Last fall, Lesko v. United States—an appeal of a decision from the Court of Federal Claims about an Office of Personnel Management (“OPM”) regulation—was argued before a panel of the U.S. Court of Appeals for the Federal Circuit.  This week, however, following a sua sponte poll of the Circuit’s full bench, the court ordered the appeal to be heard en banc, directed the parties to file new briefs, and invited amicus involvement.  The Circuit has instructed the renewed briefing to address the specific impact of the Supreme Court’s landmark decision in Loper Bright Enterprises v. Raimondo overruling the forty-year-old Chevron doctrine, which required federal courts to defer to federal agencies’ views on what the law is under certain circumstances.

The issue in Lesko is whether a nurse practitioner who worked at the Indian Health Service was erroneously denied enhanced pay, and therefore overtime, for working nights, Sundays, and holidays.  In March 2023, the Court of Federal Claims answered that question in the negative because the nurse practitioner’s work outside of regular hours was not officially scheduled “in writing,” as required by an OPM regulation.  The Lesko court reached that conclusion based on the Federal Circuit’s past decision in Doe v. United States, which found that a Federal Employees Pay Act provision authorizing overtime pay only when it’s “officially ordered or approved” was ambiguous.  As a result of the ambiguity, the Doe court granted Chevron deference to an OPM regulation requiring, among other things, written authorization as a condition of receiving overtime pay.

During the pendency of Ms. Lesko’s appeal, the legal landscape has shifted.  In May 2023, the Supreme Court granted cert in Loper Bright on the question of whether to overrule or clarify the Chevron-deference doctrine.  As Ms. Lesko’s opening brief noted, given that Doe turned on Chevron deference, her appeal, which similarly “involve[d] issues of Chevron deference to agency regulations,” would likely be impacted by the eventual outcome in Loper Bright.  Of course, that was an understatement, considering the sweep of the Supreme Court’s June 2024 decision:

Chevron is overruled.  Courts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as the APA requires.  Careful  attention to the judgment of the Executive Branch may help inform that inquiry.  And when a particular statute delegates authority to an agency consistent with constitutional limits, courts must respect the delegation, while ensuring that the agency acts within it.  But courts need not and under the APA may not defer to an agency interpretation of the law simply because a statute is ambiguous.

Unsurprisingly, Ms. Lesko brought this development to the Federal Circuit’s attention in a FRAP 28(j) letter filed in September 2024.  Oral argument was then held in October before Chief Judge Moore, Judge Chen, and Judge Stoll.  But before the panel issued its opinion the full Federal Circuit decided sua sponte to hear the case en banc—that is, with all of its judges—and requested new briefs with a second argument set for September 2025. 

The Federal Circuit has requested briefing on the following questions:  

Specifically, the Federal Circuit has requested briefing on the following questions:  

• Considering Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024), how should “officially ordered or approved” in 5 U.S.C. § 5542(a) be interpreted?

• Is this a case in which “the agency is authorized to exercise a degree of discretion” such that OPM has authority to adopt its writing requirement? Loper, 603 U.S. at 394.

• Is there a statutory provision (e.g., 5 U.S.C. §§ 1104, 5548) that provides such authority?

The Court also invited amicus participation to assist in resolving those questions.

The first question appears to go to what the “best reading” of the relevant statute is.  After all, as Loper Bright teaches, “statutes, no matter how impenetrable, do—in fact, must—have a single, best meaning” that “is fixed at the time of enactment.”  And “[i]n the business of statutory interpretation, if it is not the best, it is not permissible.”

The second and third questions concern the broader issue of whether OPM’s overtime regulation imposing a writing requirement is beyond its power.  Put another way, did Congress delegate to OPM the power to decide what requirements must be met for overtime to be “officially ordered or approved”?  For context, the Federal Circuit’s order quotes from the following passage in  Loper Bright:

In a case involving an agency . . . the statute’s meaning may well be that the agency is authorized to exercise a degree of discretion.  Congress has often enacted such statutes.  For example, some statutes “expressly delegate[ ]” to an agency the authority to give meaning to a particular statutory term.  Others empower an agency to prescribe rules to “fill up the details” of a statutory scheme or to regulate subject to the limits imposed by a term or phrase that “leaves agencies with flexibility,” such as “appropriate” or “reasonable.”

