US Supreme Court Overrules Chevron

The US Supreme Court holds that the Administrative Procedure Act requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous; overruling Chevron. Loper Bright Enterprises, et al  v. Raimondo, Secretary of Commerce, et al, No. 22–451. Clausen Miller Appellate & Trial Monitoring Practice Group Chair Melinda Kollross and Partner Don Sampen authored an amicus brief on behalf of the DRI Center for Law & Public Policy in this monumental case.

Background and Implications

On June 28, 2024, the Supreme Court overruled the 40-year-old “Chevron doctrine” in the case of Loper Bright Enterprises v. Raimondo, 603 U.S. __, No. 22-451.  The Chevron doctrine derives from Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).  It articulates a two-step approach for a court to determine whether an administrative agency regulation is consistent with power vested in the agency by an act of Congress.  The first step is to discern whether Congress had directly spoken to the issue in question, which, if so, then the congressional directive would be followed.  If, however, congressional intent is silent or ambiguous on the issue, then the second step is for the court to defer to the agency if it had provided a permissible construction of the statute.

The congressional act at issue in Loper involved the Magnuson-Stevens Fishery Conservation and Management Act.  Under that act the National Marine Fisheries Service (NMFS) administers certain “management plans” that specify annual catch limits and other requirements for commercial fishery operations.  At issue in the case was a regulation that required domestic vessels to carry observers on board for the purpose of collecting data necessary for fish conservation and other regulation of the industry.  In 2020 the NMFS promulgated a rule requiring fishermen to pay for the observers under certain circumstances, potentially reducing annual returns to the vessel owner by up to 20 percent.  Fishery owners challenged the regulation in two cases, one in the D.C. Circuit and one in the First Circuit.  Both courts of appeal upheld the regulation by applying the Chevron doctrine.

The Supreme Court granted certiorari limited to the question whether Chevron should be overruled or clarified.  The DRI Center for Law and Public Policy submitted an amicus brief in support of the Petitioners authored by CM Appellate & Trial Monitoring Practice Group Chair Melinda Kollross and Partner Don Sampen suggesting a possible alternative to overruling, namely, that the case be evaluated and resolved under the so-called “major questions doctrine,” a modified version of Chevron.  That doctrine, which the Supreme Court employed in West Virginia v. Environmental Protection Agency, 142 S.Ct. 2587 (2022), and in many other cases, bars or limits administrative actions that assert “highly consequential power beyond what Congress could reasonably be understood to have granted.”  

Although recognizing that various limitations have been placed on the Chevron doctrine over the years, the Court nonetheless decided to overrule Chevron in its entirety.  It did so primarily by relying on its interpretation of the Administrative Procedure Act, which was enacted in 1946.  The APA, according to the Court, requires that courts, and not administrative agencies, decide questions of law without deference to an agency interpretation.  Chevron, moreover, wrote the Court, could not be reconciled with the APA by presuming that statutory ambiguities were to be regarded as “implicit delegations to agencies.”

Going forward, courts may no longer defer to an agency “simply because a statute is ambiguous.”  Still, certain forms of deference are possible.  The Court commented, for example, that factfinding by an agency continues to carry weight.  An agency’s determination may also “help inform” a court’s decision-making ability.  And, of course, a court “must respect the delegation” of authority to an agency by Congress, while at the same time “ensuring that the agency acts within it.”  Courts must nonetheless “exercise their independent judgment in deciding whether an agency has acted within its statutory authority.”