Executive Summary

The decision by the United States Supreme Court (“SCOTUS”) on June 28, 2024, in Loper Bright Enterprises v. Raimondo, 603 U. S. ____ (2024) (“Loper”) reads simply: “The Administrative Procedure Act requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous; Chevron is overruled.”[1] Chevron cannot be reconciled with the Administrative Procedure Act (“APA”) by presuming that statutory ambiguities are implicit delegations to agencies. Chevron was decided in 1984. The APA was adopted in 1946.

Moving forward, courts are no longer required to defer to a federal agency’s interpretation of the federal statute it administers when that statute is silent or ambiguous, unless the statute expressly grants discretionary authority to the federal agency. The Court’s ruling will only apply moving forward and prior cases decided using the Chevron doctrine will not be affected by the Court’s ruling.

The Chevron Doctrine Generally  

Generally, it is the court’s duty to interpret the meaning of statutes. The Chevron doctrine required courts after 1984 to defer to a federal agency’s interpretation of the enabling statutes. Prior to Chevron, a court could assign “great weight” to an agency’s interpretation, but courts were not bound by that interpretation.

From 1984 until its recent overruling, courts applied the Chevron doctrine when an agency’s interpretation of a statute was challenged. A Chevron analysis involved two-steps. First, the court would look to whether Congress had directly spoken to the question and, if Congress’s intent was clear, a court would stop at Chevron step one and adopt the “clear” interpretation. When Congress was “silent or ambiguous” then Chevron step two required courts to defer to the agency’s interpretation of the statute if it was “based on a permissible construction.” That analysis persisted for 40 years prior to Loper.

The Court’s Basis for Overruling Chevron

In Loper, the Supreme Court overruled Chevron, finding that the doctrine was contrary to the text of the federal APA, which outlines how federal court’s review federal agency actions. Specifically, under APA section 706, a reviewing court “shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action.” The Loper case concluded that APA section 706 directs “that courts decide legal questions by applying their own judgment” and “makes clear that agency interpretations of statutes . . . are not entitled to deference.”

Referencing the framers and past historic cases, the Loper decision affords agencies respect and great weight to inform interpretations, if evidence supports the findings, however, gone is any deference to agency interpretation of statutes. The decision refreshes courts’ independent judgment to determine the meaning of statutes with aid from agencies to “effectuate the will of Congress.” Chevron insisted on more than the “respect” historically given to Executive Branch interpretations; it demanded that courts mechanically afford binding deference to agency interpretations. “That regime is the antithesis of the time honored approach the APA prescribes.” Chevron’s presumption is misguided because agencies have no special competence in resolving statutory ambiguities. Courts do.

Concerns that canceling Chevron deference could mean a lack of technical expertise among courts to address statutory ambiguities, or could result in policymaking by courts instead of political actors, or could result in inconsistent interpretations among courts were dismissed by the Court. The Court’s opinion expects courts to ably act consistent with the APA to interpret statutes, no matter the context, based on the traditional tools of statutory construction, not individual policy preferences. Even the principle of stare decisis, meaning adhering to precedent, couldn’t save Chevron. The Court in Loper reflected that “the quality of [the precedent’s] reasoning, the workability of the rule it established, . . . and reliance on the decision[]” all weigh in favor of letting Chevron go, noting that SCOTUS hasn’t applied Chevron since 2016.

Implications 

Lower courts may still consider and weigh an agency’s interpretation in determining the meaning of a statute; however, lower courts will no longer be required to adopt an agency’s permissible interpretation of an ambiguous or silent statute. Courts can defer to agency interpretations, but only when the statute expressly delegates discretionary authority to the agency, subject to the court’s review, to ensure the agency acts within its delegation. Finally, the Court emphasized that its ruling would not affect past cases that applied the Chevron doctrine. That does not, however, necessarily foreclose parties from re-challenging a prior interpretation under Chevron. It simply means that prior interpretations under Chevron are not automatically invalid because of Loper.

Loper implicates every federal regulatory action taken by an executive agency. Loper itself comes to the Court from two challenges to the National Marine Fisheries Service’s interpretation of the Magnuson-Steven Fishery Conservation and Management Act, mandating plaintiffs to pay for observers to monitor a fish hatchery plan. Justice Kagan’s dissent enumerates the variety of implications to come from erasing Chevron. Decisions about public health, food safety, endangered species, Medicare reimbursements, aviation safety, and pollution control are among the federal agency actions that impact lives of American citizens. Now these decisions will more likely be subject to review by federal court judges who lack the requisite expertise to determine if an alpha amino acid polymer is a “protein” or if squirrel populations are distinct by geography, genetics, or behaviors. 

States still are free to craft how and when they want their courts to defer to state agency interpretations of state law. In Idaho, for example on March 29, 2024, the Governor signed into a law a prohibition against agency deference. House Bill 626 went into effect July 1,2014, and amends the state’s Administrative Procedure Act. It directs the courts to interpret the relevant questions of law themselves, or de novo rather than considering previous judicial or agency interpretation. It even goes a step further and instructs courts to limit agency power in favor of individual liberty where an interpretation is in relative doubt. This shift in procedure for the courts will provide agency challengers more consideration when putting forward their claims. Indiana and Nebraska have passed similar laws in anticipation of Chevron being overturned, effectively ending agency deference in those states.

[1] Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837 (1984) (“Chevron”)