U.S. Supreme Court overturns the Chevron doctrine to reshape the federal administrative state

Key Takeaways

On July 1, the U.S. Supreme Court issued a 6-3 decision in Loper Bright Enterprises v. Raimando and its companion case Relentless v. Department of Commerce that will fundamentally reshape the balance of power between federal agencies, Congress and the Courts. The ruling overturns the Chevron doctrine, precedent established in the 1980’s that directed the courts to defer to the expertise of federal agency’s “reasonable” interpretation of a law if the statute is ambiguous or silent. Considered one of the most important rulings in federal administrative law, Chevron has been cited by federal courts more than 18,000 times.

• Background: In Loper Bright, the Court considered whether the National Marine Fisheries Services, which requires herring industry vessels to have an observer on board to perform conservation oversight, could pass the cost of those observers onto the fishing companies themselves in the absence of federal funding. The D.C. Circuit Court ruled that because Congressional statute was silent on the matter, the Fisheries’ regulation would hold under the Chevron deference doctrine. The fisheries appealed the matter to the Supreme Court.
• The Court’s Ruling: The Court overturned the D.C. Circuit’s decision and in so doing struck down the Chevron precedent. The ruling represents a major shift in the administrative state. Rather than deferring to agency expertise in interpreting Congressional intent, the judiciary will exercise final say over matters in which the statute is unclear or silent. 
• Mixed Impact on Counties: Under Loper Bright, County governments will likely have greater opportunity to overturn burdensome regulations and influence implementation of federal policy through legal challenges. However, by giving final say to the courts, this ruling may undermine uniformity in the application of federal laws and instead lead to significant regional variation. Federal lawmakers may also shift their approach to the legislative process, opting for far greater specificity to reduce the potential for judicial interference. 

Alongside Loper Bright, the Court’s 6-3 decision in Corner Post, Inc. v. Board of Governors of the Federal Reserve System significantly expands the time frame for legal challenges to federal agency rulemaking, further exposing federal regulators to increased litigation. Taken together, the two rulings will have lasting repercussions for the federal administrative state.