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The Federalist Society is hosting a webinar on the “Nondelegation and the Limits of Agency Authority after Consumers’ Research and Loper Bright” next Friday, January 23 at 2:00 PM ET. Details and registration link below:
The panel will discuss the questions left open—or raised—by the Supreme Court’s decisions in FCC v. Consumers’ Research and Loper Bright Enterprises v. Raimondo, about the proper approach to statutory construction and the role that the nondelegation doctrine should play as a background principle in statutory analysis in cases where an agency has claimed broad authority to weigh competing public values when promulgating legislative rules.
Featuring:
- Prof. Jonathan Adler, Tazewell Taylor Professor of Law and William H. Cabell Research Professor, William & Mary Law School; Senior Fellow, Property and Environment Research Center
- Prof. Ilan Wurman, Julius E. Davis Professor of Law, University of Minnesota Law School
- (Moderator) Adam White, Senior Fellow, American Enterprise Institute; Director, Scalia Law’s C. Boyden Gray Center for the Study of the Administrative State
The Federalist Society is hosting a webinar on the “Loper Bright Fallout for SEC Rulemaking” next Tuesday, January 20 at 12:00 PM ET. Details and registration link below:
In an unprecedented action, the SEC in July dismissed with prejudice a pending enforcement case concerning an alleged violation of a rule promulgated under the Investment Company Act of 1940 (ICA). In 2023, the SEC had charged the defendants (a mutual fund, its investment advisor, and independent directors of the fund) with violating its 2016 “liquidity rule,” which limits the percentage of assets investment companies may hold in “illiquid” investments. The independent directors argued that the ICA did not authorize the SEC to make rules concerning fund liquidity and that its decision to do so based on a protection of investors rationale was owed no deference under the 2024 Supreme Court decision in Loper Bright.
The district court ordered supplemental briefing on Loper Bright implications, but before the SEC filed its supplemental response, it dismissed the case against all defendants, citing “policy reasons”, without more explanation.
Our panelists will discuss the numerous legal and policy issues and questions raised by this sequence of events.
Featuring:
(Moderator) Michael Piwowar, Executive Vice President, Milken Institute Finance
Jan Folena, Partner and Co-Chair of Securities & Regulatory Enforcement, Stradley Ronon
Margaret Little, Senior Litigation Counsel, New Civil Liberties Alliance
Tomorrow, the Supreme Court will consider for the first time two cert petitions at its conference presenting Loper Bright-related questions. A third, more tangentially Loper Bright-related petition will return as a relist.
United National Foods is Back
The petition in United National Foods, Inc. v. NLRB raises at least two Loper Bright implementation questions:
Whether Loper Bright Enterprises v. Raimondo . . . permits a court to (a) accept an agency’s reasonable construction of a statute without exhausting all relevant tools to find the single, best meaning or (b) give precedential weight to decisions affording deference under Chevron . . . when the court evaluates different agency action.
By way of background, this case returns to the Court for a second time after United National Foods’s original cert petition was GVR’d in light of Loper Bright. In an earlier decision, a divided Fifth Circuit panel relied on Chevron deference to uphold the authority of the NLRB’s General Counsel to unilaterally dismiss an administrative complaint after a party has filed for summary judgment, concluding the National Labor Relations Act was ambiguous on that point. On remand from the Supreme Court the same divided panel ruled once more in favor of the agency. Judge Oldham again dissented, suggesting “‘further consideration’ was an empty formality. . . . Same reasoning, same result, different day.” In his view, “that result conflict[s] with Loper Bright and the Supreme Court’s GVR order[.]” Should the Court grant cert, it will also have the opportunity to clarify that Loper Bright applies with full force to the NLRB’s interpretation of the NLRA, putting that arguably open question to rest.
Poore Over This Sentencing Commission Case
The petition in Poore v. United States likewise raises an important question about the applicability of the principles announced in Loper Bright: Whether the limits on agency deference announced in Kisor v. Wilkie and Loper Bright constrain the deference courts may accord the Sentencing Commission’s interpretation of its own rules via commentary. The New Civil Liberties Alliance filed an amicus brief in support of Mr. Poore’s petition, underscoring the importance of the question. Recasting Regulations previously covered the Poore petition in greater detail here.
Loper Relist Watch
The Court has also relisted the petition in Tennessee v. Kennedy. Although the questions presented do not directly implicate Loper Bright, the decision below does insofar as it addresses the broader question of the scope of statutory stare decisis that applies to Chevron-era precedent after Loper Bright. That is, the decision below raises the question whether statutory stare decisis travels with the specific agency action at issue or with the agency’s interpretation of the statute. Recasting Regulations has covered this case in greater detail here.
Mr. Pepson is regulatory counsel at Americans for Prosperity Foundation.
Earlier this month, a group of Republican U.S. Senators, led by Ted Cruz (Texas) and Mike Lee (Utah), sent a letter to the Environmental Protection Agency (“EPA”) discouraging the agency from moving forward with a proposal to reallocate exempted renewable volume obligations pursuant to the agency’s Renewal Fuel Standard program. Loper Bright figured prominently in the coalition letter and, specifically, the legislators’ argument that Congress’s failure to authorize such reallocation by statute deprived the EPA of authority to do so in the face of statutory silence.
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AFP Foundation’s Michael Pepson mentioned Lesko v. United States as a case to watch for understanding how Loper Bright might guide restraint over agency authority without Chevron deference earlier this year. At the time, the Federal Circuit had ordered en banc review to reconsider whether the Court of Federal Claims correctly upheld the Office of Personnel Management’s (“OPM”) overtime regulations. Last week, the full Circuit ruled in favor of OPM after applying the new Loper Bright paradigm for judicial review.
