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.

As we’ve discussed, Loper Bright has been changing the legal landscape as courts revisit and revise or uphold standards of review. Recently, the Eighth Circuit reviewed “the authority of the President and Secretary of Education, under existing law, to forgive hundreds of millions of dollars of loans made to borrowers to finance the cost of obtaining their post-secondary education.” Missouri v. Trump, No. 24-2332, 2025 WL 518130, at *1 (8th Cir. Feb. 18, 2025). At issue was a Biden-era rule (“SAVE Rule”) promulgated by the Department of Education to modify a pre-existing income contingent repayment (ICR) plan for federal student loans that would alter payment thresholds, stop interest accrual, and forgive loan balances after as little as ten years of repayment. Seven states challenged the rule as exceeding the Secretary of Education’s authority.

Congress Creates Loan Program

In 1993, Congress authorized the federal government to directly issue loans to college students, which allowed borrowers to repay their loans through four generally applicable options: (1) a standard repayment plan with fixed payments over a period not exceeding ten years; (2) a graduated repayment plan with increasing payments over a period not exceeding ten years; (3) an extended repayment plan with fixed or graduated payments over a period not exceeding twenty-five years; or (4) an income contingent repayment plan with varying payments based on income over a period not exceeding twenty-five years. 20 U.S.C. §§ 1078(b)(9)(A), 1087e(d)(1)(A)–(D).

Congress later enacted the College Cost Reduction & Access Act to expand repayment options for low-income borrowers by creating an income-based repayment (IBR) plan to limit monthly payments for borrowers experiencing a “partial financial hardship.” See, Pub. L. No. 110-84, § 203, 121 Stat. 784, 792–95 (2007) (codified as amended at 20 U.S.C. § 1098e). The plans have two central features: a ceiling on loan payments and loan forgiveness after twenty or twenty-five years of payments. These features are expressly set forth in the statute. 20 U.S.C. § 1098e.

There were thus two potential programs applicable to repayment based on income: the ICR and the IBR. The ICR statutory text does not provide a specific formula for calculating loan payments and does not explicitly state the Secretary can forgive loans. Instead, the balance owed “equal[s] the unpaid principal amount of the loan, any accrued interest, and any fees, such as late charges, assessed on such loan.” Congress empowered the Secretary to “establish procedures for determining the borrower’s repayment obligation on that loan for such year, and such other procedures as are necessary” to implement the ICR.

Accordingly, since 1994, the Department of Education has established various ICR plans that provided for loan forgiveness of any remaining debt at the end of the established payment period of twenty or twenty-five years, depending on the plan and the borrower’s loans.

The Biden Administration SAVE Rule

The SAVE Rule, by contrast, starts cancelling outstanding balances after 120 months of payments for certain borrowers and forgives remaining balances after twenty years of payments for borrowers with only undergraduate loans or twenty-five years of payments for those with graduate loans. The difference between the SAVE Rule and previous approaches is that under SAVE some borrowers would repay less than the original amount borrowed and only “borrowers in the top two quintiles of lifetime income could expect to pay more than they initially borrowed.”

In evaluating whether the SAVE Rule was authorized by the statute the court relied on Loper Bright Enters. v. Raimondo, 603 U.S. 369 (2024) for the scope of its task, “determine[ing] the statute’s ‘best meaning’ by “deploying its full interpretative toolkit.” The court thus starts with “the statute’s plain language,” looking to “the meaning that proper grammar and usage would assign” the text, giving “effect, if possible, to every clause and word of a statute” and “look[ing] to the structure of the statute and the language surrounding the term to ascertain its meaning.” If the text is clear, “the judicial inquiry must end.”

Accordingly, the court determined that at “the time ICR was first codified, the statute had four generally applicable options for borrowers to repay ‘principal and interest’ on their loans:

• a standard repayment plan with a fixed payment made over a set number of years, not to exceed ten years;
• an extended repayment plan with a fixed annual repayment amount paid over an extended period of time;
• a graduated repayment plan, “with annual repayment amounts established at 2 or more graduated levels and paid over a fixed or extended period of time, except that the borrower’s scheduled payments shall not be less than 50 percent, nor more than 150 percent, of what the amortized payment on the amount owed would be if the loan were repaid under the standard repayment plan”; and
• an income contingent repayment plan, with varying payments based on income paid over an extended time period, not to exceed twenty-five years.”

