How the Supreme Court “Chevron” Decision Undermines Regulatory Protections

Did You Know?

On June 28, the US Supreme Court decided a case that overturned 40 years of precedent that has been in place since 1984. This precedent, referred to as the “Chevron Doctrine,” gave the power to interpret laws to subject matter experts in federal agencies who wrote the regulations to implement the law. As a result of this recent decision, Courts are no longer obligated to follow that Agency’s interpretation and can now give their own interpretation of the law or send the law back to Congress to rewrite.

This opens the door for legal challenges to any program implemented through regulation (including small business programs) that are not explicitly authorized in legislation. It also puts a wide array of health, environmental, and pollution standards, food and drug safety, workplace safety standards, financial services regulations, and education standards at risk of legal challenges if the specific standards were determined through regulation instead of explicitly outlined in statute.

This ruling essentially removes regulatory power from subject matter experts in Federal agencies that previously wrote regulations based on their interpretation of legislative language passed by Congress and places it in the hands of the Courts. The decision states that courts are better suited to determine what ambiguities in federal law may mean, even when those ambiguities involve technical or scientific questions that fall within an agency’s area of expertise. Further, the responsibility is now placed in the hands of Congress to draft legislation with very significant details and clarity, intended to avoid any ambiguity that could trigger a judicial review.

Reversal of the Chevron doctrine opens the doors for a significant increase in challenges to agency rule-making in wide-ranging policies regulating everything from energy, banking, and tax to healthcare, environment, workplace safety, etc. This shift in the agency interpretation and enforcement structure, with Congress being filled with elected officials who may not necessarily be technical or scientific, further empowers K Street lobbyists, who are subject matter experts, to play a more direct role in drafting legislation.

Key Points of this Decision:

  1. Reevaluation of Deference: The Court emphasized that deference to agencies should not be automatic. It underscored the judiciary’s role in independently interpreting statutory language, especially when the language is clear and unambiguous.
  2. Statutory Clarity: The decision reinforced the principle that if a statute’s language is clear, courts must give effect to the unambiguously expressed intent of Congress.
  3. Limits on Agency Power: By limiting Chevron deference, the Court aimed to curtail what it perceived as overreach by federal agencies in interpreting laws beyond their expertise and statutory mandate.

Implications

  1. Judicial Oversight: This decision reasserts the importance of judicial oversight over federal agencies. Courts are now expected to engage more deeply in statutory interpretation rather than deferring to agencies.
  2. Impact on Agencies: Federal agencies are expected to face increased challenges in defending their interpretations of statutes, leading to a more rigorous scrutiny of agency rules and regulations, potentially slowing down the regulatory process.
  3. Legislative Precision: The decision places greater responsibility on Congress to draft clear and precise legislation. Ambiguities in statutes are less likely to be resolved by agency interpretation, pushing Congress to provide detailed guidance within the legislative text.
  4. Legal Uncertainty: The narrowing of Chevron’s deference is expected to lead to increased litigation as parties challenge agency interpretations more frequently, seeking judicial clarification.

Conclusion

The decision is likely to have a severe impact on the federal government’s ability to protect the public from all kinds of harm – environmental, economic, financial, social, etc. While some of the immediate impacts are clearer for agencies that have faced significant corporate push-back against their regulatory oversight, such as the Food and Drug Administration (FDA), Environmental Protection Agency (EPA), and Securities and Exchange Commission (SEC), this decision will likely have far-reaching implications for agency interpretation of laws and application of regulations throughout the federal government.