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S. Court Made Regulating Corporations Nearly Impossible

A decision about fishing regulations could lead to a massive rollback of progressive policies across the board.

Fishermen haul up a full net of pink and chum salmon in Chatham Strait, Alaska.,SkeenaWild Conservation Trust

On June 28, the Supreme Court published its decision in the case Loper Bright Enterprises v. Raimondo. While the case has not attracted as much attention as some of the Court’s recent spate of controversial rulings, it revoked a long held precedent and will limit government agencies’ ability to do their jobs. 

Loper Bright deals with seemingly mundane questions of commercial fishing regulation. Current federal law requires fishing companies to allow National Marine Fisheries Services (NMFS) monitors to board their boats for regulatory purposes. The NMFS, however, has interpreted federal law to create a new rule requiring the industry to subsidize this monitoring at a cost of roughly $700 per day. Loper Bright Enterprises sued, claiming that the NMFS created the rule based on an overbroad interpretation of the federal law. In a 6-3 vote split along ideological lines, the Court sided with Loper Bright in a majority opinion authored by Chief Justice John Roberts. 

The decision will have a far greater impact than simply settling a dispute over arcane fishing regulations. In the case, the Court upended the doctrine of Chevron deference that has governed American administrative law for four decades. Established in the 1984 case Chevron v. Natural Resources Defense Council, Chevron deference instructed judges to defer to federal agencies’ interpretation of ambiguous laws, provided their interpretations were reasonable. This doctrine allowed agencies to implement the law without fearing judicial second-guessing on ideological grounds, enabling administrators to provide efficient and expert-driven governance. But in the majority opinion, Roberts wrote that “Chevron is overruled,” describing the precedent as a “judicial invention that required judges to disregard their statutory duties.” He added that without Chevron, “Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority.” 

Loper Bright’s repercussions for American democracy are profound, sweeping, and deeply troubling.  

First, Loper Bright severely hampers government functionality by limiting the government’s ability to govern. Congress creates regulatory bodies precisely because it recognizes that it cannot anticipate every wrinkle in policy implementation across the vast array of issues on which it legislates. Consequently, federal agencies are staffed by experts and civil servants who can use their scientific and professional expertise to adapt, interpret, and enforce statutory law to function in a complex world. 

But in dismissing the value of agency expertise, Roberts wrote for the majority that “Chevron’s presumption is misguided because agencies have no special competence in resolving statutory ambiguities. Courts do.” Without Chevron deference, agencies will be paralyzed by constant judicial scrutiny unless Congress has explicitly anticipated and addressed in legislation every possible scenario and decision regulators may be confronted with—a tall and essentially impossible order. 

Second, Loper Bright undermines democratic self-governance. Conservatives insist that the administrative state’s very existence undermines democracy by elevating unelected bureaucrats to make important policy decisions in place of elected leadership and disrupting the national system of checks and balances. Under this logic, Chevron’s rejection restores balance by placing responsibility for policymaking with an elected Congress. But rather than empowering elected legislators, Loper Bright shifts power to an unelected judiciary. 

In abandoning Chevron deference, the Court has retained the 1944 precedent of Skidmore v. Swift and Company, which presents agency decisions as guides for judicial interpretation that judges can rely on or reject at their discretion. Skidmore states that agency interpretations reflect “a body of experience and informed judgment” that are “entitled to respect” from judges. 

But as Justice Elena Kagan wrote in her dissent, “respect” is an imprecise standard permitting judges to arbitrarily grant or withhold deference as they see fit. Additionally, Skidmore gives judges, who lack the industry-specific expertise of administrative staff, extraordinary leeway in interpreting laws governing complex aspects of American economic and social life. Kagan noted that the majority dismissed the valuable scientific and technical expertise agencies exercise in interpreting and enforcing statutory law, writing that “agencies have expertise in those areas. Courts do not.” 

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The result of ending Chevron will be a surge of litigation challenging regulatory rules and decisions, overwhelming lower courts and allowing judicial preferences to regularly override expert agency decisions. Hampering expert administrators by transferring their power to unelected judges without policy expertise will encourage judicial forum shopping as plaintiffs seek judges sympathetic to their positions. None of this can be reasonably understood as an expansion of democratic self-governance. 

Third, corporate interests are among the biggest beneficiaries of Chevron’s demise. Corporations linked to influential networks like those of Charles Koch and Leonard Leo have long campaigned against the regulatory state as an unaccountable and power-hungry “deep state,” and the Koch and Leo networks have connections to the lawyers challenging Chevron in Loper Bright. The end of Chevron deference represents an enormous victory in their war by undermining the government’s ability to enforce regulations that protect public welfare. 

As I write in my forthcoming book, Dual Justice: America’s Divergent Approaches to Street and Corporate Crime, corporate crime often evades prosecution in the United States in large part because lawmakers have historically delegated most responsibility for governing corporate misconduct to the administrative state. The American government primarily relies on the regulatory interventions of administrative agencies to manage corporate wrongdoing rather than criminal prosecution. 

As a result, the United States has developed an anemic capacity to prosecute corporate wrongdoing, leaving regulatory enforcement as the government’s primary weapon for protecting citizens from bad actors and corporate malfeasance. Discarding Chevron radically undercuts the government’s already limited ability to safeguard the public from bad actors and corporate malfeasance by making it easier for corporate interests to challenge regulatory enforcement actions against their harmful behavior. 

Fourth, and finally, the demise of Chevron deference threatens progressive policies across the board. For forty years, the federal government’s more than 400 agencies, sub-agencies, independent commissions, and executive branch departments have been able to rely on scientific and professional expertise to fill in the gaps of ambiguous legislation without worrying about judicial interference. Without Chevron deference, corporations will likely be emboldened to initiate challenges that could dismantle protections for workers, consumers, and the environment that have been secured through administrative action. Progressive initiatives in workers’ rights, healthcare access, civil rights, fair pay, safe food and consumer goods, vaccine regulations, abortion drugs, student loan forgiveness, clean air and water, and more are often advanced through the administrative state and can now be subject to increased judicial questioning through a new avenue. 

The Loper Bright decision represents a fundamental shift in the balance of power between branches of government and could lead to a significant and alarming rollback of progressive policy achievements of all kinds.

Anthony Grasso is a professor at Rutgers University-Camden whose research focuses on American politics, law, and inequality. His book, Dual Justice: America’s Divergent Approaches to Street and Corporate Crime, will be published this upcoming fall.

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