In a monumental opinion issued today, the U.S. Supreme Court in Loper Bright Enterprises v. Raimondo overruled Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., holding (6-3) that deference to an agency's interpretation of a statute is contrary to the Administrative Procedure Act (APA) and the judiciary's responsibility to interpret statutes and decide questions of law. Although the Court did not repudiate existing precedent that relied on Chevron, the decision will upend how litigants challenge agency actions. In the coming week, we will look at how Loper Bright may impact specific industries and legal questions. As an introduction to this discussion, let's look at how the Court came to its conclusion.

Loper Bright and its companion case, Relentless, Inc. v. Department of Commerce, began as a challenge to an agency rule relating to the fishing industry, but quickly became a vehicle to challenge the concept of Chevron deference, which requires a court to defer to an agency's interpretation of a statute if the interpretation is "permissible."

Comparing Chevron's requirements with the APA's, the Court concluded that Chevron cannot be "squared with the APA," which requires courts to decide questions of law and statutory interpretation, a task the Framers intended for the judiciary and for which the judiciary is more than competent. Indeed, the Court noted that courts are frequently called upon to decide complicated, technical questions of statutory interpretation, and that courts can still consider an agency's interpretation along with other sources of expertise and guidance, such as amici

What a court cannot do, and what Chevron requires, is ignore traditional methods of statutory interpretation in favor of determining whether an agency's interpretation is "permissible." As the Court explained, this limitation prevents a court from determining the "best reading" of the statute, which is the goal of statutory interpretation, regardless of whether an agency is involved.

Nor, according to the Court, is it acceptable to assume that statutory ambiguity was Congress's implicit delegation of authority or discretion to an agency. Ambiguity can be the result of any number of other reasons, such as Congress's being unable to resolve an issue or failing to consider it. Neither situation is an express call for deference. Congress can delegate discretion to an agency, subject to constitutional limits, but must do so explicitly.  Otherwise, the responsibility to resolve statutory ambiguities belongs to the courts. The Chevron doctrine, the Court concluded, even with the "byzantine set of preconditions and exceptions" created to narrow the doctrine's scope, has interfered with that responsibility. And because applying Chevron has proved to be "unworkable," arbitrary, and inconsistent, stare decisis does not prevent the Court from overruling the decision, although decisions applying Chevron endure.

In separate concurrences, Justices Thomas and Gorsuch emphasized that Chevron deference was an unconstitutional violation of the separation of powers between the executive and judicial branches, although Justice Gorsuch expanded his focus to consider the history and application of stare decisis in depth and why it requires that Chevron, which he deems a "revolution masquerading as the status quo," be overruled. 

Finally, in a substantial dissent, Justice Kagan, joined by Justices Sotomayor and Jackson, decried today's decision as "judicial hubris," both because it grants courts increased power to review agency actions and because it is contrary to stare decisis. According to the dissent, the Chevron doctrine "is entitled to a particularly strong form of stare decisis" because Congress has never repudiated the doctrine and courts and litigants have relied on it in thousands of cases. 

Although it decisively ended Chevron, today's opinion created countless questions regarding how agency actions will be scrutinized and how courts will respond to the likely influx of cases challenging agency actions. Stay tuned for more detailed industry-specific analysis next week.