When the best reading of a statute is that it delegates discretionary authority to an agency, the role of the reviewing court . . . [is] to independently interpret the statute and effectuate the will of Congress subject to constitutional limits.  The court fulfills that role by recognizing constitutional delegations, “fix[ing] the boundaries of [the] delegated authority,” and ensuring the agency has engaged in “‘reasoned decisionmaking’” within those boundaries[.]

It will be interesting to see how the full Federal Circuit thinks through these questions and what broader implications the ultimate decision will have given OPM’s government-wide responsibilities.

Loper Bright has reached the Court of Federal Claims for review of bid protests under the Administrative Procedures Act (APA). 

QED GROUP LLC v. USA, No. 1:2024cv01961 – Document 47 (Fed. Cl. 2025)

In a dispute over whether a prospective bidder for a broad pre-approved vendor list could be excluded because it was subject to a waiver on an existing contract, the Court of Claims applied the requirements of Loper Bright, and its instruction regarding Skidmore and Auer deference, to side with the bidder.  

Section 889 of the John S. McCain National Defense Authorization Act prohibits federal executive agencies from contracting with an entity that uses “covered telecommunications equipment” as a substantial or essential component of any system where “covered telecommunications equipment includes equipment produced by entities headquartered in China” or “that the Secretary of Defense … reasonably believes to be an entity owned or controlled by, or other-wise connected to, the government of [China].” 

Two subsections (d)(1) and (d)(2) allow for waivers. Section (d)(1) applies to waivers by an agency head and includes a variety of limitation on time and scope. Section (d)(2) applies to waivers by the Director of National Intelligence (DNI) and is not subject to the same limitations.  

Q2 Impact was covered by a DNI waiver under §(d)(2) for its contract supporting a USAID learning activity in Egypt. As a result, when the General Services Administration solicited proposals for its OASIS+ program, GSA found Q2 Impact ineligible to be placed on a pre-approved providers list because of its existing DNI waiver, explaining it was “unable to enter into a contract with any entity that represents it ‘DOES’ use covered telecommunications equipment or services …”.  

Q2 Impact filed suit in the Court of Claims alleging that the government relied on the wrong subsection of §889 to exclude it.  

The Court of Claims reviews bid protests under the APA, which provides that a reviewing court shall set aside agency action that “not in accordance with law.” Such review, like agency interpretations of the Constitution—is not entitled to deference. Loper Bright Enterprises v. Raimondo, 603 U.S. 369, 391-92 (2024). And thus it “remains the responsibility of the court to decide whether the law means what the agency says.”  

Using the standard tools of statutory construction, such as whether the law has a “plain and unambiguous meaning” and the “context in which that language is used” and the “broader context of the statute as a whole” the court determined that Q2 Impact had the correct interpretation of § 889. 

To reach this conclusion, the court compared Section (d)(1) waivers with Section (d)(2) waivers.  

The government argued that where a provider and “covered product” has been granted a waiver under a particular contract, a new contracting agency must get a separate waiver under the new contract regardless of whether the original waiver was granted under §(d)(1) or §(d)(2). The Court of Claims disagreed, looking first for any statutory language providing deference to the government’s position. Finding none, it applied Loper Bright:   

In Loper Bright, the Supreme Court recently held that “[s]ection 706 [of the APA] makes clear that agency interpretations of statutes … are not entitled to deference. … [I]t thus remains the responsibility of the court to decide whether the law means what the agency says.” Loper Bright, 603 U.S. at 391-92 (citations and quotation marks omitted).  

But that was not the end of the inquiry, because under Skidmore, an agency’s  

“interpretations constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance consistent with the APA.” Loper Bright, 603 U.S. at 394 (citing Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)).  

Moreover, when interpreting its own rule or regulation, Auer deference may apply if three requirements are satisfied.  

(1) “the regulatory interpretation must be the agency’s authoritative or official position, rather than [an] ad hoc statement not reflecting the agency’s views”; (2) “the agency’s interpretation must in some way implicate its substantive expertise”; and (3) the “agency’s reading of a rule must reflect its fair and considered judgment.” Id. at 577-79.  

