Over the last forty years the Chevron doctrine, established by the Supreme Court in Chevron U.S.A, Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), has been a pillar of administrative law in the United States. Under the doctrine, if a court determined that a law passed by Congress was ambiguous or silent on a particular issue, the court was required to defer to the agency’s interpretation of the statute’s meaning, so long as that interpretation was “permissible.” In other words, agencies were empowered to “fill in the gaps” in the statutes they were charged with enforcing, and courts were required to defer to those gap-filling interpretations—even if the interpretation was not one the court would have independently reached. That deference tipped the scales in favor of an agency’s reading of ambiguous statutes it administered, and helped ensure that regulated parties could rely on agency analyses.

But no more. On June 28, the Supreme Court struck down the Chevron doctrine in Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce. The Court held that courts must exercise their independent judgment when deciding whether an agency has acted within its statutory authority, and may not defer to an agency interpretation of the law. While courts may still consider an agency interpretation for guidance—the weight of which depends on the thoroughness of the agency’s consideration, the validity of its reasoning, and consistency with earlier and later pronouncements—strong deference to an agency’s interpretation of its governing statutes has ended. This represents a significant power shift from agencies to the federal courts, and likely stems from a desire to reduce perceived agency overreach.

This also represents a sea change for regulated ports and maritime industry parties. Though the full implications of Chevron’s demise will take time to unveil, several points are worth noting.

First, we can expect more volatility. Without Chevron deference, agency interpretations of governing statutes have become less authoritative and more susceptible to dispute. On the one hand, this presents an opportunity for ports and maritime sector companies to challenge agency regulations that may exceed the agency’s authority. For instance, in Loper Bright the Supreme Court addressed whether the National Marine Fisheries Service (NMFS) was authorized to impose the cost of observers on fishermen in the Atlantic herring fishery. The Supreme Court remanded the question to the lower court to answer for itself rather than simply defer to NMFS’s determination that passing the cost along to the regulated fishermen is legal. On the other hand, reduced deference to agency interpretations means that regulated entities will now be more frequently subjected to rulings by federal judges, rather than notices and comment rulemaking on the part of agency experts.

Second, we may see fewer regulatory shifts following each change in administrations. Up to this point, whichever political party held the White House sought to adopt (or repeal) regulations to advance its policy agendas when they wouldn’t pass Congress. Often these regulatory changes relied on differing interpretations of the underlying statutes. Loper Bright makes it clear that statutes “have a single, best meaning” that federal courts will now assess without deference to the agencies. Regulatory changes will certainly continue to accompany administration turnover, but their scope may be dampened by Loper Bright.

Third, we can expect less uniformity. The Supreme Court noted “there is little value in imposing a uniform interpretation of a statute if that interpretation is wrong.” As a practical matter, this means that maritime entities will have a more difficult time complying with the law. Without deference to agency interpretation, different judges across various jurisdictions will likely interpret the same statute in contrasting ways. As a result, maritime entities may have to adapt their behavior to comply with conflicting interpretations of a law across diverse zones.

Apart from such significant changes, we should also recognize what Loper Bright does not alter. More regulations will likely be overturned, however Loper Bright is not a license for federal judges to revoke any rule with which they disagree. The Court was clear that the best reading of a statute may be that it delegates discretionary authority to an agency. When the agency acts with reasonable decision-making within those boundaries, a federal court may not substitute its preferred policy.

Loper Bright does not eliminate other forms of agency deference—at least for the time being. Courts defer to agency fact-finding. That deference is mandated by statute (unlike the Chevron doctrine), and the Loper Bright decision favorably discusses the history of judicial deference to agency fact-finding. We expect that courts will continue to defer to agency determinations of factual matters in the future.

Courts also defer to an agency’s reasonable interpretation of its regulations under a doctrine known as Auer deference. This was adopted by the Supreme Court in Auer v. Robbins, 519 U.S. 452 (1997), and recently affirmed in Kisor v. Wilkie, 139 S. Ct. 2400 (2019). Loper Bright does not directly challenge this doctrine; however, its rationale seriously undercuts the justifications for deferring to an agency’s interpretation of its own regulations. Though Auer deference remains the law, we expect the Supreme Court might overturn the doctrine sometime in the future. Accordingly, litigants may consider preserving arguments in litigation that Auer was wrongly decided.

This article summarizes aspects of the law and does not constitute legal advice. For legal advice regarding your situation, you should contact an attorney.

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