Tue, Jul 23 2024 23 July, 2024

U.S. Supreme Court narrows federal agencies’ regulatory powers

The Supreme Court decision severely curtails the ability of federal agencies to regulate in areas of public health and the environment. Experts said the decision could ‘paralyse’ the ability to govern.

The U.S. Supreme Court (Photo: Adobe Stock/ bbourdages)

The U.S. Supreme Court upended a decades-old judicial principle that allows federal agencies wide latitude to regulate in their areas of expertise. The decision could make it vastly more difficult for the U.S. government to regulate in areas of public health, consumer product safety, and importantly, climate change.

The 6-3 ruling on June 28th in a case called Loper Bright Enterprises v. Raimondo ended what is known as the doctrine of “Chevron deference,” nicknamed after a case involving Chevron in the 1980s. That older decision found that when laws written by the U.S. Congress contain provisions that may seem vague, the relevant federal agency has some discretion to regulate as it sees fit. The deference in the name “Chevron deference” refers to the notion that Congress and the courts defer to the executive agency’s expertise on technical matters. After all, an agency like the Environmental Protection Agency has scientists on staff; the Congress and the courts do not.

But the latest Supreme Court decision tossed out Chevron deference, and the Court wrote that executive agencies largely cannot regulate in areas that are not explicitly written into law.

Many legal, public health, and environmental experts saw the decision as a disaster, which will fundamentally undercut the ability of the federal government to properly govern.

“Overturning Chevron will allow judges, who are generalists, to second-guess the specific, highly nuanced policy choices made by agency subject-matter experts,” Suhasini Ravi, an associate at Georgetown University’s law school, wrote earlier this year.

It may also open up a massive can of worms, allowing companies to sue over policies and regulations they believe affect their operations.

“The impact will be enormous. By paralyzing federal agencies and inviting lawsuits against the rules these agencies implement, this decision will profoundly undermine bedrock laws like the Clean Air Act that are meant to protect public health,” Jennifer Jones, director of the Center for Science and Democracy at the Union of Concern Scientists, a Washington-based NGO, said in a statement.

“Policies that should be based on the best available scientific evidence will be at risk of being dismantled by the whims and ideological preferences of unelected judges, and people will suffer as a result.”

“This decision is a major setback for everyone who believes we deserve a safe, livable future, and a victory for greedy corporations that want to skirt vital safety and public health protections for the sake of their bottom line,” Craig Segall, vice president NGO Evergreen Action, a climate policy NGO, said in a statement.

The American Petroleum Institute, the most powerful oil and gas lobbying group, celebrated the decision. “We agree with the Court that agency actions must faithfully implement the laws passed by Congress,” the group said in a statement. “Today’s decision is a reminder that it’s time for both parties to work together and advance bipartisan, commonsense policies that provide regulatory certainty and secure an affordable, reliable energy future.”

But even as the oil and gas industry welcomes a new era in which federal agencies have less authority, investors may also see heightened uncertainty.

“Whereas, under Chevron deference, investors might have assumed that new agency rules were durable in the face of judicial review (absent a stay), that may have changed,” ClearView Energy Partners, a Washington-based consulting firm, wrote in a note to clients. “In some cases, capital that might have been deployed previously to energy projects after the issuance of a final regulation might wait until the exhaustion of judicial review.”

Overturning Chevron deference is only the latest in a string of decisions by the Supreme Court, which appears intent on dismantling many environmental programmes. A few days before the Chevron decision, the Court invalidated a programme that regulates air pollution that drifts across state lines. And two years ago, the Court severely undercut the EPA’s ability to regulate greenhouse gas emissions from power plants.

With far less authority to take regulatory action on climate change, federal agencies will have fewer tools going forward.

“The hubris of the majority in this case is hard to overstate,” Jones said. “They’ve taken power from the elected branches of government and seized that power for themselves.”

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