Modern life is complicated and addressing the issues each of us face requires expertise and focus. Modern government is no exception and is made up of a myriad of agencies, both at the state and federal level. These administrative agencies, however, have always been controversial. Lawyers often find agency actions challenging to deal with, which can lead to litigation and Court review, whether for enforcement and compliance issues or when agencies make new rules or regulations. The challenges to the bureaucracy, and a shifting political landscape, have resulted in a judicial approach that has significantly changed this year. It will impact the various administrative agencies that have expansive authority to regulate businesses, workers, property cleanup and redevelopment, investments, and clean air and clean water. The recent Loper Bright Supreme Court decision will impact how these agencies regulate, and how they will be held accountable by courts for their actions. Decades ago, the Supreme Court set forth the legal standard for review of federal administrative agency actions in situations where there was ambiguity in statutory language and it became known as Chevron deference. The famous case involved how the Environmental Protection Agency, or EPA, addressed air pollution under the Clean Air Act. Recently, in its Loper Bright decision, another case that involved environmental regulation, this time of fisheries, the Supreme Court overturned that deferential approach. With this new decision, the Supreme Court has done what only it could do – undo its own precedent. For the first time since the 1940s era, the Supreme Court now places the courts, and not the administrative agencies, into the role of interpreter and decider of statutory ambiguity as it applies to federal administrative law. The decision returns the Supreme Court to a road it previously travelled when reviewing administrative action. The influence of Loper Bright on future Court decisions is not clear. Over the past decade, there are a number of examples where agencies have justified their regulatory actions without relying upon Chevron deference. Courts around the country, however, are now seeing the Loper Bright decision becoming a basis to challenge regulatory action. In fact, after this decision, the Supreme Court agreed to accept review of a number of cases, and then sent them back to lower courts for review in light of this new decision. Nonetheless, a recent review of some court cases showed that the new approach to administrative law is not consistently followed. ii The practical implications of the change in judicial review are potentially far reaching. For example, addressing climate change is a significant government challenge, requiring expertise and carefully crafted laws to address this ongoing and developing problem. Congress will now need to pass legislation with clearer statutory direction for agencies to carry out their goals, which will be true even in situations where it seeks to clearly grant them discretion to act. This challenge may prove difficult in an era of divided government and may result in areas of concern going unaddressed. At this time, the Loper Bright decision does not appear to impact how agencies interpret their own rules or regulations or to impact administrative actions that do not rely upon the deferential approach from the Chevron era. Further, the Loper Bright decision indicates that previous cases relying on the Chevron deference precedent should remain in effect. Nonetheless, the Court’s shift away from deference to agency decision-making will result in increased litigation, professional commentary, and evolving analysis for the foreseeable future. History of Administrative Agencies: The Long Road Travelled. The creation of federal agencies was a response to, and shaped by, the Great Depression. Congress acted by creating an alphabet soup of agencies, from the Securities and Exchange Commission to the Department of Labor, and eventually to the Environmental Protection Agency, among many others. Congress statutorily required these agencies to address many issues and each agency was shaped as it responded to a lack of clear Congressional consensus on the specifics of their responsibilities. The complexity of specific areas - like addressing a changing climate - demonstrates the challenge of directing what agencies can and should do with emerging problems. The science needed to understand complex issues can also increase these challenges. Climate change involves many factors and disciplines and requires substantial expertise as well as legal clarity because of its far reaching and nuanced impacts to multiple actors and areas that are regulated to achieve Congressional goals. These areas often overlap and interconnect, with climate change regulations covering automobiles, factory emissions, and electricity production further complicating efforts, and demonstrating why clarity is often impossible to achieve and ambiguity can result for all types of complex issues. The Supreme Court’s Historic View of Administrative Law: The Two Roads Diverge. In the last century, the Supreme Court saw its role as determining the legality of agency action on a case-by-case basis. Under this view, the Court did not give the benefit of the doubt to agency expertise or decision-making. The agency, in essence, had to persuade the Court that they acted properly. In the years since, the Supreme Court made the Chevron deference standard the law, but that deferential view began to change. In its “major questions doctrine,” the Supreme Court reasoned that Congress could not be deemed to have allowed an agency to make decisions about the scope of a law if the language itself was silent on such actions. The Court’s shift culminated in Loper Bright. Many argue this decision returns the balance to due process under the law and