The Death of Chevron: What Loper Bright Means for the Future of Administrative Law
It was a good run for the Chevron doctrine — a decades-old doctrine established by the U.S. Supreme Court for courts to apply when interpreting statutes administered by federal agencies.[1] The doctrine’s time of death was approximately 10 a.m. on June 28, 2024, when the U.S. Supreme Court issued its opinion in Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024), explicitly overruling its opinion in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).[2]
The day before overruling the longstanding doctrine, the Court issued another blow to the federal administrative landscape in Securities and Exchange Commission v. Jarkesy, 144 S. Ct. 2117 (2024). In Jarkesy, the Supreme Court held that the Seventh Amendment to the U.S. Constitution entitles a defendant to a jury trial — as opposed to an adjudicatory hearing before an administrative law judge — when the Securities and Exchange Commission (SEC) seeks civil penalties against the defendant for securities fraud.[3]
This article considers the implications of these two landmark decisions on the federal administrative landscape, as well as on Florida’s administrative landscape.
The Birth of the Federal Administrative Procedure Act
Enacted in 1946, the federal Administrative Procedure Act (APA)[4] “prescribes procedures for agency rulemakings and adjudications, as well as standards for judicial review of final agency actions.”[5] As to judicial review, §706 of the APA provides that courts “shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action.”[6] Section 706 also requires courts to “hold unlawful and set aside agency action, findings, and conclusions found to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”[7]
As the Court observed in United States v. Morton Salt Co., 338 U.S. 632, 644 (1950), the APA “was framed against a background of rapid expansion of the administrative process as a check upon administrators whose zeal might otherwise have carried them to excesses not contemplated in legislation creating their offices. It created safeguards even narrower than the constitutional ones, against arbitrary official encroachment on private rights.”[8] The APA, thus, marked a “comprehensive rethinking of the place of administrative agencies in a regime of separate and divided powers.”[9]
Chevron and Related Supreme Court Precedent
In 1977, Congress amended the Clean Air Act to impose certain requirements on states that had not achieved the national air quality standards established by the Environmental Protection Agency (EPA), including a requirement for such states to establish a permit program regulating “new or modified major stationary sources” of air pollution.[10] To implement this permit requirement, the EPA promulgated a rule allowing states to adopt a plantwide definition of the term “stationary source.”[11]
Multiple environmental groups challenged the EPA’s rule.[12] The Supreme Court granted certiorari to decide whether the “EPA’s decision to allow [s]tates to treat all of the pollution-emitting devices within the same industrial grouping as though they were encased within a single ‘bubble’ [was] based on a reasonable construction of the statutory term ‘stationary source.’”[13]
In answering that question in the affirmative, the Court concluded that the lower court “misconceived the nature of its role in reviewing the regulations at issue.”[14] According to the Court, once the lower court determined that Congress had not spoken on the issue, the question was not whether, in the lower court’s view, the EPA’s rule was appropriate or not in the general context of the program established by Congress, “but whether the [EPA] Administrator’s view that it is appropriate in the context of this particular program is a reasonable one.”[15]
The Court went on to establish a two-step framework for reviewing agency rulemaking that would come to be known as the Chevron doctrine:
When a court reviews an agency’s construction of the statute which it administers, it is confronted with two questions. First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.[16]
In announcing this framework, the Chevron Court declined to entertain policy arguments advanced by the parties over the correctness of the EPA’s rule, reasoning that such arguments “are more properly addressed to legislators or administrators, not to judges.”[17] Expanding on this point, the Court explained that because “[j]udges are not experts in the field, and are not part of either political branch of the [g]overnment,” they cannot reconcile competing political interests purely on the basis of their “personal policy preferences.”[18] On the other hand, agencies to which Congress has delegated policy-making responsibilities “may, within the limits of that delegation, properly rely upon the incumbent administration’s views of wise policy to inform its judgments.”[19]
