Insights

On June 28, 2024, the Supreme Court issued its highly anticipated ruling overruling Chevron U.S.A. Inc. v. Natural Resources Defense Council Inc.,467 U.S. 837. For 40 years, the Chevron doctrine has required courts to defer to a federal agency’s reasonable interpretation of statutes administered by that agency. Id.at 843. This doctrine has provided agencies with much power in making policy decisions regarding the outcome of ambiguous statues. Critics of the doctrine have complained of the unpredictable and inconsistent interpretations due to frequent administration changes.

The Chevron doctrine required courts to partake in a two-part test first asking, “whether Congress has directly spoken to the precise question at issue.” Id.at 842. If the answer is negative, the court should then move to the second step which requires the courts to defer to the agency’s permissible interpretation of the ambiguous statute. Id. at 843.

The Supreme Court granted cert in Loper Bright Enterprises v. Raimondo, et al. for the sole purposes of determining whether Chevron should be overruled. In a consolidated 6-2 and 6-3 decision, the Court decided that it must be. Chief Justice John Roberts, writing for the majority, explained that “Chevron has proved to be fundamentally misguided.” Loper,603 U.S. ____, p. 29.

In support of this decision, the Court cites a lengthy string of cases that predated Chevron and involved the courts’ own interpretation of federal statutes. The Court reasoned that it was always Congress’ intent for the judiciary branch to interpret ambiguous federal statutes. This intent is clear in the language of the Administrative Procedures Act. The APA vests in “the reviewing court” the decisions of “all questions of law,” and “interpret[ations]. . . of statutory provisions.” 5 U.S.C. ss 706.

The Court next looked to whether stare decisis dictates adherence to the Chevron doctrine. As the Court said—“It does not.” Loper,603 U.S. ____, p. 29. Stare decis is not an “inexorable command” Id.(citing Payne v. Tennessee,501, U.S. 808, 828 (1991). Likewise, the stare decisis considerations weigh in favor of diverging from Chevron as its framework has proven unworkable and required the Court to repeatedly attempt to clarify it. “Under Chevron, a statutory ambiguity. . . becomes a license authorizing an agency to change positions as much as it likes with unexplained inconsistency.” Loper,603 U.S. ____, p. 33. (internal quotations omitted).

Courts now must exercise their independent judgment in deciding whether an agency has acted within its authority, per the APA. Loper,603 U.S. ____, p. 35. Courts may not defer to an agency’s interpretation of an ambiguous statute simply because the statute is ambiguous. Id.Legal interpretation has been “emphatically” the purview and duty of the judicial department which must continue to do so independent of the political branches.

Justices Clarence Thomas and Neil Gorsuch authored concurrences agreeing with the majority’s holding but based their conclusion mainly on stare decisis and separation of powers. Justice Elena Kagan authored a dissent, joined by Justice Sonia Sotomayor and Justice Ketanji Brown Jackson, arguing that stare decisis requires Chevron’s survival. The dissent also argued that agencies are subject matter experts and therefore, it is Congress’ intent for agencies to interpret ambiguous federal statutes.

In light of future uncertainties this decision may case the Court clarified that the decision will not call into question prior cases that relied on Chevron. The dissenting Justices similarly expressed concern with the future of the regulatory landscape.