Maryland Business Litigation Lawyer BlogThe United States Supreme Court Overturns Chevron Deference
Forty years ago, the Supreme Court decided Chevron v. Natural Resources Defense, which gave deference to federal agencies to implement their charging statutes. In its latest term, the Court’s 6-3 decision in Loper Bright Enters. v. Raimondo overturned Chevron and dramatically altered the balance of power between federal agencies and the federal judiciary.
Chevron implemented a two-step approach for the interpretation of statutes. First, courts determined whether Congress had spoken to the statutory question at issue. If Congress’s intent was clear, that ended the court’s inquiry. But if the statute was ambiguous or silent, Chevron directed courts to defer to the agency’s interpretation of the provision if the agency’s reading was a permissible construction of the statute, regardless of how the court would ultimately interpret it. This two-step approach gave deference to administrative agencies concerning the laws they administer and resulted in the presumption that when Congress left ambiguity in a statute, it would be resolved by the administering agency.
The Loper majority abandoned this long-standing doctrine based on perceived conflict with the language of the Administrative Procedure Act (“APA”). Section 706 of the APA states that courts will decide questions of law arising on review of agency action and set aside actions inconsistent with the law. The majority found it significant that the APA lacks a command to defer to administrative agencies when addressing legal questions while commands existed in other areas of the APA. In addition to the language in the APA, Chief Justice Roberts justified the holding by empathizing the constitutional principle articulated in Marbury v. Madison, which states that it “is emphatically the province and duty of the judicial department to say what the law is.” 5 U.S. (1 Cranch) 137, 177 (1803).
The majority found that precedent before Chevron did not require deference to the administrative agency’s reading of an ambiguous statutory provision. This, coupled with the difficulties courts faced in implementing the Chevron doctrine, further justified the Court’s departure from precedent.
The Court made it clear that the Loper decision, standing alone, is not grounds for revisiting settled judgments that relied on Chevron. Instead, moving forward, courts will rely on the APA and exercise their independent judgment while employing the tools of statutory interpretation. Rather than deferring to the interpretation of administrative agencies when a statute is ambiguous, courts may consider executive branch input to inform their decision. Also, the presumption that ambiguity would be resolved by the agency no longer exists. However, when a statute delegates authority to an agency within constitutional limits, courts should respect such delegation and ensure that agencies act within it.
The effects of the Loper decision are yet to be seen, but in Justice Kagan’s dissent, she stated that the decision will shock the legal system. Justice Kagan emphasized that agencies (much more so than courts) have the technical expertise to better interpret ambiguous statutory provisions, and the departure from a doctrine that has become an aspect of modern government will have widespread harm to regulatory efforts such as maintaining clean air and water. In response, the Chief Justice states that judges have been responsible for legal interpretation for the last 221 years. Ultimately, the full impact of the Loper will unfold in courts, administrative agencies, and the legislature over the coming years.
Silverman Thompson regularly handles administrative matters at the federal, state, and local levels across a wide array of fields. To learn more about our administrative practice, please contact Bill Sinclair at 410.385.9116 or bsinclair@silvermanthompson.com.
bsinclair@silvermanthompson.com