Supreme Court’s overturning of Chevron doctrine reshapes regulatory landscape

The U.S. Supreme Court has overturned the long-standing Chevron doctrine in a landmark decision on June 28 altering the dynamics between regulatory agencies and the industries they oversee.  

The 6-3 ruling in Loper Bright Enterprises v. Raimondo, penned by Chief Justice Roberts, concluded that the judiciary alone holds the authority to interpret ambiguous federal laws, a departure from the 1984 Chevron USA v. National Resources Defense Council decision which had allowed agencies significant leeway in such interpretations. 

Background and implications 

The Chevron doctrine established a two-part test for courts to determine if an agency’s interpretation of a statute it administers was permissible. If Congress had not directly addressed the precise issue, courts would defer to the agency’s reasonable interpretation of the ambiguous statute. This framework has been instrumental in judicial reviews of federal regulations under the Administrative Procedure Act. 

The Supreme Court’s recent decision arose from challenges by commercial fishing companies against a National Marine Fisheries Service rule mandating vessels to fund government-certified observers during fishing trips. Lower courts had upheld the rule based on Chevron deference, but the Supreme Court’s decision to overrule Chevron shifts the interpretative power back to the judiciary. 

Immediate effects and future uncertainty 

The Court’s decision underscores the judiciary’s traditional role to “say what the law is” and emphasizes that ambiguities in statutes do not equate to delegations of interpretive authority to agencies. This shift presents new opportunities for industries to contest regulatory actions, potentially leading to an increase in legal challenges against agency regulations. 

While the Skidmore deference, which allows courts to consider the persuasiveness of an agency’s interpretation, remains intact, the clarity on how lower courts will navigate the post-Chevron landscape is limited. The Supreme Court’s ruling does not affect existing decisions made under Chevron, leaving current regulations in place for now. 

“This decision could weaken federal regulatory agencies’ ability to regulate, especially in areas where statutory ambiguity exists,” said Nathan Bowen, advocacy and public affairs vice president for the Irrigation Association. “While there is a great deal of uncertainty about how the decision will play out, the court’s ruling could very well result in more limited regulatory scope of the federal government.” 

Potential impact on regulatory agencies and industries 

The National Association of Manufacturers predicts a more active role for industries in shaping policy.  

The NAM Legal Center is currently leading regulatory challenges against the Environmental Protection Agency, the Occupational Safety and Health Administration, and the Securities and Exchange Commission. 

This decision is poised to introduce significant uncertainty as both regulators and regulated industries adjust to the new judicial approach. The ruling could lead to a reevaluation of numerous regulations and the processes by which they are challenged and upheld. 

As regulatory agencies and industries brace for this shift, the long-term effects on the regulatory landscape will unfold, potentially reshaping the relationship between federal agencies and the sectors they regulate.