Supreme Court Ends Chevron Era: Agency Power Checked

In a landmark decision on June 28, 2024, the United States Supreme Court overturned the longstanding precedent set by Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. (1984), fundamentally altering the landscape of federal agency authority. The 6-3 ruling in Loper Bright Enters. v. Raimondo, No. 22-451 (2024), signifies a seismic shift in how courts will handle statutory interpretation and agency regulations moving forward.

The case originated from a regulation adopted by the National Marine Fisheries Service (NMFS) in 2020 under the Magnuson-Stevens Act (MSA). The regulation mandated that certain fishing boats in the Atlantic herring fishery allow a federal observer on board and contribute to the observer’s salary. Plaintiffs argued that this regulation exceeded NMFS’s statutory authority and challenged the legal doctrine of Chevron deference, which the D.C. Circuit Court of Appeals had used to uphold the rule.

Chevron deference, established in 1984, provided a two-step framework for courts to determine when to defer to a federal agency’s interpretation of a statute. The first step involved assessing whether Congress had directly addressed the specific issue. If the statute was ambiguous, the court would then proceed to the second step to determine if the agency’s interpretation was reasonable. This doctrine has been both a tool and a point of contention within the judiciary, with critics arguing that it unduly limited judicial authority.

In the majority opinion authored by Chief Justice Roberts, the Supreme Court declared that courts must “exercise their independent judgment” in determining whether an agency has acted within its statutory bounds. The ruling emphasized that “courts may not defer to an agency interpretation of the law simply because a statute is ambiguous.” This decision effectively dismantles the Chevron framework, requiring courts to engage more deeply in statutory interpretation rather than relying on agency expertise.

The majority opinion drew heavily on historical precedents, including Marbury v. Madison (1803), which established judicial review, and Decatur v. Paulding (1840), which reinforced the judiciary’s role in interpreting congressional acts. The Court also referenced United States v. Moore (1878) and Skidmore v. Swift & Co. (1944), which discussed the “due respect” courts should give to agency interpretations, albeit without the deference Chevron mandated.

Justice Thomas and Justice Gorsuch each penned concurring opinions, underscoring the importance of judicial independence and the potential dangers of unchecked administrative power. Justice Kagan, in her dissent, warned that the ruling could lead to increased judicial activism and undermine the expertise of federal agencies designed to manage complex regulatory frameworks.

The implications of this ruling are profound. By overturning Chevron, the Supreme Court has reasserted the judiciary’s role in statutory interpretation, potentially leading to more rigorous judicial scrutiny of agency regulations. This could result in a wave of legal challenges to existing regulations across various sectors, from environmental protections to financial oversight.

For the agritech industry, this decision could mean significant changes in how agricultural regulations are interpreted and enforced. Agencies like the Environmental Protection Agency (EPA) and the Department of Agriculture (USDA) may face increased scrutiny over their regulatory actions. Farmers, agribusinesses, and other stakeholders might see a shift in the regulatory landscape as courts take a more active role in interpreting the statutes that govern agricultural practices and environmental standards.

In summary, the Supreme Court’s decision in Loper Bright Enters. v. Raimondo marks the end of Chevron deference, heralding a new era of judicial oversight over federal agency actions. This ruling not only reshapes the relationship between the judiciary and administrative agencies but also sets the stage for significant legal and regulatory shifts across multiple industries, including agritech.

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