Astute readers will note that Chevron was issued almost four decades after passage of the APA, begging the question: How did courts review challenges to agency rulemaking in the interim? It depends on who you ask. According to the Chevron Court, it had “long recognized that considerable weight should be accorded to an executive department’s construction of a statutory scheme it is entrusted to administer, and the principle of deference to administrative interpretations.”[20] According to the Loper Bright Court, by contrast, even after the New Deal, “the Court continued to adhere to the traditional understanding that questions of law were for courts to decide, exercising independent judgment.”[21]
The truth may lie somewhere in the middle. In N.L.R.B. v. Hearst Publications, 322 U.S. 111 (1944), before the enactment of the APA, the Court observed that “the reviewing court’s function is limited” when “the question is one of specific application of a broad statutory term in a proceeding in which the agency administering the statute must determine it initially.”[22] Even after the enactment of the APA, in Morton v. Ruiz, 415 U.S. 199 (1974), the Court similarly observed that “[t]he power of an administrative agency to administer a congressionally created and funded program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by Congress.”[23] However, in other instances during the same period, the Court struck a different tone, as in Federal Election Commission v. Democratic Senatorial Campaign Committee, 454 U.S. 27 (1981), when it noted that while the “interpretation put on the statute by the agency charged with administering it is entitled to deference[,]…the courts are the final authorities on issues of statutory construction.”[24]
In the years leading up to Loper Bright, the Court began showing signs that it was reconsidering the wisdom of Chevron. One such instance was United States v. Mead Corp., 533 U.S. 218 (2001), in which the Court held that a tariff classification ruling by the U.S. Customs Service had “no claim to judicial deference under Chevron” because there was “no indication that Congress intended such a ruling to carry the force of law.”[25] Subsequently, in King v. Burwell, 576 U.S. 473 (2015), the Court opted not to apply Chevron when, according to the Court, the issue was of “deep ‘economic and political significance.’”[26] Some members of the Court sent even clearer signals. In Cuozzo Speed Techs., LLC v. Lee, 579 U.S. 261 (2016), Justice Thomas argued in a concurring opinion in favor of “reconsider[ing] th[e] fiction of Chevron and its progeny” in an appropriate case.[27] Even more recently, in Kisor v. Wilkie, 588 U.S. 558 (2019), Justice Gorsuch wrote a concurring opinion, arguing that “there are serious questions” as to whether the Chevron doctrine “comports with the APA and the Constitution.”[28]
Loper Bright
The time for Chevron’s downfall finally came in the summer of 2024. In Loper Bright, the Court considered consolidated cases in which a handful of petitioners challenged a rule promulgated by the National Marine Fisheries Services (NMFS) implementing the Magnuson-Stevens Fishery Conservation and Management Act (MSA).[29] The district court granted summary judgment against the petitioners, concluding that the MSA authorized the rule, but noted that even if there was enough to raise an ambiguity in the statutory text, “deference to the agency’s interpretation would be warranted under Chevron.”[30] The court of appeals affirmed, applying Chevron’s two-step framework.[31] The Court granted certiorari “limited to the question whether Chevron should be overruled or clarified.”[32]
In answering that question, the Court invoked the early declaration from Marbury v. Madison that “[i]t is emphatically the province and duty of the judicial department to say what the law is.”[33] In invoking this fundamental understanding of the judiciary’s role in our government, the Court acknowledged that both its pre- and post-New Deal precedent afforded “due respect to Executive Branch interpretations of federal statutes,” but asserted that such respect could not supersede the judgment of the judiciary.[34] The Court also asserted that its practice of deference was afforded only to agency determinations of fact — not questions of law.[35] Thus, the Court concluded that, “[n]othing in the New Deal era or before it, thus, resembled the deference rule the Court would begin applying decades later to all varieties of agency interpretations of statutes.”[36]
