Two cases decided at the end of the October 2023 Supreme Court term opened the door to new challenges to even longstanding federal regulations and may have enduring effects on the ability of agencies to implement their preferred policies.<\/p>\n\n\n\n
First, in Loper Bright Enterprises v. Raimondo<\/em>, No. 22-451, 603 U.S. ____ (2024), a 6-3 opinion written by Chief Justice Roberts, the Supreme Court overruled Chevron U.S.A. Inc. v. <\/em>Natural Re\u00adsources Defense Council, Inc.<\/em>, 467 U.S. 837 (1984). Chevron<\/em> famously implemented a two-step framework for reviewing statutory interpretations by federal administrative agencies. Under that framework, courts first determined \u201cwhether Congress has di\u00adrectly spoken to the precise question at issue\u201d and whether congressional intent is \u201cclear.\u201d Id.<\/em> at 842. If congressional intent was not clear, such that \u201cthe statute is silent or ambiguous with respect to the specific issue,\u201d courts gave controlling deference to the federal agency\u2019s interpretation as long as it was \u201cbased on a per\u00admissible construction of the statute.\u201d Id.<\/em> at 843.<\/p>\n\n\n\n The Supreme Court overruled Chevron<\/em>, holding that it contradicted the Administrative Procedure Act\u2019s (APA\u2019s) direction that \u201cthe reviewing court shall decide all relevant questions of law,\u201d including \u201cconstitutional and statutory provisions.\u201d 5 U.S.C. \u00a7 706. Tracing the history of federal judicial review from the Founding and Marbury v. Madison<\/em>, 1 Cranch 137, 177 (1803), to the passage of the APA in 1946, see Loper Bright <\/em>Slip Op. at 7-12, <\/em>the Court said that \u00a7 706 codified \u201cthe traditional understanding\u201d that courts<\/em> review questions of law de novo<\/em>, id.<\/em> at 12-13, even while reviewing agency factfinding deferentially. Id.<\/em> at 14. Going forward, then, the Court explained that in reviewing agency actions under the APA, courts should adopt the best<\/em> interpretations of statutory provisions, as they see it, not merely decide whether agency interpretations are permissible. In making that determination, however, the Court recognized that the reviewing court can \u201cseek aid from the interpretations of those responsible for implementing particular statutes\u201d \u2014 i.e.<\/em>, the agency. Id.<\/em> at 15\u201316.<\/p>\n\n\n\n Second, in Corner Post, Inc. v. Board of Governors of the Federal Reserve System<\/em>, No. 22-1008, 603 U.S. ____ (2024), a 6-3 decision written by Justice Barrett, the Supreme Court addressed when a challenge to a federal regulation must be brought. Specifically, the Court answered when an APA claim \u201caccrues\u201d for purposes of the six-year statute of limitations for suits against the federal government. Corner Post<\/em> Slip Op. at 1 (quoting 28 U.S.C. \u00a7 2401(a)). The Court held that a claim accrues when a plaintiff is injured by a final agency action, such as a rule promulgated by the agency, not when the final agency action occurs regardless of when the plaintiff was injured. Id.<\/em><\/p>\n\n\n\n The Court\u2019s analysis was straightforward. Under Section 2401(a), civil actions must be \u201cfiled within six years after the right of action first accrues.\u201d A claim generally \u201caccrues\u201d when the plaintiff has \u201ca complete and present cause of action.\u201d Meanwhile, to challenge a federal regulation under the APA, 5 U.S.C. \u00a7 702 requires a litigant to demonstrate it has been injured by the agency action, id.<\/em> at 4, and 5 U.S.C. \u00a7 704 requires a final agency action, id.<\/em> at 5. The Court thus held that an APA claim does not \u201caccrue\u201d and the statute of limitations does not begin to run until the APA plaintiff \u201csuffers an injury from final agency action.\u201d Id.<\/em> at 6. The Court contrasted Section 2401 with other statutes of repose, which make certain regulations or agency orders final and unreviewable after a set period of time following the issuance of the regulation or order. Id.<\/em> at 9.<\/p>\n\n\n\n The Court downplayed the policy concerns expressed by the dissent, stating that most administrative challenges occur when a regulation is passed and that if no authority upholding an agency action exists, then courts are well equipped to consider the merits of the newcomers\u2019 challenges. Id.<\/em> at 21. The Court acknowledged that, if policy concerns remained, Congress could change the law to govern when agency actions may be challenged under the APA. Id.<\/em> at 22-23.<\/p>\n\n\n\n The interplay of these two decisions is likely to have wide-reaching effects on administrative law.