“Courts will still have to defer to agencies on fact findings, and where Congress plainly leaves room for an agency to exercise some policymaking discretion, courts aren’t going to have a license to second- guess that.”
— Maria Monaghan Counsel
U.S. Chamber of Commerce Litigation Center
of products that must comply with environmental and/or manufacturing standards, such as Environmental Protection Agency (EPA) energy consumption requirements under the Clean Air Act. The potential impacts could have an even broader reach. For instance, the Northern District of Texas also cited Loper Bright in granting a preliminary injunction on the Federal Trade Commission’s ban on noncompete agreements.
Using their Own Judgment In the past, it was typical for Congress
to pass potentially ambiguous laws and then leave the interpretation and specific regulations related to those laws up to federal agencies. The Chevron deference arose out of the need to have a way to address these ambiguities and enable agencies to implement laws and rules, even when they were not clear. Loper Bright did away with this approach, finding that courts should use their own judgment when deciding whether an agency has acted within its legal authority. The long-term implications of this SCOTUS decision remain to be seen, but the general consensus is that government agencies will wind up with less power to create regulations, rules and mandates that impact manufacturers and other entities. Further, when manufacturers do challenge specific regulations, the courts will now have more authority in deciding the legality of those regulations.
Maria Monaghan, counsel for the U.S. Chamber of Commerce Litigation Center, says SCOTUS made clear in Loper Bright that courts have an obligation to make an independent judgment about the meaning of a relevant statute. “This can impact both agency rulemaking and regulatory litigation,” she points out. With respect
18 FEDA News & Views
to rulemaking, for example, federal agencies must now consider whether their assertion of authority is consistent with the best reading of the statutory language, rather than whether they can make an argument that’s consistent with a reasonable reading of that language.
“In practice, this may cause agencies to be more cautious about asserting broad and novel authority to regulate,” Monaghan says. The new rule could also help reduce agency “flip-flops” on major policy questions from one administration to the next. “With respect to regulatory litigation, the decision puts challengers on a more even playing field with the federal government.”
For example, agencies may not be able to successfully defend their statutory interpretations in court. Losing legal challenges could prompt agencies to become more cautious in their rulemaking, leading to fewer litigations overall. Monaghan also points out that Chevron deference was already “waning” prior to Loper Bright, and that some of the lower courts were becoming more reluctant to apply it on specific cases (and, in many cases, the government stopped asking for it). In terms of whether previous
regulatory rulings will be reassessed as a result of Loper Bright, Monaghan says SCOTUS included a paragraph in the decision that makes it clear that any previous agency actions that were already upheld under the Chevron framework are still entitled to statutory stare decisis, a doctrine that requires courts to follow earlier judicial decisions when similar issues arise. “That means that it’s not open season to rechallenge rules that have already been upheld under Chevron,” Monaghan explains. “Once any regulations that are currently under consideration are adopted, however,
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