According to the Court, the two-step framework established in Chevron “triggered a marked departure from the traditional approach” that “cannot be squared” with the APA’s prescription that “the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action.”[37] More particularly, the Court concluded, Chevron’s second step “defies the command of the APA” by “requir[ing] a court to ignore, not follow ‘the reading the court would have reached’ had it exercised its independent judgment as required by the APA” and, instead, “mechanically afford binding deference to agency interpretations.”[38]
Taking specific issue with Chevron’s deference to agencies where the statute is ambiguous, the Court declared that “agencies have no special competence in resolving statutory ambiguities. Courts do.”[39] According to the Court, “The very point of the traditional tools of statutory construction…is to resolve statutory ambiguities.”[40]
As a final blow, the Court concluded that not even the doctrine of stare decisis could save Chevron because the Chevron framework “was always unmoored from the APA’s demand that courts exercise independent judgment in construing statutes administered by agencies.”[41] The Court disagreed with the dissenting justices that “[j]udges are not experts in the field.”[42]According to the Court, “[t]hat depends, of course, on what the ‘field’ is. If it is legal interpretation, that has been, ‘emphatically,’ ‘the province and duty of the judicial department’ for at least 221 years.”[43]
Thus, as of June 28, 2024, instead of following the two-step framework established in Chevron, courts must “exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as the APA requires.”[44] “[C]ourts need not and under the APA may not defer to an agency interpretation of the law simply because a statute is ambiguous.”[45]
Jarkesy
A day before issuing its opinion in Loper Bright, the Court issued an opinion dismantling the SEC’s use of administrative law judges (ALJs) to hear enforcement actions brought by the SEC. In Jarkesy, the Court held that the Seventh Amendment entitles a defendant to a jury trial when the SEC seeks penalties against him or her for securities fraud.[46]
Prior to Jarkesy, the SEC could bring an enforcement action in federal court or before an ALJ, who also happened to be employed by the SEC.[47] In addition to different discovery rules, one of the primary differences between those two forums is the existence of a jury in federal court, as opposed to an ALJ in the administrative forum.[48] Additionally, although judicial review is available after the conclusion of proceedings before the ALJ, such review is deferential.[49]
The Jarkesy Court explained that the protections of the Seventh Amendment apply to suits at common law and to statutory claims that are “legal in nature.”[50] To determine whether a suit is legal in nature, courts consider “the cause of action and the remedy it provides,” with the remedy being the “more important” consideration.[51] In the SEC’s case, the Court determined that the remedy sought for alleged fraud — civil money damages — “is all but dispositive” because it “is designed to punish or deter the wrongdoer.”[52] Thus, the Court concluded, the civil penalties sought by the SEC in these types of cases can only be enforced in a court of law.[53]
The Jarkesy Court went on to conclude that the public rights exception — which allows Congress to “assign [a] matter for decision to an agency without a jury, consistent with the Seventh Amendment” — did not apply because suits that are in the nature of an action at common law presumptively concern private rights, which may not be removed from Article III courts.[54] Responding to arguments from the dissenting justices, the Court asserted that “effects like increasing efficiency and reducing public costs are not enough to trigger the exception.”[55]
The Impact of Loper Bright and Jarkesy on the Future of Federal Administrative Law
Where the future of federal administrative law goes from here is anyone’s guess. The conventional wisdom of federal administrative practitioners is that the Court’s opinion in Loper Bright will lead to an uptick in challenges to agency rules,[56] and, potentially, inconsistency among courts as to the validity of those rules. Indeed, the dissenting justices in Loper Bright argued just that, asserting that “as compared with de novo review, use of the Chevron two-step framework fosters agreement among judges.”[57] Inconsistent decisions would have a significant impact on the federal regulatory landscape — and the stakeholders regulated by that landscape — as federal agencies issue thousands of rules a year on issues ranging from health care and the safety of consumer products to the environment and transportation, among many others.[58]
Moreover, while the Jarkesy opinion was limited only to the SEC’s administrative regime, the dissent noted that “more than two dozen agencies…can impose civil penalties in administrative proceedings” according to statutory schemes enacted by Congress.[59] It seems reasonable to assume that constitutional challenges to these schemes will follow.
