The U.S. Supreme Court Halted Judicial Deference to Federal Agencies’ Statutory Interpretations. What Comes Next?

Introduction

In June 2024, in Loper Bright Enterprises v. Raimondo, the U.S. Supreme Court sunk what remained of Chevron deference. Under that doctrine, tracing back to the 1984 decision Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., courts gave binding weight to federal agencies’ formal interpretations of ambiguous statutes that those agencies administered. Extending mainly to interpretations contained in promulgated regulations, Chevron deference attached equally to an agency’s views about the scope of its own power as to its legal determinations reached when exercising that power—a double whammy.

The Chevron inquiry had two steps. The first asked whether Congress had directly spoken to the precise question in a way that foreclosed the agency’s view. If the statute were either silent on the issue or had an ambiguity that principles of statutory construction could not resolve, then the court at the second step would defer to the agency’s interpretation, so long as reasonable.

The default notion that “a tie goes to the agency” might have sounded simple; yet over time, the Chevron doctrine proved anything but. Judges no less than litigants often failed to distinguish between the first and second Chevron steps. No deference would attach to agencies’ mere guidance documents or ad hoc litigating positions, which lacked the requisite formality of rules or orders. And courts increasingly required an especially clear statement of Congressional intent before an agency could pronounce on a matter of major economic or political significance.

Loper Bright represents Chevron’s unambiguous epitaph. In aiming to settle questions about judicial review of agency action, however, this watershed decision may have generated many more.

The Loper Bright Decision

Loper Bright involved a challenge to a federal agency’s implementation of a statute that called for the creation of regional fishery management plans, which the federal agency then approved as final regulations. The regional plans could mandate that fishing vessels carry observers on board to collect conservation data, and one approved plan mandated that certain vessels reimburse the costs associated with this observation, which the statute did not expressly authorize. (If all of this sounds familiar, that is likely because a recent Oscar-winning movie, Coda, portrayed this very same reimbursement practice as outrageous.)

The Supreme Court granted certiorari solely on whether to overrule Chevron. Its analysis began by noting that “Article III of the Constitution assigns to the Federal Judiciary the responsibility and power to adjudicate ‘Cases’ and ‘Controversies.’” The Court then invoked the famous passage, from the 1803 decision Marbury v. Madison, that it “‘is emphatically the province and duty of the judicial department to say what the law is.’” (None of this is auspicious for fans of sweeping executive authority.)

As Loper Bright recounted, through the mid-twentieth century, judicial deference “was cabined to factbound determinations” reached by executive agencies, whose legal interpretations by contrast earned mere respect. In Skidmore v. Swift & Co., for example, the Court had explained that judges should accord an agency’s opinion on a legal question weight that would “‘depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.’”

Soon thereafter, Congress passed the Administrative Procedure Act (APA), prescribing standards of judicial review of agency action. In particular, the APA provides that in suits by persons aggrieved by federal agency action, “the reviewing court shall decide all relevant questions of law” and “interpret constitutional and statutory provisions” (5 U.S.C. § 706). As Loper Bright concluded, the APA thus codified the traditional idea “that courts decide legal questions by applying their own judgment.” And in that process, federal agencies’ views about legal questions “are not entitled to deference.”

Even so, as Loper Bright highlighted, oftentimes statutes expressly delegate discretionary authority to an agency. Where that happens, a court must “independently interpret the statute and effectuate the will of Congress.” This exercise has multiple parts: identifying delegations of authority, fixing the delegated authority’s outer boundaries, and ensuring that the agency has engaged in rational decisionmaking within those boundaries.

On the last point, unlike for agencies’ legal interpretations, the APA “mandate[s] that judicial review of agency policymaking and factfinding be deferential.” More specifically, the APA empowers courts to invalidate agency action that is “arbitrary, capricious, [or] an abuse of discretion” (5 U.S.C. § 706(2)(A)). This distinct inquiry asks only whether an adequate evidentiary basis and a reasoned explanation support the agency’s conclusion.

As Loper Bright held, however, courts no longer may infer from the mere presence of a textual ambiguity—or worse yet, from silence—that Congress intended to delegate to an agency the authority to interpret the statute. The Supreme Court bid Chevron deference farewell for the future, but made its decision nonretroactive, viewing past applications of Chevron as water under the bridge.

The Post-Chevron Frontier

• It will be tough to assess whether any individual case would have come out differently under Loper Bright or Chevron. After all, there is a fine line between a “permissible” statutory interpretation and one with which the court actually agrees.
• Yet going forward, on questions of statutory interpretation, federal agencies and regulated parties will start on equal footing. Chevron has long applied to direct APA claims, public enforcement actions, tort and contract suits with the federal government, and sundry other claims subject to federal standards. Now it doesn’t. Taking its place are “the traditional tools of statutory construction—the tools courts use every day.”
• Still, in matters implicating technical expertise, courts will naturally look for guidance to an agency’s “body of experience and informed judgment.” The difference is that the agency must present this information through briefing and evidence to persuade the court. Opposing litigants would do well to come equipped with their own technical viewpoints, amici curiae, or well‑developed arguments about an interpretation’s unintended or unworkable results.
• The Supreme Court has essentially superseded Chevron’s multi-step test with another of brand new vintage. Since courts no longer will presume that every statutory ambiguity constitutes a delegation of authority to an agency, the first step under Loper Bright will be to identify the extent to which a statute expressly vests the agency with discretionary authority to act; and the next step will ask to what extent the agency’s action embodies a legal interpretation, to which no deference applies, versus a policy or factual determination, subject to review for rationality.
• Loper Bright repeatedly emphasized, without elaboration, that any statutory delegation of authority must fit within “constitutional limits.” To be sure, Congress cannot imbue an agency with power that Congress itself lacks under Article I of the Constitution. But would Congress get away with deputizing an agency to interpret statutory language, no more and no less? What about with telling an agency to craft a whole legal regime to govern a general topic? Or could Congress, even with a clear statement of intent, validly task an agency with opining on major economic or political questions? All for another day.
• This federal decision will have a ripple effect on state law and practice. Certain federal statutes (akin to that in Loper Bright) call for federal agencies formally to approve state-created plans. Other federal statutes make state and federal regulators co‑enforcers of federal law. And valid federal regulations may preempt inconsistent state laws. Chevron deference would no longer seem to have any role to play in these questions.

• On the flip side, nothing in Loper Bright abrogated the deference that many state courts pay to state agencies’ implementation of state statutes. For example, Massachusetts courts afford “substantial deference” to state agencies’ statutory interpretations; Connecticut courts will do similarly for interpretations that are “formally articulated” and longstanding; and New York courts will generally defer to state agencies’ applications of statutory terms, but not always to agencies’ views about pure statutory meaning. In the future, practitioners may well try to replicate Loper Bright’s holding on the individual state level.

In sum, opponents of expansive administrative power have finally caught their white whale. Time will tell which critiques of this outcome prove prescient—and which turn out, in the end, to be red herrings.

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