The 2024 Chevron Doctrine Ruling: How a Single Supreme Court Ruling Overturns 40 Years of Federal Agency Discretion
The 2024 Chevron Doctrine Ruling:
How a Single Supreme Court Ruling Overturns 40 Years of Federal Agency Discretion
By: Rebecca Malpass, Director of Policy & Research, The Water Collaborative of Greater New Orleans
On June 28, 2024, the Supreme Court went for another judicial power grab, ruling that federal agencies, and the experts who work for those agencies, no longer have the authority to interpret laws that have previously given an agency discretion to do its job. Now, judges with limited expertise get to decide.
Chevron U.S.A. v. Natural Resources Defense Council (1984)
Market Chess Let's Show Deference to the Chevron Doctrine
In 1977, Congress amended the Clean Air Act (CAA) to further strengthen clean air protections, citing that any new stationary sources of pollution from a refinery or other facility must comply with new, stricter federal regulations. However, it grandfathered in existing refineries and facilities, essentially absolving older facilities from compliance with new regulations. In turn, exempt facilities were reluctant to repair or upgrade their infrastructure for fear of being forced to comply with the new, costly, and demanding regulations.
In 1981, Anne Gorsuch, then-director of the Environmental Protection Agency (EPA)—the government agency tasked with upholding and enforcing CAA regulations—granted facility permits for new, pollution-heavy equipment that did not meet the 1977 CAA standards as long as the total emissions from a facility did not exceed pollution limits. This was called the “Bubble” Policy, because it interpreted the CAA’s “stationary sources” of pollution as the entirety of a refinery or facility, rather than the individual parts of that facility, such as a pipeline or a smoke stack.
In 1984, the Natural Resources Defense Council (NRDC), challenged the EPA’s interpretation of the 1977 CAA and its “Bubble” Policy — Chevron v. NRDC — but ultimately lost in a Supreme Court decision that upheld a federal agency’s ability to use its discretion and expertise to interpret an ambiguous law; in this case, the meaning of “stationary sources” of pollution. This decision, called the Chevron Deference or Chevron Doctrine, set a 40-year-long precedent that has allowed federal agencies to have authority over statutory interpretations.
Chevron v. NRDC (1984) is one of the most cited cases in Administrative Law and has been used as precedent in over 18,000 court decisions. The Chevron Deference requires courts to ask two questions. One: Is the law in question ambiguous enough to require interpretation? Two: If so, is the federal agency’s interpretation of the law reasonable? For four decades, the Chevron Deference has enabled federal agencies to create rules and policies that can be adjusted in an ever-changing world to meet the needs of modern civilization.
Loper Bright Enterprises v. Raimondo (2024)
In 1976, the Fishery Conservation and Management Act, eventually renamed the Magnuson–Stevens Fishery Conservation and Management Act and known as the Magnuson-Stevens Act, required government-appointed inspectors to be on board fishing vessels to ensure fishing companies are in compliance with federal regulations and not overfishing. The law has never specified who is responsible for paying these federal monitors in the north Atlantic region. For many years, the National Marine Fisheries Service (NMFS), an office within the National Oceanic and Atmospheric Administration (NOAA) under the Department of Commerce, paid for monitoring.
In 2013, after several years of budgetary constraints and increased needs for monitoring, the New England Fishery Management Council, a regional fishery management council responsible for implementing fishery management plans, submitted a proposal to the NMFS requiring fishermen to pay for inspection costs. The rule was approved by the NMFS in 2020.
That same year, a commercial fishing company, Loper Bright Enterprises, filed a lawsuit against the Department of Commerce over the NMFS’s ruling. The company’s lawyers argued that the Magnuson-Stevens Act did not specifically authorize the NMFS to require fishermen to pay inspection fees. The district court held that the Magnuson-Stevens Act authorized the rule requiring fishermen to pay for monitoring. The D.C. Circuit affirmed that decision; however, it concluded that the language in the Act was ambiguous on whether the NMFS was authorized to require fishermen to pay for monitoring. Under the second step of the Chevron Deference, the Court of Appeals cited Chevron v. NRDC as precedent for the federal agency to interpret the law and create its own policies to fill in the gaps, concluding that NMFS interpretation of the MSA was reasonable. In 2022, Loper Bright Enterprises appealed to the Supreme Court.