The Impact of Loper Bright and Jarkesy on the Future of Florida Administrative Law
Whereas federal administrative law is governed by the federal APA, Florida administrative law is governed by the Florida Administrative Procedure Act, codified in F.S. Ch. 120.[60] First adopted in 1974,[61] the Florida APA, like the federal APA, sets forth the procedures for agency rulemakings and adjudications, and establishes standards for judicial review of final agency actions.[62] Additionally, like the federal APA, the judicial review provisions of the Florida APA require courts to remand or set aside agency action when they determine that “[t]he agency has erroneously interpreted a provision of law and a correct interpretation compels a particular action.”[63]
In 2018, Florida amended its constitution to add art. V, §21, which provides that “[i]n interpreting a state statute or rule, a state court or an officer hearing an administrative action pursuant to general law may not defer to an administrative agency’s interpretation of such statute or rule, and must instead interpret such statute or rule de novo.”[64] As the First District Court of Appeal observed in Lee Memorial Health System Gulf Coast Medical Center v. Agency for Health Care Administration, 272 So. 3d 431 (Fla. 1st DCA 2019), prior to this amendment, “administrative agencies were afforded wide discretion in the interpretation of a statute, and an agency’s interpretation…was not overturned on appeal unless clearly erroneous.”[65]
In light of this amendment, one could reasonably argue that Loper Bright will have no immediate impact on Florida administrative law. Indeed, since the passage of the amendment, state courts have routinely invoked the amendment when reviewing agency decisions.[66]
While Loper Bright may not have an immediate impact on Florida administrative law, it is possible the Court’s decision in Jarkesy could. The Florida APA empowers ALJs to hear all manner of administrative disputes, including challenges to agency rules, challenges to agency decisions affecting substantial interests, and protests to contract awards.[67] Many of the hearings affecting substantial interests involve an agency’s decision to deny, revoke, or suspend a professional license or impose fines as a penalty for a licensee’s noncompliance with applicable statutory or regulatory requirements.[68]
Unlike the SEC’s ALJs, however, the ALJs who hear many of these disputes are employed by a separate agency, the Division of Administrative Hearings (DOAH).[69] While DOAH, like the agencies whose disputes DOAH hears, is also an executive branch agency, there is more separation than with the in-house ALJs at the SEC. Nevertheless, under the Court’s reasoning in Jarkesy, one could argue that some of the disputes DOAH currently hears, including licensure disputes and disputes involving the imposition of fines, must be heard by a jury.
Notably, litigants are entitled to review by a DOAH ALJ only if the case involves disputed issues of fact.[70] When a case does not involve disputed issues of fact, the litigant must appear before a hearing officer employed by the agency involved. Thus, if the Agency for Health Care Administration (AHCA) decides to revoke a license, and that licensee cannot allege disputed issues of fact, the licensee’s only recourse is to make a case before a hearing officer employed by AHCA. One could argue, under the reasoning of Jarkesy, that this violates the Seventh Amendment.
Conclusion
Loper Bright and Jarkesy mark a sea change in the role of the judiciary when reviewing agency decisions and demonstrate a stark division in thought among the members of the Court regarding the interplay between the courts and executive branch agencies. Whereas the majority of justices believe that courts are better equipped to interpret statutes, and to hear certain disputes involving those statutes, the dissenting justices believe that ability better lies with the agencies charged with implementing those, often, complex statutes who are “experts in the field.”[71] This is sure to be an area to watch for administrative practitioners and the regulated entities and individuals they represent.
[1] Chevron, U.S.A., Inc. v. Natural Res. Defense Council, Inc., 467 U.S. 837, 842-43 (1984).
[2] Loper Bright, 144 S. Ct. at 2273.
[3] Jarkesy, 144 S. Ct. at 2127.
[4] 5 U.S.C. §551, et seq.
