In June 2024, the U.S. Supreme Court decided a case with significant implications for federal agencies, the parties, and the matters they regulate. The case of In Loper Bright Enterprises v. Raimondo involved an action brought by commercial fishermen over an agency rule. However, the Supreme Court used this case to overturn a long-standing doctrine known as the Chevron rule. That doctrine required courts to give deference to federal agencies’ reasonable interpretations of ambiguous statutes that the agency administers. As a result of the decision, federal agencies will likely face more litigation regarding their rule-making authority.
Facts of the Case
Commercial fishermen sued the National Marine Fisheries Service (NMFS) to challenge the agency’s rule requiring the fishermen to pay for at-sea monitoring programs. The fishermen contended that the NMFS was not authorized to create the rule under the Magnuson-Stevens Fishery Conservation and Management Act of 1976 and that the NMFS failed to follow proper rulemaking procedures.
The federal district court found in favor of the government and the U.S. Court of Appeals for the D.C. Circuit affirmed. The courts held that the NMFS made a reasonable interpretation of its authority in adopting the rule and it followed appropriate procedures.
The Supreme Court Decision
Chief Justice Roberts writing for the majority stated that under the Administrative Procedure Act (APA), courts must “decide all relevant questions of law” when reviewing agency actions. Accordingly, courts should interpret laws using their independent judgment, not defer to agencies’ interpretations.
The majority rejected the idea that ambiguities in a statute involving a federal agency is an implicit delegation by Congress to that agency allowing the agency to interpret the law. Instead, the Court held that ambiguities should be resolved the same way they would in other contexts with the courts deciding the matter using established rules of statutory construction.
Notably, the Loper Bright decision overruled a 40-year-old precedent in Chevron U.S.A. v. Natural Resources Defense Council, Inc. Under Chevron, courts were required to give deference to agency interpretations of ambiguous statutes if those interpretations were reasonable. The majority felt that Chevron proved to be unworkable and resulted in inconsistencies and thus should be overturned. However, the Court did not clearly indicate what the new standard of review should be over an agency interpretation, although it seems it will still give some level of deference to agencies.
Three justices dissented in the case arguing that where there are ambiguities in statutes it makes sense to defer to agencies. The agencies are subject matter experts and better equipped to make policy decisions. Further, Congress did not attempt to change the ruling in Chevron in the last 40 years.
Impact of the Case
The Court attempted to limit the decision’s impact by stating that prior cases that relied on Chevron are not overturned but must be litigated on their merits. However, it is likely that many more challenges to agency rules will be made in the coming years.
The elimination of some onerous rules and putting limits on the power of agencies may be helpful to parties facing enforcement actions but there is still uncertainty in how courts will implement Loper Bright.
If you are facing a regulatory investigation or enforcement action, contact us for a consultation to learn how we can help you. We have extensive experience representing clients in both administrative and court proceedings involving a wide range of agencies.