What are the implications of the U.S. Supreme Court ruling that cancels the ‘Chevron deference’ standard? The Loper Bright Enterprises ruling this summer does have the potential to alter how environmental, energy, transportation, and other policies, will be implemented.
Loper Bright Enterprises v. Raimondo, a June 28, 2024 ruling, is similar to Dobbs v. Jackson Women’s Health Organization overturning Roe v. Wade in June 2022, the historic abortion ruling. Loper Bright transfers policymaking authority from federal agencies over to federal courts, overturning the 1984 Chevron ruling. The Supreme Court held that federal courts may not defer to an agency’s interpretation of an ambiguous statute.
Along with a companion case, Relentless, Inc. v. Department of Commerce, Loper Bright Enterprises overruled Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. (1984). That was where the ‘Chevron deference’ standard came from; it had directed courts to defer to an agency’s reasonable interpretation of a law or policy decision that the agency enforces.
Loper Bright Enterprises is a New Jersey-based family-owned herring fishing company operating in the waters of New England. The June 2024 ruling originated from fishing companies challenging a rule established by the National Marine Fisheries Service (NMFS) for these companies to pay for the cost of federal monitors that may be assigned to their boats, under authorization of the Magnuson–Stevens Fishery Conservation and Management Act. The company claimed that the Act did not allow NMFS to pass the monitors’ costs to the fishing companies, challenging the Chevron deference that was held in the NMFS’ favor during lower court hearings.
The Chevron deference became a two-part test that was deferential to government agencies: first, whether Congress has spoken directly to the precise issue at question, and second, it was based on whether the agency’s answer is based on a permissible construction of the statute.
Law firm Holland & Knight identified implications for environmental, energy, and transportation issues in how the Loper Bright Enterprises ruling could be interpreted by federal courts.
Environmental. The U.S. Environmental Protection Agency (EPA) may have trouble enforcing the new greenhouse gas power plant rule, which is likely to be challenged on the ground that it is unsupported by statutory authority. The Supreme Court’s ruling that greenhouse gases are air pollutants covered by the Clean Air Act would still stand, but the EPA’s attempts to consider climate impacts in rule makings covering a wide range of statutory authority may be getting a lot more scrutiny. Some environmental regulations are already facing court challenges, which should continue. The Renewable Fuel Standard has the strength of being created by statute nearly 20 years ago; however, the Supreme Court’s Loper Bright ruling could alter how the program evolves over time – such as restricting the EPA’s discretion to approve or deny participation by new types of fuels or entities.
Energy. The interpretation and implementation of various federal regulations and policies impacting oil, gas, and mineral development on federal lands and waters will likely be challenged under the new standard of judicial review of agency action. The procedures adopted by the Federal Energy Regulatory Commission (FERC) for environmental reviews and cost allocation for regional transmission grid expansions are likely to be taken on. The Federal Power Act, Natural Gas Act, Energy Policy Act of 2005, and the landmark National Environmental Policy Act (NEPA) that was signed into law in 1969, will likely be challenged as well.
Transportation. Aviation and maritime transportation are expected to see implications before other transportation sectors. Policies governing prevention of collisions at sea would undergo scrutiny. One area that could impact ground transportation could come from what happens to the Oil Pollution Act and Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA); that could have a significant impact for recovery resulting from an oil spill. The National Transportation Safety Board’s (NTSB) investigative policies following accidents may be challenged, too, and it would affect aviation, maritime, and ground transportation.
The waste and recycling industry is also analyzing how this summer Supreme Court ruling may affect their legal and regulatory environment, especially what comes through the EPA and U.S. Department of Labor. Some analysts say it may not make an immediate impact on the waste industry. Long term, it may bring in more legal complexity when considering aspects of rules such as the EPA’s recent hazardous substance designation for certain polyfluoroalkyl substances (PFAS) or Occupational Safety and Health Administration’s (OSHA’s) proposed heat standard, according to Wastedive.
And in other news………
Public likes EV charging: Customer satisfaction with public EV charging continues to improve, according to a new J.D. Power study. Tesla remained at the top of the J.D. Power study. Satisfaction with DC fast charging increased to 664 points on a 1,000-point scale, a 10-point increase from the same period in 2023. One area of dissatisfaction was Level 2 charging, where satisfaction dropped four points.
IRA opportunities: Companies announced at least 334 major new clean energy projects in the first two years since the Inflation Reduction Act (IRA) was signed into law, driving the biggest U.S. economic revolution in recent history, according to the national nonpartisan business organization E2. The 118 announcements in the IRA’s second year are expected to generate more than $40 billion in new investments and create a minimum of 34,600 jobs.
