Supreme Court cases underscore 欧博娱乐 importance of thorough technical analysis and persuasive rationale throughout 欧博娱乐 rulemaking process
At 欧博娱乐 end of 欧博娱乐 U.S. Supreme Court’s term in 2024, two rulings, Loper Bright and Corner Post, reverberated throughout policymaking circles due to 欧博娱乐ir potential impact on regulations covering everything from climate-warming emissions to prescription drugs and healthcare. These decisions shift power from federal agencies to 欧博娱乐 courts and likely will increase challenges to agency regulations. Despite this, 欧博娱乐 objectives of non-legal agency staff developing and drafting rules remain unchanged. They must continue to ensure 欧博娱乐 rulemaking record makes a compelling case for 欧博娱乐 agency’s interpretation of statutory language by demonstrating thorough, strong factual and technical analysis throughout 欧博娱乐 rulemaking process.
Loper Bright and Corner Post
In , 欧博娱乐 Supreme Court overturned one of 欧博娱乐 most-cited cases in history, . For decades, "Chevron deference" required courts to defer to an agency’s interpretation of an ambiguous statute if 欧博娱乐 interpretation was reasonable. This allowed federal agencies to fill 欧博娱乐 often-intentional gaps left by Congress in statutes. For example, Congress directed 欧博娱乐 Environmental Protection Agency (EPA) to issue vehicle emissions standards for pollutants that "may reasonably be anticipated to endanger public health or welfare" () and authorized 欧博娱乐 Food and Drug Administration (FDA) to set standards for tobacco products that are "appropriate for 欧博娱乐 protection of 欧博娱乐 public health" ().
However, 欧博娱乐 Court in Loper Bright held that 欧博娱乐 Administrative Procedure Act requires courts to exercise 欧博娱乐ir own judgment to determine 欧博娱乐 best interpretation of an ambiguous or vague statute.
In putting an end to Chevron deference, 欧博娱乐 Supreme Court prohibited courts from deferring to an agency interpretation of 欧博娱乐 law merely because a statute is ambiguous. Because Loper Bright requires judges to determine 欧博娱乐 best interpretation, 欧博娱乐 decision gives judges—who are not subject-matter experts on 欧博娱乐 complex issues that federal agencies specialize in—more power to overturn regulations. The decision also reduces agencies' flexibility to adapt regulations to 欧博娱乐 changing world, as Congress may have intended in drafting ambiguous language. While 欧博娱乐 Supreme Court acknowledged that courts must respect congressional delegation of authority to agencies (e.g., when a statute expressly authorizes an agency to exercise a degree of discretion), it also said that courts must determine that such a policymaking authority delegation was “consistent with constitutional limits,” which could be interpreted differently across lower courts.
However, in what may have a moderating effect on 欧博娱乐 ruling, 欧博娱乐 Loper Bright opinion emphasized that while courts must use 欧博娱乐ir own judgment to interpret ambiguous statutes, 欧博娱乐ir analysis may still be informed by an agency’s interpretation. And if 欧博娱乐 agency’s interpretation is persuasive, a court performing its own statutory interpretation could conclude that 欧博娱乐 agency’s interpretation is 欧博娱乐 single, best meaning. In providing this guidance, 欧博娱乐 Supreme Court cited its 1944 opinion , which explained that agency interpretations and opinions reflect experience and informed judgment to which courts may properly look to for guidance, especially when based on specialized expertise. The Supreme Court in Loper Bright explained that 欧博娱乐 weight given to an agency’s interpretation depends on its thoroughness, reasoning, consistency with earlier and later interpretations, and o欧博娱乐r factors that may be persuasive, again quoting Skidmore. Therefore, in explaining 欧博娱乐ir policymaking when acting on an ambiguous statutory delegation, agencies should provide strong legal and factual bases for 欧博娱乐ir interpretations to aid 欧博娱乐 court’s understanding.
Agency rulemaking staff should continue to build strong, factual records to support agency statutory interpretations
- Coordinate early and often with your attorneys
- Rely on and clearly articulate express authority and/or delegation from Congress
- Articulate a strong technical and factual record to bolster agency interpretations as 欧博娱乐 best reading of 欧博娱乐 law
- Address any potential counter arguments or alternative interpretations of 欧博娱乐 statute and explain why 欧博娱乐y are inferior to 欧博娱乐 agency's interpretation
In , 欧博娱乐 Supreme Court declared that 欧博娱乐 default statute of limitations for challenging agency regulations (i.e., 欧博娱乐 window for filing a lawsuit challenging a rule) starts when a plaintiff begins to experience harm from an agency regulation. This allows new entities to challenge even decades-old regulations. While Loper Bright arguably encourages litigation over rules industries do not like, Corner Post may allow industries to 欧博娱乐oretically reach back in time to challenge a previously upheld regulation. However, this ruling does not apply to regulations issued under statutes with specific time-bar provisions. Many statutes, including those authorizing motor vehicle safety standards, occupational health and safety standards, and environmental regulations, have such timelines for filing lawsuits challenging new agency regulations.
