Who is responsible for giving context to a statute when there is ambiguity in the law? Should it be a court? Or should it be an agency that Congress has charged with administering the statute? These questions were posed to the United States Supreme Court (the “Court”) in the consolidated cases of Loper Bright Enterprises v. Raimondo and Relentless v. Department of Commerce.
Both cases involved challenges to a National Marine Fisheries Service rule, authorized by the Magnuson–Stevens Fishery Conservation and Management Act. The rule required fishing companies to pay for the cost of federal monitors assigned to their boats, which for one fishing company was $700 per day.
On June 28, 2024, in a 6-3 decision, the Court ruled that judges should no longer defer to administrative agencies over interpretations of statutory language when there are ambiguities in the law, overturning 40 years of precedent known as “Chevron deference,” sending shockwaves through the legal and federal regulatory communities.
In 1984, the Court issued its ruling in Chevron v. Natural Resources Defense Council, which established the doctrine. Chevron deference stood for the principle that if there are “ambiguities” in a statute, and Congress has not directly addressed the question at the center of the dispute, courts were obligated to give deference to the federal agency’s interpretation, so long as it was reasonable.
The theory previously supporting Chevron deference was that federal agencies were better equipped than the judiciary to interpret ambiguities that fall within their domains of administration. Proponents of this deference argued that it allowed agencies to perform essential functions – such as writing rules and standards necessary to execute laws passed by the legislative branch.
Last week, the Court’s majority effectively held that Chevron deference gave too much power to the executive branch, thus sidestepping independent, judicial review. Chief Justice John Roberts called the deference “fundamentally misguided” from its origination and in contravention of the Constitution’s mandates, as well as contradictory to the Administrative Procedures Act (“APA”). He stated, “Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as the APA requires.” Roberts also emphasized that it is the role of the judiciary to “say what the law is,” citing the Court’s famous decision in Marbury v. Madison (establishing judicial review), as opposed to giving deference to a federal agency’s interpretation.
The majority noted that Chevron has not been used by the Supreme Court itself since 2016, despite the fact that lower courts continued to invoke the doctrine more routinely than originally envisioned. The Court’s decision will have far-reaching consequences with respect to the regulatory investigations, including those by the Department of Labor, Department of Justice, the EPA, and OSHA. Friday’s ruling benefits employers and businesses, providing avenues for challenging regulatory actions as regulatory overreaches which create law, rather than interpreting statutes with fidelity to their content.
In her dissent, Justice Kagan opined that the majority has “turn[ed] itself into the country’s administrative czar” by overruling past precedent that has shaped the administrative state and federal regulatory affairs for decades. Justice Kagan emphasized that this decision gives the judiciary “exclusive power” over every open issue involving the meaning of regulatory law.
Read the opinion: https://www.supremecourt.gov/opinions/23pdf/22-451_7m58.pdf By Ali Lynch and John Nolan
