Last Friday, the Supreme Court upended 40 years of precedence by overruling the doctrine of Chevron Deference. Chevron Deference was a major tool for administrative agencies by giving them deference when interpreting national law. This decision has major implications for every federal agency including the EPA and SEC. Over at TheCorporateCounsel.net, Meredith Ervine discusses this ruling in her latest blog post:
As I’m sure you’ve read, SCOTUS overturned the deferential Chevron doctrine on Friday — just a few days after its 40th birthday. The majority opinion concludes as follows:
“Chevron is overruled. Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as the [Administrative Procedure Act] requires. Careful attention to the judgment of the Executive Branch may help inform that inquiry. And when a particular statute delegates authority to an agency consistent with constitutional limits, courts must respect the delegation, while ensuring that the agency acts within it. But courts need not and under the APA may not defer to an agency interpretation of the law simply because a statute is ambiguous.”
The New York Times reports that the Chevron decision is “one of the most cited in American law.” The dissent says SCOTUS alone “has upheld an agency’s reasonable interpretation of a statute at least 70 times” and cites a law review paper to say that Chevron was cited in more than 18,000 federal court decisions at last count. While, as Bloomberg Law reports, “the majority tempered the latest ruling to some degree by saying past decisions that upheld regulations on the basis of Chevron would remain in force,” the dissent didn’t take much comfort in this:
“Some agency interpretations never challenged under Chevron now will be; expectations formed around those constructions thus could be upset, in a way the majority’s assurance does not touch.
And anyway, how good is that assurance, really? The majority says that a decision’s ‘[m]ere reliance on Chevron’ is not enough to counter the force of stare decisis; a challenger will need an additional ‘special justification.’ […] Courts motivated to overrule an old Chevron-based decision can always come up with something to label a ‘special justification.’ Maybe a court will say ‘the quality of [the precedent’s] reasoning’ was poor. Or maybe the court will discover something ‘unworkable’ in the decision—like some exception that has to be applied. All a court need do is look to today’s opinion to see how it is done.”
This DLA Piper article attempts to define the significant impact this decision will have on all three branches of government and regulated entities:
“Among other things, this blockbuster ruling:
– Charges courts with supplying the interpretation of ambiguous statutory provisions, even where technical and scientific expertise may be implicated;
– Increases the likelihood of success of those challenging federal regulations;
– Limits executive agencies’ ability to fill gaps in the laws or to address situations not expressly anticipated by Congress, and may cause agencies to proceed more cautiously and narrowly in adopting regulations; and
– Places pressure on Congress to legislate with greater specificity (or at least to make express delegations of interpretative authority, where permissible).”Together with the major questions and non-delegation doctrines, the decision is likely to have a particular impact in areas where Congress hasn’t passed meaningful legislation, which seems to implicate current key priorities for the SEC — think crypto, AI and climate change.
Our members can learn about the latest developments in the SEC Climate Rule Litigation here.
If you aren’t already subscribed to our complimentary ESG blog, sign up for daily updates here for daily updates delivered right to you.
