Economy

Supreme Court curbs federal agency power, overturning Chevron precedent

The Supreme Court on Friday curtailed the power of federal government agencies to regulate vast parts of American life, overturning a 40-year-old legal precedent long targeted by conservatives who say the government gives unaccountable bureaucrats too much authority.

For decades, the court’s decision in Chevron U.S.A. v. Natural Resources Defense Council directed judges to defer to the reasonable interpretations of federal agency officials in cases that involve how to administer ambiguous federal laws.

Writing for the majority in the 6-3 ruling, Chief Justice John G. Roberts Jr. said that framework has proved “unworkable” and allowed federal agencies to change course even without direction from Congress.

The court is finally ending “our 40-year misadventure with Chevron deference,” Roberts said, reading parts of his opinion from the bench.

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The court’s three liberal justices — Sonia Sotomayor, Elena Kagan and Ketanji Brown Jackson — dissented, with Kagan writing that the majority has turned itself into “the country’s administrative czar,” taking power away from Congress and regulatory agencies.

In a lengthy dissent read from the bench, Kagan said the court discarded precedent, unwisely setting up the Supreme Court — and courts in general — as the final arbiter on regulatory matters in which they are not experts. Kagan said that power rightly belongs with federal agencies.

“In every sphere of current or future federal regulation, expect courts from now on to play a commanding role,” Kagan wrote in her opinion. “It is not a role Congress has given them. … It is a role this court has now claimed for itself, as well as other judges.”

Kagan went on to say the Friday ruling is likely to produce “large-scale disruption” since the previous decision had been relied upon heavily by the courts over the last 40 years.

The precedent, established in 1984, gave federal agencies flexibility to determine how to implement legislation passed by Congress. The framework has been used extensively by the U.S. government to defend regulations designed to protect the environment, financial markets, consumers and the workplace.

While lower courts have relied on Chevron in tens of thousands of cases evaluating federal rules and orders, conservatives have balked at the legal precedent, and the approach has fallen out of favor in the last decade as the Supreme Court moved to the right. The high court’s conservative supermajority includes three justices nominated by President Donald Trump, whose administration put a premium on judges skeptical of federal government power and the so-called administrative state.

Supporters of Chevron, including environmental groups, labor and civil rights organizations and the Biden administration, told the court that Congress often writes broad statutes to give government experts the leeway to address emerging complex problems. Overturning or scaling back the legal precedent, they said, will hamstring and weaken federal agencies and shift power to the courts and Congress.

Opponents of Chevron, in contrast, told the court that the framework unfairly tips the scales in litigation by requiring judges to systematically favor government regulators over those challenging burdensome regulations. Chevron has allowed federal agencies to flip-flop and impose different rules each time a new administration takes over, they said, leaving judges with little choice but to defer to the changing interpretations of agency officials.

The pair of cases before the court, Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce, were brought by Atlantic herring fishermen in New Jersey and Rhode Island who challenged federal rules initiated by the Trump administration requiring them to pay for at-sea monitors.

But the court’s decision has far broader implications for thousands of private companies and industries regulated by the government.

Both lawsuits were backed by conservative legal organizations — the Cause of Action Institute and New Civil Liberties Alliance — that have received millions of dollars from the Koch network, founded by billionaire industrialist Charles Koch and his late brother, David Koch.

This is a developing story. It will be updated.

This post appeared first on The Washington Post

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