Delegation of regulatory authority from Congress to federal agencies is a foundational principle of modern government. Congress often tasks agencies to address complex problems, and lawmakers combine broad and specific terms to identify the scope of an agency’s authority in effectuating the purpose of a statute. Even when Congress is most precise, the terms in a statute may have multiple possible readings. 

For four decades, federal courts relied on the Chevron doctrine to guide their approach in determining whether to defer to an agency’s interpretation of a statute. As Notice & Comment readers no doubt know, Loper Bright Enterprises v. Raimondo and its companion case, Relentless, Inc. v. Department of Commerce (collectively, Loper Bright), eliminated this central principle of modern administrative law.

The full impact of this decision in lower courts will not come into view for some time. On its face, Loper Bright’s holding may appear simple: courts must determine the best reading of the applicable statutory provision using all available tools of interpretation, with room for non-binding respect to agency interpretations under Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944), as one of the tools. But the Court provides little guidance to lower courts confronting the problems that Chevron sought to address in reviewing agency actions: interpreting statutory ambiguity and silence. Lower courts will likely struggle to discern a single, best reading of an ambiguous statute without considerable conflict, and they will almost certainly diverge in determining whether and how much to apply Skidmore respect. 

The Center for Applied Environmental Law and Policy (CAELP) recently published a white paper to help those defending agency actions best position their arguments in lower courts.

Aspects of Loper Bright are relatively clear. The majority notes that Congress “often” lawfully delegates a degree of discretion to agencies. As illustrated in a forthcoming article by Don Goodson at New York University’s Institute for Policy Integrity, the majority draws an important distinction between grants of discretionary authority and Chevron deference. Once an agency’s discretionary authority is established, litigants defending agency actions can often take advantage of the APA’s arbitrary-and-capricious standard of review to argue that reasonable, record-supported actions should be upheld.

The Loper Bright majority identified three example categories of agency discretion in statutes. The opinion’s language and citations should allow those defending agency actions to better assess the requirements, open questions, and limits of each. 

First, the majority recognized that “some statutes ‘expressly delegate[]’ to an agency the authority to give meaning to a particular statutory term.” All of the majority’s examples include express delegations of authority for an agency to define terms, which may indicate that this type of delegation will have to be clearer than others in the statutory text.

Second, the majority noted that Congress may “empower an agency to prescribe rules to ‘fill up the details’ of a statutory scheme,” citing Wayman v. Southard, 23 U.S. 1, 10 (1825). While Wayman indicated that certain subjects “must be entirely regulated by the legislature itself,” it held that Congress could “delegate to others[] powers which the legislature may rightfully exercise.” Id. at 43. Neither Loper Bright nor Wayman addresses whether the nature of the delegation (express or not) plays any role in this example, leaving open the possibility that less-than-express terms could suffice in a best reading. Of the majority’s three example categories, this is the least defined, especially given the age of Wayman.

Third, the majority recognized that Congress can empower agencies “to regulate subject to the limits imposed by a term or phrase that ‘leaves agencies with flexibility,’ such as ‘appropriate’ or ‘reasonable.’” Of the three example categories, these and similar terms of flexibility will likely be the most well-established and reliable vehicles to persuade courts that Congress delegated a sufficient degree of discretionary authority to an agency in most cases.

Notably, the Court did not foreclose other types of agency discretion, but litigants should undertake caution when advocating for discretion beyond these example categories. Although the majority acknowledges that the Court must defer to agency policymaking and fact-finding, the opinion often ties these concepts to the three example-categories of discretion, directly or indirectly. And, absent statutory language indicating otherwise, the majority expressly rejects the notion that general policymaking authority can usurp courts’ role in determining the best reading of a statutory provision.

The Loper Bright Court does not address the impact of Loper Bright on the Major Questions Doctrine (MQD). The majority opinion discusses the MQD as a substantive hurdle in (formerly) applying Chevron deference to regulations of vast economic and political significance but is otherwise silent about the ongoing role of the MQD. Notwithstanding this lack of clarity, the majority’s requirement that courts determine a best reading of all relevant statutory language, ambiguous or not, in all cases (agency or non-agency) leads us to believe that there should be no work left for the extra-textual MQD factors in the wake of Loper Bright: the statute’s best reading either allows the action or not. We recognize for many reasons, however, that opponents of agency action will continue to raise the MQD or its factors in addition to Loper Bright-based arguments. We accordingly caution litigants defending agency action to prepare for these arguments. 

Litigants defending agency actions should also make best use of the majority’s conclusion that past cases relying on Chevron remain subject to statutory stare decisis principles despite the Court’s changed method of statutory interpretation in agency cases. Taking the Court at its word and examining the Court’s robust precedent on this issue, we conclude that past Chevron-based decisions that have been repeatedly followed should not be revisited absent a compelling showing. Challengers must demonstrate that a reviewing court reflexively deferred to a plainly incorrect agency interpretation of ambiguous language and that the interpretation has not induced significant reliance interests, rendering the past decisions unworkable. We recognize, of course, that litigants challenging agency action likely will seek to challenge past Chevron decisions as often as possible and may even succeed in the rare circumstances where these factors are met.

Ultimately, litigants defending agency action should position Loper Bright to demonstrate that Congress “often” provides agencies with broad discretion to effectuate the purpose of a given statute in rapidly changing, complex areas of regulation.

The white paper can be found here. Patrick Jacobi is a Senior Attorney at the Center for Applied Environmental Law and Policy.