HELLO, LOPER BRIGHT: INITIAL GLIMPSES OF POST-CHEVRON JURISPRUDENCE

Author: Matt Carlin, Editor-in-Chief

I. Introduction: The Supreme Court Recently Overruled a Forty-Year Precedent

In the recent summer months of 2024, the Supreme Court overruled a long-standing precedent guiding federal courts to yield to a federal agency’s reasonable interpretation of ambiguous statutes.[1] This precedent was established in 1984 in the case Chevron, U.S.A., Inc. v. Nat. Resources Def. Council, Inc. (“Chevron”).[2] The referent statutes themselves enable the agencies to exist and have any regulatory authority.[3] The problem is, Congress passes these agency-related statutes through the arduous political process, which involves necessary compromise to get anything through.[4] Compromise usually means that statutes are left broad and non-specific (i.e., ambiguous).[5] The agencies, then, must operate in the real world where they regulate industries whose activities are imprecisely dealt with by Congress’s end product.[6]

Since Chevron, whenever a federal agency interpreted and acted in the ambiguous parts of their enabling statutes, a federal court would not contradict the agency’s interpretation—even if the court disagreed with the interpretation—so long as the interpretation was reasonable.[7] In other words, federal agencies could, at times, say what the law is. The recent decision in Loper Bright Enterprises v. Raimondo (“Loper Bright”), however, asserted that “saying what the law is” is the court’s sole responsibility.[8] With Loper Bright, industries have a better opportunity to challenge federal agency decisions that impact their business.

II. A Brief Background of Agencies

Article II of the United States Constitution—the section establishing the executive branch of the federal government—only enumerates two specific positions in the executive branch: the President and the Vice President.[9] Article II references other positions like “ambassadors” and “officers” of the United States, but it establishes none specifically.[10] Yet, there are 439 agencies that currently exist at the time of this writing[11] because Congress is able to create them under the Necessary and Proper Clause in Article I, Section 8.[12] Create, Congress did.

Now, the over-400 agencies help regulate many aspects of business, securities, agriculture, environment, telecommunications—the list goes on.[13] Congress cannot develop the subject-matter expertise to manage the diverse areas of governance and regulation, so it often delegates that authority to agencies because they have experts with “boots on the ground” insight.[14]

III. Loper Bright, Explained

In Loper Bright, there were fishing vessels that objected to the National Marine Fisheries Service’s (“NMFS”) statutory interpretation of the Magnuson-Stevens Fishery Conservation and Management Act (“MSA”).[15] The MSA gives the NMFS authority to “implement a comprehensive fishery management program,”[16] and the NMFS “may require that one or more observers be carried on board a vessel . . . for the purpose of collecting data necessary for the conservation and management of the fishery.”[17] The purpose of these observers’ data, in other words, was to prevent overfishing.[18] Bringing the observers on board was both mandatory and costly, but the statute was silent on who pays for it.[19] The NMFS decided to place that cost on the fishing vessels.[20]

In response, the fishing vessels sued in federal court claiming it was not within the agency’s authority to make this statutory determination.[21] While both lower courts used Chevron to defer to the NMFS’s interpretation as a reasonable and authoritative interpretation, the Supreme Court disagreed, overturning both the NMFS’s interpretation and all Chevron deference along with it.

As referenced before, the Supreme Court reasoned that when the NMFS decided that the fishing vessels should bear the cost of the observers, they were deciding what the law is.[22] This, according to Chief Justice Roberts, was inconsistent with Article III the Constitution—where it is “the province and duty of the judicial department to say what the law is”[23]—and inconsistent with the language of the Administrative Procedure Act (“APA”), passed to “prescribe[] procedures for agency action and delineate[] the basic contours of judicial review of such action.”[24] The MSA incorporated the APA, so it had statutory authority.[25] Thus, because the Constitution and the APA give courts the authority to say what the law is, it is an unconstitutional default, reasoned the Court, to defer to an agency’s statutory interpretations where courts would disagree.[26]

Notably, Chief Justice Roberts stated that previous holdings under Chevron are subject to statutory stare decisis[27]—where stare decisis is at its strongest.[28] Robert’s opinion also supports Skidmore deference,[29] which permit courts to look to agency interpretations and opinions as “a body of experience and informed judgment to which courts and litigants [could] properly resort for guidance, even on legal questions.”[30] But we have yet to see how influential Skidmore will be, and whether lower courts might dispose previous holdings under Chevron, despite statutory stare decisis.

