Overruled!

In a U.S. Supreme Court term noted for big decisions, the high court handed down one of the biggest at the very end of its term in late June. In Loper Bright Enterprises v. Raimondo, the Court dealt a death blow to a 40-year precedent that had become known as the Chevron Doctrine.

Chevron was itself a landmark decision. In it, the Supreme Court ruled that lower courts must defer to an administrative agency’s reasonable interpretation of an ambiguous statute, even if the court felt it had a better interpretation. Since then, the Chevron decision has been cited in federal court cases more than 18,000 times.

In overturning Chevron, the Supreme Court held that Chevron was erroneously decided and inconsistent with the Administrative Procedures Act, which “requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority.” In other words, courts cannot abdicate their traditional function of resolving statutory ambiguities. A court may seek input and guidance from administrative agency experts, but the final interpretation rests with the court.

The Loper Bright decision is expected to result in a host of legal challenges. Many hope that it will level the playing field between administrative agencies and regulated entities, ultimately causing the agencies to be more circumspect in their rulemaking and Congress to be more precise in its lawmaking. Others fear that it will cause disorder and confusion for companies that depend on regulatory certainty in making and carrying out their business plans. One thing is certain: Things will be different!

Questions? The business attorneys at Wright Beamer can help you navigate the waters of this historic sea change.

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