Environmental Law Implications of Loper Bright and the End of Chevron Deference

On Friday, June 28, 2024, the U.S. Supreme Court overruled Chevron v. NRDC in Loper Bright Enterprises v. Raimondo.[1] Although the Court’s decision to overturn Chevron was anticipated, Loper Bright nonetheless represents a paradigm shift because the Chevron doctrine had been a cornerstone of administrative law for 40 years.

Under Chevron, courts undertook a two-step review of a federal agency’s legal interpretations of a statute that it administered. Under “Step One,” a court would determine whether the statute spoke unambiguously on the issue. If it did, that would be the end of the analysis. However, if the statute was silent or ambiguous, under “Step Two,” a court would defer to the agency’s permissible interpretation of the statute, provided it was not clearly contradicted by the statute or was not otherwise unreasonable. Critics of Chevron contended that agencies read their authority unduly expansively, relying on Chevron deference to shield their actions from scrutiny. Supporters claimed Chevron was a reasonable doctrine that allowed agencies to exercise their expertise when applying statutes Congress charged the agency to implement.

Following Loper Bright, courts must now exercise their independent judgment in deciding whether an agency acted within its statutory authority, even when a statute is ambiguous. To accomplish that, federal courts will use their traditional statutory interpretation tools to resolve statutory ambiguities.

More details on the new framework and its potential implications for future federal agency action generally can be found here. How the decision will specifically affect actions taken by the U.S. Environmental Protection Agency (EPA or Agency) remains to be seen.

• EPA has relied less on Chevron in its rulemakings and court positions. The Agency’s approach to statutory interpretation in recent rulemakings and court filings indicates that the effect of Chevron may not be as substantial on EPA as some may suggest. Instead, EPA made a tactical shift several years ago and deemphasized the role of Chevron in many, but not all, rulemakings, placing more importance on arguing that its statutory interpretation is the best interpretation regardless of Chevron This squares with the approach taken across the government, with the Biden administration reportedly having invoked Chevron only five times in promulgating 51 major rules.[2] In a sense, much of the effect of Loper Bright has already been felt, and matters that do not involve claims of Chevron deference will not be affected by the new decision.
• The Agency’s interpretation of the relevant statute will still be considered. The Loper Bright decision does not mean EPA’s interpretation of environmental statutes will be ignored. The Supreme Court noted that an agency’s interpretation “may help inform [a court’s] inquiry” into whether “an agency has acted within its statutory authority.”[3] Thus, while not dispositive as under Chevron, EPA’s interpretation of ambiguous statutes may still carry weight with a court. However, EPA must now compete with opposing private litigants on equal terms to demonstrate that the Agency’s interpretation is truly persuasive.
• Loper Bright does not address the deference courts may choose to give EPA’s interpretation of its own regulations or to the Agency’s technical expertise. The decision only addresses agency interpretation of ambiguous statutes; it does not address the doctrine that applies to the agency’s interpretation of its own regulations. Guided by what is known as Auer deference, courts generally defer to an agency’s interpretation of ambiguous regulatory language unless it is plainly erroneous or inconsistent with the regulation.[4] Likewise, Loper Bright does not address the principles that courts have followed in deferring to EPA’s technical expertise on the merits of an issue or where Congress has granted broad discretion to EPA to fashion regulations.
• That said, Loper Bright likely will increase and strengthen some legal challenges to EPA action. Chevron did not insulate EPA’s actions from legal challenges — the Agency regularly appears in court to defend its actions. Nevertheless, following Loper Bright, the number of those challenges may increase and the legal approaches within them may change. The Supreme Court’s direction to the lower courts is to use the entire suite of statutory interpretation tools to determine the “best” interpretation of the statute at issue. For those considering whether to challenge an agency action, Loper Bright provides a more level playing field as EPA may no longer prevail by offering only a “reasonable” or “permissible” view of a statute.
• Watch for challenges to past EPA actions, particularly under the Clean Air Act. The Court stated that it was not its intention to overturn prior judicial decisions that relied on the [5] However, the Court just made it easier to challenge federal regulations in ruling that the six-year statute of limitations under the Administrative Procedures Act does not start ticking until a plaintiff is adversely affected by the regulation.[6] Moreover, the Clean Air Act allows for late judicial review of agency action based on “grounds arising after the statutory period for review has expired,”[7] and the D.C. Circuit has held that a judicial decision can constitute “grounds arising after.”[8] Given the change wrought by Loper Bright, it is possible that some may seek to challenge prior agency actions that were not previously litigated on the merits.

Loper Bright is not likely to be this Supreme Court’s last consideration of challenges to the scope of the federal administrative state. It follows the Court’s decision in 2022 that reinvigorated the Major Questions doctrine in setting aside EPA’s Clean Power Plan[9] as well as last week’s decision holding that SEC administrative enforcement violates the Seventh Amendment right to a jury trial, a decision that may be used to challenge EPA administrative enforcement programs. Cases addressing other doctrines that enhance agency authority, like Auer deference, may also make their way through the courts.

[1] The opinion decided the consolidated cases Loper Bright, No. 22-451, and Relentless, Inc. v. Dep’t of Com., No. 22-1219.

[2] James Kunhardt and Anne Joseph O’Connell, Judicial deference and the future of regulation, Brookings Inst. (Aug. 18, 2022), https://www.brookings.edu/articles/judicial-deference-and-the-future-of-regulation.

[3] Loper Bright, slip op. at 35.

[4] Auer v. Robbins, 519 U.S. 452 (1997). The Auer doctrine has likewise been limited, e.g., Kisor v. Wilkie, 588 U.S. 558 (2019), and may see further scrutiny after Loper.

[5] Loper Bright, slip op. at 34.

[6] Corner Post v. Board of Governors, Federal Reserve System, No. 22-1008 (July 1, 2024).

[7] 42 U.S.C. § 7607(b)(1).

[8] See, e.g., Honeywell Intern., Inc. v. EPA, 705 F.3d 470, 472-3 (D.C. Cir. 2013).

[9] West Virginia v. EPA, 597 U.S. 697, 723 (2022).

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