The U.S. Supreme Court on Friday overturned the long-standing Chevron Deference Doctrine, saying that judges—not federal agencies—should interpret federal laws.

In a 6-3 decision in two marine fishery cases, the court drastically shifted the balance of power in the federal government, saying that the Administrative Procedure Act (APA) gives judges the power, not agencies, to interpret statutes.

The vote was along ideological lines. The decision is considered a victory for conservatives, who have long argued that entrenched federal bureaucrats have too much power to implement laws.

“The deference that Chevron requires of courts reviewing agency action cannot be squared with the APA,” Chief Justice John Roberts wrote, in the majority opinion.

Justice Roberts continued, “Perhaps most fundamentally, Chevron’s presumption is misguided because agencies have no special competence in resolving statutory ambiguities. Courts do.”

The Chevron Deference Doctrine was established in a 1984 ruling, Chevron v. Natural Resources Defense Council. The court, at the time, said that federal judges should defer to federal agencies to interpret ambiguous statutes.

In a dissenting opinion, Justice Elena Kagan wrote, “Some interpretive issues arising in the regulatory context involve scientific or technical subject matter. Agencies have expertise in those areas; courts do not.”

The two current cases, Loper Bright Enterprises v. Raimondo and Relentless Inc. v. Department of Commerce, challenged rules by the National Marine Fisheries Service, which had said that commercial fishing firms should pay for observers on their vessels. The two companies sued, saying that the Magnuson-Stevens Act did not include such a requirement. The lower courts said the agency had the power to impose that requirement, relying on the Chevron Deference Doctrine.

We can expect more litigation challenging the regulatory and enforcement activities of the OCC, FDIC, FRB, FTC and CFPB, and a greater likelihood that the agencies will lose when such challenges are made. The decision may also deter these agencies from taking regulatory and enforcement actions where the underlying statute or regulation is ambiguous.

We will be providing additional analysis on what this means for our clients in the days to come.

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