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High Court Uses Loper to Lop Off Executive Agency Regulatory Powers

July 9, 2024

“Gone are the days when agencies are left to use their expertise and experience to divine what Congress meant to say.”

The six conservative justices on the US Supreme Court (SCOTUS) have once again chosen to ignore decades of precedence—this time in the cases of Loper Bright Enterprises v. Raimondo (Loper) and Relentless Inc. v. US Department of Commerce (Relentless). The high court’s decision in the two cases has put the final nail in the coffin of the Chevron deference.

The deference has played an outsized role in environmental regulation for the better part of the last half-century. One would be hard-pressed to find any significant climate-related regulation over the past 40 or more years that hasn’t benefitted from it.

“Overturning Chevron was a shared goal of the conservative movement and the Trump administration. It was expressed constantly.”— Mandy Gunasekara

Striking down the deference has been a long-held conservative objective. Rather than an end, Loper is viewed as a beginning. Mandy Gunasekara, a fellow at the far-right Heritage Foundation and former chief of staff at EPA during the Trump administration, believes the Loper decision “creates a massive opportunity for…regulations to be challenged. And it could galvanize additional momentum toward reining in the administrative state writ large if the administration changes in November.” (Emphasis added)

The deference derives its name from the 1984 decision in Chevron USA v. National Resources Defense Council (NRDC), in which the court held “that when a federal statute is ambiguous or silent, courts should defer to an agency’s interpretation of that law so long as it is reasonable.” Think of it as having created a rebuttable presumption favoring federal agencies.

Supporters of the deference believe that administrative agencies have the requisite collective knowledge and experience—unlike members of Congress and federal judges—to undertake the often-multi-year rulemaking process. They further believe that the executive branch, unlike the judiciary, is more accountable to voters.

Since the Chevron decision was first announced, the doctrine has been considered settled case law. Its application in 17,000 to 19,000[iii] cases goes far beyond energy and environmental matters and includes federal regulations across all sectors, including healthcarepatents, transportation, and national security. Indeed, the whole of government.

Chief Justice Roberts, writing for the conservative majority, “rejected any suggestion that agencies, rather than courts, are better suited to determine what ambiguities in a federal law might mean. Even when those ambiguities involve technical or scientific questions that fall within an agency’s area of expertise.” (Emphasis added) The chief justice further indicated that Chevron is inconsistent with the Administrative Procedures Act (APA), which sets out the powers and responsibilities of federal agencies and the courts.

“A rule of judicial humility gives way to a rule of judicial hubris.” — Justice Elena Kagan

Justice Elena Kagan wrote a scathing dissenting opinion that was concurred in by Justices Sotomayor and Brown. “It is now “the courts (rather than the agency)” that will wield power when Congress has left an area of interpretive discretion.” She goes on to say: “A longstanding precedent at the crux of administrative governance thus falls victim to a bald assertion of judicial authority. The majority disdains restraint and grasps for power.” (Emphasis added)

Opinions on the exact impact of the loss of the Chevron deference differ. However, most agree it will have far-reaching practical and political implications on the pace and substance of US climate-related policies and regulations. Not the least of these impacts is the additional time climate-related litigation is likely to take because of the increased caseloads of judges—now that the power of administrative agencies has been reined in.

The impact of the Loper decision and “the fate of regulations will be determined by what happens when they start moving through the courts without the protection of Chevron.” Given the languorous pace at which cases move through the courts, it may be years before the impact of Loper is really known.

Chief Justice Roberts indicated that the death of the deference doesn’t “call into question prior cases that relied on the Chevron framework.” He continued: “The holdings of those cases that specific agency actions are lawful—including the Clean Air Act holding of Chevron itself—are still subject to statutory stare decisis despite our change in interpretive methodology.” (Emphasis added)

However, the claim rings rather hollow given that the conservative majority seems to have had little trouble wiping away 40 years of precedents in Loper and 50 years in the case of abortion in one fell swoop. Sudden reversals of established precedents are in logical opposition to the concept of stare decisis—that which came before. In any event, fossil fuel interests will test Roberts’ claim many times over the coming years.

