Supreme Court Overturns Chevron Ruling, Paving the Way for 'Legal Earthquake'

Four days after the Supreme Court ruled in Luber-Brite Enterprises Inc. v. Raimondo, overturning a 40-year legal precedent known as Chevron deference, the justices announced they would send nine cases back to lower courts in light of their ruling.

This batch of cases may be the first sign of the legal turmoil that may be engulfing the U.S. judiciary now that one of the Supreme Court's most widely cited opinions has been overturned.

“Today’s majority decision will send a huge shock through the legal system,” Justice Elena Kagan wrote in her dissenting opinion.

By overturning its 1984 ruling in Chevron v. Natural Resources Defense Council — which allowed judges to defer to federal agencies’ interpretation of laws when the language was unclear — the court curtailed the power of regulatory agencies and strengthened the judiciary’s.

The case also raises questions about the fate of more than 19,000 previous federal cases that cited the precedent.

In the majority opinion, Chief Justice John Roberts appeared to have anticipated this outcome.

“The rulings of those cases in which specific agency actions are lawful — including Chevron’s own Clean Air Act ruling — remain subject to the principle of the supremacy of legal decision,” he wrote, referring to the legal principle of deference to case law.

But the Roberts clause may not be enough to stop the “legal earthquake” the court has created with its ruling, according to Cary Coglianese, a law professor at the University of Pennsylvania and director of the Penn Program on Regulation.

Coglianese explained that the Supreme Court protected the actions of previous agencies, but said little about previous agencies' interpretations of the laws, leaving the door open to challenges to previous cases.

“On some readings of what the court has done, these opportunities to reopen [previously closed cases] “They are still around,” he said, “and you can expect people to try to exploit them.”

seize the moment

In two cases that were returned to lower courts in light of the Looper decision, the plaintiffs share the same attorney: the Pacific Legal Foundation, or PLF.

According to its website, PLF — which called for an end to Chevron's deference in a friend-of-the-court brief it filed in the Luber case — represents at least five different plaintiffs whose cases could benefit from Chevron's retreat.

The public interest law firm is one of several conservative anti-regulation groups that have been preparing to have the Supreme Court overturn the Chevron ruling, according to Accountable.US, a nonpartisan research organization focused on special interests.

A new report from the group identifies four organizations, including PLF, that are planning legal challenges and lobbying efforts now that the precedent has been struck down. The others are the Balancing Act Project, which says on its website that it will work to define a “new regulatory environment” in a post-Chevron world; the Competitive Enterprise Institute, an anti-regulatory nonprofit that is challenging the EPA’s authority; and Americans for Prosperity, the Charles Koch-backed network whose lawyers represented plaintiffs in the Looper case.

“Not only has the conservative legal movement been pushing for Chevron’s deference to be overturned for a long time, but key groups have already lined up challenges ahead of the ruling to immediately take advantage of the new regulatory landscape it has created,” Carolyn Ciccone, president of Accountable.US, told CNBC.

“They are wasting no time in ensuring that corporations and special interests reap the benefits of this power grab at the expense of ordinary Americans,” she said.

The four organizations publicly celebrated the Supreme Court's decision to strike down Chevron, which conservatives saw as a legitimate restraint on the power of unelected bureaucrats.

Just three days later, conservatives again hailed the court when it ruled in Corner Post v. Board of Governors of the Federal Reserve System. The court’s 6-3 decision in Corner Post dramatically expanded individuals’ rights to sue regulators, another blow to federal agencies.

Together, these rulings send a clear message from the Supreme Court: “The court’s doors are open to hear complaints about agency authority,” Coglianese said.

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