Overturning the Chevron Deference Could Mean a Regulatory Revolution

The Supreme Court on Friday overturned the legal precedent known as the Chevron deference in a 6-3 decision, which will reshape the way that federal agencies interpret laws and craft rules that regulate a wide range of businesses.

For decades, courts have turned to regulatory agencies to fill in the legal gaps when areas of the law are ambiguous–this is the so-called Chevron deference, which emerged from case law. 

The Chevron deference resulted from a 1984 case filed by Chevron, a big oil company, which argued that the Environmental Protection Agency’s interpretation of the Clean Air Act was overly broad. Chevron lost the case after a judge found that federal agencies are considered to be the authority on a statute if it’s ambiguous. That decision brought forth the Chevron doctrine, or the Chevron deference. 

The high court revisited Chevron through a pair of companion cases: Relentless v. Department of Commerce and Loper Bright Enterprises v. Raimondo. 

It was unclear how far the justices would go in their decision: Some law experts mused that the Supreme Court might rewrite the standard while preserving some elements of Chevron. But on Friday the high court went all in and unraveled 40 years of precedent.

“Chevron is overruled,” the justices wrote in the majority opinion. “Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority,” adding that “careful attention to the judgment of the executive branch may help inform that inquiry.”

Business groups, including the Chamber of Commerce, have kept their fingers crossed for it to be scaled down. Instead, they got a complete victory.