Roberts also indicated that “even if courts should not defer to an agency’s interpretation of an ambiguous statute that it administers, it can consider that interpretation.” The allusion is to what’s known as the Skidmore deference. As Bloomberg Law suggests, the Skidmore deference is something of a misnomer. Skidmore doesn’t compel a court to defer to an agency. Instead, the standard “provides that an agency’s rulings, interpretations, and opinions are not controlling on courts, but merely constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance.”

As important as the decision in Loper is on its own, the potentially devastating impact of the case is overshadowed by the trend of the solidly conservative high court to strip away administrative powers while expanding judicial reach. Prior to the Loper decision, SCOTUS suspended President Biden’s freeze on new liquified natural gas (LNG) export approvals.

The high court also put a hold on US EPA’s good neighbor plan “to reduce nitrogen oxide emissions from power plants and industrial sources,” pending the outcome of challenges in the US Court of Appeals.

A decision in the Securities and Exchange Commission v. Jarkesy “dealt a blow to the ability of federal agencies to bring their own cases against polluters and pipeline builders.” The decision “is expected to broadly reshape the role of administrative law judges, who levy fines and resolve disputes at other agencies such as the Federal Energy Regulatory Commission.” (Politico, paywall) The decisions in these cases reflected the now familiar 6 to 3 high split between conservatives and liberals on the high court bench.

Before the Loper decision, I had suggested in a series of articles that Chief Justice Roberts and Justice Barrett might join with their liberal colleagues in preserving—although tightening—the deference, as much for practical and political concern as for legal principles. Like the other branches of government, SCOTUS is exhibiting historically low approval ratings. I had identified both justices as the most likely of the six conservatives to be concerned about how the high court is viewed. I was wrong.

The Biden administration was not unmindful of the likely outcome in Loper when it finalized its rules restricting carbon dioxide emissions from existing coal-fired power plants. The rule applies to existing coal and natural gas plants planning to stay open beyond 2039. The rule requires them to cut or capture 90 percent of their CO2 emissions by 2032.

The EPA based its arguments on “EPA’s traditional approach to establishing pollution standards under section 111 of the Clean Air Act.” It’s unclear if SCOTUS will be of the same opinion. Unsurprisingly, 27 Republican attorneys general and fossil industry trade groups are in the process of challenging the new rules in multiple suits in the DC federal appeals court.

If there was ever a question of the impact of Donald Trump’s three appointments to the US Supreme Court (SCOTUS), those questions have been answered over its past two terms—beginning with the overturning of Roe v Wade that stripped women of their constitutional protection to make their own decisions about abortion and most recently Loper.

In the final analysis, the problem and the solution are political. Hyperpartisanship is destroying US democracy. We’re in an era where finding even broad agreement on core policy objectives is proving impossible. Is it little wonder Congress can’t enact legislation specific enough to satisfy conservative jurists?

Until both Republicans and Democrats commit themselves to the nation’s transition to a low-carbon economy, the circle of proposed regulation followed by lengthy legal challenges will continue. The Loper decision has now made that easier.

Joel Stronberg

Joel B. Stronberg, Esq., of The JBS Group is a veteran clean energy policy analyst with over 30 years of experience, based in Washington, DC. He writes about energy and politics in his blog Civil Notion (www.civilnotion.com) and has recently published the book Earth v. TrumpThe Climate Defenders' Guide to Washington Politics based on his commentaries. He has worked extensively in the clean energy fields for public and private sector clients at all levels of government and in Latin America. His specialties include: resiliency; distributed generation and storage; utility regulation; financing mechanisms; sustainable agriculture; and human behavior. Stronberg is a frequent presenter at conferences and workshops.