IV. What Now?

In Loper Bright’s wake, one thing that seems to be certain is uncertainty itself.[31] It is also clear that, with a “thumb off the scale” in agency favor, there will likely be more litigation to challenge agency decisions,[32] especially where the cost benefits could be significant in an industry. While there have only been a few months since the case was decided, there are initial glimpses of what this post-Chevron litigation might look like.

            a. Tennessee v. Becerra

            The Sixth Circuit recently heard oral arguments in Tennessee v. Becerra.[33] There, Tennessee challenged the U.S. Department of Health and Human Services (“HHS”) decision to deny Tennessee Title X grant funding because Tennessee refused to comply with an HHS rule.[34] The rule required family planning programs to provide pregnant patients information about abortion, if asked.[35] Tennessee lost at the district court level because of a precedent case using Chevron deference to the HHS ruling on Title X.[36] However, on appeal, the State is using Loper Bright to argue that their case was improperly dismissed because the lower court should get to reconsider whether to follow the Chevron-based precedent in light of Loper Bright[37]—an early attack of Chevron-based statutory stare decisis.

            b. Utah v. Su

            In Utah v. Su, the Fifth Circuit decided to vacate and remand a case back to a Texas district court to reconsider it in light of the Supreme Court’s new guidance.[38] The district court had affirmed the Department of Labor’s 401(k) green investing rule based on ERISA.[39] This was a result of President Biden’s executive orders allowing some retirement plan managers to consider sustainability factors “not material to financial performance” when making investment decisions affecting workers’ retirement.[40] Conservative Attorneys General quickly brought suit to contest this executive action, and now stand a better chance of rendering Biden’s sustainability objective unviable without Chevron deference protecting it any longer.[41]

            c. U.S. Chamber of Commerce Challenges

            The U.S. Chamber of Commerce, the “world’s largest business organization,”[42] regularly brings regulatory challenges where it perceives economic restriction.[43] Historically, the Chamber brought most challenges in the D. C. Circuit, but now it has shifted to bringing more challenges in Texas to be within the Fifth Circuit.[44] According to Bloomberg Law, the Chamber filed more challenges in the first six months of 2024 than any other year[45]—perhaps intuiting the Supreme Court’s destination in Loper Bright. The Chamber’s shift reflects inevitable forum-shopping as plaintiffs seek favorable jurisdictions for their regulatory challenges.[46] This gives the Fifth Circuit the chance to set many early precedents for the new Loper Bright era. Whether other circuits follow in-step with the Fifth will be revealed in time.

V. Conclusion

In conclusion, the pending regulatory challenges and recently remanded cases show that circuit courts are allowing lower courts to reconsider decisions that were dispositive under Chevron. Regardless of Justice Roberts’ guidance on deferring to Chevron-based precedent, any of it could be overruled by lower courts.[47] Then, with the statute of limitations for APA challenges becoming very plaintiff-friendly under another 2024 Supreme Court decision,[48] the Roberts Court has positioned the country for significant regulatory overhaul.

Congress will be forced to reevaluate their legislation and will need to be specific in each statute on what powers and authorities it wants agencies to have.[49] But this means there would likely be more to disagree about in a proposed statute, risking further gridlock without any effective legislation.[50]

Loper Bright’s legacy will be determined case by case in the slow process of the courts. Consequently, it will first be a boon for agency law litigators.[51] While much public discussion focuses on how Loper Bright benefits business and industry,[52] it also means that some industries may be stalled in their operations, unsure of what decisions to make if agencies are hesitant to issue rules and guidance based on statutory ambiguities.[53] This may be an unintended consequence of Loper Bright that agencies and their industries will have to endure for the time being. But while uncertain horizons can have hidden threats for industries, they can also portend promise worth the venture. Time will tell.

