Reed Smith Client Alerts

Key takeaways

  • U.S. Supreme Court overruled Chevron deference, upending 40 years of administrative law
  • Highly regulated industries will be impacted for many years by how government agencies react to the decision
  • Industry stakeholders must be prepared for potential impact of decision and understand significance for future of government agency regulation

In a landmark 6-3 decision, the Supreme Court of the United States overruled the doctrine of Chevron deference, which had been a hallmark of administrative law for the past four decades. Under the Chevron doctrine, courts deferred to a federal agency’s interpretation of an “ambiguous” statute, so long as the agency’s construction was deemed to be reasonable – even if the court believed that the agency’s construction was not the best reading of the statute.

Federal agencies have relied on the Chevron doctrine since it was adopted by the Supreme Court in 1984 to successfully defend a wide range of regulations that today govern virtually all aspects of the national economy. The Court’s decision marks a seismic shift in how reviewing courts analyze the actions of federal agencies and will have the effect of curtailing agency capability and influence across regulated industries.

What the Court’s decision says

In the decision by Chief Justice Roberts in the companion cases of Loper Bright v. Raimondo, No. 22-451 and Relentless v. Dep’t of Commerce, No. 22-1219, 603 U.S. ___, (June 28, 2024), the Court held that the Administrative Procedures Act (APA) requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the statute, or the rules and regulations promulgated to give it effect, simply because a statute could be considered ambiguous.