On June 28, 2024, the Supreme Court in a 6-3 ruling overturned the district court’s decision and officially struck down the Chevron Deference. This new ruling transfers an extraordinary amount of power from the executive branch to the federal judicial branch of government. Judges, who likely have little to no subject-matter expertise and are not accountable to the public, now have the power to make decisions that should be rooted in best practices and technical expertise. For example, in a twist of poignant irony, just one day before the Chevron Deference decision, Chief Justice Neil Gorsuch—whose mother happens to be Anne Gorsuch, former head of the EPA under Reagan and creator of the “Bubble” Policy—authored a majority opinion in which he confused nitrous oxide, also known as laughing gas, with nitrogen oxide, a chemical compound that destroys the ozone.
In a seemingly calculated move, on July 1, 2024, three days after the decision to overturn the Chevron Deference, the Supreme Court ruled 6-3 on another case, reinterpreting the 6-year statute of limitations for challenging federal regulations and rules as beginning to run only after a plaintiff is injured by the agency action. Corner Post Inc. v. Board of Governors of the Federal Reserve System (2024) creates a never-ending loophole for businesses and industry leaders to continuously challenge federal regulations. All they have to do is find—or create—new businesses willing to sue a federal agency over and over again until they get what they want.
The consequences are likely to be vast.
U.S. Department of State The Supreme Court
What Happens Now?
The new Supreme Court rulings have implications for all federal agencies and their offices, from the Food and Drug Administration (FDA) to the Securities and Exchange Commission (SEC) to the Department of Health and Human Services (HHS) and more. An agency most likely to be impacted is the EPA. The EPA has protected air and water quality by setting maximum contaminant levels (MCLs) and standards of practice backed by the most recent and accurate data to control pollution levels for nearly 55 years. The individuals who lead and work within the EPA are subject-matter experts with years of research, scientific, and technical experience that helps them to create and enforce rules that safeguard both human and environmental health. Now, these rules and enforcements that keep our water and air clean and hold industries accountable for their pollution may be under attack.
Both the Chevron Deference and the Corner Post ruling have opened up a can of litigation worms. While agencies still have deference to decide how to interpret laws without clear and specific guidance related to their work, it is likely that any entity that disagrees with a federal agency’s policy will file a lawsuit against the agency to change that policy. Entities with the money and resources to pursue litigation, such as industry leaders, will have found their “in” to control and manipulate how federal agencies are run. Judges, who have their own proclivities, are likely to rule in favor of the entity with whom they most agree. In a world that has significantly polarized all social, economic, and environmental issues, one can only hope they are appointed a judge who is on their side of the issue.
While judges are not technical experts qualified to render the same decisions as federal agency employees, neither are members of Congress. Where litigation does not produce a decisive answer to policies formed under ambiguous law, Congress may have to step in and rewrite the law. Writing narrower legislation that purposefully gives less authority to agencies is a daunting task that could severely limit the creation of adaptable policies that can change with the times and needs of society. This approach is micromanagement at its worst, and in a gridlocked Congress, would be all but impossible to execute.
Although conservatives are frustrated by liberal policy regimes and vice versa, the now-defunct Chevron Deference created a natural opportunity to reverse federal agency policies when executive branch leadership changed. The reality is, now nobody wins. While business and industry leaders may see an opportunity to challenge federal policies they disagree with, they may not like the immutable outcomes decided by the judicial and legislative branches of government. At the very least, if the business community does not know how a regulation will be interpreted until there is a definitive ruling by a judge or a definitive law written by Congress, how can they plan for the future?
The future is now uncertain… for everyone.
Nowhere to Turn
In the South, liberal-leaning communities, organizations, and political figures tend to be strategically outnumbered by conservative voices. The South is often overlooked as a place to create change and invest resources due to its historical political landscape and deep-rooted history with slavery, racism, and antebellum ideals, despite igniting profound social change like the civil rights movement. Communities in the South have relied, in many ways, on federal policies and regulations to hold state agencies and governments accountable to best practices, clean water and air standards, and sustainability goals. Now, southern communities, particularly those who are vulnerable or marginalized, will feel they have nowhere to turn.
