Last month, the Supreme Court held in Loper Bright Enterprises v. Raimondo (2024) that a federal administrative agency’s interpretation of the law would no longer receive deference from the court in the context of an ambiguous statute. Instead, courts will exercise their independent judgment when determining whether a federal administrative agency acted within its statutory authority.
Administrative agencies are federal agencies that make up the executive branch, such as the Federal Trade Commission, the Environmental Protection Agency, and the Small Business Administration. The actions of federal administrative agencies are governed by the Administrative Procedure Act (“APA”), which provides the procedures for developing and issuing regulations.
Congress creates and empowers agencies through legislation, also known as the agency’s delegating statute. However, while implementing these statutes, agencies encounter “gaps” that must be interpreted. At times, these interpretations are challenged in court, presenting an important question: when Congress is not clear about a specific issue impacting the implementation of a statute, should the interpretation of the court or the administrative agency prevail?
For over 40 years since Chevron v. Natural Resources Defense Council (1984), courts deferred to agency interpretations of ambiguous statutes if they were “reasonable” enough to be permissible. Loper Bright explicitly overruled Chevron deference and affirmed the Constitutional role of the judiciary, not agencies, as the interpreter of laws passed by Congress.
Critics of Chevron deference celebrate the rightful return of judicial power to the courts and the anticipated reduction of agency overreach. Proponents of Chevron deference criticize Loper Bright’s nonadherence to precedent, hypothesizing that this decision will flood the federal court system with challenges to agency actions and shift decisions away from agency subject matter experts to judges without specialized expertise. Courts will soon decide many post-Chevron cases, allowing for a clearer picture of Loper Bright’s full impact over the coming months and years.