Tyson Fisher
While most people are talking about the U.S. Supreme Court’s presidential immunity decision, the high court’s latest term included two decisions that have stripped a significant amount of power from federal agencies, dramatically reshaping the regulatory landscape.
Those two decisions were the Loper Bright Enterprises v. Raimondo and Corner Post v. Board of Governors of the Federal Reserve System cases. Loper Bright reversed 40 years of precedent – established by something called the Chevron doctrine – that gave federal agencies the power to interpret laws. Corner Post redefined a narrow six-year window to challenge federal regulations.
Individually and taken together, the Supreme Court’s rulings on the two cases have the potential to open the floodgates to new challenges to regulations that have already gone through the judicial wringer and came out victorious.
Before going into the implications of the Supreme Court’s decisions, let’s take a look at each case.
Loper Bright and the Chevron doctrine
Perhaps one of the most consequential Supreme Court decisions during the latest term came from the Loper Bright case, which erased how certain laws have been interpreted for decades.
At the center of the Loper Bright case was the Chevron doctrine. Since 1984, that precedent gave federal agencies the power to interpret ambiguous laws granting them the authority to enact regulations.
Not all regulations are the result of a detailed directive from Congress. In some cases, federal agencies enact regulations based on their interpretation of the controlling law that gives them the authority to do so. The Chevron doctrine established a two-step guide for federal courts to follow in these cases:
- Determine if Congress directly addressed the issue at hand, and if so, whether the statute was ambiguous. If the intent is clear, the matter is resolved accordingly. If the intent is ambiguous, then go to Step 2.
- Determine if the agency’s interpretation is permissible, i.e. rational or reasonable. If so, the court must defer to the agency’s interpretation.
In 2014, the Supreme Court upheld the Environmental Protection Agency’s regulation dealing with air pollution that crosses state lines. Although Congress never explicitly directed the EPA to address such pollution, the agency interpreted broad language within the Clean Air Act to include it. Relying on the Chevron doctrine, the high court agreed and deferred to the EPA’s interpretation of the law. Consequently, the merits of the arguments against the regulation were never heard.
Now that the Chevron doctrine has been erased, challenges to federal regulations that center on vague statutes will be decided by judges, not agencies.
A district court judge can now determine if an ambiguous law gives an agency the authority to enact a regulation.
Those who supported the Chevron doctrine claimed that agencies are the experts best equipped to decide what Congress intended. For example, the EPA hires and consults with people and entities who have expert knowledge of environmental issues. Therefore, the EPA, not some random judge, can better determine why a regulation aligns with Congress’ intent.
Additionally, the pro-Chevron voices argued that Congress sometimes writes laws that are intentionally vague. It is impossible to predict the future. Consequently, agencies are given broad authority to address certain issues and to fill in the blanks as new information develops.
On the other hand, opponents argued that federal agencies are politically motivated – i.e. the interpretations of a Democrat-led EPA will vary greatly from those of a Republican-led EPA. To mitigate this problem, impartial judges should settle regulatory disputes that are a matter of law interpretation.
Corner Post and statute of limitations
Previously, anyone harmed by a regulation had six years from when the regulation was published to challenge it. Not anymore.
According to federal law, certain challenges to federal regulations had to be “filed within six years after the right of action first accrues.” For decades, courts have interpreted this to mean the clock starts when a regulation is enacted. Plaintiffs in the Corner Post case argued it should start when a business first suffers harm from the regulation, regardless of when that occurs.
The case stemmed from a challenge to a 2011 federal regulation governing debit card swipe fees charged to merchants. Based on the statute of limitations, any challenge to that regulation had to occur before 2017. However, Corner Post, a truck stop, did not open for business until 2018. The company challenged the debit card fee regulation in 2021, arguing that the six-year clock started when it was first harmed by the rule, not when it was published.
Advocates supporting the clock starting at the time of enactment argued this gives businesses, industries and society as a whole a level of finality and certainty. By having a clear endpoint, affected parties of a regulation will know to adjust accordingly. Without a clear deadline, the certainty required for businesses to plan for the future goes out the window.
Opponents argued that the narrow time limit deprives new entities of their day in court. Furthermore, someone may not realize harm from a regulation until long after it was enacted.
The Supreme Court sided with Corner Post. Consequently, certain challenges to federal regulations now can be filed virtually whenever.
Effects of Supreme Court decisions
The above Supreme Court rulings sent shockwaves through the legal and regulatory communities, setting the stage for a “tsunami of lawsuits against agencies.”
Here is what the rulings will not do: automatically undo any regulations.
During a House Oversight Committee hearing on Wednesday, July 10, Rep. Lauren Boebert, R-Colo., grilled EPA Administrator Michael Regan about regulations passed under the Chevron doctrine. She erroneously claimed the recent Supreme Court ruling deemed those rules unconstitutional and that they therefore should be repealed.
Wrong.
However, the Supreme Court has opened the door for challenges of regulations to be resurrected. When those challenges are filed, the court will no longer automatically defer to the agency’s interpretation. Rather, a federal judge will decide if a law authorizes the regulation in question based on a litany of factors, which may include an agency’s interpretation.
Simply put: Regulations that have successfully passed the Chevron hurdle can be challenged again. This may or may not result in a different outcome. Results likely will vary. In the meantime, all existing Chevron-approved regulations are considered constitutional until a federal judge rules otherwise. Chief Justice John Roberts explicitly stated that in the majority opinion.
Due to the Corner Post decision, there could be a rush of challenges to regulations that previously were off-limits due to the six-year statute of limitations. In theory, anyone could start a business with the sole intent to start the clock on a challenge of an old rule. Again, this doesn’t guarantee a reversal, as courts may end up reaching the same conclusion – just through a different avenue.
The two Supreme Court decisions combined likely will overwhelm the federal district court dockets with fresh challenges to old rules.
Justice Ketanji Brown Jackson warned just that in her Corner Post dissent.
“At the end of a momentous term, this much is clear: The tsunami of lawsuits against agencies that the court’s holdings in this case and Loper Bright have authorized has the potential to devastate the functioning of the federal government,” Jackson wrote.
In the meantime, the Loper Bright decision may force Congress to write clearer laws. At the very least, federal agencies will need to be more careful in how they justify regulations.
In the short term, new challenges will arise. What the long-term implications will be is up in the air. Some rules may be overturned. Others may be affirmed.
The wheels of justice turn ever so slowly. It likely will be several years before the effects of the new regulatory landscape are realized.
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(This is interesting, FMCSA stated when the ELD regulation was put into effect that CMV accidents would be reduced. This statement was not true, but FMCSA would like to include pre-2000 engines into the ELD requirements.)
