Supreme Court Expands Scope of Judicial Challenges to Federal Agency Action

In Chevron USA Inc. v. Natural Resources Defense Council (1984), the Supreme Court held that courts should defer to an agency's interpretation of a statute that is silent or ambiguous as to a particular issue, so long as the agency’s interpretation is reasonable. Chevron gave federal agencies, such as the Environmental Protection Agency (“EPA”) and the Department of Health and Human Services, broad discretion to interpret federal statues and strengthened their ability to defend their interpretation and application of federal law. But on June 28, 2024, the Supreme Court overruled Chevron, ruling in Loper Bright Enterprises v. Raimondo that the Administrative Procedure Act requires that courts exercise their independent judgment in deciding whether a federal agency has acted within its statutory authority. In exercising that independent judgment, courts may not defer to an agency's legal interpretation simply because a statute is silent or ambiguous as to the issue addressed.

Three days after the Loper Bright decision was issued, the Supreme Court announced Corner Post v. Board of Governors of the Federal Reserve System, which held that a claim challenging a federal regulation accrues when the plaintiff was first injured, not when the regulation was first promulgated. This effectively eliminates any statute of limitations for a newly established entity that claims to be adversely affected by any regulation to which it is subject.

Litigants in federal environmental cases now have a new procedural route to challenge EPA or other federal agency interpretation of ambiguous statutes, without the courts having to defer to the administrative agency's interpretation. Agencies will face increased legal challenges with reduced authority to interpret statutes and enforce administrative actions. Together with Corner Post, Loper Bright creates an opportunity for regulated entities to successfully challenge not only new regulations and administrative actions, but also regulations that are decades old.

If you have any questions, please feel free to contact Donald J. Moran at dmoran@pedersenhoupt.com or (312) 261-2149.

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