[5] Congressional Research Service, A Brief Overview of Rulemaking and Judicial Review, CRS Report R41546 (Mar. 27, 2017), available at https://crsreports.congress.gov/product/pdf/R/R41546#:~:text=The%20Administrative%20Procedure%20Act%20(APA,final%20rulemaking%2C%20and%20negotiated%20rulemaking; see also generally 5 U.S.C. §§551, 553, 556, 557, 558.
[6] 5 U.S.C. §706.
[7] Id. §706(2)(A).
[8] Id. at 644; see also 5 U.S.C. §551, et seq.
[9] Bowen v. Michigan Acad. of Fam. Physicians, 476 U.S. 667, 670-71 (1986).
[10] Chevron, 467 U.S. at 840.
[11] Id.
[12] Id. at 841.
[13] Id. at 840.
[14] Id. at 845.
[15] Id. (emphasis added).
[16] Id. at 842-43 (footnotes omitted).
[17] Id. at 864.
[18] Id. at 865.
[19] Id.
[20] Id. at 844 (footnote omitted).
[21] Loper Bright, 144 S. Ct. at 2258.
[22] Id. at 131.
[23] Id. at 231.
[24] Id. at 31-32; see also Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944) (“We consider that the rulings, interpretations and opinions of the Administrator under this Act, while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance.”).
[25] Mead Corp., 533 U.S. at 221. Readers may be interested to learn that the late Justice Scalia dissented from this outcome, arguing that he would have “adhere[d] to [the Court’s] established deference” under Chevron and “defer to the reasonable interpretation the Customs Service ha[d] given to the statute it [wa]s charged with enforcing.” Id. at 239-40 (Scalia, J., dissenting).
[26] Id. at 486. The politically significant issue in Burwell was a challenge to an Internal Revenue Service final rule implementing the premium tax credit provision of the Patient Protection and Affordable Care Act. Id. at 483.
[27] Id. at 286 (Thomas, J., concurring).
[28] Id. at 628, n.114 (Gorsuch, J., concurring).
[29] Loper Bright, 144 S. Ct. at 2254-56.
[30] Id. at 2256 (citing Loper Bright Enters., Inc. v. Raimondo, 544 F. Supp. 3d 82, 106-07 (D.D.C. 2021); see also Relentless Inc. v. Dep’t of Com., 561 F. Supp. 3d 226, 234-38 (D.R.I. 2021) (affirming in the companion consolidated case also on the basis of Chevron).
[31] Id. (citing Loper Bright Enters., Inc. v. Raimondo, 45 F.4th 359, 368-69 (D.C. Cir. 2022)); see also Relentless, Inc. v. U.S. Dep’t of Com., 62 F.4th 621, 628 (1st Cir. 2023) (affirming in the companion consolidated case also on the basis of Chevron).
[32] Loper Bright, 144 S. Ct. at 2257.
[33] Id. (quoting Marbury v. Madison, 5 U.S. 137, 177 (1803)).
[34] Id.; see also id. at 2258.
[35] Id. at 2258; see also id. at 2259 (explaining that deferential review afforded to agencies “was cabined to factbound determinations like those at issue in Gray [v. Powell, 314 U.S. 402 (1941)] and Hearst [NLRB v. Hearst Publications, Inc., 322 U.S. 111 (1944)].”).
[36] Id. at 2260.
[37] Id. at 2263-64, 2261 (quoting 5 U.S.C. §706).
[38] Id. at 2265 (quoting Chevron, 467 U.S. at 843, n.11).
[39] Id. at 2266.
[40] Id.
[41] Id. at 2269, 2270. The Court clarified that in overruling Chevron, it was not “call[ing] into question prior cases that relied on the Chevron framework.” Id. at 2273.
[42] Id. at 2273 (quoting Chevron, 467 U.S. at 865).
[43] Id. (quoting Marbury, 5 U.S. at 177).
[44] Id.
