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Supreme Court overturns Chevron decision, curtailing power of federal agencies

The Supreme Court took a sledgehammer to executive agencies’ power Friday by overruling a prominent precedent that bolstered their ability to implement regulations in wide areas of American life, including consumer and environmental protections.

In an 6-3 decision along ideological lines, the Supreme Court’s conservative majority upended a 40-year administrative law precedent that gave agencies across the federal government leeway to interpret ambiguous laws through rulemaking.

Known as Chevron deference, the now-overturned legal doctrine instructed judges to defer to agencies in cases where the law is ambiguous.

Now, judges will substitute their own best interpretation of the law, instead of deferring to the agencies — effectively making it easier to overturn regulations that govern wide-ranging aspects of American life.

This includes rules governing toxic chemicals, drugs and medicine, climate change, artificial intelligence, cryptocurrency and more.

“Chevron is overruled,” wrote Chief Justice John Roberts, joined by his five conservative colleagues.

“Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority.”

However, Roberts sought to prevent the decision from impacting prior cases that were decided based on Chevron deference.

“We do not call into question prior cases that relied on the Chevron framework,” he wrote. “The holdings of those cases that specific agency actions are lawful—including the Clean Air Act holding of Chevron itself—are still subject to statutory stare decisis despite our change in interpretive methodology.”

The Supreme Court’s three liberals dissented, saying courts will now play a “commanding role” that Congress has not given them. Justice Elena Kagan, who authored the dissent, read it aloud from the bench, a rarity that underscores the justices’ sharp disagreements in the case.

“At its core, Chevron is about respecting that allocation of responsibility—the conferral of primary authority over regulatory matters to agencies, not courts,” Kagan wrote.

“Today, the majority does not respect that judgment. It gives courts the power to make all manner of scientific and technical judgments. It gives courts the power to make all manner of policy calls,” she added.

The move hands a major victory to conservative and anti-regulatory interests that have looked to eliminate the precedent as part of a broader attack on the growing size of the “administrative state.” The Biden administration defended the precedent before the high court. 

It also effectively represents Justice Neil Gorsuch overturning a precedent that upheld rules issued under his own mother, who was the head of the Environmental Protection Agency in the Reagan administration. Gorsuch wrote a separate opinion calling Chevron a “judge-made fiction.”

“Today, the Court places a tombstone on Chevron no one can miss. In doing so, the Court returns judges to interpretive rules that have guided federal courts since the Nation’s founding,” Gorsuch wrote.

Friday’s opinion follows a series of Supreme Court decisions rolling back the powers of executive agencies.

The case is not the first time the high court’s conservative majority has clawed back federal agency power in recent years.

It ruled in 2021that agencies cannot rule on significant issues without “clear congressional authorization” — creating a higher legal bar for executive branch actions to clear.  

The justices are also mulling whether to claw back the Securities and Exchange Commission’s in-house enforcement system to seek civil penalties, with a decision expected later this month. 

Earlier this week, the justices clawed back the Securities and Exchange Commission’s powers.

But the conservative-majority court did reject another challenge to the “administrative state” last month when it upheld the Consumer Financial Protection Bureau’s funding mechanism. 

The challenge to Chevron before the court came through two separate but similar cases where herring fishermen challenged a rule requiring companies to pay for federal monitors onboard their vessels.

In ruling against the fishermen, lower courts invoked Chevron and deferred to the agencies in the cases, known as Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce. Justice Ketanji Brown Jackson recused from the former case, as she took part in it on a lower court. 

Chevron itself dates back to 1984, when environmental advocates sought to challenge the Reagan administration’s efforts to limit air pollution restrictions. The court defended the agency’s action, arguing that its interpretation of the Clean Air Act should be upheld.

While the doctrine applies equally to both Democratic and Republican administrations in theory, in recent years, many conservatives have sought its demise, arguing that agency deference has allowed liberal administrations to enact sweeping regulatory regimes.  

Functionally, this is a bigger deal than the overturning of Roe v. Wade.

Don’t get me wrong, I wrote on the day Dobbs was decided that it was the biggest victory in the history of the conservative movement. Roe was terrible constitutional law in which judges hijacked the democratic process to impose their ideological preferences. It forced states to accept the moral stain of allowing millions of abortions per year no matter what the legislatures, or their people, wanted. The overturning of Roe was a political earthquake. The overturning of the Chevron doctrine, in contrast, will not decide a single race this year.

In terms of the operation of the federal government, however, its effects will be more sweeping.

Since it was decided in 1984, Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. has been central to the massive expansion of the administrative state. By instructing courts to defer to a federal agency’s interpretation of actions on which Congress is not explicit as long as such interpretation is “reasonable,” it left the door open for the government to pursue all sorts of actions without direct permission from Congress. It also led Congress to increasingly shirk its obligations of lawmaking and defer authority to agencies.

This is a huge win for those of us alarmed by the growth of government specifically when it comes to actions taken by the executive branch that have never gone through Congress.

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