[1] See Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024). For a complete table of Supreme Court decisions overruling precedent, see Table of Supreme Court Decisions Overruled by Subsequent Decisions, Const. Annotated, https://constitution.congress.gov/resources/decisions-overruled/ (Last visited Aug. 7, 2024).

[2] Chevron, U.S.A., Inc. v. Nat. Resources Def. Council, Inc., 467 U.S. 837 (1984), overruled by Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024).

[3] Jack Malamud, et al., Around the Halls: After Chevron, What’s Next?, BROOKINGS INST. (July 10, 2024), https://www.brookings.edu/articles/around-the-halls-after-chevron-whats-next/ (scroll down to Mark MacArthey’s contribution titled: “Bye, bye, Chevron, but it is not the disaster some feared”).

[4] Id. at § Getting what you wished for may not necessarily be a win.

[5] Id.

[6] Id.

[7] Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244, 2247 (2024) (discussing the law under Chevron).

[8] Id. at 2256 (“This Court embraced the Framers’ understanding of the judicial function early on. In the foundational decision of Marbury v. Madison, Chief Justice Marshall famously declared that ‘[i]t is emphatically the province and duty of the judicial department to say what the law is.’” (quoting Marbury v. Madison, 5 U.S. 137, 177 (1803))) (alteration in original).

[9] See generally U.S. Const. art. II.

[10] Id. art. II, § 2.

[11] Agency List, Fed. Reg., https://www.federalregister.gov/agencies (Last visited Aug. 23, 2024).

[12] Freytag v. Comm’r, 501 U.S. 868, 883 (1991) (noting Congress’s authority to create offices and to provide for the method of appointment to those offices); Buckley v. Valeo, 424 U.S. 1, 139–40 (1976) (stating that Congress’s authority to appoint offices comes from the Necessary and Proper Clause and is limited by the President’s Appointments Clause in the Constitution at Article II, Section II, Clause II); see also U.S. Const. art. I, § 8, cl. 18 (Necessary and Proper Clause); Id. art. II, § 2, cl. 2 (Appointments Clause).

[13] Id.

[14] Mark Richardson, Delegation and Deference in the Administrative State: The Fate of Chevron Deference, GOVT. AFF. INST., GEO. UNIV. (June 24, 2024), https://gai.georgetown.edu/delegation-and-deference-in-the-administrative-state-the-fate-of-chevron-deference/.

[15] Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244, 2254–55 (2024).

[16] Loper Bright Enterprises, Inc. v. Raimondo, 45 F.4th 359, 363 (D.C. Cir. 2022) (citing 16 U.S.C. § 1801(a)(6)), cert. granted in part sub nom. Loper Bright Enterprises v. Raimondo, 143 S. Ct. 2429 (2023), and vacated and remanded sub nom. Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024).

[17] Id. (citing 16 U.S.C. § 1853(b)(8)).

[18] Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244, 2254 (2024).

[19] Id. at 2255.

[20] It cost the average fishing vessel roughly $710 per day. Id.

[21] Id. at 2255–56.

[22] Id. at 2263.

[23] See supra note 8 and accompanying text.

[24] Loper Bright, 144 S. Ct. at 2247.

[25] Id.

[26] Id. at 2266.

[27] Loper Bright, 144 S. Ct. at 2273.

[28] Kimble v. Marvel Entm’t, LLC, 576 U.S. 446, 456 (2015) (“What is more, stare decisis carries enhanced force when a decision . . . interprets a statute. Then, unlike in a constitutional case, critics of our ruling can take their objections across the street, and Congress can correct any mistake it sees.”); see also Planned Parenthood S. Atl. v. State, 892 S.E.2d 121, 129 (2023) (“[I]f a court's decision is instead tied to a statute, the legislature is free to overrule the decision through a new statutory enactment. That is why adherence to precedent—stare decisis—is at its zenith when a court decision is based on statutory construction and not the constitution.”).

