Chevron deference overturned: a victory for separation of powers

The last couple of weeks of June is often a time of great interest for those who watch the Supreme Court of the United States (SCOTUS) because they mark the release of the final decisions for cases that were heard during the court term. The Court begins hearing cases for the term in October, and oral arguments are heard over the next 6-7 months, but decisions on cases heard during the term—especially “big decisions” are often not released until May or June.

Last week, the decision in a case we’ve been watching with some interest—the “Loper Bright Enterprises” case—was announced. The case is a big one in terms of administrative law and has ramifications for separation of powers.

A few preliminaries are in order:

• Government in the United States is based on the notion of separation of powers: Legislative, Executive, and Judicial. Those branches are supposed to be largely separate and distinct—and the intention of the Founders was that there would be some natural tension between the branches.
• As the country grew and the government took on a greater role in our lives, it became clear that the President, as the head of the executive branch, couldn’t effectively execute all laws passed by the legislative branch by himself. That led to the creation of many administrative agencies housed under the executive’s authority.
• The legislative branch continues to be the lawmaking branch of government and delegates its authority to the executive through the laws passed.

That brings us to the Loper Bright Enterprises case, which ended so-called “Chevron Deference” (a 40-year-old court doctrine that has been overturned).

In the 1984 Chevron case, the Supreme Court decided that regulatory agencies were the “experts” in their field. So if citizens or businesses challenged agency actions, the courts should defer to the agency’s interpretation of its authority under the law.

In the Loper Bright case, a family fishing company was being forced out of business because it couldn’t afford to pay the $700 a day the National Marine Fisheries Services (NMFS) charged to monitor it. The $700 fee was in question here because the law passed by Congress creating the NMFS doesn’t authorize the charging of the fee—the NMFS just decided to start charging that around 2013.

Arguably, the fee helped defray the cost of regulation. Still, the principle here is whether or not Congress authorized the fees and whether agencies—unelected arms of the executive branch—are authorized to interpret authorizing statutes so broadly.

The Chevron deference case instructed lower courts to defer to executive agency interpretation of their authorizing statutes broadly, even when it was unclear whether the legislative branch intended for the agency to have that authority—essentially creating an agency legislative power that was unaccountable to the voters.

This does not imply that agency “experts” don’t know their fields—merely that they aren’t allowed to create regulation and impose sanctions without explicit authorization.

The end of Chevron deference through the current decision will do this:

• Require courts to consider the intent and plain language of the legislative branch (Congress) when disputes arise under federal agency action rather than deferring to the agency’s interpretation.
• Require that the legislative branch more precise when delegating powers to the executive branch.
• Give citizens and businesses a fighting chance when challenging administrative agency action in court.

Many state courts have applied something similar to Chevron deference for state agencies, and where that deference exists, the Loper Bright decision won’t automatically end state court deference. However, some states (like Nebraska) have already started to address this issue. In 2024, LB43 was passed, which required that “Any court reviewing an appeal from a contested case shall interpret the statute or rule or regulation de novo on the record and shall not defer to the agency’s interpretation of such statute or rule or regulation.”

While Nebraska has never applied a strict Chevron deference, our courts had applied a softer deference standard.

The end of Chevron deference at the federal level and softer deference at the state level protects the liberty of individuals and businesses from arbitrary agency regulation. It helps to ensure the separation of powers foundational to our republic since the beginning.