With Loper Bright, the Supreme Court Guts the Administrative State and Shifts Power to the Courts

In its 1984 Chevron decision, the Supreme Court held that the Administrative Procedure Act (APA) required courts to defer to permissible agency interpretations of ambiguous statutes. To defeat an agency’s action, opponents had to meet the high burden of first showing that the statute was unambiguous, and if not unambiguous, that the agency’s interpretation was impermissible. The idea behind the Chevron doctrine was simple: the individuals who work for administrative agencies have the most expertise in specific fields, so they should be interpreting congressional statutes within their areas of expertise. If the people disagreed with the agency’s interpretation, they could vote in an executive branch that supported their views and appointed like-minded agency heads. Chevron was established during the Reagan administration and gave conservatives a way to stave off the purview of courts and protect the administration’s deregulatory goals. Since its inception, Chevron has gone on to be cited by the courts more than 18,000 times in the last 40 years.

However, since the Obama administration, the conservative movement has been actively trying to limit the administrative state, highlighting concerns with executive power overreach and agency flip-flop. With a majority stronghold at the Supreme Court, conservatives are now making their goals a reality. Since 2021, the Court has invoked the “major questions” doctrine four times, finding that it holds the final word on any agency decision that involves “vast economic and political significance.”

Aligned with these goals, plaintiffs in Loper Bright brought the case to challenge the National Marine Fisheries Service’s (NMFS) rule requiring fishers to pay some of the cost of having federal compliance monitors on their ships. Plaintiffs argued that the NMFS interpreted the Magnuson-Stevens Act too broadly in violation of the agency’s authority granted by Congress. Relentless, Inc., et al. v. Department of Commerce, et al., Case No. 22-1219, concerned the same rule and also asked the Court to overturn or limit Chevron.

In a 6-2 decision (Justice Jackson recused herself from Loper Bright due to her involvement in the matter as a judge at the D.C. Circuit, but dissented in the related Relentless case), Justice Roberts, writing for the majority, found that the APA requires courts to independently interpret ambiguities in statutes and “decide legal questions by applying their own judgment”, thereby overturning the Chevron doctrine. Roberts highlighted that a court can consider an agency’s interpretation under Skidmore deference. Justice Kagan dissented, joined by Justice Sotomayor and Justice Jackson.

The impact of this decision cannot be overstated. When Congress passes a statute, it unintentionally or intentionally leaves ambiguities within the law to allow for some room in its interpretation and implementation. Even if not gridlocked, Congress does not have the time or foresight to specify every possibility that may arise from the interpretation of a statute. The question is—who should decide what ambiguities mean: agencies, which are staffed by individuals who have years of expertise within their fields, or the courts? Do courts, for example, have the expertise and resources to determine how much nitrogen may be discharged by a wastewater treatment plant before it pollutes water to unsafe levels (City of Taunton v. United States Environmental Protection Agency, 895 F.3d 120 (1st Cir. 2018)?

Post-Loper Bright, court dockets will become heavier and more complicated. Judges and law clerks now regulate every issue that impacts Americans on a daily basis. Chevron opponents maintain that

Loper Bright ensures less agency flip-flopping, but that cannot be accepted as true. Each administration will continue to implement its policy goals through its agencies, but now, every agency action will likely be stayed while it is litigated before different judges, resulting in different outcomes, and moves up to the Supreme Court for the final decision. This is not less flip-flopping—it is simply forced agency inaction until the next administration. The overturning of Chevron means less agency regulation for decades to come.

Loper Bright is not the only anti-administrative state decision released this term. On June 27, 2024, in SEC v. Jarkesy, the Supreme Court held securities cases involving civil penalties must be heard before a court that allows trial by jury, eliminating the possibility of bringing such cases before administrative tribunals. Days later on July 1st, in Corner Post v. Board of Governors, the Court expanded the ability of plaintiffs (see anti-regulation businesses) to sue agencies by finding that the 6-year statute of limitations for a claim under the APA does not begin to accrue until the plaintiff is injured by final agency action, not from the date of rule finalization. This means businesses can be created simply to dismantle decades-old agency regulations.

Although the public may not feel the influence of these decisions for years to come, the way the government operates has fundamentally changed. For employment lawyers, federal employment agencies impact much of the work we do. Consider every agency rule—from established rules such as the Department of Labor’s white-collar exemption to newer regulations such as the NLRB’s joint-employer rule—up for grabs.