The court held that no deference applied because the government’s interpretation addressed only the agency-head waiver process, not the DNI waiver process. Relative to DNI waivers, the government had not released considered guidance related to the applicable subsection and only three DNI waivers were identified as the historical pool of waivers to evaluate agency practice, including the waiver applicable here. This was not sufficient, leaving the court to “determine the meaning of § 889(d)(2) and rule 4.2104(b) without formal deference to GSA’s interpretation in the government’s briefs. Loper Bright, 603 U.S. at 391-92.” 

Because the court determined that the clearest reading the DNI waiver subsection is that it applies only to the equipment and contract for which the waiver is given, prohibiting equipment subject to the waiver from being used for any other contract, the contractor is not prohibited from receiving other government contracts that would not use the covered equipment. The court then addressed the policy concerns presented by the government and held “[u]nder Loper Bright, the courts cannot construe the law ‘with an eye to policy preferences that had not made it into the statute.’ Loper Bright, 603 U.S. at 403-04.” 

Applying Loper Bright all the government’s claims for deference were rejected and petitioner’s interpretation prevailed.   

The event will discuss how the Loper and other court decisions “pose challenges for Congress in how it legislates and directs regulatory agencies. They also underscore existing concerns over congressional capacity, internal processes, and the legislative branch’s ability to tackle complex policy challenges. Last year, BPC established the Working Group on Congress, Courts, and Administrative Law to identify concrete, bipartisan steps that Congress can take to address the questions raised by the Court. A report detailing the Working Group’s findings will be released alongside the event and available on BPC’s website.”

Speakers, moderators, and panelists include:

• Rep. Joe Morelle (NY-25) | Ranking Member, Committee on House Administration
• Heidi Heitkamp | Co-Chair, Working Group on Congress, Courts, and Administrative Law; Co-Chair, Farm and Forest Carbon Solutions Task Force; Former U.S. Senator (D-ND)
• Mel Martinez | Co-Chair, Working Group on Congress, Courts, and Administrative Law; Former U.S. Senator (R-FL); Former Secretary of Housing and Urban Development
• Margaret Spellings | President and CEO, Bipartisan Policy Center (Moderator)
• Marci Harris | Co-founder and Executive Director, POPVOX Foundation
• Victoria Nourse | Ralph V. Whitworth Professor in Law, Georgetown Law and Vice Chair, U.S. Commission on Civil Rights
• Jeffrey A. Rosen | Nonresident Fellow, AEI and Former Acting U.S. Attorney General and Deputy Attorney General

Event Details and Registration

March 27, 2025 from 9:30 am to 10:30 am EDT

Hybrid Event
Bipartisan Policy Center
1225 Eye Street NW
Washington, D.C

Register here.

Bipartisan Policy Center Working Group on Congress, Courts, and Administrative Law

On December 10, 2024, the Bipartisan Policy Center launched “launched a new Working Group on Congress, Courts, and Administrative Law, led by former Sens. Heidi Heitkamp (D-ND) and Mel Martinez (R-FL), to develop practical tools to help Congress reinvigorate its legislative capabilities following recent Supreme Court rulings, including the overturning of Chevron deference in Loper Bright.”

Working Group Co-Chairs:

• Former Sen. Heidi Heitkamp (D-ND) | Institute Director, The University of Chicago Institute of Politics
• Former Sen. Mel Martinez (R-FL) | Member, Board of Directors, Edward M. Kennedy Institute for the United States Senate

Working Group Members:*

• Corey Astill | Vice President, Health and Retirement, Smart Regulation, Business Roundtable
• Kurt Couchman | Senior Fellow, Fiscal Policy, Americans for Prosperity
• Jen Daulby | CEO, Congressional Management Foundation
• Susan Dudley | The George Washington University
• Former Rep. Allyson Schwartz (D-PA) | Senior Advisor, Leavitt Group; Former U.S. Representative
• Howard Shelanski | Joseph and Madeline Sheehy Chair in Antitrust Law and Trade Regulation; Professor of Law, Georgetown Law
• Jared Thompson | Managing Litigator, Natural Resources Defense Council
• Rob Walters | Retired Partner, Gibson Dunn

The EPA recently announced that it will formally reconsider its 2009 Endangerment Finding in which it deemed carbon dioxide, methane, and four other gases as “air pollutants,” as well as “all of its prior regulations and actions that rely on the Endangerment Finding.” That is a big deal because the Endangerment Finding has been used to justify “seven vehicle regulations with an aggregate cost of more than one trillion dollars” and “has also played a significant role in EPA’s justification of regulations of other sources beyond cars and trucks,” such as power plants.   Needless to say, how this process plays out could have major impacts on the national economy.

