On June 28, 2024, the United States Supreme Court issued its highly anticipated decision in Loper Bright Enters. v. Raimondo, No. 22-451 (2024). The case focused on the question of federal agency authority, and specifically asked the Court to revisit its decision in the 40-year-old Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) which famously outlined a legal test for judges to use when deciding whether a federal agency had acted outside its statutory authority. In a 6-3 decision, the Supreme Court officially overturned Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., ruling that “courts may not defer to an agency interpretation of the law simply because a statute is ambiguous[.]”
Background
The issue at the center of Loper Bright Enters. v. Raimondo concerns a regulation adopted by the National Marine Fisheries Service (“NMFS”) in 2020 pursuant to its authority under the Magnuson-Stevens Act (“MSA”). The regulation required certain fishing boats operating in the Atlantic herring fishery to allow a federal observer to accompany them on fishing trips and pay a portion of the observer’s salary. According to the plaintiffs, the regulation exceeded the scope of authority granted to NMFS by the MSA and should be overturned. They challenged not only the regulation itself, but also the legal doctrine of Chevron deference which the D.C. Circuit Court of Appeals relied on when it upheld the rule. To learn more about the background details of this case, click here.
In reaching its decision, the D.C. Circuit applied Chevron deference, a legal doctrine established by the landmark Supreme Court case Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., which laid out a legal test for courts to determine when a judge should defer to a federal agency’s statutory interpretation. To apply Chevron deference, courts must follow a two-step framework. First, the court should consider “whether Congress has directly spoken to the precise question at issue.” To make that determination, the court will review the relevant statute to see whether the language specifically addresses the issue targeted by the agency’s regulation or whether the statutory language is “ambiguous.” For example, the statutory text of the Endangered Species Act (“ESA”) gives a clear definition for the term “endangered species.” If the Fish and Wildlife Service (“FWS”) adopted a regulatory definition for the term “endangered species” that differed from the statutory definition, then that regulation would likely fail the first step of Chevron deference because the statutory language of the ESA provides an unambiguous expression of Congress’s intent to define the term “endangered species.” However, the ESA does not contain a statutory definition for the term “habitat” despite using that term multiple times throughout the text of the Act. Therefore, if FWS adopted a regulatory definition of “habitat,” such a regulation would likely pass the first step of Chevron deference because Congress has been ambiguous on the issue.
If a court determines that the first step of the Chevron framework is satisfied, it will proceed to step two which requires the court to determine whether the agency’s statutory interpretation is “reasonable.” If the court finds that the interpretation is reasonable, then it must defer to the agency even if the court would have adopted a different interpretation. If the court concludes that the agency’s interpretation is not reasonable, then it may overturn the agency’s regulation. There are a variety of tools that courts may use to determine whether an agency’s statutory interpretation is reasonable, including traditional tools of statutory interpretation such as examining the plain meaning of the statute or looking to its legislative history. Courts may also interpret reasonableness according to the Administrative Procedure Act’s “arbitrary and capricious” standard which instructs courts to overturn agency regulations that are found to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law[.]” 5 U.S.C. § 706(2)(A). Ultimately, step two of Chevron deference asks a court to decide whether an agency’s statutory interpretation is “rationally related to the goals” of the statute.
In the decades since Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. was first decided, it has had a controversial legacy. While some view Chevron deference as another tool of interpretation judges may use when reviewing agency regulations, others regard it as a limitation on judicial authority.
When the D.C. Circuit considered the 2020 monitoring regulation in Loper Bright Enters. v. Raimondo, it determined that the regulation was a reasonable interpretation of the MSA. According to the court, the MSA was ambiguous as to whether NMFS could require a monitoring fee program because the statute neither explicitly authorized nor explicitly prevented the agency from adopting such a program. The court then concluded that the regulation was reasonable largely because the MSA allows fishery management plans to include any other measures “necessary and appropriate” for the management of a fishery.
On appeal to the Supreme Court, the plaintiffs in Loper Bright Enters. v. Raimondo challenged not only the 2020 regulation, but the doctrine of Chevron deference itself. Specifically, the plaintiffs asked the Court to consider “whether the Court should overrule Chevron or at least clarify that statutory silence concerning controversial powers expressly but narrowly granted elsewhere in the statute does not constitute an ambiguity requiring deference to the agency.” While the Supreme Court declined to decide whether the monitoring fee program was outside of NMFS’s authority, it did agree with the plaintiffs that Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., and the doctrine of Chevron deference, should be overruled.
Final SCOTUS Ruling
The Supreme Court issued a 6-3 ruling in Loper Bright Enters. v. Raimondo with a majority opinion authored by Chief Justice Roberts, two concurring opinions authored by Justices Thomas and Gorsuch respectively, and a dissent authored by Justice Kagan. Each will be examined below.
