Supreme Court just made it harder for federal agencies to regulate in sweeping ruling

In a momentous decision that will affect vast swaths of American life, the U.S. Supreme Court on Friday undid decades of regulatory law, making it far more difficult for federal agencies to issue rules and regulations that carry out broad mandates enacted by Congress. The vote, along ideological lines, was 6-to-3.

Writing for the court’s conservative supermajority, Chief Justice John Roberts explicitly overturned a 40-year-old precedent that had instructed lower court judges to defer to reasonable agency interpretations of ambiguous federal statutes. Acknowledging that some of the court’s most conservative members had initially proposed or embraced that idea, Roberts said that time and experience had proved the approach “unwise,” “misguided,” and “unworkable.”

The 1984 decision, he said, is contrary to the Framers’ understanding or our form of government. Roberts went on to quote Chief Justice John Marshall’s famous 1803 decision in Marbury v. Madison declaring that, “[i]t is emphatically the province and duty of the [judiciary] to say what the law is.” That, said Roberts, means that courts, not agencies, decide what the law is, and if Congress wants to do something different, it should say so explicitly.

Justice Elena Kagan took the rare step of announcing her dissent from the bench on behalf of the court’s three liberals.

“Agencies report to the president, who in turn answers to the public for his policy calls,” she said. “Courts have no such accountability,” nor do they have the kind of expertise that agencies have to carry out broad mandates from Congress. Today, she said, a four decades-old “rule of judicial humility gives way to a rule of judicial hubris.”

“As if [the court] does not have enough on its plate,” she added acerbically, “the majority turns itself into the country’s administrative czar,” giving itself the power to determine what rules will govern AI, or the nation’s health care or transportation systems, or even the environment. “That is not a role that Congress gave to [the courts],” Kagan asserted, but “it is a role this court has now claimed for itself, as well as for other judges.”

Case Western law professor Jonathan Adler, generally agreed with Friday's ruling, though he added that it may make it harder for the executive branch to react to major crises, like the COVID pandemic, or sudden disasters in the financial world: “This decision will make it more difficult for future administrations to change policy without going to Congress,” he said, noting that if there is a second Trump administration, “they will find out what it’s like to get what they wished for because, in a lot of contexts, it will be hard to dramatically change the way various federal statutes are implemented.”

The consistent message of Friday’s decision, Adler said, is that agencies can’t interpret old statutes to fix new problems. As he put it, “agencies don’t get to pour new wine out of old bottles.” They have to go back to Congress when a new problem arises.

Does that mean that all the agency regulations of the last 40 years can now be challenged? Chief Justice Roberts seemed to say that the answer to that question is “No.” What’s done is done.

But Georgetown law professor Stephen Vladeck cautions that it’s not that easy because there are many regulations that nobody thought to challenge before. “I think there’s no way of looking at today’s ruling as anything other than a jobs program for lawyers and for judges,” said Vladeck, “because what it really is, is a massive transfer of the critical decision-making authority from these agencies—who, even if they’re not elected, are directly subservient to the president—to unelected federal judges.”

And Richard Hong, who served for 17 years as an SEC lawyer, calls Friday’s decision a “game changer.” He notes that Friday’s decision to overrule Chevron must also be understood in the context of Thursday’s decision to prevent agencies like the Securities and Exchange Commission from imposing civil penalties for fraud without a formal jury trial: “If yesterday’s SEC v. Jarkesy decision was causing tremors, causing some dishes to tumble out from the cupboards, today’s case is a Richter-7 earthquake - the magnitude of the Hiroshima atomic bombing,” he said.

David Doniger, a lawyer for the Natural Resources Defense Council, has been involved in these regulatory questions for 40 years and worries that judges of all political stripes will substitute their policy judgments for agency judgments.

“You may have a random judge in Amarillo deciding on the safety of heart medicines or clean air for our kids, or rules to keep the doors from blowing off airplanes," he said. "Judges will now be able to essentially rewrite our laws.”

Ironically, 40 years ago, Doniger actually argued the case the Supreme Court reversed today. He was on one side, and on the other was the Reagan administration’s Environmental Protection Agency, headed by Anne Gorsuch, mother of now Supreme Court Justice Neil Gorsuch. Back then she wanted and got more power to change the rules. Today, Justice Gorsuch was a strong supporter of overturning the decision that his mother’s EPA won 40 years ago.