But like many such consequential matters, EPA’s reconsideration of Endangerment Finding turns, in part, on questions of statutory interpretation. And as EPA’s announcement notes, after the agency issued the Endangerment Finding in 2009, “major Supreme Court decisions in the intervening years, including Loper Bright Enterprises v. Raimondo . . . have provided new guidance on how the agency should interpret statutes to discern Congressional intent and ensure that its regulations follow the law.”

Background

Under the Clean Air Act, the EPA “Administrator shall by regulation prescribe . . . standards applicable to the emission of any air pollutant from any class or classes of new motor vehicles or new motor vehicle engines, which in his judgment cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare.” Under the statute, if EPA makes an endangerment finding with respect to an “air pollutant,” as defined by the CAA, it must then issue regulations.

In a 2007 decision, the Supreme Court ruled 5-4 in Massachusetts v. EPA that greenhouse gases are “air pollutants” and thus EPA has the authority under CAA to regulate new motor vehicles emission of greenhouse gases. But the Court did not address “whether on remand EPA must make an endangerment finding” for greenhouse gases “or whether policy concerns can inform EPA’s actions in the event that it makes such a finding.” Justice Scalia, joined by Chief Justice Roberts, Justice Thomas, and Justice Alito, dissented, disagreeing with the majority’s views on the scope of the EPA Administrator’s discretion to make an endangerment finding, as well as the majority’s interpretation of “air pollutant” to necessarily include gases like carbon dioxide. In a colorful footnote, Justice Scalia wrote that “[it] follows” from the majority’s conclusion that carbon dioxide is an “air pollutant” under the CAA “that everything airborne, from Frisbees to flatulence, qualifies as an ‘air pollutant.’ This reading of the statute defies common sense.”

Following Massachusetts v. EPA In 2009, the EPA chose to issue an Endangerment Finding for greenhouse gases and a host of highly consequential regulations flowed from it. EPA is now reconsidering that decision. Loper Bright and other intervening Supreme Court precedent will certainly play a role in that process. 

Enter Loper Bright

Loper Bright overruled Chevron v. NRDC—which required courts to defer to federal agencies’ views on what the law is under certain circumstances—and held that courts may no longer “defer to an agency interpretation of the law simply because a statute is ambiguous.” As the Supreme Court observed in Loper Bright, “statutes, no matter how impenetrable, do—in fact, must—have a single, best meaning” that “is fixed at the time of enactment.” And “[i]n the business of statutory interpretation, if it is not the best, it is not permissible.” But as the Court noted, “[t]hat is not to say that Congress cannot or does not confer discretionary authority on agencies. Congress may do so, subject to constitutional limits, and it often has.” And as the Court explained, “the statute’s [best] meaning may well be that the agency is authorized to exercise a degree of discretion.” Among other things, some statutes “empower an agency to prescribe rules to ‘fill up the details’ of a statutory scheme or to regulate subject to the limits imposed by a term or phrase that ‘leaves agencies with flexibility,’ such as ‘appropriate’ or ‘reasonable.’” (citations omitted). Footnote 6 of the Court’s opinion in Loper Bright provides two examples of this type of statute, both of which are also administered by EPA and appear to use language that is similar to the provision of the CAA authorizing the EPA Administrator to make endangerment findings.

Given Massachusetts v. EPA’s holding that greenhouse gases like carbon dioxide are subject to regulation under the CAA (regardless of whether that case was correctly decided and what the “best” reading of the CAA’s definition of “air pollutant” is), a salient question in EPA’s reconsideration process is the extent of the EPA Administrator’s “judgment”—that is, discretion or “flexibility,” to borrow from Loper Bright—to decide whether something falling within the statutory definition of “air pollutant” should (or should not) be the subject of an endangerment finding and thus EPA regulation under the CAA. It will be interesting to see how Loper Bright bears on that and other important questions as the EPA formally reconsiders its Endangerment Finding.