Court Distinguishes SAVE Plan from IBR

Unlike the IBR, Congress did not empower the Secretary to cancel outstanding balances after a certain number of payments. Nevertheless, the federal officials claimed the absence of the phrase “full repayment” and the presence of the words “income contingent” signify Congress expected loan repayment to be fully contingent on whether a borrower earned enough income and borrowed a small enough amount of money. But silence does not equal authority. And, although “courts give ‘respect’ to ‘an Executive Branch interpretation [that] was issued roughly contemporaneously with enactment of the statute and remained consistent over time.’” . . . “’respect’” simply means ‘[t]he views of the Executive Branch could inform the judgment of the Judiciary, but d[o] not supersede it.’” . . . and “[T]he basic nature and meaning of a statute does not change when an agency happens to be involved” or “has happened to offer its interpretation.” Citing Loper Bright, 144 S. Ct. at 2258, 2271.

The court thus concluded that “As with the previous attempt at loan forgiveness, the major questions doctrine informs our analysis. We assume Congress would have provided clear signs if it authorized such significant power to the Secretary. . . . It did not. By creating the ICR plan, Congress simply created a different method to calculate payments to repay student loans.”

Accordingly, the court held that the states were likely to succeed in their challenge to the SAVE Rule’s forgiveness provision, affirmed the district court’s entry of a preliminary injunction, and remanded with instructions to modify the preliminary injunction to enjoin the entire SAVE Rule.

On February 19, President Trump issued an executive order titled Ensuring Lawful Governance and Implementing the President’s “Department of Government Efficiency” Deregulatory Initiative.  In the EO, Trump directed agencies to review all regulations to identify those that may need to be revised or repealed to comply with the Constitution, existing law, court precedent, and the Administration’s priorities.

Three important Supreme Court doctrines are among the reasons the President directed agencies to identify existing rules for deregulation.  The EO directs agencies to search for “regulations that are based on unlawful delegations of legislative power;” “regulations that are based on anything other than the best reading of the underlying statutory authority or prohibition;” and “regulations that implicate matters of social, political, or economic significance that are not authorized by clear statutory authority[.]”  These criteria mirror the nondelegation doctrine, Loper Bright’s end of deference to agency interpretations of law, and the Major Questions Doctrine, respectively.

The nondelegation doctrine seeks to ensure that Congress does not hand away its legislative power to private parties or the Executive Branch.  The Supreme Court is currently considering a case, FCC v. Consumers’ Research, examining whether the Universal Service Fund violates that doctrine by allowing the agency and a private body to essentially determine the tax rates to fill the fund’s coffers.  There are undoubtedly many statutes throughout the federal government that violate this doctrine, and it’s long past time that agencies go looking for them and call them out.

Loper Bright famously overturned the Chevron Doctrine, which had previously directed courts to defer to agency interpretations of ambiguous laws, even if that interpretation was not the best reading of the law.  The administrative state was built on the back of these questionable legal interpretations, and Loper Bright opens the door for the public, agencies, and courts to restore the scope of agency authority to its proper statutory limits.

The Major Questions Doctrine recognizes that when Congress legislates on matters of social, political, or economic significance, it is likely to do so clearly.  And not, as Justice Scalia wrote, hide the proverbial elephant in a mousehole.  This doctrine has been used for decades to rein in overeager regulators as they hunt for passing phrases in old laws to accomplish their present-day regulatory objectives on matters such as greenhouse gas regulations, student loan “forgiveness,” and nationwide vaccine mandates.  If Congress wants agencies to advance these policy preferences, it must tell them directly and clearly.

The EO directs that after agencies compile lists of regulations that transgress these, and other, principles from the EO, agencies should send the list to OMB’s Office of Information and Regulatory Affairs and exercise a measure of prosecutorial discretion while the White House and agencies process the deregulatory agenda according to applicable administrative statutes.

These steps mirror a plan I outlined in December titled DOGE Must be Methodical to be Effective.  The only additional recommendation I had was to involve Congress by sending the agency-identified list to the respective committees of jurisdiction and give them an opportunity to codify the rules in statute, if Congress believes that is proper.  I still think that would be a good idea, and the opportunity for congressional collaboration is still available.  The House has set up a DOGE Subcommittee in the Committee on Oversight and there is a burgeoning DOGE Caucus.  Engaging these Members of Congress will increase the political legitimacy and durability of these deregulatory efforts.

President Trump’s EO on Ensuring Lawful Governance is an important first step to ridding the regulatory state of unconstitutional, overbroad, and harmful regulations.  The next steps will be crucial as well.

Mr. Valvo is chief policy counsel at Americans for Prosperity Foundation and one of the counsels representing the fishermen in Loper Bright.

In Loper Bright Enterprises v. Raimondo the Supreme Court overruled Chevron v. NRDC—which had required federal courts to defer to the government’s “reasonable” interpretation of ambiguous language in statutes—holding that “[c]ourts must exercise their independent judgment in deciding whether an agency has acted within its statutory authority, as the [Administrative Procedure Act] requires” and that “courts need not and under the APA may not defer to an agency interpretation of the law simply because a statute is ambiguous.”

