Annie Tsai

I know we’ve all been busy with all of the hubbub about the presidential debates, hearings, immunity, and all of the things, but something else recently happened that’s worth your time to pause and learn about. 

On June 28 in a 6-3 vote, the Supreme Court overturned a precedent set by the 1984 Chevron v. Natural Resources Defense Council case, commonly referred to as “Chevron deference”. As one of the most cited cases in the history of American law (over 19,000 times in the past 40 years), the Chevron deference essentially gave federal agencies the ability to interpret ambiguous statutes passed by Congress. 

While Chevron deference has not been cited in Supreme Court cases since 2016, it has seen continued utilization in lower court cases year after year. The change represents a significant shift in how most of us understand how federal agencies work. 

The Good

The reality with interpretation is that it is just that – it is subjective and while federal agencies are not guaranteed to adopt the political leanings of newly sworn in executive branch leadership, these agencies do typically align their priorities against the president’s agenda. The overturning of the Chevron deference means that the responsibility resides with Congress to ensure that laws passed provide enough clarity for federal agencies to operate. And when this is not the case, it is the courts – not the federal agencies – that hold the interpretive power. 

As well, the ruling specifies that courts may give “substantial weight” to an agency based on their subject matter expertise, in particular when the agency’s interpretation has been consistent. Existing precedent citing Chevron deference will not be revisited. 

The Bad

In particular, pundits have cited concerns about the reduced scope and authority that the Environmental Protection Agency and Securities and Exchange Commission could have moving forward. For example, the SEC’s March 2022 Climate-Related Disclosures Rule proposed a new requirement for public companies to include certain climate-related disclosures in their registration statements and periodic reports. 

While annual sustainability reports have become much more common, the lack of standardization creates a lot of room for positioning – positioning like Google’s 2024 Environmental Sustainability Report which says they replenished 1 billion gallons of water representing 18% of their freshwater consumption from data centers and offices, conveniently skirting that the company used 5.56 billion gallons of water in 2023. It takes a lot of water to cool data centers and well, Google has a lot of really big datacenters. To put that into perspective, 5.56 billion gallons of water would give residents of Flint, Michigan clean water for roughly 1 year and 9 months. 

Without federal agencies creating standards to theoretically protect and inform the American people, we are left to our own devices and ability to cut through the marketing speak and actually understand what is happening. Yes, I know, some of you challenge the intent of “protect and inform” – let’s save that for another day.

The Probable Reality

Expect change and likely most things to take longer when it comes to the federal government. 

The ability for federal agencies to interpret legal statutes meant that Congress was able to provide general guidance and allow those agencies to fill in the gaps with their expertise. While almost certainly there have been times when agencies have overstepped with their interpretations, most of the time Chevron deference has enabled agencies to simply operate across their areas of accountability. 

Given the increasingly partisan nature of Congress (and politics in general), it will likely take much longer for bills with all of the necessary specificities to be negotiated and passed. And more likely than not, bills with all of the details simply won’t be passed unless both the House, Senate, and executive office are party controlled. 

And, with interpretation now falling to the courts, the courts very simply are going to be slammed.

It’s Never Been a Better Time to Become a Lawyer

I’ve said it before, and I’ll say it again. It’s truly never been a better time to go to law school. Take your pick – Corporate Securities, Environmental, Administrative, Healthcare, Regulatory Compliance, Appellate Litigation, Financial Services, Intellectual Property, Constitutional Law, Antitrust, Cybersecurity, Telecommunications, Employment, Energy – the list goes on and on. If 19,000 cases deferred to Chevron in the past 40 years (which also set precedence for other potential cases), just think about the volume that will be brought forward in the next decade alone. Jump in, it’s your time to shine. 

Signed, not a lawyer.