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Seismic Changes to Policy and Regulation in the Wake of Chevron’s Reversal

Last Friday, the Supreme Court overruled their landmark 1984 decision in Chevron v. Natural Resources Defense Council, which established the legal principle known as the Chevron doctrine. The Chevron doctrine served as a foundational piece of administrative law for over 40 years and its end signals a seismic shift in how agencies and Congress will craft policy, and particularly how courts interpret it.


Under the Chevron doctrine, if Congress has not directly addressed the question at the center of a regulatory dispute, a court was required to uphold the agency’s interpretation of the statute as long as it was reasonable. The doctrine consisted of a two-part test for how courts should handle cases involving the interpretation of statutes by administrative agencies. Courts first had to determine whether the statute in question was clear regarding the issue at hand. If the statute’s intent was clear, then both the court and the agency had to give effect to the unambiguously expressed intent of Congress. If the statute was ambiguous or silent on the specific issue, the court could not impose its own interpretation of the statute but rather examined whether the agency’s interpretation was reasonable. If the agency’s interpretation was reasonable (not arbitrary or capricious), the court would defer to the agency's expertise.


At a base level, this ruling will likely make it harder for future administrations to make policy changes without congressional approval. This is problematic for a few reasons. Litigation to block or limit agency rulemakings could increase significantly. This would in turn make federal agencies hesitant to put more expansive rules into place over fears the courts could strike them down or a future administration could roll them back. In order to avoid excessive litigation, Congress will need to provide more clarity on the intent of statutes that impact regulatory authority. Congressional intent can be notoriously difficult to discern and when it can be found it’s not always comprehensive.


The end of Chevron is particularly relevant in environmental law. Virtually every environmental statute needs to be interpreted before it can be applied. The nature of applying environmental laws inherently requires making both scientific and policy judgments. If an agency’s interpretation is challenged, courts can defer to the expert agency or they can impose their own policy ideas. The significance of the Chevron doctrine was it acknowledged that administrative agencies have specialized expertise and are better suited than courts to make policy decisions within their regulatory domain. The Supreme Court has now decided that the federal judiciary is better suited to evaluate environmental policy than expert agencies.


This decision will have cascading effects, but three stand out: First, it will make it easier to challenge and invalidate agency actions. Second, it will prevent agencies from updating policies as scientific understanding improves, because courts will lock in what they think is the “best” interpretation, which then can’t be changed (at least not in the short term). Third, it will take away accountability for unpopular environmental policy decisions, because judges, unlike agency officials, can’t be replaced through electoral politics and most have lifetime appointments.


This ruling won’t apply to every agency action, as the Chevron doctrine applied to notice-and-comment rulemakings that interpret ambiguous statutory language. However, agencies are going to be nervous that this decision signals a judicial willingness to micromanage their policies. Rather than instituting policies that could lead to painstaking litigation, agencies may opt to instead push watered-down rulemakings or avoid them altogether.


The upshot is that this decision will cut both ways. Both Republican and Democratic administrations now have an increased chance of having their policies curtailed. Without clear congressional intent, activist judges at both ends of the spectrum will have more room to chip away at policies as they see fit. For example, the Court has made it a lot easier for conservative judges to strike down the Biden Administration’s climate and energy rules. However, liberal-leaning judges could do the same to former President Trump’s regulations attempting to claw back Biden's climate agenda if Trump wins a second term in November.


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