U.S. Supreme Court Overturns Chevron, Raising The Bar For Federal Rules, And Suspends EPA Regulation

 In a 6-3 decision issued on June 28, the Supreme Court of the United States (SCOTUS) overturned one of federal courts’ most-cited precedents. This precedent, known as the Chevron doctrine, insisted federal courts defer to federal executive branch agencies’ interpretations of ambiguous federal laws, provided an agency’s reading was reasonable. In practice, the Chevron doctrine gave the White House and its executive branch agencies greater leeway to issue regulations.

With this ruling, that is no longer the case. The decision means:

• Federal courts will now exercise independent legal judgment when evaluating federal executive branch agencies’ regulatory actions instead of deferring to the agencies’ reading of the law; and
• Entities affected by federal regulations will now have a stronger footing to contest burdensome regulations.

Make no mistake: last week’s ruling creates a new playing field for administrative law. It is one of the most significant business cases in decades as it relates to federal agency rulemaking and signals a return to greater congressional control over regulatory mandates in the future.

To be clear, however: in the court majority’s written opinion, Chief Justice Roberts stated the 17,000 lower court decisions and 70 Supreme Court rulings that have cited the Chevron doctrine will stand. Those regulations should remain in place. For matters where courts have not ruled, and future rulemakings, regulations based on agencies’ readings of ambiguous laws could be challenged in court.

Read more about this decision here and here.

In related news: on June 27, SCOTUS halted the U.S. Environmental Protection Agency’s (EPA) implementation of its “Good Neighbor Rule,” which had sought to regulate cross-state air pollution, because the court’s majority feels challengers to the EPA’s rule are “likely to prevail” in their effort to find the regulation unconstitutional. As The Hill explained,  this rule seeks to reduce pollution in upwind states to protect downwind neighboring states from the negative effects of pollution. Under the federal Clean Air Act, states have the authority to craft their own interstate pollution plans, but the EPA also has the authority to override plans that it deems insufficient.

Read more about the “Good Neighbor Rule” here.