<\/p>\n\n\n\n Most immediately, the decisions provide an opening for new challenges to federal regulations, including longstanding rules. As Justice Jackson highlighted in her Corner Post<\/em> dissent, see Corner Post<\/em> Slip Op., Jackson Dissent, at 23, it\u2019s now possible that new objections to old rules may be entertained and determined de novo<\/em>. And the consequence of those challenges (at least for now) can be a facial invalidation (or \u201cuniversal vacatur\u201d) of the regulation for all<\/em> regulated entities, not merely the challenger. In the short term, this is likely to bring about some destabilizing changes in regulatory frameworks, as long-settled regulations are subjected to new and more searching judicial inquiry.<\/p>\n\n\n\n Over the long term, however, Loper Bright<\/em> may bring more stability to regulated industries. For one, Chevron<\/em>\u2019s overruling means that, after a court has issued a precedential decision on the meaning of a statute, that decision will restrict an agency\u2019s authority to interpret the statute differently. Under Nat\u2019l Cable & Telecommunications Ass\u2019n v. Brand X Internet Servs.<\/em>, 545 U.S. 967 (2005), as long as an earlier court decision had not held that statute was \u201cunambiguous,\u201d agency interpretations could still receive deference even for a contrary statutory interpretation. Id.<\/em> at 984. But Loper Bright<\/em>\u2019s overruling of Chevron<\/em> effectively overrules Brand X<\/em> as well.<\/p>\n\n\n\n Loper Bright <\/em>may also bring more stability to administrative law, even in the absence of a court challenge. The Court\u2019s decision returns the standard for judicial review of agency interpretations to Skidmore v.<\/em> Swift & Co.<\/em>, 323 U.S. 134 (1944). Under Skidmore<\/em>, courts give an agency\u2019s statutory interpretations varying weight depending on \u201cthe thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.\u201d Id.<\/em> at 140. The Loper Bright <\/em>Court repeatedly emphasized that, in considering an agency\u2019s views, statutory interpretations that were adopted contemporaneously with the statute and have remained consistent over time are worthy of more respect than novel or inconsistent interpretations.<\/p>\n\n\n\n In both of these respects, then, Loper Bright <\/em>is likely to curtail the agency practice of seismic rule changes every time a new presidential administration enters office. If the prior rule was subject to challenge, the courts\u2019 interpretation will ossify the result unless and until Congress intervenes. And even if the prior rule was not subject to judicial review, the shift itself will undermine the persuasiveness of the agency\u2019s views.<\/p>\n\n\n\n In the same vein, despite the Court\u2019s refusal to provide agencies repose in Corner Post<\/em>, the Court\u2019s decision in Loper Bright <\/em>will make litigation at the outset of a rule more important, because rules will likely have more staying power than they have for the past 40 years. And rules promulgated soon after Congress passes a federal statute will be more likely to remain in effect.<\/p>\n\n\n\n Still, several open questions remain.<\/p>\n\n\n\n First, in Loper Bright<\/em>, the Court acknowledged that it was not scrapping all <\/em>deference to agencies. Some statutes expressly authorize agencies to define particular statutory terms through regulations promulgated by the agency. Id.<\/em> at 17 & n.5. Others allow agencies flexibility to determine what regulations are \u201cappropriate\u201d or \u201creasonable.\u201d Id.<\/em> at 17 & n.6. \u201cWhen the best reading of a statute is that it delegates discretionary authority to an agency, the role of the review\u00ading court under the APA is, as always, to independently in\u00adterpret the statute and effectuate the will of Congress sub\u00adject to constitutional limits.\u201d Id. <\/em>at 17-18. The scope of those permissible delegations will no doubt be the subject of litigation \u2014 as will any constitutional limits on such delegations.<\/p>\n\n\n\n Second, in Corner Post<\/em>, the Court left open whether the extended statute of limitations will apply to all types of regulatory challenges. For example, the majority acknowledged that entities that did not exist during the rulemaking process may not be able to establish the necessary injury to challenge an agency\u2019s failure to provide sufficient notice of its regulation under the APA. See<\/em> Corner Post<\/em> Slip Op. at 21 n.8. That question will undoubtedly soon be the subject of litigation in the lower courts.<\/p>\n\n\n\n