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In late June, the Supreme Court issued one of its most momentous rulings in years. In Loper Bright Enterprises v. Raimundo, the Supreme Court overturned a 40-year precedent, striking down the Chevron v. NRDC case and its "Chevron deference," which gave a nod to agency interpretation of unclear laws so long as it could be construed as "reasonable." This case will shift the interpretation of law from the executive branch agencies to the courts.
The Loper decision will dramatically change all three branches of the federal government. While the opinion of the Court made clear that it does not undo the dozens of cases that have cited Chevron, a short-term rise in legal challenges to regulations is almost inevitable, as their likelihood of success has dramatically increased with the stroke of a pen.
The most immediate effect of Loper is that federal courts will no longer be able to defer to agencies when laws are unclear. Instead, they will have to exercise their independent judgments and ensure that all regulatory actions are duly authorized by law. In turn, this may lead to more splits between federal courts and, as a result, more percolation of regulatory challenges to the higher courts.
The Executive Branch and the private sector will both have to re-examine the legality of regulations subject to challenges under the Administrative Procedures Act–namely, those made in the past six years. Loper will undoubtedly lead to an increase in the likelihood of success in challenging the Biden regulatory agenda. It will especially affect the most regulated industries, such as energy, banking, and healthcare. Loper may end up having a chilling effect on regulatory agencies, who know that their actions will now be held to a higher standard. Agencies may be reluctant to promulgate regulations that they expect could be challenged, enjoined, and ultimately struck down. This applies equally to potential deregulatory efforts of a future Administration.
Loper will also change the way that Congress works since regulations will have to hew more closely to the letter of the law. This impact will be salient in complex matters that require subject matter expertise, such as energy and environmental laws. Congress will have to write clearer, more specific laws for agencies to implement. Deference to agencies by Congress will have to be made explicit in the text of legislation, as has been done before Chevron. Legislators will have to take a greater share of responsibility for what they vote for.
In short, Loper will affect all three Branches of the federal government, as well as the private sector. It will have downstream effects throughout our economy, ultimately affecting every American. It will require a rethinking of how Washington, DC works from the practices of the past 40 years.
1 See p. 11 of the ruling, citing Gray v. Powell (1941)
In 2024, the U.S. Supreme Court will review the constitutionality of federal agencies to interpret the intent Congress in agency. This will give businesses impacted by regulations the power to challenge decisions affecting every American citizen and businesses through their elected representatives.
