Congress has entrusted federal agencies to administer a litany of statutes encompassing subject matters that run the gambit from public health, financial markets, food & agriculture, antitrust, and many other disparate areas affecting the health, safety, and well-being of the American people. Administrators of these agencies typically have vast technical knowledge of and experience in the subject matter of the statutes they’ve been designated to enforce.
Whether intentional because of administrators’ subject matter expertise or from mere oversight, Congress has left many ambiguities and gaps within these statutes, giving wiggle room for agency interpretation of the statutes they administer. In Chevron, U.S.A., v. Natural Resources Defense Counsel (“Chevron”) [1], the United States Supreme Court provided a framework for dealing with such statutory ambiguities, colloquially known as the Chevron two-step. The Court explained that “[w]hen a court reviews an agency’s construction of the statute it administers, it is confronted with two questions.” [2] The Court stated that the first question is “whether Congress had spoken to the precise question at issue.” [3] “If the intent of Congress is clear,” the Court went on, “… the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.” [4] As for the second step, if “the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.” [5] The Court viewed these latter instances as implicit delegations by Congress, and held that “court[s] may not substitute [their] own construction of a statutory provision for a reasonable interpretation made by an administrator of an agency.” [6] (emphasis added).
Deference afforded to agency interpretations of ambiguous statutes provided a great deal of power to administrators as they implemented rules and regulations and undertook enforcement actions, but this deference was not shielded from skepticism.[7] This skepticism came to a head on June 28, 2024, when the Supreme Court overruled Chevron in Loper Bright Enterprises v. Raimondo (No. 22-451) and Relentless, Inc., v. Dep’t of Commerce (No. 22-1219) (collectively, “Loper Bright”).[8] The Court held that deference to agency interpretations of statutes was inconsistent with the Administrative Procedure Act (“APA”),[9] which codifies judicial review of agency actions and directs reviewing courts to “decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action.” Deference to agency interpretations of ambiguous statutes, in the Court’s view, cut against the independent judgment of courts to decide questions of law, as required by the APA. [10]
The Court in Loper Bright held that statutory ambiguities are “not a delegation of law interpreting power” by Congress, and based on the possibility that ambiguities may result from congressional oversight or neglect, they do not reflect “congressional intent that an agency, as opposed to a court, resolve the resulting interpretive questions.” [11] In the wake of Loper Bright, Congress will not be able to rely on ambiguities if they want to delegate discretionary authority to agencies, but rather will need to be much more explicit if their intent is to delegate. [12]
Parties adversely affected by agency action will now be afforded the benefit of an independent judicial review of statutory interpretations when the agency is acting pursuant to statutory ambiguities. However, it is important to note that while courts will no longer automatically defer to agency interpretations in these instances, courts can still look to agency interpretations to inform their decisions if the agency interpretations are well reasoned.[13]
As a result of Loper Bright, it should be expected that agencies will be significantly more constrained in adapting their interpretations of statutes based on real-world changes in the areas they regulate. It would be unwise for agencies to assume that their interpretations will necessarily be adopted by the courts upon review even if their interpretations reflect realities on the ground. In the likely event that Congress continues to be unclear in statutory language, parties impacted by agency action will be floating in a sea of uncertainty, as agency interpretations in these instances will no longer be binding. Clarity will not come about in these instances until litigation arises. It’s fair to assume, then, Loper Bright will foster increased litigation, and parties adversely impacted by agency action will need to be mindful of any court rulings interpreting the statutory provisions causing them harm.
Should you find yourself harmed by any agency action, contact the experienced team at F|G to assist you with all your needs in navigating the legal landscape in the wake of Loper Bright.
[1] 467 U.S. 837 (1984).
[2] Id. at 842.
[3] Id.
[4] Id. at 842-43.
[5] Id. at 843.
[6] Id. at 844.
[7] See, e.g., Perez v. Mortgage Bankers Ass’n, 575 U.S. 92, 109-10 (2015) (J., Scalia) (concurring in judgment).
[8] Loper Bright Enters v. Raimondo, No. 22-451, No. 22-1219, slip op. (U.S. June 28, 2024).
[9] Codified in relevant part at 5 U.S.C. § 706 et seq.
[10] Loper Bright, slip op. at 35.
[11] Id. at 22.
[12] Id. at 26.
[13] Id. at 35.