Stephen Blake, Craig Waldman, and Jonathan Youngwood are Partners at Simpson Thacher & Bartlett LLP. This post is based on a Simpson Thacher memorandum by Mr. Blake, Mr. Waldman, Mr. Youngwood, Meredith Karp, Michael Garvey, and Pete Kazanoff.
Supreme Court Decisions and Developments
Supreme Court: Overturns Chevron Deference
Overturning nearly 40 years of precedent, on June 28, 2024, the Supreme Court held by a 6-3 vote: “Chevron is overruled.” Loper Bright Enters. v. Raimondo, 144 S. Ct. 2244 (2024) (Roberts, C.J.). [1] Under Chevron v. Natural Resources Defense Council, 104 S. Ct. 2778 (1984), federal courts were required to defer to an administrative agency’s interpretation in cases involving statutory questions of agency authority as long as the agency’s interpretation was not unreasonable. Writing for the majority, Chief Justice Roberts concluded that Chevron could not be reconciled with the Administrative Procedure Act (“APA”), which governs federal administrative agencies, because the APA requires a reviewing court to exercise its independent judgment in deciding whether an agency has acted within its statutory authority, but Chevron requires the court “to ignore, not follow,” the reading the court would have reached had it exercised this independent judgment.
The Court further criticized Chevron’s presumption–that Congress understood that a statutory ambiguity would be resolved, first and foremost, by the agency, and desired the agency to possess whatever degree of discretion the ambiguity allows–stating that it “is misguided because agencies have no special competence in resolving statutory ambiguities.” Chief Justice Roberts stated that “[t]he very point of the traditional tools of statutory construction–the tools courts use every day–is to resolve statutory ambiguities.” He noted that this is particularly true when the ambiguity concerns the scope of the agency’s own power, which he described as “perhaps the occasion on which abdication in favor of the agency is least appropriate.”
Although the Court found that past judicial decisions have shown Chevron to be “unworkable” and unreliable as a result of inconsistent application by the lower courts, it did “not call into question prior cases that relied on the Chevron framework.” Rather, the Court concluded that “[t]he holdings of those cases that specific agency actions are lawful—including the Clean Air Act holding of Chevron itself—are still subject to statutory stare decisis despite our change in interpretive methodology.”
