On June 28, 2024, the United States Supreme Court overturned a 40-year-old precedent. Since 1984, the Chevron doctrine has required courts to give deference to the way an administrative agency interpreted its own rules when those rules were ambiguous. But in the Loper Bright case, the Supreme Court overturned Chevron and ruled that courts must instead exercise their independent judgment in deciding whether an agency has acted within its statutory authority. This sounds highly technical (and on some levels, it is) but the practical impact of this decision is immediate, widespread, and changes the face of administrative law.
So let’s unpack Chevron v. Natural Resources Defense Council (from 1984), Loper Bright v. Raimondo (2024), and all this change means for agriculture.
First, we have to understand the importance of administrative law. The executive branch agencies include a long list of alphabet soup agencies that reach into every aspect of our lives: everything from the EPA, USDA, BLM, CDC, FDIC, CFPB, DOT, NRCS, and beyond. Of course, Congress passes laws. Often, these statutes are broad and without critical details. Administrative agencies promulgate regulations (rules) to carry out the laws. When an entity appeals a final decision made by an agency, that appeal is usually subject to the Administrative Procedures Act (APA). The APA prescribes procedures for agency action and delineates the basic contours of judicial review of such action.
In the Chevron case in 1984, the Supreme Court considered the EPA’s interpretation of a regulation under the Clean Air Act. The Court created a two-step approach applicable to judicial review of agency action. When a court considered what a regulation meant, the first question was whether Congress had directly spoken to that particular question. In other words, look to the statutory language. If Congress had spoken, that was the end of the analysis, and courts were supposed to reject administrative agency constructions that were contrary to clear congressional intent. But if the statute was silent or ambiguous with respect to the question at hand, a court could not apply its own judgment, but rather was required to defer to the agency if the agency had offered a permissible interpretation of the statute, even that construction was not the reading the court would have reached on its own. Supporters of the Chevron doctrine believed it made sense to leave these detailed technical questions to the subject matter experts housed in the bureaucratic agencies. But many pointed out that this test flew in the face of the APA and traditional ideas of the judicial branch, which usually require courts to decide issues of law and interpret statutes. In other words, Chevron created a separation of powers problem. There can be no doubt that Chevron shifted power away from the legislative and judicial branches of the government and settled that power on executive branch administrative agencies. This was the test for 40 years — the case was cited over 17,000 times and had wide-reaching impacts.
Now, in Loper Bright, the Supreme Court has overturned Chevron and created a new approach for administrative law. The decision actually rests on two consolidated cases, both involving a 1976 federal law that requires herring boats to carry federal observers to collect data used to prevent overfishing. Under a 2020 regulation interpreting the law, owners of the boats were required to pay $700 a day for the federal observers. The lower courts upheld the regulation based on Chevron deference. But the Supreme Court rejected this approach. Instead, the Court explained that our Framers (think Alexander Hamilton) anticipated that courts would often confront statutory ambiguities and expected that courts would use their own legal judgment in resolving those ambiguities. The Court rejected Chevron’s conclusion that the inquiry is fundamentally different just because an administrative interpretation is in play. The Court pointed out that while early federal decisions afforded due respect when appropriate to the federal agencies charged with enforcing the law, the Chevron case went too far in giving great deference. Now, based on Loper Bright, when considering a conflicting interpretations of a statute, courts are instructed to independently interpret the statute and effectuate the will of Congress subject to constitutional limits.
“AGENCIES HAVE NO SPECIAL COMPETENCE IN RESOLVING STATUTORY AMBIGUITIES. COURTS DO.”
So we’ve changed from “Chevron deference” to “Loper Bright independent judgment.” What’s the upshot for agriculture? We can expect the balance of power to shift back toward the judiciary and legislative branches and away from the executive administrative agencies. In theory, there should be less flip-flopping from administration to administration. In practice, from a procedural perspective, we’ll see administrative law judges and regular courts interpret statutes using their own independent judicial discretion. Courts will no longer defer to agencies’ rationale. Lawmakers should pass laws with more details so we don’t have these ambiguous laws that require extensive construction to apply to real world facts. The Court’s decision notes that Congress can write agency discretion into a statute, but it has to specifically say as much. Administrative judges will require additional training to prepare for their new role.
From a substantive point of view, numerous USDA regulations could be called into question, including recent rules to strengthen the Packers and Stockyards Act. Crop insurance regulations will be revisited. Wetland determinations and recent WOTUS rules will be in the crosshairs. Pesticide regulations and the EPA’s new regulation setting limits on PFAS in water could also be challenged. Most agricultural groups applaud the new decision, arguing Chevron had enabled administrative overreach to the detriment of farmers and ranchers. American Farm Bureau filed an amicus brief in Loper Bright and has noted the importance of this case to restore checks and balances. For those of us who practice federal administrative law, I cannot overemphasize the change Loper Bright brings to this area. Judicial review of administrative decisions is going to look wildly different from here on out as we rely on courts — not agencies — to decide what statutory language means.
A note for Hoosiers: Loper Bright is a federal case, specifically addressing federal agencies’ interpretations of federal statutes. But, here in Indiana, the State already changed its law (effective July 1, 2024) to say that courts should not give any deference to state administrative agencies’ statutory interpretation. See I.C. 4-21.5-5.11.