[45] Id.; see also Jarkesy, 144 S. Ct. at 2175 (Sotomayor, J., dissenting) (arguing that schemes like the SEC’s “may yield important benefits over jury trials in federal court, such as greater efficiency, and expertise transparency and reasoned decisionmaking, as well as uniformity, predictability, and greater political accountability”).
[46] Jarkesy, 144 S. Ct. at 2126-27.
[47] Id. at 2125-26.
[48] Id. at 2125.
[49] Id. at 2126.
[50] Id. at 2128 (quoting Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 53 (1989)).
[51] Id. at 2129 (quoting Tull v. U.S., 481 U.S. 412, 421 (1987)).
[52] Id.
[53] Id. at 2130. The Court added that the “close relationship between the causes of action in this case and common law fraud confirms [its] conclusion.” Id.
[54] Id. at 2131-2132.
[55] Id. at 2139 (citing Stern v. Marshall, 564 U.S. 462, 501 (2011)).
[56] Two months after Loper Bright, the Fifth Circuit Court of Appeals vacated a rule issued by the Department of Labor, holding that it was contrary to the Fair Labor Standards Act, citing Loper Bright. Restaurant Law Center v. United States Department of Labor, 120 F.4th 163 (5th Cir. 2024). The Fifth Circuit’s opinion reversed the district court’s decision, which cited Chevron.
[57] Loper Bright, 144 S. Ct. at 2309 (Kagan, J., dissenting) (citing K. Barnett, C. Boyd, & C. Walker, Administrative Law’s Political Dynamics, 71 Vand. L. Rev. 1463, 1502 (2018); C. Sunstein, Chevron as Law, 107 Geo. L. J. 1613, 1672 (2019)).
[58] Congressional Research Service, Counting Regulations: An Overview of Rulemaking, Types of Federal Regulations, and Pages in the Federal Register, CRS Report R43056 (Sep. 3, 2019), available at https://sgp.fas.org/crs/misc/R43056.pdf; see also Loper Bright, 144 S. Ct. at 2311 (Kagan, J., dissenting) (arguing that, given its pervasiveness, overruling the Chevron doctrine “is likely to produce large-scale disruption”).
[59] Jarkesy, 144 S. Ct. at 2173 (Sotomayor, J., dissenting).
[60] See generally Ch. 120, Fla. Stat., et seq.
[61] Jim Rossi, The 1996 Revised Florida Administrative Procedure Act: A Survey of Major Provisions Affecting Florida Agencies, 24 Fla. St. U. L. Rev. 283, 283 (1997).
[62] See generally Fla. Stat. Ch. 120, et seq.
[63] Fla. Stat. §120.68(7)(d) (2024).
[64] Fla. Const. art. 5, §21; see Loper Bright, 144 S. Ct. at 2301 (Kagan, J., dissenting) (observing that Congress had not enacted similar legislation to “abolish Chevron across the board”).
[65] Lee Memorial Health System Gulf Coast Medical Center, 272 So. 3d at 437.
[66] See, e.g., Kanter Real Estate, LLC v. Dep’t of Envtl. Prot., 267 So. 3d 483, 487 (Fla. 1st DCA 2019); A.C. v. Agency for Health Care Admin., 322 So. 3d 1182, 1187 n.6 (Fla. 3d DCA 2019).
[67] See Fla. Stat. §120.65 (2024).
[68] See generally Fla. Stat. §§120.569, 120.57 (2024).
[69] See Fla. Stat. §120.65 (2024).
[70] See Fla. Stat. §120.57(2) (2024).
[71] Loper Bright, 144 S. Ct. at 2311 (Kagan, J., dissenting).
Kristen Bond Dobson is a healthcare attorney with law firm Parker Hudson in Tallahassee. She previously served as a senior staff attorney for Justice Barbara J. Pariente at the Florida Supreme Court and as a staff attorney for Judge Robert M. Gross at the Fourth District Court of Appeal.
This column is submitted on behalf of the Administrative Law Section, Louise R Wilhite-St Laurent, chair, and Lyyli Van Whittle, editor.
