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What’s All This About Chevron?
Liz Leonard | 10.16.24
If you often deal with federal regulations, for example, if you are subject to air quality permitting requirements or you apply for federal grant money, you may have heard some chatter in the last few months about the end of “Chevron deference” or the “Chevron doctrine.” At the end of June, the Supreme Court issued a decision in Loper Bright v. Raimondo, 144 S.Ct. 2244 (2024), which overturned the 1984 decision, Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). The Loper Bright decision continues the recent trend of reducing agency power and influence and shifting that influence to the courts.
But what exactly was Chevron deference and how will things change? Chevron deference meant that when an administrative agency was responsible for administering a statute, such as how the EPA is responsible for administering the Clean Air Act, a court would defer to the agency’s interpretation if (1) the statute was unclear or ambiguous and (2) the agency’s interpretation was reasonable. This meant that courts were more likely to affirm an agency’s action when challenged, giving agencies breathing room to act based on their understanding of the law and their policy priorities.
Since at least the year 2000, Chevron deference has been narrowed or contained in various ways. In recent years, the Supreme Court has essentially ignored it, last relying on Chevron to defer to an agency interpretation back in 2016. Loper Bright finally overturned this practice of deference altogether, holding that the Administrative Procedure Act (APA) gave courts, not agencies, the power and responsibility to make determinations on issues of law. Therefore, courts will no longer defer to an agency’s interpretation of ambiguous statutory provisions that the agency administers. However, the court may still consider the agency’s interpretation to be particularly persuasive based on the agency’s unique experience and expertise.
Essentially, this means that agency actions are more vulnerable to challenges in court. And Loper Bright was not the only Supreme Court decision last term that opened agencies up to an increase in lawsuits. Corner Post, Inc. v. Board of Governors of the Federal Reserve System, 144 S.Ct. 2440 (2024) held that the default six-year statute of limitations for APA claims begins to run when the entity challenging the agency action is injured, not when the agency action took place. This means that when new entities are created, those entities may be able to challenge agency actions that imposed that regulation, even if those agency actions were taken decades ago. This disrupts the stability and finality of long-standing agency actions which are now subject to legal challenges from newly created private companies or groups.
It is too early to know the extent to which these recent Supreme Court decisions will affect run-of-the-mill agency business. It is possible that more challenges will be brought against agency actions. These challenges can have wide-ranging effects, including nationwide injunctions on agency activity. As a result, we may see more frequent and sudden changes in agency policy or authority.
In addition to the immediate changes to federal administrative law that may unfold, the Loper Bright decision will likely have a broad and long-lasting effect on the relationship between the legislature, administrative agencies, and the courts. This may eventually result in less pronounced shifts in agency policy with each new
administration that enters the White House.
These recent changes only affect the review of federal agency decisions and federal statutes. The Wisconsin Supreme Court abolished our version of deference to agency interpretation of law back in 2018 with the Tetra Tech EC, Inc. v. Wisconsin Department of Revenue, 2018 WI 75, decision. Under Loper Bright, federal court review of federal agency decisions will now look very similar to what Wisconsin has been doing for the last six years.
Given the uncertainty stemming from these recent changes, it will be particularly important to stay informed on recent activity when interacting with federal regulations and agencies.
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poses only. It does not offer legal advice with respect to particular
situations, and does not purport to be a complete treatment of
the legal issues surrounding any topic. Because your situation
may differ from those described in this Newsletter, you should
not rely solely on this information in making legal decisions.