In a significant ruling, the Supreme Court overturned its decision in Chevron v. Natural Resources Defense Council, which had granted federal agencies considerable leeway in interpreting laws. Instead of deferring to agencies, judges can now apply their own interpretation of the law, facilitating the overturning of agency regulations across the federal government.

What is Chevron Deference?

In 1984, the Supreme Court ruled in Chevron v. Natural Resources Defense Council, a case involving the EPA’s interpretation of the Clean Air Act. The Court decided that since the law was ambiguous, the EPA and other federal agencies should have flexibility in interpreting the statute. Chevron established that courts should uphold the agency’s interpretation, even if it differs from what the court believes is the best interpretation, as long as it is reasonable.

This principle, known as “Chevron deference,” became a cornerstone in Administrative Law. Over the past 40 years, federal courts have cited this decision more than 18,000 times.

The Supreme Court’s Decision Overturning Chevron

In a 6-3 ruling, the Supreme Court discarded the “Chevron deference” principle, deeming it inconsistent with the Administrative Procedure Act, which governs the procedures federal agencies must follow and how courts review agency actions. The decision emphasized that it is the courts’ role to interpret laws, not the agencies, and that Congress expects courts to handle statutory questions.

The ruling also specified that courts must now use “their independent judgment in deciding whether an agency has acted within its statutory authority.” This means judges can apply their own interpretation of the law to determine if an agency acted within legal bounds, making it easier for courts to overturn federal agency regulations.

The majority opinion stated that previous cases relying on the Chevron principle should be upheld, including the original Chevron v. Natural Resources Defense Council decision.

Further Implications 

The Justices indicated that the precedent in place before the Chevron decision, known as Skidmore, is still valid. Based on Skidmore v. Swift, which involved interpreting the Fair Labor Standards Act, courts may still defer to an agency’s interpretation of a law, but only to the extent that the agency can persuade the court based on thoroughness, consistency, and sound reasoning.

There are 47 federal agencies whose regulations impact the import and export of goods. For the past 40 years, these agencies had broad discretion to interpret laws and implement rules. Moving forward, courts no longer have to defer to these agencies and may more easily overturn their regulations.