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When the Supreme Court decided Loper Bright Enterprises v. Raimondo, overturning Chevron deference, it clarified the principle that federal agencies cannot extend their authority beyond what has been clearly authorized by Congress. In declaring that “statutes . . . have a single, best meaning,” the Court made clear that agencies must follow the law as written and not their policy preferences. Over the past year, this clarity has prompted many agencies to scrutinize long-standing policies, even those created before Chevron deference. The Trump Administration has even made such reevaluation a central pillar of its deregulatory agenda, as reflected in Executive Order 14219 and guidance from the Office of Management and Budget. The Department of Justice’s (“DOJ”) new Title VI rule, which eliminates disparate-impact liability, is just one of the clearest and most recent examples of the real impact Loper Bright is having on the American regulatory space.
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Jace Lington and Bennett Nuss discuss the implications of the Loper Bright decision on administrative law with guest Eli Nachmany. Eli’s forthcoming paper, “Deference Undisturbed,” examines the effects of the Loper Bright decision on prior cases decided under the Chevron framework. They discuss the open legal questions that remain after the end of Chevron, the role of Congress in shaping administrative law, and the future of various deference doctrines.
Separation of Powers Institute Professor Chad Squitieri hosted Professor Natalie Schmidt for a fascinating discussion about her article on the distinction between law and fact. The podcast covers formalism, functionalism, realism, agencies’ role in factfinding, and why the distinction between law and fact is critical following the Supreme Court’s decision in Loper Bright.
Listen to the Episode:
Loper Bright overruled the Chevron doctrine and held that the APA requires courts to independently interpret statutes without deferring to federal agencies’ views on what the law is. In its wake, questions have arisen as to whether and how Loper Bright applies to the National Labor Relations Board’s interpretations of the National Labor Relations Act, a statute that predated the APA. And the NLRB has taken the position that even after Loper Bright, its interpretations of the NLRA are entitled to deference.
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AFP Foundation Files Amicus Brief in Relentless v. Department of Commerce
Americans for Prosperity Foundation (“AFPF”) has filed an amicus brief in Relentless v. Department of Commerce—the companion case to the historic Loper Bright Enterprises v. Raimondo. With Loper Bright held in abeyance on remand, the outcome in Relentless may have significant implications for proper implementation of the Magnuson-Stevens Act (“MSA”), as well as the understanding of de novo review in the post-Chevron administrative‑law landscape.
A Case Shaped by Loper Bright
Relentless returns to the First Circuit following the Supreme Court’s 2024 decision in Loper Bright, which ended Chevron deference and restored to federal courts their proper role of providing independent, best readings of the law. Because the Court vacated the First Circuit’s earlier decision upholding the legality of industry-funded monitoring in the Atlantic herring fishery, the case was sent back to the district court for reconsideration under Loper Bright’s de novo standard of review.
Even without the benefit of Chevron deference, however, the government again prevailed. The district court ruled the agencies’ position “reflect[ed] reasoned decisionmaking” and was consistent with their discretionary authority to implement regulations “necessary and appropriate” for the conservation of the fishery.
The District Court Failed to Undertake Meaningful De Novo Review
As AFPF’s brief explains, courts must now provide their best reading of a statute and not merely rubber-stamp a “reasonable” one advanced by an agency. The district court in Relentless relied on its old Chevron Step Two reasoning and failed to provide an independent reading of key statutory terms like “carry,” “necessary,” and “appropriate.” In doing so, it ignored important clarifications in the Supreme Court’s recent opinion in Seven County Infrastructure Coalition v. Eagle County. Rather than police the boundaries of Congress’s delegation to the government, the district court assumed, without explanation, that industry-funded monitoring was the kind of measure that could be justified either as a compliance cost or something falling within the bounds of the government’s discretionary authority to implement “necessary and appropriate” rules in the fishery.
The Magnuson–Stevens Act Does Not Authorize Industry Funding
The underlying legal dispute in Relentless, like Loper Bright, turns on two provisions of the MSA: (1) Section 1853(b)(8), which permits regulators to require observers or monitors “be carried” aboard fishing vessels, and (2) Section 1853(b)(14), a residual catch-all clause that provides authority for certain “necessary and appropriate” regulations. AFPF argues that neither provision authorizes the government to force fishermen to finance supplemental at-sea monitoring programs.
First, the original public meaning of “carry,” as used in Section 1853(b)(8), is restricted to physical conveyance and related incidental costs. Nothing in the text or its common usage suggests Congress authorized regulators to oblige fishermen to pay monitors’ salaries, which could consume up to 20% of their returns.
Second, Section 1853(b)(14)’s “necessary and appropriate” language cannot bear the weight the government places on it. Drawing on the Supreme Court’s 2024 decision in Harrington v. Purdue Pharma, AFPF emphasizes that catch-all provisions must be read in context. They only provide authority for regulatory measures similar to those expressly listed in the surrounding statute—not sweeping funding mechanisms Congress never contemplated.
So What?
Allowing agencies to invent funding schemes without clear statutory authority would dangerously erode Congress’s power of the purse. As AFPF notes, if regulators can require fishermen to pay government monitors, what stops them from imposing even more burdensome financial mandates? The government and courts have never offered any limiting principle.
More importantly, the district court’s reconsideration of Relentless failed to engage in the sort of robust textual analysis anticipated under Loper Bright and a de novo standard of review. The First Circuit cannot allow the lower court’s veering into arbitrary-and-capricious review, and its focus on “reasonableness,” as if Chevron were still good law, to stand. In this sense, Relentless presents a crucial (and high-profile) test of the impact and durability of Loper Bright.
Ryan P. Mulvey is senior policy counsel at AFPF and authored AFPF’s amicus brief in Relentless. In his role at Cause of Action Institute, Mr. Mulvey is lead counsel in Loper Bright Enterprises v. Raimondo.