will make unelected agency officials accountable for their actions. Others are concerned that complex issues will not be addressed because Congressional agreement on all aspects of regulating complex and controversial topics is difficult to reach, and hence, ambiguity will result in increased litigation impacting government’s ability to address key problems. After Loper Bright, courts will take a more active role in determining the best meaning of federal statutory language where ambiguity exists. The practical, but not legal result, is a higher burden on Congress for statutory clarity that may well be elusive. The impacts of the decision on interpreting vagaries, for example, in labor law and securities law and environmental law and its enforcement, will present lawyers and courts with challenges for years to come in implementing Loper Bright. We are now on the road previously travelled when it comes to how Courts can look at many administrative actions, and it is not yet clear how much of a difference that will make. The Path Chosen by the Supreme Court - a Detailed History. In the 1940s, in Skidmore v Swift and Co., the case focused on labor law questions and how “work” was to be defined.iii Workers challenged a determination about whether “waiting time” should be considered the same as “working time.” The Court focused on the Department of Labor’s interpretation of its rules, concluding that the agency was entitled to consideration and respect, but that the Department did not control a court’s interpretation. Instead, the Supreme Court concluded that it should take a case-by-case approach in its reviews to determine the appropriate level of deference based upon, among other things, previous agency decisions and the consistency of the agency’s actions.iv The resulting standard of review was respectful but was not deferential to the agency. In the 1980s, in Chevron U.S.A. Inc. v Natural Resources Defense Council, Inc., the EPA’s approach to regulating air emissions was at issue.v The case challenged the agency’s focus on emissions from a stationary source, overall, instead of individual emission points within that source. Plaintiff argued that the EPA’s view went against the Clean Air Act's purpose, specifically, its goal of reducing air pollution in states not meeting air quality standards. In its decision, the Supreme Court upheld the EPA's approach. The Court decided that if a federal law is ambiguous, courts must defer to the administrative agency's reasonable interpretation of the law, establishing the modern principle now known as “Chevron deference.” Ironically, the Court upheld the environmental interpretation that many deemed to be the less protective approach for the environment. In 2022, in West Virginia v. EPA, regulating air emissions was once again at issue.vi The EPA issued an order requiring coal-fired power plants to either reduce electricity production or subsidize renewable energy sources to reduce emissions across the nation by 2030. Subsequently, the next administration, repealed this rule, arguing against the emissions reduction standard that the EPA had previously implemented. When challenged, the Supreme Court looked at the issues in the case as a “major question” holding that when an administrative agency takes actions of vast economic and political significance, it must have clear authorization from Congress to take such action. Agencies and courts cannot infer such authority from statutory silence on these questions – the silence on the issue cannot be deemed a Congressional delegation of authority to an agency to act. The Supreme Court found there was no clear Congressional mandate on changing energy generation found in EPA’s original approach in its Clean Power Plan. In 2024, in Loper Bright, the Supreme Court looked at the implementation of another environmental law.vii Here, the court scrutinized a requirement that the fishing industry pay for fishing observers if federal funding became unavailable to pay for the required onboard observers that were collecting data for fishery conservation efforts. The fishermen argued that the law did not address whether they must pay for the observers, and it did not authorize passing these costs of monitors directly to the industry. The lower court upheld the policy by applying Chevron deference, affirming the agency’s statutory interpretation requiring the fees as reasonable despite the statute's silence on whether fishermen must pay for observers. The Supreme Court, however, did not defer to the agency interpretation or its expertise in fishery conservation efforts, and overturned the lower court decision, and with it, the long-standing Chevron deference standard. With Loper Bright, the courts once again would have primary responsibility to interpret ambiguous statutes instead of the agencies charged with implementing them.
i John is a Partner with Sahn Ward Braff Coschignano PLLC where he leads the Environmental Energy and Resources Practice Group. His regulatory and administrative law experience resulted from his role as Regional Attorney at the New York State Department of Environmental Conservation for the Lower Hudson Valley - Catskill Region. He also served as Counsel to the Chairman of the Assembly Environmental Conservation Committee working on several environmental law initiatives. He serves as the Chair of the Legislation Committee Environmental and Energy Law Section of the New York State Bar Association that sponsors the Annual Legislative Forum. He also serves as the Chair of the Environment Law Committee of the Nassau County Bar Association. ii See, “Courts Show Little Interest in Skidmore as a Chevron Alternative,” available at https://news.bloomberglaw.com/ip-law/courts-show-little-interest-in-skidmore-as-a-chevron-alternative, last visited on July 29, 2024.
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