Introduction

In a not-so surprising turn, the Supreme Court’s June 28, 2024, decision in Loper Bright Enterprises v. Raimondo has upended the long-standing Chevron doctrine. Previously, Chevron governed cases where private parties contested federal agencies’ interpretations of federal statutes. Under Chevron, if a statute was deemed ambiguous, then agencies typically prevailed in court.

This framework empowered federal agencies to wield substantial influence over policy, bolstering their interpretations and creating a formidable challenge for litigants contesting federal agency actions. According to a publication in the Notre Dame Law Review, in cases governed by the Chevron doctrine, federal agencies emerged victorious an overwhelming 93% of the time when courts determined that statutes were ambiguous.[1]

Even though Chevron is gone, many of its effects may still influence state governments. Today, this decision necessitates further consideration of its impact on state law and the appropriate steps for litigants.

Chevron’s Effect on State Law

Chevron was not a state law doctrine, but it had a significant impact on state law and agencies. As many know, a number of laws that state agencies enforce are actually federal laws—and typically, state and federal agencies work hand-in-hand with one another. Further, state supreme courts have followed the US Supreme Court interpretation of Chevron by adding similar deference doctrines in their respective states. Therefore, following the Loper Bright decision, we anticipate two outcomes for states: decreased deference given to state agencies enforcing federal law, and states reducing their own deference to state agencies.

1. Reliance on State Agencies and Governments

 

The number of bills enacted by Congress has been declining each year,[2] partly because Congress increasingly relies on federal agencies to develop policy under Chevron.[3] However, beyond federal agencies, another authority has emerged: the states.

Federal reliance on state agencies to enforce and interpret federal law has grown notably, especially in complex areas like environmental regulation, where state agencies often enforce federal mandates.[4] This setup operates as a trickle-down effect: Congress delegates authority to federal agencies, which in turn delegate to state agencies.[5] The question of whether state agencies should receive Chevron deference has been a longstanding issue, predating the Loper Bright litigation.[6]

Loper Bright will reshape how courts treat state agency interpretations of federal law. Absent Chevron deference, we expect heightened litigation not only over federal agency interpretations but also over federal-state partnerships where state agencies wield significant interpretive power.

2. State-Chevron Lockstep

State supreme courts frequently align their legal interpretations with the U.S. Supreme Court—a practice known as “lockstepping.”[7] Many states have crafted their own versions of Chevron-style deference for state-level administrative bodies.[8] Though some states are moving away from Chevron-like deference, others continue to apply it.[9] The Loper Bright decision is expected to prompt more states to reconsider their deference toward state agencies,[10] potentially resulting in increased litigation over state agency regulations.

For example, Iowa currently follows a deference doctrine: if the legislature grants an agency interpretive power, then the court will overturn the interpretation if it is “irrational, illogical, or wholly unjustifiable.”[11] The Loper Bright decision could lead state courts or state legislatures to reconsider their stance on state agency interpretive power, potentially restricting state agencies from creating policy interpretations entirely.

Conclusion

While Loper Bright is arguably the most significant recent decision from the Supreme Court, it is not the first in a series of decisions aimed at limiting the power of administrative agencies. Alongside Loper Bright’s pivotal removal of agency deference, the Court has also issued several decisions that similarly restrict agency authority, such as extending the statute of limitations for challenging agency interpretations.[12] These developments indicate that numerous interactions between private parties and federal agencies in the past could undergo future changes, largely driven by litigation.

After the dust settles following post-Loper Bright, expect numerous lawsuits. Expect significant changes in how federal law is interpreted by both state and federal courts and anticipate potential changes in state law too.

[1] Kent Barnett & Christopher J. Walker, Chevron Step Two’s Domain, 93 Notre Dame L. Rev. 1441, 1444–45 (2018).

[2] Number of Bills Enacted by Each Congress in the United States from 1973 to 2023, Statista.com (Apr. 2, 2024) https://www.statista.com/statistics/1361682/bills-passed-congress-us.

[3] See generally E. Donald Elliott, Chevron Matters: How the Chevron Doctrine Redefined the Roles of Congress, Courts and Agencies in Environmental Law, 16 Vill. Envtl. L.J. 1 (2005); Steve R. Johnson, Kristin E. Hickman, Joseph B. Judkins, & Donald B. Susswein, The Upsides and Downsides of Ending Chevron Deference, 154 Tax Notes 1287, 1288–89 (2018).

[4] Cf. Cathleen Day, Note, Down by the Chesapeake Bay: Cooperative Federalism, Judicial Intervention, and the Boundary Between State Land Use and Federal Environmental Law, 38 Energy L.J. 253 (2017).

[5] See, e.g., Philip J. Weiser, Chevron, Cooperative Federalism, and Telecommunications Reform, 52 Vand. L. Rev. 1, 3 (1999); it should be noted that this is a simplified version of the “trickle-down” concept.

[6] See, e.g., Emily Stabile, Federal Deference to State Agency Implementation of Federal Law, 103 Ky. L.J, 237 (2014).

[7] Aaron Saiger, Derailing the Deference Lockstep, 102 B.U.L. Rev. 1879, 1888 (2022).

[8] See generally id.

[9] Id.; Pamela King, Supreme Court May End Chevron Doctrine. These States Have Already Done It, Politico (Nov. 08, 2023, 1:16 PM) https://www.eenews.net/articles/supreme-court-may-end-chevron-doctrine-these-states-have-already-done-it.

[10] Pamela, supra note 9.

[11] Democko v. Iowa Dep’t of Nat. Res., 840 N.W.2d 281, 287 (Iowa 2013).

[12] Corner Post, Inc. v. Bd. of Governors of the Fed. Rsrv. Sys., No. 22–1008 (July 1, 2024).