The US Supreme Court recently overturned the landmark “Chevron Deference” decision leading to more judicial scrutiny over ambiguous statutes being interpreted by agencies. This decision is expected to have broad and far-reaching implications. The new precedent Loper-Bright v. Raimondo (Loper-Bright) overrules Chevron U.S.A., Inc. v. Natural Resources Defense Council (Chevron) the precedent that has adjudicated agency statutory interpretation since 1984. There have been many staunch critics of Chevron since its inception, due to its inherently favorable view it gives the agency’s interpretations of legislation. The new Loper-Bright decision will lead to new opportunities and new uncertainties. In this piece we will explore the new precedent and what it means for the plastics industry.
Background
The federal government has steadily grown in its capacity and scope of lawmaking since its inception. This increase in activity has led to a need for experts in their field to help lawmakers with rule creation across a plethora of unique topics. This need was filled through the role of administrative agencies. For the most part agencies have accomplished their intended purpose. However, there have been challenges in determining the scope of authority that any agency has. Dealing with these challenges of agency scope led to a line of court cases which determine the authority of the legislature to allocate their rulemaking authority to the agencies and the ability of the court system to limit rules that aren’t within the scope of authority.
Loper Bright Precedent
The original test for determining agency deference when interpreting a statute was determined in Skidmore v. Swift & Co. (Skidmore). This test was more thorough than Chevron and it required a court to determine whether an agency’s rules deserved deference based on the thoroughness of the agency’s investigation, the validity of its reasoning, the consistency of its interpretation over time, and other persuasive powers of the agency. The Skidmore precedent was established in 1944, and it remained until Chevron overruled the decision in 1984.
In the Chevron ruling the Supreme Courtmoved away from the rigid requirements of Skidmore in determining whether an agency should receive deference in its rulemaking. The Chevron deference test focuses on congressional intent and agency interpretation. In determining the constitutionality of an agency rulemaking, a court must determine whether Congress has spoken directly to the precise issue at question and whether the agency’s answer is based on a permissible construction of the statue. Agency decisions with the force of law were to be given deference by the courts if there was ambiguity in the statute. This allowed lawmakers to be broad in their allocation of power allowing for flexibility for agencies to use their specific expertise to determine the best rules. However, there have been some critiques of this precedent, it strays from the constitutional principle of having three branches of government with checks and balances on one another. The power to make laws has been allocated from the legislature to agencies. These agencies act as a new branch of government and their decisions were given deference over any possible ambiguity. The courts’ check on an agency’s power was very limited, allowing for an increase in the implementation of rules in their scope and coverage.
Post Loper-Bright the agency landscape looks a little different. Loper-Bright took a step back from Chevron and gave the judiciary more oversight on agency rulemakings, a precedent more reminiscent of Skidmore. Instead of giving an agency deference in the face of legislative ambiguity, the court must use their independent judgment to decide whether an agency has acted within its statutory authority. In the face of statutory ambiguity courts can still rely upon the expertise of the agency, but there is no requirement to give deference to agency interpretation.
Policy Implications
Loper-Bright marks a new era for administrative agencies, but the scope is limited. There are other lines of administrative precedent that regulate agency actions when making a policy judgment (Motor Vehicle Manufacturers v. State Farm) and interpreting regulation (Bowles v. Seminole Rock & Sand Co.). The Loper-Bright decision is limited to agencies interpreting statutes to create rules, and does not overturn every rulemaking that was determined under Chevron. The ruling does, however, open the door for new challenges of current and new rules.
The Supreme Court has subsequently ruled in Corner Post, Inc. v. Board of Governors of the Federal Reserve System (Corner Post)to increase the statute of limitations for challenges to an agency rulemaking. In the case, the Supreme Court ruled that the statute of limitations, which is six years, to challenge agency rulemaking does not begin to toll until the plaintiff experiences actual harm by the agency’s action. Previously, most of the circuit courts had concluded that the statute of limitations for these challenges began to toll at the inception of the rule. Producing a new avenue to challenge previous agency rulemakings if you experience new harm due to the agency rulemaking. Loper-Bright and the subsequent Corner Post create a new ability for the courts to overturn agency action if legislation is ambiguous and a new ability to challenge long-standing agency rules with the increased statute of limitations.
For the plastics industry, this means that there are new opportunities to consider or challenge agency rules interpreted through legislative statutes. There will be a need for legislators to be far more specific in their mandates for agencies, which will require more expertise. If legislators fail to be specific there could be an increased chance that the rule derived, by the agency, from the statute will be challenged. This need for expertise could be filled through hiring more technical staff members or by relying on industry to provide its expertise. Where these opportunities arise industry members should look to take part in the legislative process. The plastics industry is often left out of the room for these discussions, but the new administrative landscape presents a new opportunity for involvement. Additionally, there will be more opportunities to challenge previous and future rulemakings. With the new timeline for filing a case against an agency rulemaking there is more opportunity to compile thorough challenges based on actual harm. There are opportunities to challenge rules that are currently on the books if new harm is felt because of these rules. Extending the statute of limitations gives industry the chance to check the power of agency and rules that are ambiguous in nature.
This new precedent presents some negatives for the industry as well. The new precedent means new uncertainty, Chevron was a stable precedent that had lasted for decades, and it had developed case law that helped effectuate the standard. A new standard creates new questions that will need to be determined by the Supreme Court, through future case law. Until the Loper-Bright standard is fully fleshed out, it will be difficult to determine how a court might rule in any administrative law case.
