The Fall of Chevron: Impact on Federal Agency Regulations and Industries

The US Supreme Court’s recent ruling in the case of Loper Bright Enterprises v. Raimondo has overturned the long-standing Chevron doctrine, which allowed federal agencies to have the final say on interpreting ambiguous laws and regulations. Chief Justice John Roberts emphasized the importance of courts exercising their independent judgment in determining whether an agency has acted within its statutory authority.

The decision in Loper will have far-reaching implications for industries regulated by federal agencies, such as healthcare and securities. For over 40 years, courts have deferred to agency interpretations under the Chevron doctrine, citing the agencies’ expertise and accountability. However, the Court’s ruling in Loper signals a shift towards courts being the ultimate arbiters of statutory interpretation.

The impact of the Loper decision extends beyond just conservation regulations, affecting various industries where federal agencies play a significant role in rulemaking and enforcement. The ruling challenges the notion of agency deference and emphasizes the need for judicial oversight over agency actions.

The dissenting opinion in Loper warned of potential disruptions and exclusive power being granted to the courts in interpreting regulatory laws. The decision may lead to conflicting interpretations across different court jurisdictions, creating challenges for industry participants operating nationwide.

Furthermore, the ruling is expected to increase litigation against agency rules, with plaintiffs emboldened to challenge perceived regulatory overreach. Healthcare organizations and other stakeholders are likely to challenge flawed interpretations of statutes found in regulations, leading to a potential wave of post-Chevron litigation.

In the securities arena, the Securities and Exchange Commission (SEC) may face increased scrutiny over its rulemakings, especially in areas like climate risk disclosure and antifraud statutes. The demise of Chevron could result in agencies taking a more cautious approach in interpreting their authority under unclear statutes.

Overall, the Loper decision marks a significant shift in the balance of power between federal agencies and the courts, signaling a new era where courts will play a more active role in interpreting and enforcing regulatory laws. Industry stakeholders are advised to stay informed about the implications of this ruling on their operations and seek legal guidance if needed.