Environmental Regulatory Impacts from the Overturn of Chevron

On June 28, 2024, the United States Supreme Court in Loper Bright Enterprises v. Raimondo (“Loper”) and Relentless, Inc. v. Dept. of Commerce (“Relentless”) overruled a 40-year-old precedent that required courts to afford deference to agencies’ reasonable interpretations of ambiguous statutory provisions, also known as Chevron deference. According to the new Loper Bright doctrine, courts “must exercise their independent judgment” and “may not defer to an agency interpretation of the law simply because the statute is ambiguous.” The Court’s ruling presents opportunities for regulated entities to challenge agency interpretations of environmental laws.

Background

In Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc. 467 U.S. 837 (1984), the Court established a two-step process for reviewing an agency’s interpretation of a statute it administers. Under the two-step process, the reviewing court would first use all traditional tools of statutory construction to determine whether Congress has directly spoken to the question at issue. If clear, the review would be complete and Congress’ direction would control. If not, and the court determined the statute was ambiguous, the court would proceed to the second step, deferring to the agency’s interpretation of the statute, as long as the court concluded the agency interpretation was reasonable.

Overturning Chevron

Under the Loper Bright doctrine, courts should not automatically defer to agencies in the case of an ambiguous statute.

Implications for Environmental Regulations

The court’s rulings are expected to impact multiple environmental regulations, which in turn will likely impact businesses in regulated industries.

The Court’s decisions in Loper and Relentless to overrule Chevron will render recently enacted regulations more vulnerable to challenges, as courts are no longer required to defer to an agency’s interpretation of an ambiguous statute. Such recently enacted environmental regulations include EPA’s greenhouse gas emissions standards for fossil fuel-fired power plants and updated emission standards for light-duty and heavy-duty vehicles. Both sets of rules rely on EPA interpretations of the Clean Air Act, which was last amended by Congress in 1990. Following the Court’s decisions in Loper and Relentless, courts may be less likely to defer to EPA’s interpretation of its statutory authority.

EPA also recently issued numerous rules governing the use of per- and polyfluoroalkyl substances (PFAS), more commonly known as “forever chemicals.” Following the Court’s decisions in Loper and Relentless, courts may also be less likely to defer to EPA’s interpretation of its statutory authority to regulate PFAS.

In conclusion, without the Chevron deference, regulated entities will have a greater ability to challenge agency action. If you have any inquiries regarding how the Supreme Court’s rulings will impact your regulated businesses from an environmental compliance perspective, please feel free to reach out to one of our Environmental attorneys.