[29] Loper Bright, 144 S. Ct. at 2267 (citing Skidmore v. Swift & Co., 323 U.S. 134, 139–40 (1944)).

[30] Id. at 2258 (quoting Skidmore v. Swift & Co., 323 U.S. 134, 139–40 (1944)) (alteration in original) (quotations omitted).

[31] See Ben Miller, Circuits Reckon With Appeals ‘Caught in the Middle’ Post-Chevron, BL (July 31, 2024, 5:20 AM), https://news.bloomberglaw.com/ip-law/circuits-reckon-with-appeals-caught-in-the-middle-post-chevron.

[32] Justin Wise, Chevron Ruling Poised to Boost Business for Corporate Litigators, BL (July 1, 2024, 4:45 AM), https://news.bloomberglaw.com/business-and-practice/chevron-ruling-poised-to-boost-business-for-corporate-litigators.

[33] Tennessee v. U.S. Dept. of Health and Human Services, No. 3:23-CV-384, 2024 WL 1053247 (E.D. Tenn. Mar. 11, 2024), appealed sub nom. Tennessee v. Becerra, No. 24-5220 (6th Circ. argued July 18, 2024).

[34] Mary Ann Pazanowski, Family Planning Fight Poised to Test Scope of Chevron Rollback, BL (July 17, 2024, 10:30 AM), https://news.bloomberglaw.com/health-law-and-business/family-planning-court-fight-may-test-scope-of-chevron-rollback.

[35] Id.

[36] Tennessee v. U.S. Dept. of Health and Human Services, No. 3:23-CV-384, 2024 WL 1053247, *7 (E.D. Tenn. Mar. 11, 2024) (citing Rust v. Sullivan, 500 U.S. 173 (1991)), appealed sub nom. Tennessee v. Becerra, No. 24-5220 (6th Circ. argued July 18, 2024).

[37] Pazanaowski, supra note 34.

[38] Miller, supra note 31.

[39] Utah v. Su, No. 23-11097, 2024 WL 3451820 (5th Cir. July 18, 2024); see also Miller, supra note 31.

[40] Utah v. Su, No. 23-11097, 2024 WL 3451820, *1 (5th Cir. July 18, 2024).

[41] Ben Miller, Texas Court to Rehear ESG 401(k) Rule Challenge Post-Chevron (1), BL (July 18, 2024, 7:35 PM), https://news.bloomberglaw.com/daily-labor-report/texas-court-to-revisit-esg-401k-investment-rule-post-chevron.

[42] About Us, U.S. CHAMBER OF COM., https://www.uschamber.com/about (Last visited Aug. 8, 2024).

[43] Evan Weinberger, K. Sophie Will & Thomas Gleason, Chamber of Commerce’s Texas Wins Offer Playbook for Rule Fights, BL (Aug. 7, 2024, 5:00 AM), https://news.bloomberglaw.com/banking-law/chamber-of-commerces-texas-wins-offer-playbook-for-rule-fights.

[44] Id.

[45] Id.

[46] Id.

[47] Id.

[48] Corner Post, Inc. v. Bd. of Governors of Fed. Reserve System, 144 S. Ct. 2440 (2024).

[49] See Malamud, et al., supra note 3, at § Bye, bye, Chevron, but it is not the disaster some feared.

[50] Id. at § Getting what you wished for may not necessarily be a win; See also Jim Saska, What would Congress do without Chevron deference?, ROLL CALL (June 5, 2024, 3:16 PM), https://rollcall.com/2024/06/05/what-would-congress-do-without-chevron-defe rence/.

[51] Miller, supra note 27.

[52] Sterling Miller, What in-house lawyers should know about the overturned Chevron doctrine, THOMSON REUTERS (July 17, 2024), https://legal.thomsonreuters.com/blog/what-in-house-lawyers-should-know-about-the-overturned-chevron-doctrine/.

[53] Ethan Howland, Supreme Court’s Chevron ruling creates power sector uncertainty: Moody’s, UTILITYDRIVE (July 12, 2024), https://www.utilitydive.com/news/supreme-court-chevron-utility-power-sector-uncertainty-moodys/721196/.