How a state agency utilizes federal funding, distributes resources, and manages programs generally boils down to Congressional laws and mandates from federal agencies. Now that federal agencies’ rules, regulations, and enforcements can and will be challenged indefinitely, communities in the South are at risk. Industries, particularly the oil and gas industry, and conservative elected officials based in the South are starting to challenge federal rules that protect the environment and public health in favor of “economic development.”
This argument has long been distorted. Environmental sustainability and economic growth are not mutually exclusive. In fact, the Bureau of Labor Statistics found that “green” job wages were higher than the median for all occupations in 2021. The Bureau also projected an average of more than 30,000 new job listings in the sector each year from 2021 through 2031. The bottom line is that we can do both. We can bring new jobs, new companies, and new economic growth to the South and ensure environmental protections that safeguard public health and long-term sustainability in communities. Our state governments have rejected this idea.
In states like Louisiana, communities have been fighting for clean air and water for decades. It’s a David versus Goliath story. Behemoth companies like Denka, Venture Global LNG, and Formosa are owned and managed by national and international businessmen who do not have to live in or near the polluted conditions their companies’ facilities create. This is the epitome of “You don’t eat where you … .” But some communities in Louisiana—known as sacrifice zones—don’t have a choice.
In 2016, the EPA found that the Denka facility in St. John the Baptist Parish—the only facility in the United States to produce neoprene—was violating CAA standards by emitting toxic levels of the carcinogenic compound chloroprene into the air less than one mile from an elementary school. In a landmark decision in April 2024, the EPA held facilities like Denka responsible for lowering their toxic emissions and gave them 90 days to do so. In May 2024, federal courts upheld the EPA’s decision.
Now, after the Supreme Court’s reversal of the Chevron Deference, Denka has found their new strategy. The company is now petitioning the courts once again to reverse the EPA’s April ruling that improves air quality for community members, particularly children, in St. John the Baptist Parish. Sadly, state officials are defending the Japanese conglomerate at the peril of the very residents they are sworn to serve and protect. Similar battles are being fought by the Plaquemines Parish LNG plant, a Delaware-based company that exports liquefied natural gas.
Watered Down Regulations
Clean water protections are also at risk. Recently, the EPA established MCLs—legally enforceable standards—for 6 per- and polyfluoroalkyl substances, also known as PFAS. PFAS are a group of over 13,000 chemical compounds used in the manufacturing of waterproof materials, firefighting foam, and various household products. These “forever chemicals” are highly pervasive in the environment and likely carcinogenic. They do not break down easily, meaning they stay in the environment for decades, and are known to contaminate water, soil, plants, animals, and even humans. PFAS compounds are found in the blood of over 97% of Americans, according to the Centers for Disease Control (CDC) and Prevention National Health and Nutrition Examination Survey (NHANES).
The Water Collaborative reported in 2022 that PFAS compounds PFOS and PFBA were found in the lower Mississippi River in Southeast Louisiana. Nearly one million residents in Southeast Louisiana get their drinking water directly from the Mississippi River, and many water utilities lack the technology to remove PFAS from their drinking water during treatment, potentially exposing Louisiana residents to PFAS through their tap water.
For months, water utilities have balked about the EPA’s new regulations, insisting that installing PFAS treatment technologies will cost billions of dollars industry wide. Despite an additional $1 billion in infrastructure funding to help utilities remove PFAS from their treated water, litigation is likely inevitable. The Supreme Court’s Chevron ruling will serve as a platform for utilities—and industries that manufacture PFAS and have issued billion-dollar settlements to utilities for PFAS contamination—to protest and overturn these new MCLs and more.
Silver Linings?
While environmentalists and federalists may fear for the future, perhaps not all is lost. In the 1980s, during the height of Reaganomics, when the Chevron decision was first made, it served to protect conservative business interests. Agencies had the right to interpret ambiguous laws which, under Republican leadership, meant a generally loosened interpretation of permitting standards. But this ruling went both ways. Under Democratic leadership, this usually meant a stricter interpretation of permitting standards. Now, all federal agency interpretations and standards are fair game to challenge. So yes, while conservative business interests may gain an upper hand in challenging federal agency rules under Democratic leadership, if liberally-minded parties play their cards right, they have the same opportunity to challenge federal agency rules under Republican leadership. With litigation inevitably swallowing up the time and resources of lower federal courts and more challenges making their way to the Supreme Court, perhaps, too, this creates an opportunity to expand the Supreme Court. You never know…