Chief Justice John Roberts, writing for the majority in the Loper Bright case, ruled June 28 that “Chevron is overturned.”
Image courtesy of the Supreme Court of the United States
Construction sector and other market observers continue to evaluate potential impacts of the U.S. Supreme Court’s June 28 Loper Bright decision, but there is a general consensus that the ruling could have a stifling effect on federal agencies’ ability to develop and enforce regulations.
But they differ in their perceptions of the court’s 6-3 ruling, which overturned the long-held legal Chevron doctrine that has directed courts to defer to a a federal agency’s expertise in regulation setting when legislative language is unclear or ambiguous.
Industry experts say the ruling could ensure that agency rulemaking hews closer to the intent of lawmakers, while environmental and public health advocates say they anticipate a flood of legal challenges that could result in fewer environmental and health protections, and a potential destabilization of the regulatory environment.
Steve Hall, executive vice president of the American Council of Engineering Cos., describes the ruling as “a sword that kind of cuts both ways.”
He says it could enable groups such as ACEC, which represents design firm interests, to challenge regulations that go beyond an agency’s legal authority under a given law, but it also could result in judicial and regulatory instability, as well as uncertainty for member firms. “The decision definitely creates for organizations like ACEC a new lane to challenge [regulatory overreach] but we need to be careful how we do that, because it could create a parallel opportunity for instability.”
Sean Donahue, a partner at Donahue, Goldberg and Herzog, who has represented environmental and public health organization parties in numerous major environmental and clean energy cases in the Supreme Court and in federal courts of appeals, said on a press call that although it’s unclear how the judicial branch will review cases going forward, “there’s no question” that the Loper decision will encourage “a massive effort by parties that are subject to regulation for their pollution or many other areas of regulation to challenge long-established policies, and how that unfolds is really important.”
He added that the ruling “overturned 40 years of precedent that had been relied on in scores of Supreme Court decisions, many of them unanimous, and hundreds of thousands of lower court decisions.”
Some groups contend that the ruling could create more stability for the regulated community, not less. Kristin Swearingen, Associated Builders and Contractors’ vice president of legislative and political affairs, said the decision will make it more difficult for each new administration to “engage in incessant flip-flopping on issues … leading to unmanageable uncertainty for the employer community.”
Leah Pilconis, Associated General Contractors of America general counsel, said in a statement that going forward, Congress will likely face more pressure to be specific and clear in writing legislation. “Put simply, [it] will be pressured to leave little to be interpreted by federal agencies,” she contends. “On the other hand, agencies will need to provide strong legal justifications for their rules and strictly follow Congress’s direction to pass judicial review.”
Full Implications Still Unknown
A potential test case of the fallout from Loper is currently pending review by the federal appeals court in Washington, D.C., in a lawsuit filed last month month by the U.S. Chamber of Commerce, AGC and National Waste Recycling Association. It challenges the U.S. Environmental Protection Agency’s designation of two types of PFAS chemicals as hazardous under the nation’s Superfund law, officially the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA).
AGC’s Pilconis says the Loper ruling “bodes well” for the case.
The EPA designation “is an interesting rule to evaluate because it’s the first time that EPA used Section 102 of the CERCLA law to designate substances as hazardous,” says Jessica Rosell, a partner at Lathrop GPM LLP who has specialized in litigating PFAS cases, “I think there’s a real chance for the Loper decision to implicate how courts that are evaluating these challenges will review the agency’s interpretation of Section 102 … and whether or not EPA was correct or reasonable in evaluating [if] these substances merited a hazardous substance designation.”
Environmental attorney Donahue says Congress could revisit the Administrative Procedures Act, the law underpinning how the government functions, by adding specific language that provides legal deference to the expertise of federal agencies during judicial review of regulations being challenged.
“That may be necessary particularly if this onslaught of challenges proves to be as destabilizing as many of us fear it may be,” he says.
Pam is ENR’s senior editor for government coverage, focusing on federal environmental and labor issues as they relate to the construction industry. She has a degree in journalism and an M.A. in writing fiction, and has worked previously as both an editor at ENR (2007-2016) and as a freelancer for a variety of publications and clients. One of her favorite gigs involved writing about stars, black holes and the mysteries of the universe for NASA.