Majority Opinion
The majority opinion in Loper Bright Enters. v. Raimondo holds that the Administrative Procedure Act (“APA”) requires courts to “exercise their independent judgment” when determining whether an agency has acted outside of its statutory authority, and that “courts may not defer to an agency interpretation of the law simply because a statute is ambiguous[.]” The majority relied on past Supreme Court cases that address the role of courts and federal agencies in statutory interpretation, and the APA to reach its conclusion.
In overturning Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., the Supreme Court began by noting that Article III of the United States Constitution assigns to the federal judiciary the responsibility to hear and decide all “cases” and “controversies.” The Court then cited the foundational Supreme Court opinion, Marbury v. Madison, 5 U.S. (1 Cranch) 137 (1803), which is regarded as establishing judicial review. Specifically, the Supreme Court in Marbury v. Madison stated that it is “the province and duty of the judicial department to say what the law is.”
After citing Marbury v. Madison, the Court reviewed other past Supreme Court cases regarding statutory interpretation and agency authority. First, the Court cited several early cases, such as Decatur v. Paulding, 14 Pet. 497 (1840), which echoed the holding in Marbury v. Madison by restating that it is the responsibility of courts to interpret acts of Congress. Next, the Court went on to cite various cases where it had concluded that a federal agency’s interpretation of a law it was tasked with administering should be given “due respect” by reviewing courts. For example, the Supreme Court cited United States v. Moore, 95 U.S. 760 (1878) which explains that courts should give “the most respectful consideration” to federal agency interpretations because employees of such agencies are considered “masters of the subject[.]” Finally, the Court cited Skidmore v. Swift & Co., 323 U.S. 134 (1944), where the Supreme Court held that a federal agency’s interpretations of statutes it is tasked with administering “constitute a body of experience and informed judgement to which courts and litigants [could] properly resort for guidance,” but that such interpretations would not control a reviewing court’s own statutory interpretations. According to the majority in Loper Bright Enters. v. Raimondo, prior to its ruling in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., the Supreme Court had consistently held that while a federal agency’s statutory interpretations could be given due respect by a reviewing court, it was ultimately up to the judiciary to determine the proper meaning of the law.
The APA is a federal law that governs the way federal administrative agencies develop and issue regulations. Additionally, and most relevant to Loper Bright Enters. v. Raimondo, the APA establishes standards for judicial review of agency actions. Under its provision titled “Scope of Review,” the APA states that “[t]o the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action.” 5 U.S.C. § 706. According to the Court, that statutory language represents Congress’s intent to have reviewing courts, not agencies, “decide all relevant questions of law” and “interpret […] statutory provisions.” The Court concluded that the Chevron doctrine cannot be reconciled with the APA because Chevron deference requires courts to adopt reasonable agency interpretations of statutory language, even if the court would have reached a different interpretation. According to the majority, this does not comply with the APA’s requirement that courts “shall decide all relevant questions of law.”
In light of both previous Supreme Court decisions, and the text of the APA, the majority in Loper Bright Enters. v. Raimondo concluded that “[i]n an agency case as in any other […] there is a best reading [of the law] all the same – ‘the reading the court would have reached’ if no agency were involved.” According to the Court, when a court is presented with a case that involves statutory interpretation, it may not “defer to an agency interpretation of the law simply because a statute is ambiguous.” Instead, it is the role of the court to apply its own judgement to determine what the law says.
Concurrences
Justices Thomas and Gorsuch each issued a concurrence in Loper Bright Enters. v. Raimondo. Both Justices joined the majority but wrote separately to address additional issues.
In his concurrence, Justice Thomas asserted that the Chevron doctrine violated Article III of the United States Constitution. According to Justice Thomas, Chevron deference does not comply with Article III’s requirement that courts have the power to decide cases and controversies that arise under the Constitution and the laws of the United States.
In his own concurrence, Justice Gorsuch focused on the “proper application” of the doctrine of stare decisis, arguing that the Court’s decision to overrule Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. does not violate that doctrine. Stare decisis is a foundational legal doctrine within the American legal system. Simply put, the doctrine of stare decisis holds that courts and judges should honor previous court rulings and opinions from past cases. While there is nuance and limitation in how stare decisis is applied, the respect courts grant to past precedence is viewed as fundamental to how the judicial system operates. In general, courts will only overturn past cases if there are particularly strong grounds for doing so.
According to Justice Gorsuch, there are three reasons why the majority opinion is in line with the principles of stare decisis. First, he states that while a previous court decision may be legally binding for the parties involved, no court decision can prevent Supreme Court from fulfilling its responsibilities under the Constitution or laws of the United States. Second, Justice Gorsuch states that while stare decisis requires respect for previous rulings, that respect may depend on the “quality” of a previous court’s reasoning. Specifically, Justice Gorsuch states that “a precedent is more likely to be correct and worthy of respect when it reflects the time-tested wisdom of generations[.]” According to the Justice, Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. conflicted with past Supreme Court cases such as Marbury v. Madison which conclude that it is the role of the judiciary to say what the law is. Finally, Justice Gorsuch states that stare decisis does not require judicial opinions to be read “like statutes.” Instead, the Justice describes stare decisis as a tool of “judicial humility” which compels judges to “pause and reflect carefully” on past rulings instead of demanding “total obedience to them in perpetuity.” For those three reasons, Justice Gorsuch argues that overturning Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. does not violate the doctrine of stare decisis.