Professors Kristin Hickman and Amy Wildermuth have a new article on Loper’s two buckets: “independent judgment for mere statutory interpretation and reasoned decisionmaking for exercises of delegated policymaking discretion.”

Abstract

By overturning Chevron, the Supreme Court’s Loper Bright decision clearly changed the way in which courts must approach agency actions interpreting statutes. But Loper Bright stopped well short of declaring that courts should always ignore agency interpretations and only interpret statutes using their independent judgment. In two critical paragraphs, the Court acknowledged that some statutory provisions delegate discretionary authority to agencies counseled a more restrained judicial review for reasoned decisionmaking when agencies exercise such power. But, whereas Chevron focused nearly exclusively on the statutory word or phrase that an agency was endeavoring to interpret and implement, Loper Bright shifts the analysis at least initially to the delegations themselves-i.e., the statutory terms that give agencies the authority to act in the first place. Drawing on prior work, we propose a framework that categorizes statutory delegations of rulemaking power as specific authority, general authority/housekeeping, and hybrid delegations. We then argue that Loper Bright is best understood and interpreted as demanding independent judgment, potentially influenced by Skidmore‘s contextual factors, for general authority/housekeeping regulations and a more restrained reasoned decisionmaking review for specific authority and hybrid regulations. We explain how this approach harmonizes Loper Bright‘s vision for judicial review of agency action with the Supreme Court’s recent nondelegation and major questions jurisprudence. We also suggest that reading Loper Bright this way will cabin agency discretion in a manner that curtails agency overreach while still allowing executive discretion in implementing and administering statutory requirements.

Access the paper on SSRN.

Two cases interpreting the Fair Labor Standards Act in the federal courts in Texas  have applied the Supreme Court’s Loper Bright decision to overturn to two separate Department of Labor regulations.

Tipped Employees

In the first case, Restaurant Law Center v. U.S. Department of Labor, 120 F.4th 163 (5th Cir. 2024), the Fifth Circuit overruled the lower court, which had upheld as lawful a 2021 Department of Labor rule that restricted when employers may claim a “tip credit” for “tipped employees” under the Fair Labor Standards Act.  A tip credit enables an employer to pay tipped employees an hourly wage below the minimum standard wage but requires the employer to pay any difference between what the tipped employee actually makes on tips and the minimum wage.

Under the rule at issue, finalized in December 2021, an employer was authorized to take the tip credit for tip-producing work (such as a waitress serving food), but if more than 20 percent of the employee’s workweek was spent on supporting work (such as setting or clearing tables), the employer could not claim the tip credit for that excess. In addition, for the credit to apply, the tipped employee could not perform supporting work for more than 30 minutes at any given time.

Finding the meaning of tipped employee under the Fair Labor Standards Act to be ambiguous, the lower court found the 2021 rule to be a permissible interpretation under the Chevron doctrine. By the time the Fifth Circuit heard the appeal, Loper Bright had overturned Chevron and the Fifth Circuit therefore reexamined the rule in light of that decision.  As it explained, “Courts are constantly faced with statutory ambiguities and genuinely hard cases. But [now] instead of declaring a particular party’s reading ‘permissible’ in such a case, courts use every tool at their disposal to determine the best reading of the statute and resolve the ambiguity.”  Id. at 171; see id. (“[T]he Supreme Court’s intervening opinion in Loper Bright requires us to depart from the district court’s analysis at the very start. We must parse the text of the FLSA using the traditional tools of statutory interpretation.”).

Applying and construing the text of the Fair Labor Standards Act, the Fifth Circuit explained that the 2021 rule “sits uncomfortably with the operative statutory term: ‘tipped employee.’ Under the Final Rule, if an employee is not engaged in her occupation at a given moment, then she is not a ‘tipped employee’ at that moment. The Final Rule necessarily means, therefore, that when an employee is not engaged in her ‘tipped occupation,’ as the regulatory language puts it, she is engaged in some other occupation. Because the Final Rule is so granular in divvying up component tasks, a single occupation could quickly break apart, implausibly, into many.” Id. at 173.  Moreover,

The Final Rule is attempting to answer a question that DOL itself, not the FLSA, has posed. The FLSA is clear: an employer may claim the tip credit for any employee who, when “engaged in” her given “occupation … customarily and regularly receives more than $30 a month in tips.” 29 U.S.C. § 203(t) (emphasis added). The FLSA does not ask whether duties composing that given occupation are themselves each individually tip-producing.