Clement and Murphy PLLC represented the fishermen before the Supreme Court in Loper Bright.

Read more (subscription required).

In Moctezuma-Reyes v. Garland the Sixth Circuit was tasked with interpreting the meaning of the statutory phrase “exceptional and extremely unusual hardship” in assessing Mr. Moctezuma-Reyes’s petition for review of an immigration judge’s denial of his application for cancellation of his removal from the United States, which the Board of Immigration affirmed.

The Court expressed sympathy for Mr. Moctezuma-Reyes’s circumstances, describing him as “a devout Catholic, a loving father as well as husband, and a godfather to six children,” noting that the immigration judge described him as “‘a good person, a good father, a good husband.’” The Court nonetheless found that his removal would not cause “exceptional and extremely unusual hardship” and denied his petition because the law, as written, required that result. After all, courts are not supposed to make policy choices—that is Congress’s job. 

But whatever one thinks about that outcome as a policy matter, what makes this decision notable is the Sixth Circuit’s thoughtful implementation of Loper Bright’s core teaching:  “[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.” 

As the panel opinion, authored by Judge Thapar, noted: “[E]ven with Loper Bright now on the books, one might claim that we should nevertheless defer to the BIA on the legal meaning of ‘exceptional and extremely unusual hardship.’ Why? Because the Supreme Court has instructed us that occasionally the best reading of a particular statute will reveal that Congress expressly and explicitly delegated discretion to the agency—and that we must defer to the agency’s exercise of its discretion.” But as the panel opinion explained, “express language conferring discretion on the agency is critical: If broad language alone triggered deference, we’d unwittingly return to construing less than precise words as implicit delegations to the agency that warrant deference. That can’t be right. The case that declared ‘Chevron is overruled’ didn’t quietly reinstitute it.” And as the panel opinion observed, while “there are rare circumstances where a court may have to defer to an agency,” courts “must be sure. The actual delegation of authority to the agency must be clear: imprecise wording alone won’t cut it. Chevron is no more.” This means that before deferring to an agency’s judgment on a statute’s meaning, a court “must find that the statute expressly confers discretion on the agency.” In other words, under Loper Bright, onlystatutes with “express language conferring discretion on the agency to interpret a broad standard” require courts to undertake a three-step inquiry to determine whether a form of deference is warranted.

Applying those principles, the panel opinion concluded that, although broadly worded, the statute’s “‘exceptional and extremely unusual hardship’ standard does not qualify for this sort of deference,” because it was not coupled with “language vesting the BIA with discretion to determine the meaning of” that phrase. As the panel observed, “the actual statutes that Loper Bright cited as examples of delegations that may call for deference don’t only have broad language. They pair that language with words that expressly empower the agency to exercise judgment.” That analysis is faithful to and properly implements Loper Bright and should be followed by other courts: subject to constitutional limits, only express—as opposed to implicit—delegations of interpretive power to agencies should be eligible for the form of deference contemplated by Loper Bright.

Judge Stranch concurred in the judgment, arguing that “Loper Bright does not give this court the power or the responsibility to define ‘exceptional and extremely unusual hardship’ from new cloth—it instead teaches that reinterpreting a statute should be undertaken only with great caution.” The panel opinion ably countered: “But Loper Bright instructed us to carry out our judicial duty to say what the law is, even when agencies are involved. That’s what we’ve done here.” Let us hope other courts follow the panel opinion’s lead.

The Foundation for American Innovation is hosting a panel discussion and reception about how the Loper Bright case shifts power back to Congress.

The event is in Washington, DC on Wednesday, February 12.

​The Supreme Court’s overturning of Chevron deference last year dramatically changed the relationship between the legislative and executive branches. After four decades of Supreme Court precedent holding that courts should broadly defer to agencies in their interpretation of statutes, the landmark Loper Bright case has shifted responsibility back to Congress.

​But is Congress up to the task of executing its renewed Article I responsibilities? What capabilities and institutional reforms would better equip Congress for its new role?

​To explore these questions, the Foundation for American Innovation invites you to a panel discussion and reception in Washington, DC, on Wednesday, February 12, featuring experts on Congress and the administrative state.

​The panel will build upon a recent symposium published by the Foundation for American Innovation and the C. Boyden Gray Center for the Study of the Administrative State at George Mason University’s Antonin Scalia Law School. Congress after Chevron: Legislative Responses to Changing Deference Doctrines features new papers on Congress’s post-Chevron challenges and opportunities.

Information and Registration.