Dissent
Justice Kagan, joined by Justices Sotomayor and Jackson, issued a dissenting opinion. The dissent argues that the majority wrongly interpreted the APA and the Supreme Court’s own past rulings on agency authority. The dissent also raises concerns about how courts will proceed following the overturning of a legal doctrine that it describes as “embedded” in the legal system.
According to the dissent, the majority incorrectly interpreted Supreme Court case law on agency authority, particularly case law that existed prior to the passage of the APA in 1946. The dissent cites two Supreme Court cases from the early 1940s which it describes as the “the leading cases on agency interpretation” prior to the APA’s enactment. Both Gray v. Powell, 314 U.S. 402 (1941), and NLRB v. Hearst Publications, Inc., 322 U.S. 111 (1944), the Supreme Court issued opinions deferring to an agency’s interpretation of ambiguous statutory language. In Gray v. Powell, the Court deferred to an agency interpretation of the term “producer” as it was used in a statute regarding price controls. There, the Court determined that deference was appropriate because the agency’s experience “in the field” would give a better informed, more equitable outcome. Similarly, in NLRB v. Hearst Publications, Inc., the Court limited its review to an agency’s interpretation of the term “employee” in the National Labor Relations Act to whether the agency’s reading had a “reasonable basis in law.” According to the dissent, those cases established that it has long been the Supreme Court’s practice to defer to reasonable agency interpretations of ambiguous statutory language even before the passage of the APA.
In turning to the APA, the dissent argues that the provision outlining the scope of judicial review does not require courts to independently review and decide “all relevant questions of the law” as concluded by the majority. According to the dissent, the language of the judicial review provision does not specify what type of review judges should apply when reviewing questions of law pursuant to the APA. Because that provision is silent on what standard judges should apply, the dissent argues that a deferential standard of review is just as in line with the text of the APA as an independent review standard. If Congress wanted courts reviewing matters of agency to apply a non-deferential, completely independent standard of review, the dissent argues that Congress could have written that into the text of the APA.
Finally, the dissent raises a series of concerns over how courts will proceed following the overturning of Chevron deference. Specifically, the dissent notes that the majority kept in place the Court’s ruling in Skidmore v. Swift which holds that agency interpretations “constitute a body of experience and informed judgement” that may be “entitled to respect.” However, the majority failed to articulate how much “respect” an agency interpretation is due. The dissent argues that different courts are likely to reach different conclusions, resulting in future inconsistency. Additionally, the dissent asserts that further inconsistency is likely to stem from courts that reach different conclusions about how best to interpret ambiguous statutory language. According to the dissent, in the absence of Chevron deference, courts will be required to make more “policy calls” that may be different from court to court.
Going Forward
It is currently too early to tell exactly what effect the majority’s opinion in Loper Bright Enters. v. Raimondo will have on the legal system. While the Court did overturn Chevron deference, it left in place cases like Skidmore v. Swift which say that agency statutory interpretations, particularly those based on expertise, are due some amount of respect. However, it is not clear how much respect. Going forward, the majority states that, when it comes to statutory ambiguities “Congress expects courts to do their ordinary job of interpreting statutes, with dues respect for the views of the Executive Branch” but that ultimately “courts need not and under the APA may not defer to an agency interpretation[.]” While many questions remain, it appears that after Loper Bright Enters. v. Raimondo, courts may take agency statutory interpretations into consideration but may not defer to those interpretations. Instead, courts will need to reach their own conclusions about what the law says.
It is very likely that the Court’s decision in Loper Bright Enters. v. Raimondo will lead to numerous challenges of agency regulations, both new and old. Additionally, the Supreme Court’s ruling in Corner Post, Inc. v. Bd. of Governors of the Fed. Reserve System, No. 22-1008 (2024) issued on July 1 is likely to make it easier for prospective plaintiffs to challenge agency regulations. In that ruling, the Court determined that the six-year statute of limitations the APA grants for challenging agency regulations will start when the plaintiff is injured by final agency action instead of when the regulation goes into effect. That ruling, together with the decision in Loper Bright Enters. v. Raimondo, is likely to result in many future challenges to long-standing agency rules, including rules implementing various environmental and other laws that impact the agricultural industry. How those cases will be decided is unknown.
To read the Supreme Court’s opinion in Loper Bright Enters. v. Raimondo, click here.
To read the Supreme Court’s opinion in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., click here.
To read the text of the APA, click here.
For more National Agricultural Law Center resources on administrative law, click here.