By Ted Gotsch
Senior Policy Analyst, Content and Publications
The world of federal regulation is one that often seems opaque for those not intimately familiar with the process of rulemaking. Only those who work in federal regulations get excited when anyone mentions the process, which is why the recent awareness and rumblings of seismic change seems highly unusual.
Until a month ago, D.C. policy wonks explaining such matters would have mentioned something called Chevron deference, which referred to a precedent set in the landmark 1984 Supreme Court decision in Chevron v. Natural Resources Defense Council. Under that doctrine, if federal legislation is ambiguous or leaves an administrative gap, the courts must defer to the regulatory agency’s interpretation if the interpretation is reasonable.
It was one of the ultimate IYKYK (if you know, you know) flexes for policy insiders and was generally understood to mean that the regulatory process would provide the details of how legislative language would be implemented. The idea was that our form of government has divided the process of creating laws and implementing those laws between the legislative and executive branches of our government.
That all changed, however, on June 28 when the Supreme Court decided the Loper Bright Enterprises v. Raimondo case, finding that federal agencies are not the final authority when deciphering the intent and appropriate implementation of laws. Instead, when there are disagreements or uncertainty in the application of a law, the courts should be used as a final interpreter, rather than deferring to the agency when policies are challenged or unclear.
What will this decision mean for public policy? That is the question that is being debated by legal scholars and regulatory professionals. In recent years, the federal court system has seen an increase in the number of cases that have been brought to them that question or directly object to the regulatory interpretation and authority of the federal agencies across all issue areas. This is particularly true for several of the Academy’s six mega-issues, as highlighted in the Academy’s Election Issues Clearinghouse.
The Supreme Court decision seems to make it easier for politically-charged issues to be brought before the courts. The ruling has already started to be referenced in existing litigation, such as three different federal district cases focused on a Health and Human Services rule prohibiting discrimination based on sexual orientation and gender identity. The Department of Labor is also defending challenges to recent rulemakings, one focused on defining a fiduciary and another addressing environmental, social, and governance factors in investment considerations.
As a result of the ruling, plenty of players inside the Beltway are weighing in on how the policymaking landscape could shift. Many noted that Congress may need to stop delegating policy drafting authority to federal agencies. Instead, they may need to draft much more specifically in the legislation, which could result in more focused and targeted lobbying by various interests.
Legislators do not usually have the expertise themselves nor a staff with the expertise that is usually found within the federal agencies. There are concerns that this will lengthen the time it takes for any law to pass, as well as increase the level of pressure on lobbying and advocacy groups to influence Congress.
Lawmakers could create workarounds to stay within the bounds of Loper Bright, including giving agencies the explicit ability to craft regulations within the law itself, something that has been previously underutilized.
There is little doubt that this ruling is creating regulatory uncertainty. As the decision continues to be discussed and the impacts start to be felt, there will be an increased focus on how the three branches of government work together to create, implement, and enforce our laws. More than ever, it is important that we all understand and participate in the public policy process.
