Justices draw regulator red line

The Supreme Court’s Loper Bright Enterprises v. Raimondo decision should relieve concrete, construction and trucking interests of some uncertainties arising from federal agency rules or shield them when challenging such measures in federal courts. Loper plaintiffs questioned a Department of Commerce rule that hinged on authority indicated in Chevron U.S.A Inc. v. Natural Resources Defense Counsel. That 1984 high court decision enabled adoption of a rule costly to Loper plaintiffs and based on authority that the Commerce-administered National Marine Fisheries Service gleaned under the Magnuson-Stevens Act.

That statute includes the Administrative Procedure Act (APA) which, writes Chief Justice John Roberts, “requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous. Chevron reshaped judicial review of agency action without grappling with the APA, the statute that lays out how such review works. Its flaws were apparent from the start.”

As a leading voice of reason on federal regulatory matters impacting construction, the Associated Builders & Contractors praises the Supreme Court on the Loper decision and offers customary perspective on the case’s complexities. Above all, ABC concludes, the decision restores a balance of federal government power.

“Chevron often required courts to defer to federal agencies when those agencies were interpreting statutes they administer,” adds ABC general counsel and top employment law authority Littler Mendelson. “Because of [Loper], courts will no longer defer. Instead, they will give statutes their ‘best’ interpretation. That means agencies will have less leeway to write broad rules. Agencies will have to write rules that ‘hew more closely to statutory language’ and may also have to defend some existing rules against closer scrutiny.”

In a companion analysis of Loper’s overruling of Chevron, Littler shareholders Michael Lotito and Alexander MacDonald observe: “Judges can consider agency expertise, practice, and consistency. They can also respect agency policy decisions when an agency has been given explicit authority to make policy. But they cannot give agency interpretations of law binding legal effect.”

The ABC-led Coalition for a Democratic Workplace (CDW) sheds additional light on Loper in a brief highlighting the modus operandi of its top target in Washington, D.C. The National Labor Relations Board, CDW argues, has taken advantage of Chevron to interpret “statutes in radical, expansive ways never intended by Congress. Chevron also allowed the Board to engage in incessant flip-flopping on issues with each change of administration, leading to unmanageable uncertainty for the employer community.” Loper will yield more reasonable executive branch policies, the Coalition adds, as the judicial system finally gains “the ability and responsibility to rein in overreaching agencies like the NLRB to protect the regulated community.”

Others on board with the Loper outcome include the American Farm Bureau, which argues that Chevron multiplied federal agencies’ power and undermined separation of powers principles. “The Constitution built a system of checks and balances among three branches of government to prevent any one branch from becoming too powerful,” the Bureau explains. “The legislative branch creates, the executive branch enforces, and the judicial branch interprets the laws. Chevron created a super-branch of government.”

In a broad, welcome manner, Supreme Court justices have pushed back on that “super-branch” and clarified how the NLRB, Department of Labor, Department of Transportation and Environmental Protection Agency can legally approach their mandates per the National Labor Relations Act, Occupational Safety and Health Act, Motor Carrier Safety Administration Act, Clean Air Act, Clean Water Act and Resource Conservation and Recovery Act.

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