There’s been an important legal decision, a victory for the business community decided by the Supreme Court.
Many business people might not have realized how vital the Supreme Court’s recent decision to reverse and overturn the “Chevron case” was for business. Why? The Court imposed serious new limits on the regulatory powers of federal agencies, especially in the executive branch. When Barron’s announced, “Chevron is overruled,” you could almost feel the legal earthquake rumbling through government regulations and the corporate tax system.
The old 1984 Chevron USA vs. Natural Resources Defense Council was a landmark decision that helped federal agencies defend their regulations in court if industry groups challenged them. That case created the doctrine that judges should defer to executive branch agencies when there were gaps and ambiguities in laws and regulations. It was a terrible decision.
In sharply overturning the rule, the current Supremes declared that the Chevron proposition was “fundamentally misguided.” Chief Justice Roberts instructed America’s lower courts to “exercise their independent judgment in deciding whether an agency has acted within its statutory authority.” The high court, in essence, held that the Chevron deference granted too much power to administrative agencies and undermined the judiciary’s role in interpreting laws.
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Chevron also undermined the separation of powers by allowing the executive branch to create and interpret laws effectively, resulting in administrative overreach beyond what Congress intended. The Supreme Court ruled that “Chevron’s presumption is misguided because agencies have no special competence in resolving statutory ambiguities. Courts do.”
The Chevron case had created an imperial bureaucracy, allowing the federal government to make, interpret, and adjudicate the laws we live under. However, when America’s Founders established responsible government, it required our elected leadership to be accountable for its decisions and the effects of those decisions; that’s why they produced a Constitution restricting the government’s powers. By doing so, the Founders created a minimal bureaucracy, accountable to elected officials, who have great incentive to listen to their constituents’ complaints.
Chevron also created unpredictability and uncertainty, allowing agencies to revise their rules and laws as administrations changed. By limiting the arbitrary power of agencies run by non-elected bureaucrats, the high court reaffirmed the role of the courts.
The ruling of the Supreme Court also means trouble for the SEC, the Federal Trade Commission, and the Environmental Protection Agency, which has been trying to put fossil-fuel power plants out of business. The high court has already decided, in 2022, that the EPA lacked authority to “mandate a national shift to ‘clean’ energy sources.” The EPA then issued new rules, which are now threatened by the Chevron deference and a coalition of 25 states that filed a lawsuit to block the latest Biden plan from taking effect.
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Regulators, beware. The Supremes have shaken the ground beneath your feet and the administrative state. The decision on Chevron will surely lead to new litigation challenging settled agency rules.
Other stories you may want to read:
- John R. Smith: U.S. and Florida Flooded With Unneeded Laws - September 26, 2024
- John R. Smith: Florida’s Economy and Education Systems Ranked Best In U.S. - September 4, 2024
- John R. Smith: The Road to Complete Destruction - August 30, 2024