Post-Chevron, Will We See More Action at the State Level in the Long-Run?

Last year, we asked what the end of “Chevron deference” could mean for the states. The question was largely speculative because the U.S. Supreme Court had not yet heard oral arguments on the case asking to overturn the 1984 decision in Chevron v. NRDC nor would we truly know what type of cascading effects a pullback on the federal regulatory landscape would mean for the states. Last month we received an answer to one of these questions. The Court overruled Chevron in an ideologically divided 6-3 vote. 

The doctrine of “Chevron deference” originated from that case and required courts to defer to formal agency actions if they are based on a rational or reasonable reading of an ambiguous statute that the agency has been charged with administering. Basically, if Congress did not clearly direct an agency to do something via statute, then the agency can make a reasonable decision on how to proceed and the courts shouldn’t question that agency's decision unless it's clearly an unreasonable interpretation. This doctrine has provided federal agencies with a lot of leeway in interpreting federal laws. This doctrine confronts the reality that not every situation can be definitively codified in statute.

Last year, we predicted that the conservative majority on the Court would significantly limit, if not outright overturn, Chevron deference. The majority opinion in Loper Bright Enterprises v. Raimondo explicitly overrules Chevon, with Chief Justice Roberts writing that Chevron deference is inconsistent with the Administrative Procedure Act, which directs courts to “decide legal questions by applying their own judgment” and therefore “makes clear that agency interpretations of statutes — like agency interpretations of the Constitution — are not entitled to deference. . . . [I]t thus remains the responsibility of the court to decide whether the law means what the agency says.” Roberts’ opinion rejected arguments that agencies, with technical and scientific expertise, are better suited to determine what the ambiguities of a federal law applying to them might mean, writing that “Congress expects courts to handle technical statutory questions.”

So Chevron deference is no more. What will this mean going forward? Although we have the answer to one question, the results won’t be fully understood for some time. The legal commentary has run the gamut from “massive power grab” to “not much will change.” Most agree that this will translate into many more lawsuits challenging federal agency actions. And it’s reasonable to expect those lawsuits will result in restricted, if not significantly delayed, agency action. One reason federal agencies have stretched the powers granted them by Congress is that Congress itself defers tough decisions to the agencies or fails to take up important policy decisions altogether. So will Congress now remedy these past mistakes and enact new laws that clearly spell out what actions should be taken? I’m not holding my breath. 

Which brings us back to the original speculation on what the end of Chevron deference could mean for state policymaking. There’s not a directly line of action here from Chevron, which only applied to federal agencies (although some state courts have adopted a similar test), but if the federal government refuses to take up a trending area of public policy (e.g., AI regulation this year), then state policymakers will be more than willing to do so on their behalf. Sometimes the resulting patchwork of state regulation finally pushes the feds to act, but not always. So, while it won’t happen tomorrow we do expect the end of Chevron to translate into more action at the state level moving forward. 

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This article appeared in our Morning MultiState newsletter on July 9, 2024. For more timely insights like this, be sure to sign up for our Morning MultiState weekly morning tipsheet. We created Morning MultiState with state government affairs professionals in mind — sign up to receive the latest from our experts in your inbox every Tuesday morning. Click here to sign up.