Supreme Court ends ‘Administrative State’

In a trio of decisions at the end of its term—Loper Bright v. Raimondo, SEC v. Jarkesy, and Corner Post v. Board of Governors of Federal Reserve—the U.S. Supreme Court skewed the balance between the three branches of government and remade the way executive agencies will draft and enforce their interpretive regulations. The implications and ambiguities of the Court’s rulings will be felt throughout the economy for decades. In what follows, we will review and clarify each of the three cases. However, considered together, it’s clear the courts have put themselves squarely at the center of determining an agency’s statutory authority and, ultimately, the sufficiency of each and every regulation.

Loper Bright v. Raimondo

Since 1984, when the Court decided Chevron v. Natural Resources Defense Council, courts have deferred to agency expertise when authorized by a statute, when the statute is ambiguous or open-ended, and when the regulation is a reasonable interpretation of Congressional intent (not “arbitrary and capricious”), which became known as “Chevron deference.” It was an act of judicial restraint as well as a recognition that the courts lacked the expertise to assess the increasingly complex, often science- or technology-based rules.