Supreme Court Imperils an Array of Federal Rules

The Supreme Court’s decision could make it easier for opponents of federal regulation to challenge them in court, potentially sparking a surge in new litigation and creating uncertainty for businesses and industries.

“If Americans are worried about drinking water, their health, their retirement benefits, discrimination in the workplace, whether they fly, drive a car, or go outside to get some fresh air, all of these everyday activities are subject to a huge amount of regulation by federal agencies,” said Lisa Heinzerling, an administrative law expert at Georgetown University. “And this decision means that even more regulations could potentially be struck down by the courts.”

The decision effectively ends a precedent known as “Chevron deference,” which followed a 1984 Supreme Court decision that held that when Congress passes a law that lacks specificity, courts must grant broad discretion to the federal agencies tasked with enforcing it. The theory is that scientists, economists and other experts have more expertise than judges in making regulatory decisions, and that agencies are more accountable to voters.

Since then, thousands of legal decisions have relied on the Chevron Principles when regulations resulting from laws such as the Fair Labor Standards Act of 1938, the Clean Air Act of 1970 and the Affordable Care Act of 2010 have been challenged.

When Congress writes laws, it often uses vague instructions like “ensure that the regulations are in the public interest,” leaving it to agency experts to write rules to limit toxic smog, ensure that health insurance covers basic medical services, ensure the safety of drugs and cosmetics, and protect consumers from companies’ risky financial practices.

But conservatives say it gave too much power to unelected government officials. They waged a coordinated, years-long campaign to repeal the Chevron Doctrine. They believe that courts, not executive branches, should have the power to interpret statutes. The effort was led by Republican attorneys general, conservative legal activists and their donors (some with ties to big business), and supporters of former President Donald J. Trump.

“Deleting Chevron has been a shared goal of the conservative movement and the Trump administration. That goal has been constantly expressed,” said Mandy Gunasekara, who served as chief of staff at the Environmental Protection Agency under Trump and helped draft Project 2025, a policy blueprint for the incoming Republican administration. “This creates a tremendous opportunity to challenge these regulations, and potentially create even more momentum for control of the administrative state once the administration changes in November.”

Still, Jonathan Berry, a former senior Labor official under the Trump administration, said reversing the Chevron principles “wouldn’t immediately break anything.”

Instead, Berry said the fate of the restrictions will depend on what happens when they begin to go before the courts without Chevron’s protection. “The question is on what scale these restrictions will be implemented,” Berry said.

Let’s look at how this decision may affect different government agencies.

Environmental Protection Agency

Environmentalists worry that ending the Chevron Principles could mean the elimination of hundreds of EPA rules aimed at limiting air and water pollution, protecting people from toxic chemicals and, among other things, tackling climate change.

Over the past six months, the Biden Administration has unveiled the most ambitious regulations in U.S. history aimed at cutting greenhouse gas emissions from cars, trucks, power plants and oil and gas wells. Without these regulations, President Biden’s goal of halving greenhouse gas emissions by the end of the decade will likely be impossible to achieve, something that analysts say all major economies need to do to avoid the most lethal and devastating effects of global warming.

All of the Biden administration’s climate change regulations are already the subject of litigation being challenged in court.

Legal experts say overturning the Chevron decision would not eliminate the EPA’s fundamental legal obligation to regulate climate-warming pollution, which is clearly enshrined in a 2007 Supreme Court decision and in legislation passed by Democrats in 2022 in anticipation of challenges to its authority.

But certain regulations aimed at reducing pollution from cars and trucks by accelerating the transition to electric vehicles, or sharply reducing power plant pollution through costly carbon capture and sequestration technology, may now be legally vulnerable.

As a result, tough climate regulations designed to dramatically reduce emissions will very likely be replaced by much looser regulations that cut far less pollution. Experts say existing regulations on smog, clean water and toxic chemicals could suffer a similar fate.

Labor agency

The elimination of Chevron’s preferential treatment could have a range of effects on workers and make it harder for governments to enact workplace safety regulations and enforce minimum wage and overtime rules.

A recent example is the Biden administration’s April I raised my salary Starting Jan. 1, the minimum wage at which salaried workers automatically receive 1.5 times overtime pay will rise from about $35,000 a year to about $59,000. I tried Experts pointed to the Labor Department’s authority to set so-called salary standards and that such challenges would have a much better chance of succeeding without the Chevron precedent.

The changes could also limit protections for workers who publicly challenge their employers’ policies, said Charlotte Garden, a labor law professor at the University of Minnesota. The National Labor Relations Board often concludes that workers can avoid discipline or firing for protesting low wages, harassment or attendance rules. Related Laws Professor Garden referred to “coordinated activity” and said protective measures could only apply to groups of employees who conduct such protests, rather than individuals.

