Noted with Interest: Loper Bright v. Raimondo: Reshaping Administrative Law and Agency Authority

Since 1984, the U.S. Supreme Court’s Chevron doctrine required courts to defer to administrative agencies’ “reasonable” or “permissible” interpretations of ambiguous statutes. No longer. The near-universal prediction that a newly constituted U.S. Supreme Court, openly skeptical of the administrative state and vigilantly protective of Article III prerogatives, would discard Chevron has proven correct: in June 2024, the Court expressly overruled Chevron along partisan lines in Loper Bright Enterprises v. Raimondo. 

Background and History of Judicial Deference to Agency Interpretation of Statutes

            The Administrative Procedure Act (APA) is the cornerstone for judicial review of agency statutory interpretations. The 1946 APA established a framework to manage the unprecedented administrative expansion of the New Deal and continues to govern the process by which federal agencies develop and issue regulations. The Act also provides for judicial review of agency statutory interpretations, stating that “the 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 APA generated considerable caselaw after its passage, the meaning of which has been hotly contested. Deference advocates argue that post-APA courts often deferred to agencies’ reasonable interpretations of statutes, while deference skeptics argue that statutory interpretation remained the sole province of the courts and that although courts occasionally deferred to agencies’ fact-intensive determinations, that was never the case for pure questions of law.      

            Chevron entered the judicial canon in the summer of 1984, though no one immediately recognized its import. Yet by the end of the decade—perhaps as a result of the embrace of the D.C. Circuit (including, famously, by one Judge Scalia)—Chevron had become a landmark, garnering hundreds of judicial citations. Subsequent caselaw built upon Chevron, with the doctrine attracting criticism, particularly (though not solely) from conservative jurists. On an increasingly conservative U.S. Supreme Court, that criticism crescendoed over time, such that when the Court granted certiorari to resolve whether Chevron “should be overruled or clarified” in May 2023, the writing was on the wall.

The Facts

            Loper Bright centered on fishery regulations issued by the National Marine Fisheries Service (NMFS). The NMFS, relying on a statutory grant of authority from the Magnuson-Stevens Fishery Conservation and Management Act (MSA), had issued regulations requiring certain Atlantic herring vessels to pay for on-vessel observers, costing the effected businesses up to twenty percent of their annual returns. Fishing interests brought suit, alleging the NMFS regulations were not authorized by the MSA. The D.C. Circuit ruled against the fishing interests, relying upon Chevron. The U.S. Supreme Court granted certiorari, expressly asking whether “Chevron should be overruled or clarified.”                       

 

The Majority 

            The majority 6-3 decision, authored by Chief Justice Roberts, squarely stated that “Chevron is overruled” and that the APA requires reviewing courts to “exercise their independent judgment in deciding whether an agency has acted within its statutory authority.” Though never explicitly stating that Chevron is incompatible with the constitution, the majority began with constitutional principles, outlining the framers’ vision for an independent judiciary to interpret the nation’s laws. Although the early Court “recognized from the outset . . . that exercising independent judgment often included according due respect to executive branch interpretations of federal statutes,” that respect did not bind the judiciary to any reasonable interpretation provided by the executive. Instead, courts were required to exercise independent judgement. Recognizing that New Deal courts occasionally applied a deferential standard of review to “fact-bound determinations” issued by administrative agencies, the majority then explained that such deference did not extend to purely legal questions. Thus, “[n]othing in the New Deal era or before it . . . resembled” the deference afforded by Chevron.

            The majority next turned its attention to the APA. The APA’s command that “the reviewing court shall decide all relevant questions of law” and “interpret constitutional and statutory provisions” left no room for deference to agencies’ interpretations of law. The majority explained that legislative history was in accord, confirming that the APA “incorporates the traditional understanding of the judicial function.” 