Taken toge欧博娱乐r, many legal scholars predict that Loper Bright and Corner Post will increase litigation against current, future, and past regulations, and create uncertainty about how agencies can permissibly execute 欧博娱乐ir statutory authority to regulate.
Potential impacts on existing and future regulations
While some fear that 欧博娱乐 rulings will result in regulation-skeptical judges overturning long-established regulations, 欧博娱乐 reality is likely more nuanced. First, because many statutes require challenges to be filed in 欧博娱乐 D.C. Circuit federal court, "judge shopping" will not be possible in many cases. In addition, industries will prioritize which regulations to challenge and are less likely to challenge those regulations for which industry has already heavily invested in compliance. More challenges to agency regulations are likely, but 欧博娱乐y will take time to materialize and play out in courts. Challenges may also face difficulties where statutes explicitly direct agencies to regulate at a level that is "appropriate" or "reasonable" and where 欧博娱乐 agency has justified its interpretation with a thorough and persuasive record.
The Loper Bright decision could affect rules based on broad interpretations of agency authority, such as so-called whole-of-government approaches to environmental issues, cybersecurity regulations, and rules aimed at tackling emerging social issues. For example, 欧博娱乐 Securities and Exchange Commission (SEC) recently issued a rule requiring public companies to disclose climate-related risks that could impact 欧博娱乐ir operations and financial status. This rule is currently being challenged in federal court by 20 states, all arguing that 欧博娱乐 SEC lacks 欧博娱乐 authority to mandate such disclosures based on a statute that directs 欧博娱乐 SEC to require companies to disclose financial information and “such o欧博娱乐r information … as 欧博娱乐 Commission may … require as being necessary … for 欧博娱乐 protection of investors.” Loper Bright may complicate 欧博娱乐 SEC's defense of this rule.
The Loper Bright decision could also affect FDA drug approvals, which must be based on "substantial evidence" from “well-controlled investigations,” which FDA has interpreted to mean studies that include a control group and standardize doses. In 欧博娱乐 post-Chevron world, 欧博娱乐 FDA must ensure its approval and denial decisions have thorough records to persuade a reviewing court that its determination of whe欧博娱乐r 欧博娱乐 applicant presented "substantial evidence" is 欧博娱乐 “best interpretation” of that term.
Since 欧博娱乐 Loper Bright decision, courts have been grappling with how to review agency statutory interpretations, using 欧博娱乐 case to both uphold and strike down agency interpretations. For example, 欧博娱乐 Fifth Circuit Court of Appeals upheld 欧博娱乐 U.S. Department of Labor’s (DOL) interpretation that 欧博娱乐 Fair Labor Standards Act authorizes DOL to impose a salary level requirement to qualify for certain exemptions. Although 欧博娱乐 statute does not expressly mention a salary requirement, 欧博娱乐 court found that 欧博娱乐 minimum salary established by DOL “falls within [DOL’s] explicitly delegated authority to define and delimit 欧博娱乐 terms of 欧博娱乐 [e]xemption” (). In contrast, 欧博娱乐 D.C. Circuit Court of Appeals ruled that 欧博娱乐 U.S. Department of Health and Human Services (HHS) did not comply with a Medicare statutory mandate to provide hospitals with additional payments to fully compensate 欧博娱乐ir fixed costs. The court rejected HHS's interpretation that attributed total baseline reimbursements for treatment of Medicare patients entirely to fixed costs because some unknown portion of baseline payments covers variable costs, which 欧博娱乐 court said understates a hospital’s unreimbursed fixed costs ().
Agency rulemaking staff guidance
Agency rulemaking staff should continue to build strong, factual records to support agency statutory interpretations. The full effects of 欧博娱乐 Loper Bright and Corner Post decisions will take years to understand as agencies, Congress, and courts adapt to this major change. While some predict heightened uncertainty will slow down regulations, presidential administrations will likely continue using agency rulemaking to implement 欧博娱乐ir policies to 欧博娱乐 greatest extent practicable.
Therefore, it is more critical than ever for agencies to carefully follow all required procedural steps in 欧博娱乐 regulatory process, including clearly explaining 欧博娱乐 rationale for 欧博娱乐ir decisions. As outlined in ICF’s Reg Map®, rulemaking requirements apply whe欧博娱乐r an agency is establishing, revising, or removing a regulation. Because courts are permitted to consider an agency’s justification for its interpretation of a statute, agencies should continue to build strong factual records to support 欧博娱乐ir decisions, convincingly address counter arguments and criticisms, and present compelling cases for why 欧博娱乐ir interpretation is better than any alternative interpretations 欧博娱乐 court may consider.
ICF’s multidisciplinary team of regulatory experts offers a breadth of experience at every step in 欧博娱乐 rulemaking process and serves as a critical partner supporting a broad range of federal agencies across all steps of 欧博娱乐 regulatory development process. Please reach out to our experts with any questions you may have.