Navigating the Post-Chevron Landscape: How Loper Bright v. Raimondo Transforms Federal Regulation

The Supreme Court's recent decision in Loper Bright Enterprises v. Raimondo marks a major shift in federal regulatory practice. The ruling effectively overturns the legal doctrine first established 40 years ago in Chevron U.S.A. Inc. v. Natural Resources Defense Council, which required courts to defer to federal agencies' interpretations of ambiguous statutes so long as those interpretations were deemed reasonable. Chevron deference, as the rule became known, extended significant power to federal agencies to decide how to implement federal laws.

Under the Loper decision, courts are no longer required, or even allowed, to defer to an agency’s interpretation of federal law. Instead, courts must apply their own independent judgment to decide whether an agency has acted within its statutory authority.

This change is likely to lead to an increase in legal challenges against federal regulations, which are the primary means by which federal agencies interpret federal statutes, as litigants have new power to argue that regulations are beyond the scope of an agency’s statutory authority. Increased litigation will potentially result in inconsistent outcomes, as different judges may interpret statutes in varied ways without the unifying principle of Chevron deference.

Further, federal agencies may experience slower rule-making processes as they adopt more cautious and precise approaches to avoid ambiguities that could face judicial scrutiny. Additionally, new rule-making processes might emerge to address and codify previous regulations interpreted under Chevron.

For Everview clients in California and Texas, the Loper ruling will not affect how state agencies interpret state laws, as neither California nor Texas courts have adopted the federal Chevron doctrine to evaluate whether state agencies are acting within the scope of state law.

However, the ruling has the strong potential to impact federal regulations that are implemented at the state level, including regulations that implement the Clean Water Act, Clean Air Act, and even safety regulations adopted by the Mine Safety and Health Administration. Loper may also lead to federal changes that influence state agencies that coordinate with or adhere to federal guidelines.

While the full implications of the decision are still unfolding and could be influenced by upcoming presidential and congressional elections, the end of Chevron deference introduces a new layer of regulatory uncertainty for mining, construction, and energy businesses. Everview is here to assist clients in navigating these changes.