In a major victory for businesses, the Supreme Court on Friday gave judges more power to block new regulations if they are not explicitly authorized by federal law.
The court's conservative majority struck down a 40-year rule that said judges should defer to agencies and their regulations if the law is unclear.
The vote was 6 to 3, with liberal judges dissenting.
The decision signals a shift in power in Washington away from agencies and toward the companies and industries they regulate, and will give corporate lawyers a stronger position in challenging new regulations.
At the same time, it is a blow to environmentalists, consumer advocates, unions and healthcare regulators. Along with the Biden administration, they argued that judges should defer to agency officials who are experts in their fields and have a duty to enforce the law.
This deference rule, known as the Chevron doctrine, had taken on extraordinary importance in recent decades because Congress has been divided and unable to pass new laws on pressing issues such as climate change, online commerce, hospitals and nursing care, and working conditions.
Instead, new administrations, and particularly Democratic ones, sought to introduce change by adopting new regulations based on old laws. For example, climate change regulations proposed by the Obama and Biden administrations were based on provisions of the 1970 Clean Air Act.
But that strategy depended on judges being willing to defer to the agencies and reject challenges from companies and others who argued that the regulations went beyond the law.
The court-appointed Republicans came to the case skeptical of the Chevron doctrine. They were concerned about the “administrative state” and argued that unelected federal officials should not be granted powers typically reserved for legislators.
“Chevron is dismissed,” Chief Justice John G. Roberts Jr. wrote Friday for the majority. “Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority.” Judges “may not defer to an agency’s interpretation of the law simply because a statute is ambiguous,” he added.
In her opinion, Justice Elena Kagan said the Chevron rule was crucial “to supporting regulatory efforts of all kinds, to name a few, to keep air and water clean, food and drugs safe, and financial markets honest. And the standard is correct,” she said. She now “falls victim of a blatant assertion by the judicial authority. “The majority disdains moderation and clings to power.” Justices Sonia Sotomayor and Ketanji Brown Jackson agreed.
Senate Majority Leader Charles E. Schumer (D-N.Y.) expressed outrage. “By overturning Chevron, the Trump MAGA Supreme Court has once again sided with powerful special interests and giant corporations against the middle class and American families. Their headlong rush to overturn 40 years of precedent and impose their own radical views is appalling.”
Experts said the impact of the ruling may not be clear for some time.
Washington attorney Varu Chilakamarri said the ruling means “the industry’s interpretation of the law will be considered as valid as the agency’s. It will be some time before we see the effects of this decision in the legislative process, but going forward, the agency’s action will be under even greater scrutiny and there will likely be more opportunities for the regulated community to challenge the agency’s rules and decisions.”
In decades past, the Chevron doctrine was supported by prominent conservatives, including the late Justice Antonin Scalia. In the 1980s, he believed that it was better to entrust decisions about regulations to agency officials working for the president rather than to unelected judges. He was also reflecting an era when Republicans, from Richard Nixon and Gerald Ford to Ronald Reagan and George H.W. Bush, controlled the White House.
But since the 1990s, when Democrat Bill Clinton was president, conservatives have increasingly complained that judges were approving new federal regulations.
Corporate lawyers looked for a compelling case to challenge the Chevron doctrine and found it in the plight of four family fishing boats in New Jersey.
Their case began with a 1976 law that seeks to conserve fish populations. A regulation adopted by the National Marine Fisheries Service in 2020 would have required some herring boats to not only carry a federal monitor on board, but also pay the monitor's salary. Doing so was predicted to cost more than $700 a day, or about 20% of what fishing boats earned on average.
The regulation had not gone into effect but was upheld by a federal judge and appellate judges in the D.C. Circuit Court, who deferred to the agency's interpretation of the law.
