Supreme Court Strikes Down Chevron Deference, Changing the Landscape of Agency Rulemaking

For nearly 40 years, when a court found that a statute was ambiguous, the court deferred to the reasonable interpretation of the federal agency administering the statute. This principle—known as Chevron deference, after the 1984 Supreme Court case Chevron U.S.A. v. Natural Resources Defense Council—had led courts, Congress, and regulated entities to rely on agency interpretations of ambiguous statutes in developing and implementing complex regulatory programs. Under Chevron, courts had upheld agency rulemaking in a wide range of public policy spheres, including healthcare, financial services, workplace safety, and the environment. On June 28, 2024, the U.S. Supreme Court overruled Chevron and held that courts “may not defer to agency interpretation of the law simply because a statute is ambiguous.” Although some of the consequences of the ruling may be near-term, and others might not be felt immediately, the decision may impact thousands of administrative programs and will inject uncertainty into litigation challenging agency regulations.

At first glance, these cases may seem like an unusual vessel for a challenge to agency interpretative power. Loper Bright v. Raimondo and Relentless, Inc. v. Department of Commerce involve the National Marine Fisheries Service’s interpretation of the Magnuson-Stevens Act, a federal fishery conservation statute. Both cases were brought by commercial fishing groups challenging a regulation that provides that the government may require the fishing industry to pay for federal monitoring staff on their boats. Although the Magnuson-Stevens Act is silent on whether the fishing industry must fund federal monitors, the lower courts, applying Chevron, deferred to the National Marine Fisheries Service’s interpretation of the law and upheld the regulation.

In a 6–3 decision penned by Chief Justice John Roberts, the Court found that Chevron cannot be squared with the Administrative Procedure Act (APA), which provides that the reviewing court “decide all relevant questions of law” and “interpret . . . statutory provisions.” The Court held that the APA dictates that agency interpretations of law are not entitled to deference; rather, it is exclusively the role of the reviewing court to independently interpret the law. According to the majority, Chevron erred by presuming that statutory ambiguities are implicit delegations of authority to agencies to make such determinations, as agencies—unlike courts—“have no special competence in resolving statutory ambiguities.”

Justices Thomas and Gorsuch filed concurring opinions. Justice Thomas opined that Chevron violated the separation of powers by “curb[ing] the judicial power afforded to courts,” and “expands agencies’ executive power beyond constitutional limits.” Justice Gorsuch expressed his support for overturning Chevron because it contravenes the APA, runs afoul of separation of powers, due process, and established interpretive rules, and endows federal agencies with unwarranted authority.

Justice Kagan filed a sharply worded dissent, joined by Sotomayor. Justice Jackson also joined the dissent but only as to Relentless, as she was recused from Loper Bright. The dissent criticized the majority opinion, arguing that the opinion improperly increased the power of courts and made the Supreme Court the “country’s administrative czar.”

Key Takeaways

There is no question that Loper Bright marks a sea change in the judicial interpretation of administrative action. Courts have relied on Chevron for nearly 40 years, citing the opinion in 18,000 opinions. By giving courts the exclusive authority to interpret ambiguous laws, Loper Bright fundamentally alters the extent to which federal agencies can craft comprehensive regulation from broadly written statutes. This may be particularly true of sweeping regulatory actions that are grounded in novel interpretations of older statutes.

In the short term, Loper Bright may spark a rush of litigation to test the new boundaries of agencies’ application of the law. The decision also may be cited in current litigation challenging agency rulemakings. Over time, the development and implementation of federal rulemaking may be substantially slowed down and significantly narrowed if agencies are forced to revisit their legal bases for regulating. Another case decided by the Supreme Court this term, Corner Post, Inc. v. Board of Governors of the Federal Reserve System, is likely to further increase the cases challenging agency action. In Corner Post, the Court held that an APA claim does not accrue for purposes of the six-year statute of limitations until the plaintiff is injured by final agency action. Prior to Corner Post, most Circuits had held that APA actions accrue at the time of final agency action, but after Corner Post, newly created or newly injured persons or entities will be able to challenge longstanding agency actions and regulations.

All that said, it is difficult to predict what the practical effects of Loper Bright will be. As the Court noted, it has not upheld an agency regulation on Chevron grounds since 2016, and lower courts are still permitted to consider the views of the agencies even if they cannot defer to an agency’s interpretation of a statute. Given those factors, it is unclear how often overruling Chevron will be a deciding factor in future challenges to agency regulations.