Id. 

On this basis, the Fifth Circuit found the rule to be contrary to the text of the Fair Labor Standards Act.  In a separate section, it also found the rule to be arbitrary and capricious.  Based on these finding, the Fifth Circuit vacated the rule in its entirety.

Exempt Employees

The second case, Texas v. U.S. Department of Labor, is a district court case from the Eastern District of Texas.  In this matter, the State of Texas and several trade associations and employers challenged a Department of Labor rule that raised the minimum salary threshold at which executive, administrative, and professional (EAP) employees are exempt from overtime pay under the Fair Labor Standards Act.  Current law exempts certain employees from the minimum wage and overtime requirements of the Fair Labor Standards Act if they (1) are salaried, (2) are paid above a minimum salary threshold, and (3) perform the duties of their exempt job classification.  The new rule, finalized in April 2024, changed the second of these three criteria by significantly raising the salary threshold for the exemption, and also by including an automatic increase of that threshold every three years. thereby requiring employers to pay overtime to a much larger number of employees.

The court explained that, under Loper Bright, courts are no longer bound to defer to agency interpretations of their controlling statutes and that, in fact, “when there is an ambiguity ‘about the scope of an agency’s own power … abdication in favor of the agency is least appropriate.’” 2024 WL 4806268 at *13 (E.D. Tex. Nov. 15, 2024) (quoting Loper Bright).  Conducting its own independent statutory analysis, which included a detailed review of the mechanisms employed by the Department of Labor to reach its new salary thresholds, the court concluded that the rule effectively redefined the exemption in a way not authorized by the Fair Labor Standards Act.  As it explained, “because the EAP Exemption [under the Fair Labor Standards Act] requires that an employee’s status turn on duties—not salary—and because the 2024 Rule’s changes make salary predominate over duties for millions of employees, the changes exceed the Department’s authority to define and delimit the relevant terms.”  Id. at *17.

As with the decision described above, the court vacated the rule in its entirety.  The Department of Labor appealed the decision and the parties are currently briefing the case before the Fifth Circuit.

Conclusion

Both of these cases highlight how Loper Bright has empowered courts to scrutinize agency actions more diligently, especially where agencies have stretched statutory language to implement broad and controversial policy changes. They demonstrate that federal agencies will continue to face heightened judicial resistance to rules relying on expansive interpretations of their authority.

Lee Steven is senior legal counsel at Americans for Prosperity Foundation.

Congress created the Council on Environmental Quality to serve as an advisory body that makes recommendations to the President on what environmental policy should be. But CEQ has long claimed power to issue binding regulations—also known as “legislative rules”—implementing the National Environmental Policy Act. The source of CEQ’s claimed power: not a duly enacted statute but an Executive Order issued by President Carter purported to confer rulemaking authority on CEQ. This makes no sense. After all, as the Supreme Court has explained, “[a]n agency . . . ‘literally has no power to act’ . . . unless and until Congress authorizes it to do so by statute.” Nonetheless, for many years, as a general matter courts uncritically accepted that CEQ has this power without pausing to examine its underlying source.

In 2024, pursuant to its claimed rulemaking power, CEQ issued NEPA regulations radically reimagining this procedural statute and recasting it as a substantive value-laden law.  Iowa and a number of other States sued, challenging these new NEPA regulations as beyond CEQ’S statutory authority. Last month, in Iowa v. Council on Environmental Quality, citing the Supreme Court’s landmark decision in Loper Bright Enterprises v. Raimondo, a North Dakota district court rejected CEQ’s claimed power to issue binding government-wide NEPA regulations at all.  

Loper Bright overruled Chevron v. NRDC—which required courts to defer to federal agencies’ views on what the law is under certain circumstances—and held that “[c]ourts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority” and may no longer “defer to an agency interpretation of the law simply because a statute is ambiguous.”