Food and Drug Administration

The Food and Drug Administration wields great power in setting how new drugs are tested and what standards they must meet to be safe and effective before they are approved for use. Lawyers who worked at the agency say those regulations could now be challenged by companies frustrated by the high approval hurdles. And some say legal challenges could ultimately affect drug prices.

Challenges are also expected to come to the FDA’s tobacco division, which approves the sale of new cigarettes and e-cigarettes to protect public health. “We expect to see industry attacking the FDA’s very authority to do premarket review,” said Desmond Jenson, deputy director of the Public Health Law Center’s Commercial Tobacco Control Program.

Others said the Chevron decision could have a chilling effect, forcing the FDA to proceed very carefully if it moves forward with proposals to ban menthol cigarettes or drastically reduce nicotine levels to make them less addictive, given the possibility of litigation.

Abortion opponents say the ruling could go in their favor as they seek a new Supreme Court case challenging the Food and Drug Administration’s approval of the abortion drug, which the Supreme Court rejected earlier this month.

“Lawsuits like this will be viewed more favorably when the FDA has no tolerance when in doubt,” Christy Hamrick, a strategist for the anti-abortion group National Student Life Congress, said in a statement.

health care

Health care law experts say the ruling could affect how Medicare, Medicaid and the Affordable Care Act insurance programs are run, giving opponents an opportunity to challenge how these massive programs are run.

The health care system is governed by complex regulations that cover how hospitals operate, who gets paid for health care services, and how the government oversees insurers. Many of those regulations are based on interpretations of laws that go back decades. Any changes to the rules could affect major industries.

“There are so many regulations that go unnoticed and are put in place just to make sure that trains run on time,” said Nicholas Bagley, a law professor at the University of Michigan.

The complex set of rules designed and administered by the Department of Health and Human Services and the Centers for Medicare and Medicaid Services could be challenged in new ways, said Rachel Sachs, a health care law expert at Washington University School of Law in St. Louis.

“There’s a lot of work to do in that process,” she said, “so there’s plenty of opportunity for challengers to criticize the particular choices that CMS and HHS are making in interpreting these rules.”

Analysts have said the Supreme Court’s decision means Congress will have to specify exactly what an agency like the CDC can and can’t do. “Nobody’s confident that Congress can do that,” said Dr. George C. Benjamin, executive director of the American Public Health Association.

“I believe this judgment will immobilize the employment of lawyers and judges and undermine the authority of the profession,” he added.

Other scientists also questioned whether Congress and the judiciary can keep up with constantly evolving scientific evidence. “It’s incredibly difficult even for medical and scientific experts to keep up with the pace of change,” said Karen Knudsen, CEO of the American Cancer Society.

The Biden administration has written its health care regulations with an eye toward a world without Chevron’s preferential treatment, said Abe R. Gluck, a health care law expert at Yale Law School who served in the White House at the start of the Biden administration. That’s why he thinks litigation over the latest rules may not be as affected by the changes as challenges to some of the older rules.

“The Supreme Court hasn’t relied on Chevron in years,” she said, “so the federal government, including HHS, has become accustomed to drafting regulations and holding interpretive arguments as if Chevron didn’t exist.”

“They’re already adapting,” Gluck said.

Treasury Department and Internal Revenue Service

Both the Treasury Department and the Internal Revenue Service have broad authority to interpret the law when writing rules and regulations and enforcing the tax code.

Since the passage of the Inflation Control Act of 2022, the Treasury Department has been rushing to introduce regulations related to the multibillion-dollar clean energy tax credit that provides huge incentives for battery manufacturing, electric vehicle purchases, etc. The Treasury Department has received pushback from some countries. Lawmakers claim that their intentions were not followed Legal.

Congress enacts tax laws through legislation, but the IRS has broad discretion in how it enforces them. Accounting Professional They suggest that the court’s decision could complicate the agency’s ability to enforce tax law without specific direction from Congress.

A recent example is the delay last year in the implementation of a controversial tax policy that would have required users of digital wallets and e-commerce platforms to report small transactions. The new provision was introduced into the tax law in 2021 but faced strong opposition from lobbyists and small businesses.

The IRS has faced criticism from some lawmakers for delaying the policy but has defended its decision, arguing that taxpayers needed a longer transition period before the measure goes into effect to avoid a chaotic tax season.

Elizabeth Diaz, Teddy Rosenbluth and Loni Rabin Contributed report.