On June 28, 2024, the Supreme Court curtailed federal agencies’ ability to regulate issues across all facets of American life, from environmental protection to public health. In two cases, Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce, the justices evaluated a federal rule that required the herring industry to cover the costs of observers on fishing boats.
In the 6–3 decision, the Justices ruled that the Environmental Protection Agency (EPA) overstepped its bounds and struck down a major precedent, known as the Chevron doctrine or Chevron deference. Chevron deference directed courts to defer to federal agencies when administering regulations around ambiguous laws, providing that the interpretation was “reasonable.” This precedent stemmed from the 1984 Supreme Court ruling in Chevron v. Natural Resources Defense Council, where the majority ruled in favor of the EPA’s interpretation of the Clean Air Act eased regulation of emissions.
Chief Justice John G. Roberts argued in the majority opinion that Chevron deference is inconsistent with the Administrative Procedure Act, a federal law that outlines the procedures federal agencies must follow, as well as instructions for courts to review federal agency actions. Chief Justice Roberts emphasized that the responsibility to interpret laws lies with the judiciary, rather than federal agencies. He added that the ruling would not require earlier cases that relied on Chevron to be overturned. However, the Supreme Court undermined that notion the following Monday by expanding the ability for any entity to sue federal regulators. In the 6-3 ruling for Corner Post, Inc. v. Board of Governors of the Federal Reserve System, the majority opinion stated the statute of limitations begins when an entity is “injured or harmed” by a regulation, rather than when the regulation is initially implemented. In other words, an entity negatively impacted by a federal regulation can bring a lawsuit any time the harm occurs, triggering the six-year statute of limitations. Prior to this decision, the statute of limitations was triggered when the original regulation was implemented, which curbed the ability for entities to bring lawsuits against federal agencies.
For the last forty years, Chevron deference granted federal agencies the autonomy to create and implement regulations when legislation was ambiguous; this power will now rest with the judiciary. The Corner Post ruling, in conjunction with the overruling of Chevron deference, will likely lead to increased unpredictability as entities can bring an innumerable amount of lawsuits to courts across the country arguing that regulations ranging from the previous century to today are currently causing injury.
Although federal agencies will still have the ability to provide regulatory guidance, they will no longer have the freedom and judicial protection Chevron deference granted. This means that federal agency guidance can more easily be challenged, paused, or overruled in the courts. In the longer term, these rulings will impact the ability of federal agencies to provide direction around key issues, such as the FDA’s guidance on prescriptions and HHS’ guidance around Medicare costs. Moreover, these decisions could lead to varying regulatory schemes in different regions of the country, as the judiciary in various states and localities come to different conclusions about the legality of a specific regulation.
These cases evaluated together illustrate a significant blow to the administrative state, reducing the power for federal agencies to regulate by overturning a 40-year judicial precedent, which is the most cited case in administrative law. While federal agencies will still be able to provide guidance, new legislation will either have to explicitly grant regulation power to specific federal agencies or ambiguous laws will have to be interpreted by the courts, rather than by the experts in the numerous federal agencies.