Losing Agency: How One Case Could Reshape the Landscape

There’s a U.S. Supreme Court case that might soon undo one of the most basic rules-of-the-road about how our federal government works. If it does, all kinds of government regulations would be much easier for courts to overturn. And if that happens, unpredictability will be the new rule-of-the road for your business and life.

Although the past year brought many consequential Supreme Court decisions, this one, likely to emerge next year, could have perhaps the biggest effects on packagers of any decision in decades.

The case is called Loper Bright Enterprises v. Raimondo, and you can examine it for its specific details or its general themes. Specifically, it involves a challenge to regulations made by the Biden administration’s National Marine Fisheries Service that require fishing boats to pay for onboard monitors to make sure they don’t over-fish. The challengers said the law told the agency to require monitors, but didn’t say the agency could require the fishing boats to pay for them.

However, its more interesting general theme is this: The case also raises the question of whether the courts should continue to follow the doctrine from the 1984 “Chevron” case. That case, which involved EPA air pollution rules, established the concept that when courts review agency rules or other actions that involve interpretation of a law, and that law is silent on a topic or ambiguous in some way, the court will only check to make sure the agency’s interpretation was “reasonable.” If the agency’s interpretation was reasonable—that is, not nutty or clearly beyond the scope of Congress’s instructions—it would be upheld. In a word, the Chevron case says the court should “defer” to agency interpretations unless they’re not reasonable. (And by the way, if the law Congress made was clear, the court would simply check to see if the agency did what Congress instructed.)

What a judge should not do, according to the Chevron case, is substitute the judge’s own judgment for that of the agency about what should be the right interpretation of a law.

By telling courts to defer to an agency interpretation unless the interpretation is unreasonable, the Chevron doctrine meant courts almost always upheld regulations when they were challenged in court for being wrong-headed or unconstitutional in some way. Many judges and other observers say that a big reason to defer to agencies is that those agency folks have the subject matter expertise you’d want them to have if they’re going to make rules on a particular topic. Regulatory agencies have people in them, ideally, with training and education and experience that makes them appropriate folks to decide how to limit air or water pollution, or decide whether a new drug is safe and effective enough to go to market, or choose where to build an interstate highway, or where to store nuclear waste, or how to prevent over-fishing of the oceans, and so on.

The Chevron case has been cited by 19,000 other cases, according to the San Francisco Chronicle, and more importantly, it’s been a fixture in legal doctrine for almost 40 years, relied on by industry and regulatory officials alike.