The Supreme Court on June 28 issued a ruling finding that the Administrative Procedure Act dictates that courts exercise independent judgment when determining if an agency acted within its statutory authority.
Specifically, the U.S. Supreme Court issued a 6-2 in Loper Bright Enterprises v. Raimondo, No. 22–451) (Loper Bright) and a 6-3 decision in Relentless, Inc. et al. v. Dep’t. of Com. et al., No. 22–1219 (Relentless) overturning Chevron deference.
Chief Justice Roberts delivered the opinion of the court. Justices Thomas and Gorsuch wrote separate concurrences, while Justice Kagan, joined by Justices Sotomayor and Jackson, dissented.
Chevron deference stems from a 1984 decision by the Supreme Court regarding the Environmental Protection Agency’s interpretation of the term “stationary sources” in the Clean Air Act, Chevron U.S.A v. Natural Resources Defense Council.
Chevron set forth a legal test for when the court should defer to an agency’s answer or interpretation, holding that such judicial deference is appropriate where the agency’s answer was not unreasonable, so long as Congress had not spoken directly to the precise issue. Chevron required courts to defer even if the courts interpreted the statute differently.
By overruling Chevron, the court does not call into question prior cases that relied on the Chevron framework.
Those holdings are still lawful and subject to stare decisis. Mere reliance on Chevron to decide those cases does not constitute a “special justification” for overruling such prior cases.
Chevron has been widely applied for roughly 40 years, although the U.S. Supreme Court has not deferred to an agency’s interpretation under Chevron since 2016.
In overruling Chevron, the court concluded that Chevron is fundamentally inconsistent with the APA, which governs how most agency actions are reviewed.
The court repeatedly acknowledged that agencies still have a role in statutory interpretation cases, particularly where their “specialized experience” may be informative. Indeed, the court has, for over two centuries, given due respect to agency interpretations of ambiguous statutes. Respect was especially appropriate if an agency interpretation was issued roughly contemporaneously with a statute’s enactment and remained consistent over time.
In overruling Chevron, the court rejected the various justifications advanced by the federal government: (i) that Congress generally intends for agencies to resolve statutory ambiguities because of their subject matter expertise; (ii) deference to agencies promotes the uniform construction of federal statutes; and (iii) resolving statutory ambiguities can involve policymaking best left to political actors, not courts. The court explained that none of these considerations justifies the Chevron framework.
The court believed the third justification was “especially mistaken,” because resolution of statutory ambiguities involves legal interpretation. “Courts interpret statutes, no matter the context, based on the traditional tools of statutory construction, not individual policy preferences.”
Equally noteworthy, the court detailed how it has spent “the better part of four decades imposing one limitation on Chevron after another,” such as imposing procedural requirements for triggering Chevron and withholding deference in cases involving: questions of deep economic and political significance (i.e., “major questions”); agency interpretations of judicial review provisions; statutory schemes not administered by the agency seeking deference; and (sometimes) statutes with criminal applications. This evolution of the Chevron framework has, in turn, generated confusion in lower courts, which sometimes bypass Chevron altogether and sometimes misapply the doctrine. The court lamented that litigants and lower courts “understandably continue to apply” and wrestle with Chevron because they are “bound by even [the Supreme Court’s] crumbling precedents.”
Going forward, courts must determine what statutes mean by employing traditional tools of statutory construction as they have always done. They can consider—and perhaps give great weight to—an agency’s interpretation under Skidmore. “But courts need not and under the APA may not defer to an agency interpretation of the law simply because a statute is ambiguous.” Every statute will have “a best meaning, necessarily discernible by a court deploying its full interpretive toolkit.”
Potential Implications of Loper
Regarding the potential implications of the Loper decision, in judicial review, courts will have more power to overturn an agency’s interpretation of the statutes that apply to it.
Loper shifts the power from the agency to the courts. Consequently, shifts in presidential administrations will be less likely to influence statutory interpretation; however, the composition of courts can also shift.
For instance, seven active judges on the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) are Democrat appointees, while four are Republican appointees.
The D.C. Circuit will take the first post-Loper cut at any statutory issues under review in five of the new environmental rules affecting the power sector (Particulate Matter National Ambient Air Quality Standard Reconsideration, CAA section 111 Implementation, CAA section 111 Greenhouse Gas Rules, Mercury and Air Toxics Standards Risk and Technology Review, and the Coal Combustion Residuals Legacy Rule).
In review of technical analyses of the agency, Loper will not apply. For instance, agency discretion will continue to apply to EPA technical decision-making, such as review of how EPA crafted ambient air models and risk assessments, unless arbitrary or capricious.
In agency rulemaking, Loper limits agencies’ ability to re-shape the law. Agencies may be reticent to push the boundaries of their statutory authority. In other words, where a statute is not clear, the agency may take a more conservative position when constructing new regulations to avoid a future judicial remand.
Loper could make challenging regulations construing agency statutory authority easier, but it does not mean an agency’s interpretation will always be overturned.
Supreme Court Halts EPA's Good Neighbor Rule Implementation
On June 27, the Supreme Court issued another decision that also has implications for public power utilities.
The Supreme Court, in a 5-4 vote, on June 27 issued a decision temporarily staying the Federal Implementation Plan for the 2015 Ozone National Ambient Air Quality Standards — also known as the Good Neighbor plan — which sought to impose tighter limits on releases of nitrogen oxides in the 23 states subjected to the Good Neighbor Plan. The Supreme Court’s decision is in response to several emergency stay petitions by states (Ohio, Indiana, and West Virginia), utilities, and industry groups that called for a halt in implementation. The court found both EPA and states and industries presented “strong arguments about the harms they faced and equities involved” in staying the GNP. For this reason, the court determined the stay request based primarily on the likelihood of success on the merits. The stay applies nationwide irrespective of whether a state participated in the litigation or if a source is a member of one of the industry groups that filed the emergency stay petition.
The decision neither permanently stays nor vacates the final Good Neighbor Plan. Now, the case's merits will be heard in the U.S. Court of Appeals for the District of Columbia Circuit.