            Chevron could not be saved by a presumption that Congress intended agencies, rather than courts, to resolve statutory ambiguities. Ambiguities are not delegations, the majority reasoned, and courts—not agencies—are the bodies best equipped to find the best meaning of a statute. These factors are not overcome by agencies’ subject matter expertise. The legislature “expects courts to handle technical statutory questions,” and courts, guided by the parties and amici, are capable of soundly interpreting technical subject matter.

            Finally, the majority rejected the argument that stare decisis required the Court to maintain Chevron. The Chevron decision’s failure to even cite the APA indicated the decision was “fundamentally misguided” from the start. Four decades of intervening judicial tweaks then proved the doctrine “unworkable.” Moreover, Chevron had failed to generate meaningful reliance interests, allowing “an agency to change positions as much as it likes.”

            Though the majority’s decision was far-reaching, it also outlined caveats. The decision expressly noted that it did “not call into question prior cases that relied on the Chevron framework,” despite the Court’s “change in interpretive methodology.” In addition, the majority noted that Congress can expressly authorize an agency “to give meaning to a particular statutory term,” to “fill up the details of a statutory scheme,” and “to regulate subject to the limits imposed by a term or phrase that leaves agencies with flexibility, such as ‘appropriate’ or ‘reasonable.’”

The Dissent

            Justice Kagan, joined by Justices Sotomayor and Jackson, took the pen in dissent. The dissent defended Chevron as reflecting a presumption of congressional intent: Congress usually prefers that expert agencies fill statutory gaps rather than inexperienced courts, and Chevron wisely embodied that presumption. Agencies enjoy subject-matter expertise and experience with complex regulatory regimes that courts do not. In addition, the gap-filling required to address statutory ambiguities is more a question of policymaking than a question of law, and thus more suited for the political branches than for unelected judges. The majority had disregarded stare decisis and “flipped the script”—a “rule of judicial humility” was now “a rule of judicial hubris.”

Consequences and Questions

            Unlike Chevron, Loper Bright is immediately recognizable as it landmarks and ushers in a new era of administrative law. Though the ruling poses many questions that will only be answered with time, parties and practitioners can expect a number of immediate consequences.

 

• Loper Bright is almost certain to result in an increase in challenges to agency statutory interpretations. An increase in litigation is also likely to be abetted by the Court’s other consequential administrative law decision of the term, Corner Post, Inc. v. Board of Governors of the Federal Reserve System, holding that a claim under the APA’s six-year statute of limitations does not accrue until the plaintiff is injured by agency action, rather than when the contested regulation is issued. Moreover, courts, no longer required to defer to agencies’ permissible statutory readings, are likely to be more receptive to regulated parties’ challenges. And although the majority expressly stated that prior reliance on Chevron was not sufficient reason to overrule a decision, litigants will likely argue that prior agency interpretations are flawed in other ways, presenting regulated parties opportunities for creative challenges.
• One particular focus of litigation is likely to be the permissible scope of congressional delegations. The majority, though recognizing delegations were permissible “subject to constitutional limits” like the major questions doctrine, did not attempt to explain the scope of the permissible. Over the next several years, those battles are likely to unfold in the lower courts, with litigants testing the limits of constitutional non-delegation principles, the major questions doctrine, and ambiguous delegations.
• Administrative agencies may become more circumspect when issuing new regulations, avoiding aggressive readings of the law and changes to statutory interpretations over time. With agency interpretations under increased scrutiny, agencies are incentivized to interpret statutes as they believe a reviewing court would, lest new regulations be cut down through litigation. Regulations may also become more consistent over time and through presidential administrations, as a more interpretive burden is placed on the courts and the executive is disincentivized from changing course. On the other hand, Loper Bright may result in increased circuit splits, with appellate courts disagreeing about the single best meaning of a statute. As a result, regulated parties may face different applications of the law in different areas of the country until the U.S. Supreme Court resolves the split.
• Lower courts—who do not enjoy the luxury of the U.S. Supreme Court’s discretionary docket—may develop new interpretive tools to navigate their high administrative law caseload. Skidmore deference, under which agency interpretations are “entitled to respect,” may prove a convenient fallback in cases centered on technical subject matter.