Key Loper Bright Analysis

A couple aspects of the district court’s Loper Bright analysis are interesting.

First, in rejecting the CEQ and its intervenors’ multiple arguments that there was no need to decide whether CEQ has the underlying authority to issue binding regulations at all, the district court observed in a footnote: “Plaintiff States have claimed the 2024 Rule exceeds CEQ authority. This necessarily means the Court must determine what CEQ’s authority is to analyze if CEQ exceeded it.” Citing Loper Bright, the district court continued: “This process is a step in the Court’s required analysis and not an issue that needs to be presented or forfeited.” (emphasis added). Independently interpreting the statute, the district court concluded: “NEPA is not ambiguous. The plain text of the statute does not give CEQ authority to issue binding regulations. NEPA only authorizes CEQ to make recommendations to the President. Therefore, the Court finds that CEQ does not have authority under NEPA to issue regulations.” (Late last year, a D.C. Circuit panel reached a similar conclusion in Marine Audubon Society v. FAA.)

Second, the district court cited Loper Bright in rejecting CEQ’s alternate request for deference to its interpretation of NEPA under Andrus v. Sierra Club, a 1979 pre-Chevron case in which the Supreme Court remarked in dicta that “CEQ’s interpretation of NEPA is entitled to substantial deference.” The district court explained: “Andrus was a precursor to Chevron and followed much of the same process and reasoning. Whatever deference the Supreme Court assigned to CEQ in Andrus is subject to the same standard of review outlined in Loper Bright” and thus “[t]he Court is not required to give deference to CEQ interpretations.” Quoting Loper Bright, the district court also noted that “‘[E]very statute’s meaning is fixed at the time of enactment.’” In other words, the meaning of a statute can’t evolve or change over time, as CEQ’s 2024 regulation would have it.

Iowa v. CEQ is an interesting case from a broader separation of powers perspective and well illustrates the limits of a President’s ability to conjure regulatory authority by Executive Order. For that matter, President Trump has issued an Executive Order revoking President Carter’s Executive Order purporting to grant CEQ authority to issue binding NEPA regulations, and CEQ is now in the process of rescinding its prior NEPA regulations.  

When the Supreme Court overruled Chevron last year in Loper Bright Enterprises v. Raimondo, Chief Justice John Roberts seemed at pains to limit the impact of upending the Chevron methodology to future cases.  He explained that Loper Bright “do[es] not call into question prior cases that relied on the Chevron framework.  The holdings of those cases that specific agency actions are lawful . . . are still subject to statutory stare decisis[.]”  In other words, the fact that Chevron might have framed prior courts’ reasoning about the proper interpretation of the law was not enough of a “special justification” to overrule a statutory precedent.  It would, “at best,” represent “‘an argument that the precedent was wrong decided.’” 

Courts of Appeal Grapple with Fate of Step Two

Loper Bright’s full implication for stare decisis and the precedential force of thousands of Step Two Chevron decisions is unknown.  The Loper Bright dissenters, led by Justice Kagan, expressed incredulity that the Court’s efforts to insulate forty years of case law would be successful.  As Justice Kagan suggested, “[c]ourts motivated to overrule an old Chevron-based decision can always come up with something to label a ‘special justification.’”  And the courts of appeal, for their part, continue to grapple with the question.   

The Sixth Circuit Approach

Last fall, the Sixth Circuit adopted a strikingly conservative approach.  In Tennessee v. Becerra, the circuit held that, “while Loper Bright opens the door to new challenges based on new agency actions interpreting statutes, it forecloses new challenges based on specific agency actions that were already resolved via Chevron deference analysis.”  Looking to past circuit precedents upholding related, but now-repealed, regulations that implemented the same “ambiguous” statute, the Tennessee court concluded it was prohibited from offering its best, independent judgment of the law.  But the decision to understand statutory stare decisis to include circuit court precedent in this way was, and remains, controversial.  That much is clear from Judge Kethledge’s dissent. 

