U.S. Supreme Court Ends Judicial “Deference” to Government Agency Interpretations of Statutes

By Brett W. Johnson, P.C., Ryan J. Regula, Ryan P. Hogan, Charlene Anne Warner, Cole Craghan, and Savannah Wix

In past articles, we discussed two consolidated cases (Loper Bright and Relentless) asking the Supreme Court to reverse a decades-old precedent known as the Chevron doctrine. That doctrine occasionally required federal courts to defer to “permissible” agency interpretations of the statutes those agencies administer, even if a court disagrees that is the “best” reading of the statute. 

In a 6-3 decision handed down on June 28, 2024, the Supreme Court reversed this widely applied precedent. The bottom line going forward is that courts, not agencies, have the final say in interpreting statutes. Courts may no longer give the tie to the agency in close cases just because the agency’s interpretation is permissible (or entitles it to some subject matter expertise deference). As Chief Justice John Roberts' majority opinion pithily put it: “In the business of statutory interpretation, if it is not the best, it is not permissible.”

While the decision in Loper Bright and Relentless is narrow in typical Chief Justice Roberts fashion, the Court laid out some breadcrumbs for what a return to a world without the Chevron doctrine looks like. 

First, the end of the Chevron doctrine does not mean that courts should ignore agency interpretations of the statutes they administer. Courts have long accorded “respect” to the Executive Branch’s interpretations of statutes.¹ That respect is especially appropriate where the Executive’s interpretation is contemporaneous with the relevant enactment, consistent over time, and based upon informed and rationale judgment and specialized experience. 

In line with this point, Loper Bright and Relentless clarified that the Court was not overturning the traditional “respect” afforded to the Executive Branch. Rather, the respect given to an agency’s interpretation should be considered persuasive, but not binding. In dissenting, however, Justice Kagan countered that the majority is simply calling “deference” by a new name and a new standard. According to Justice Kagan, “the same judges who argue today about where ‘ambiguity’ resides” will also “argue tomorrow about what ‘respect’ requires.” In other words, Loper Bright and Relentless merely shift the type of deference from “agency interpretation of the law simply because a statute is ambiguous” to respect for an agency’s position “based upon … specialized experience,” “body of experience,” and “informed judgment,” and did nothing to change the Administrative Procedure Act’s (APA) mandate that “judicial review of agency policymaking and factfinding be deferential.” To paraphrase the British rock band “The Who,” meet the new boss who is mostly the same as the old boss.

Second, a statute may empower a government agency to decide how a statutory term should be applied to specific facts. Courts may still defer to agency determination of facts (as dictated by the APA) if there is sufficient evidence to support those findings and the requirements of due process are satisfied. So, in agency adjudications, courts can (and likely will) refrain from second guessing reasonably grounded factual findings when applying a statute. 

As such, regulated companies and individuals should not wait until after a regulation is published to raise concerns related to the statutory interpretation to factual situations, which is initially done via regulation. It is important that the record reflects disagreements and force the governmental agency to respond to criticisms or alternative interpretations during the regulatory development process. Although the Supreme Court’s decision in Corner Post v. Board of Governors, Federal Reserve System, allows regulations to be challenged under the APA within six years of that regulation first injuring the plaintiff, the failure of an entity that is traditionally regulated to actually raise an issue may likely be used against the entity in any future administrative or judicial proceeding.

Third, some agencies may still have broad powers under their enabling statute. For example, some statutes expressly give an agency authority to “give meaning to a particular statutory term.” Others allow agencies to fill in details through rulemaking or leave them with flexibility to regulate. Subject to the constraints imposed by the non-delegation (discussed more below) and major questions doctrines, nothing in Loper Bright and Relentless calls into question such authority. However, as mentioned above, if non-delegation or major questions doctrines are implicated, it is important for regulated entities and individuals to raise such concerns during the regulatory process by commenting on the proposed rules.

Fourth, just because a case previously relied on the Chevron doctrine does not make those cases automatically suspect. Rather, a litigant seeking to reverse a case that relied on Chevron must still succeed in showing that the court’s ultimate initial conclusion was wrong. While a court’s reliance on Chevron might help make that showing, it is not (by itself) enough.

Fifth, the non-delegation doctrine will not save the day (yet). Under that doctrine, Congress may not delegate its own regulatory power to an agency unless it provides an “intelligible principle” — a standard that an agency would typically satisfy with ease. And yet, the Securities and Exchange Commission v. Jarkesy decision (also authored by Chief Justice Roberts in a 6-3 majority a day before Loper Bright and Relentless were issued) declined to answer broader questions relating to agency authority. For now, this left standing the Fifth Circuit’s recent break with tradition that found no “intelligible principle” in the SEC’s open-ended and virtually unlimited discretion to decide whether a defendant would receive the “fundamental” process of trial by jury. Because the Court declined to address the non-delegation doctrine in Jarkesy (which was decided on other grounds), its decision in Loper Bright and Relentless seemingly created a framework that lacks any true guardrails on what type of “respect” an agency’s interpretations should be given.

Going forward, regulators should anticipate an increased frequency of challenges to actions taken under the statutes they administer — particularly where the action is not consistent with prior interpretations and can be viewed as arbitrary and capricious. Further, regulated parties asking courts to revisit past cases that relied on the Chevron doctrine should closely examine the administrative record, prior interpretations, and the relevant statutory language in order to demonstrate that those cases were ultimately wrongly decided. Both regulated entities and individuals should object early and often to proposed regulations that are not based on an informed or rational foundation (both factually and within the policy confines of the implementing statute), violate the non-delegation doctrine, or are otherwise unconstitutional.

Footnotes

1. Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944). [Back]