencies.
