Lawsuit Reform

States Lead by Ending the Chevron Doctrine. Will SCOTUS Follow?

The Supreme Court is expected to make its decision in Loper Bright Enterprises v. Raimondo this week, and it may possibly overturn one of the largest SCOTUS precedents ever made on judicial interpretation matters: the Chevron doctrine.

Overturning the 40-year-old judicial precedent, established in Chevron v. Natural Resources Defense Council, would have far-reaching implications across the country, including  a possibly more stable regulatory environment across presidential administrations and a clearer distinction of powers between the executive, judicial, and legislative branches. Given this, it is perhaps ironic to consider that the Court established the Chevron doctrine to ensure government agencies can efficiently execute the often-vague laws of Congress.

Considered in 1984, Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. focused on an EPA regulation and determined whether the agency had overstepped its bounds in its regulatory interpretation of certain sections of the Clean Air Act. While the Court upheld the regulation in question, more consequentially, it established a new principle requiring federal courts to defer to agency interpretations of statutes, unless an interpretation was “arbitrary, capricious, or manifestly contrary to statute.”

This principle, known as Chevron deference, thus grants agency rules and regulations (and the bureaucrats who write them) a significant advantage over their opposing party in court—often normal Americans pushing back against burdensome regulations. Texas State Representative Brian Harrison—former chief of staff of the U.S. Department of Health and Human Services—summarizes this advantage as “effectively giving the government a judicial handicap by placing a thumb on the scales of justice in favor of bureaucrats over individuals and businesses.”

Like Chevron, Loper also focuses on an environmental regulation. In this case, the National Marine Fisheries Service (a federal agency within the U.S. Department of Commerce) promulgated a rule requiring commercial fishing companies to pay the daily salaries of government mandated observers on fishing vessels. Loper Bright Enterprises sued the National Marine Fisheries Service, arguing that the 2007 law allowing the agency to require the observers does not require the fisheries to cover the salaries.

The main question before the Court in Loper comes in light of Congress’ statutory silence on the matter: whether Chevron should be overturned to prevent automatic adoptions of agency interpretations of the law. If the Court rules it should be overturned, it would be a landmark judgment.

Of course, as is so often the case with impactful reforms, some states are already ahead of the curve. Since the Supreme Court’s 1984 decision, fifteen states have taken action to prohibit the Chevron doctrine at the state level. States like Tennessee and Wisconsin passed legislative reforms requiring state courts to consider regulatory cases without deference to agencies’ statutory interpretation, whereas states like Mississippi and Arkansas ended the practice via judicial ruling. Georgia took a limited subject matter approach, applying their deference elimination reforms to tax cases exclusively.

Ohio is the most recent example of a state overturning judicial deference through a judicial ruling in TWISM Enterprises, LLC v. State Board of Registration for Professional Engineers and Surveyors (2022). Even more recently and consistent with ALEC’s Judicial Deference Reform Act, Idaho, Indiana, and Nebraska all passed legislation this year to end judicial deference practices, requiring state courts to apply de novo review. As Idaho’s reform states, “When interpreting the provisions of any state law, this chapter, or any rule… the court shall not defer to an agency’s interpretation of the law or rule and shall interpret its meaning and effect de novo.”

If Chevron is overturned federally, state courts may still be free to defer to their own agencies’ interpretations of the law if they so choose. Even in the wake of a post-Chevron legal landscape, states should continue to pursue anti-judicial deference reforms to ensure that executive regulations, especially those that push beyond the scope of approved legislation, no longer have an unfair leg up on their challengers in the courtroom.

In Depth: Lawsuit Reform

State legal systems and the liability they exert on businesses and individuals are a disincentive to bad behavior and allow fair players to succeed in the marketplace. When lawsuits inappropriately punish good actors, resources are sucked out of the business economy, away from research & development and job creation. Lawsuit…

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