On June 28, 2024, the Supreme Court of the United States (the “Court”) ruled on Loper Bright Enterprises, et al., v. Gina Raimondo, Secretary of Commerce, et al., striking down Chevron Deference and limiting the power of federal agencies.
KingSpry’s Employment Law Chair, Avery E. Smith, Esq., reviews the Court’s precedential decision in her latest blog.
Case Overview
The Court granted certiorari in Loper Bright Enterprises, et al., v. Gina Raimondo, Secretary of Commerce, et al., to examine whether Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, should be overruled or clarified.
Chevron is one of the most important rulings in federal administrative law, as it created what is commonly referred to as Chevron Deference.
What is Chevron Deference?
Chevron Deference is the doctrine of judicial deference which compels federal judges to defer to an agency’s interpretation of a statute or regulation. Since Chevron, federal judges have yielded to agencies’ interpretations of statues and regulations that are ambiguous or unclear.
The Decision
In a 6-3 vote, the Justices overruled Chevron, striking down Chevron Deference. In its opinion, the Court held 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.”
Justice Elena Kagan, Sonia Sotomayor, and Ketanji Brown Jackson dissented.
What Does the Future Hold?
There is consensus amongst the Employment Law community that the Court’s decision in Loper will result in challenges against regulations enacted by the United States Department of Labor (“DOL”), the Internal Revenue Service (“IRS”), the Securities and Exchange Commission (“SEC”), among other federal agencies.
Such challenges are likely to claim that the agencies lack the authority to issue regulations. In Loper, Chief Justice John Roberts wrote, “agencies have no special competence in resolving statutory ambiguities. Courts do.”
The Court’s decision in Loper is likely to trigger significant change in administrative law. Employers are encouraged to stay up-to-date on the impact of Loper, and consult with legal counsel when questions arise regarding their business practices.
