On May 1, 2023, the U.S. Supreme Court granted certiorari to Loper Bright Enterprises v. Raimondo [1] – a D.C. Circuit decision that upheld agency deference under Chevron v. Natural Resources Defense Council. [2] Chevron has stood for nearly 40 years on the principle that agencies should be armed with the flexibility to craft regulations with a higher level of specificity than the enabling statute. But prior decisions and recent dicta of the Supreme Court point to a drastic reduction in agency deference, if not a complete reversal of Chevron.

In Loper, a group of commercial fishing companies challenged a rule promulgated by the National Marine Fisheries Service that requires fishing vessels to be accompanied by a paid regulatory compliance monitor. The rule is based on a provision of the Magnuson-Stevens Act, which states that federal regulators have the authority to place “observers” on fishermen’s boats. But the Act is silent on who should pay for the costs of the observers. The D.C. circuit found in a 2-1 opinion that although the statute is ambiguous, the agency’s interpretation of the statute to require the fisher cover the cost of the observer was ‘reasonable’ under Chevron.

Agency decisions are generally reviewed under the “arbitrary and capricious” standard, which in effect allows an agency to apply its own construction of the enabling statute unless the construction is unreasonable. Chevron instructs that courts analyze cases involving an agency’s interpretation of a statute using a two-step analysis:

The Supreme Court granted cert to the fisher petitioners on two grounds:

  • “Whether the Court should overrule Chevron or
  • Whether the Court should 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.”

Accordingly, the Court could do away with the framework all together and allow courts to apply general principles of statutory construction without considering the reasonableness of the agency’s decision. The Court could also more narrowly hold that Chevron deference should not apply in some instances. Either way, it seems likely that there will be a change to the way courts are directed to review agency action under an ambiguous or silent enabling statute.

States, including Louisiana, have adopted the Chevron deference framework. Thus, if the Chevron framework is disturbed, states would be left to grapple with their own methods of reviewing agency decisions.

Loper is the latest development in a series of cases that the Court has considered agency deference. The Court most recently addressed agency deference in West Virginia v. EPA [3] in 2022. In that case, the Court found that the EPA did not have authority under Section 111(d) of the Clean Air Act to promulgate emissions caps.  The Court in West Virginia utilized the “Major Questions Doctrine,” which provides that an agency must point to “clear congressional authorization” in “extraordinary cases” where the “history and the breadth of the authority that [the agency] has asserted,” and the “economic and political significance” of that assertion, provide a “reason to hesitate” before concluding that Congress meant to confer an agency with authority. [4]

Based on that ruling and dicta from the Court, it seems likely that the Court will side with the fisherman petitioners to at least limit agency deference under Chevron.

The case will be considered during the next term beginning in October 2023, with a decision expected sometime in 2024 near the conclusion of the term. Kean Miller will continue to monitor the case for developments.

[1] https://www.scotusblog.com/case-files/cases/loper-bright-enterprises-v-raimondo/

[2] Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984).

[3] W. Virginia v. Env’t Prot. Agency, 142 S. Ct. 2587 (2022).

[4] Id. at 2595.