Supreme Court Overturns Chevron Case, Limits Powers of Federal Agencies

In a landmark decision on June 28, the U.S. Supreme Court issued a 6-3 opinion in Loper Bright Enterprises et al. v. Raimondo (Loper Bright), overturning the deference doctrine established in Chevron USA Inc. v. Natural Resources Defense Council. It marks a significant shift in the balance of power among executive agencies, Congress and the courts. The implications of this ruling could have substantial ramifications for how preventive health care services are mandated and covered under federal law in the future.

Chevron had long stood as a cornerstone of administrative law, requiring courts to defer to agencies' interpretations of ambiguous statutes if they were deemed reasonable. This principle, applied in countless regulatory decisions over decades, allowed agencies substantial leeway in implementing laws related to such areas as environmental protection, health care and consumer safety. The 6-3 decision—split along ideological lines—now mandates that courts must independently evaluate whether agencies have stayed within their statutory authority, effectively reducing agency discretion and potentially exposing existing regulations to legal challenges. The decision will not be applied retroactively.

Chief Justice John G. Roberts Jr., writing for the majority, argued that Chevron had become impractical and led to undue judicial deference. He asserted that courts should exercise more scrutiny over agency actions to ensure they align closely with legislative intent.

The implications of the decision are far-reaching. It is expected to lead to challenges to a wide array of federal regulations that were previously shielded by Chevron deference. This includes regulations crucial for maintaining environmental standards, public health measures and consumer protections. The dissenting justices, notably Justice Elena Kagan, warned that the ruling could destabilize settled legal interpretations and create a volatile environment where previously accepted regulatory practices could be subject to abrupt legal challenges, potentially disrupting industries and public policy implementation.

To quell concerns of possible retroactive impact, Chief Justice Roberts wrote that the retroactive impact of Friday’s decision will be limited, saying that regulations upheld by courts under Chevron cannot be challenged based solely on the overturning of the Chevron case.

Overall, the Supreme Court's decision could have profound implications for how regulations are crafted, implemented and enforced in the future. The ruling underscores a shift towards stricter judicial scrutiny of agency actions, marking a significant departure from previous deferential norms and setting the stage for continued legal battles over the interpretation and application of federal regulations across various sectors.