July 12, 2024

On June 28, 2024, the U.S. Supreme Court, in a 6-3 decision, overruled Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S. Ct. 2778 (1984), and struck down the decades-old Chevron doctrine (“Chevron deference”). Loper Bright Enters. v. Raimondo, No. 22-451, 2024 WL 3208360, ---S. Ct.--- (2024).  Chevron deference required courts to apply a two-step framework to interpret statutes administered by federal agencies (including the U.S. Patent & Trademark Office). 2024 WL 3208360, at *6.  Once a case was found to satisfy the preconditions for Chevron to apply, the court would then determine if Congress had directly spoken to the precise question at issue. Id.  If congressional intent was clear, then the inquiry ended. Id.  If, however, the court found that the statute at issue was silent or ambiguous regarding the specific issue, then it was required under Chevron to defer to the agency’s interpretation if that interpretation was based on a permissible construction of the statute. Id.

 

The majority concluded that, among other things, “[t]he deference that Chevron requires of courts reviewing agency action cannot be squared with the [Administrative Procedures Act (“APA”)], is “fundamentally misguided” for reasons expressed, including that it fails to account for the requirements of the APA, and is “unworkable” as the concept of ambiguity, embedded in its framework (i.e., identification of statutory ambiguity, which then requires deference at the doc­trine’s second step), “has al­ways evaded meaningful definition.” See e.g., 2024 WL 3208360, at *14-21.

 

In overruling Chevron, the majority held:  “Courts must exercise their inde­pendent judgment in deciding whether an agency has acted within its statutory authority, as the APA requires. Careful attention to the judgment of the Executive Branch may help inform that inquiry. And when a particular statute dele­gates authority to an agency consistent with constitutional limits, courts must respect the delegation, while ensuring that the agency acts within it. But courts need not and un­der the APA may not defer to an agency interpretation of the law simply because a statute is ambiguous.” 2024 WL 3208360, at *22.

 

As the holding suggests, the APA, particularly 5 U.S.C. § 706, played a key role in the majority’s analysis and conclusion.  The majority explained that the APA “codifies for agency cases the unremarkable, yet elemental proposition reflected by judicial practice dating back to Marbury: that courts decide legal questions by applying their own judgment. 2024 WL 3208360, at *12-13.  Quoting from § 706, the majority further explained that the APA “specifies that courts, not agencies, will decide ‘all relevant questions of law’ aris­ing on review of agency action—even those involving ambiguous laws—and set aside any such action inconsistent with the law as they interpret it.  And it prescribes no deferential standard for courts to em­ploy in answering those legal questions. That omission is telling, because Section 706 does mandate that judicial re­view of agency policymaking and factfinding be deferential. Id. (citing by way of example § 706(2)(A) (“agency action to be set aside if ‘arbitrary, capricious, [or] an abuse of discretion’”) and § 706(2)(E) (“agency factfinding in formal proceedings to be set aside if ‘unsup­ported by substantial evidence’”)).

 

The majority reasoned that “by directing courts to ‘inter­pret constitutional and statutory provisions’ without differ­entiating between the two, Section 706 makes clear that agency interpretations of statutes—like agency interpreta­tions of the Constitution—are not entitled to deference.” 2024 WL 3208360, at *12-13.  It concluded that under the APA it thus “remains the responsibility of the courts to decide whether the law means what the agency says.” Id.  Continuing, the majority stated, “The text of the APA means what it says. And a look at its history if anything only underscores that plain meaning.” Id.  It further stated, “The APA, in short, incorporates the traditional under­standing of the judicial function, under which courts must exercise independent judgment in determining the mean­ing of statutory provisions. In exercising such judgment, though, courts may—as they have from the start—seek aid from the interpretations of those responsible for imple­menting particular statutes. Such interpretations ‘consti­tute a body of experience and informed judgment to which courts and litigants may properly resort for guidance’ con­sistent with the APA. And interpretations issued contemporaneously with the statute at issue, and which have remained consistent over time, may be especially useful in determining the statute’s mean­ing.” Id. (quoting Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)).

 

The majority also determined that “stare decisis, the doc­trine governing judicial adherence to precedent,” does not require the Court to “persist in the Chevron project.” 2024 WL 3208360, at *19-21.  It further observed that the Court, “for its part, has not deferred to an agency in­terpretation under Chevron since 2016.” Id. at *19 (citing Cuozzo Speed Technologies, LLC v. Lee, 579 U.S. 261, 280 (2016), as the most recent occasion).

 

In final comments, the majority explained that it does not, by overruling Chevron, “call into question prior cases that relied on the Chevron framework. The holdings of those cases that specific agency actions are lawful—in­cluding the Clean Air Act holding of Chevron itself—are still subject to statutory stare decisis despite our change in interpretive methodology.  Mere reliance on Chevron cannot constitute a ‘special justification’ for overruling such a holding, because to say a precedent relied on Chev­ron is, at best, ‘just an argument that the precedent was wrongly decided.’  That is not enough to justify overruling a statutory precedent.” 2024 WL 3208360, at *21 (internal quotations and citations omitted).

 

Chief Justice Roberts delivered the majority opinion in which Justices Thomas, Alito, Gorsuch, Kavanaugh, and Barrett joined.  Justice Thomas separately filed a concurring opinion to reiterate his long-held and expressed view that Chevron deference violates the Constitution’s separation of powers.  Justice Gorsuch filed his own concurring opinion to express why proper application of stare decisis supports the majority holding.  Justice Kagan filed a dissenting opinion to explain why Chevron deference should not be discarded.  Justices Sotomayor and Jackson joined in Justice Kagan’s dissent (Justice Jackson joined the dissent only as it applies to consolidated companion case, Relentless, Inc. et al. v. Department of Commerce, et al., No. 22-1219, as she did not participate in the consideration or decision of Loper Bright).