The Ninth Circuit Approach

The Ninth Circuit’s decision earlier this month in Murillo-Chavez v. Bondi reflects a somewhat more nuanced approach, which arguably complements the position taken by one of my colleagues in response to Tennessee.  The Bondi case concerned the Board of Immigration Appeals (“BIA”) and its determination about whether a certain offense qualifies as “crime involving moral turpitude” (“CIMT”).  The Ninth Circuit started by noting the obvious tension between Loper Bright’s instruction that a judge provide independent judgment about the best meaning of the law and the duty to afford stare decisis effect to the many Step Two cases involving past deference to BIA’s CIMT determinations. 

[Under Loper Bright, we may] continue to “look to agency interpretations for guidance” . . . recognizing that the agency’s “body of experience and informed judgment” may give those interpretations the “power to persuade[.]” . . .  However, they have only that power, and we “need not and under the APA may not defer to an agency interpretation of the law simply because a statute is ambiguous.” 

We have no precedential decision concerning whether either of the two Oregon statutes that Murillo was convicted of violating in 2018 is a CIMT.  “When we have not previously considered whether the offense at issue is a CIMT, our most useful guidance often comes from comparing the crime with others that we have previously deemed morally turpitudinous.” 

The Bondi court ultimately decided that, while existing precedent about the meaning of CIMT was relevant—and still good law—it was not binding, and its usefulness was limited in the face of the judges’ obligation to provide their independent judgment about legal meaning. 

At least some of our prior decisions defining crimes as CIMTs were based on Chevron deference.  After Loper Bright, those “prior cases that relied on the Chevron framework . . . are still subject to statutory stare decisis despite our change in interpretive methodology.”  Thus, our holdings “that specific agency actions are lawful” were not overruled by Loper Bright simply because they relied on Chevron.  But, given Loper Bright’s clear instruction that we otherwise need no longer defer to the agency’s interpretation, we take the Supreme Court to mean that although the holdings of our prior cases in which Chevron deference was applied remain precedential until overruled, we are not compelled to use them as analytical building blocks in every case to determine whether the BIA correctly found, in the case before us, that a previously untreated crime is a CIMT.  Rather, although the logic and reasoning in our prior decisions that relied on Chevron may aid us in determining whether a crime we have not previously confronted is a CIMT, just as we may be persuaded by the agency’s analysis in the case before us, in the end we must exercise our “independent judgment,” . . . in deciding the present case

Impact of Bondi Opinion

The Bondi opinion underscores an unresolved ambiguity about what, precisely, is supposed to receive stare decisis effect post-Loper Bright.  As one commentator suggests, it is unclear whether that effect “applies at the level of the particular statutory provision at issue in a prior case,” “at the level of the particular legal interpretation,” or with respect to a “particular agency action.”  The Bondi court decided it was very important that prior cases upholding the lawfulness of BIA’s interpretation of CIMT implicated different statutory offenses and thus involved unique determinations or “agency actions.”  That might have given the Ninth Circuit enough reason to sidestep existing caselaw, but without squarely addressing its precedential force.  Whether other courts will adopt the same approach has yet to be seen.  This more narrow understanding of the Chief Justice’s statements about stare decisis could open the door to a more significant unsettling—or revisiting—of older cases resolved in the government’s favor at Chevron Step Two.  That could be a welcome development. 

One of the most interesting questions surrounding the implementation of Loper Bright is its impact on the statutory stare decisis of previous decisions that courts made under the Chevron framework.

Elliot Setzer has this essay on the topic over at the Yale Notice & Comment blog:

When the Supreme Court overturned the Chevron doctrine in Loper Bright Enterprises v. Raimondo, it purported to leave intact the holdings of cases decided under Chevron. Chief Justice Roberts wrote that “we do not call into question prior cases that relied on the Chevron framework. The holdings of these cases that specific agency actions are lawful—including the Clean Air Act holding of Chevron itself—are still subject to statutory stare decisis despite our change in interpretive methodology.” Lower courts are now grappling with what exactly this means. What constitutes the “holding” of a Chevron case, now entitled to stare decisis effect? In a couple recent decisions, the Sixth Circuit has adopted an exceptionally narrow understanding of Chevron stare decisis. While that approach has some merit as a conceptual matter, it seems unlikely that the Loper Bright Court intended such a destabilization of existing doctrine.