Does Loper Bright Affect The Major Questions Doctrine? Texas District Court: No

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.”

Before Loper Bright

Before Loper Bright, some had expressed the view that the major questions doctrine, as articulated by the Supreme Court in a long line of precedent including cases like West Virginia v. EPA, which rejected EPA’s attempt to reimagine federal energy policy, and Biden v. Nebraska, which blocked President Biden’s plan to unilaterally mass cancel $400 billion in student loans, was best viewed as an exception to Chevron deference, as opposed to a clear-statement rule required by the Constitution’s separation of powers. In a nutshell, the major questions doctrine holds that to the extent Congress can constitutionally task agencies with making decisions of vast political and economic importance, it must clearly, i.e., unambiguously, say so in the statute; an agency’s claim of plausible statutory authority is not enough to justify sweeping executive actions. In this way, this doctrine guards against protects against unintentional—and unconstitutional—delegations of legislative power the Constitution vests in Congress alone.

After Loper Bright, some have questioned the continued vitality of this doctrine. In Utah et al. v. Mincone a U.S. District Court in the Northern District of Texas recently touched on this issue in adjudicating a challenge to the Department of Labor’s 2022 ERISA regulation expanding the scope of matters retirement plan administrators could consider in making investment decisions to include nonpecuniary considerations such as environmental and social governance issues. Before the Supreme Court ended Chevron deference, the district court had rejected the Plaintiff States’ challenge to the regulation as violating the major questions doctrine, ultra vires, and arbitrary and capricious and thus unlawful under the APA. That ruling was initially on appeal in the Fifth Circuit. But after Loper Bright came out, the Fifth Circuit sent the case back to the district court to determine whether Loper Bright would change the result.

District Court Applies Loper Bright

This, in turn, required the district court to determine the scope of its task. The district court observed that its “vacated decision held the 2022 Rule did not violate ERISA under the then-binding Chevron deference standard.” But “Loper Bright changed how courts evaluate whether agency actions are in accordance with law.” “Loper Bright and the . . . APA now govern the contrary-to-law analysis by overturning Chevron.” But what about the States’ major questions doctrine and arbitrary and capricious arguments? The district court found that “Loper Bright did not disturb how courts evaluate a rule under the APA’s arbitrary and capricious standard.” The court continued: “The Fifth Circuit has treated Loper Bright as altering neither the arbitrary and capricious standard nor the major questions doctrine. In short, Loper Bright “does not affect” those standards. Therefore, the district court did not revisit its rulings rejecting the States’ major questions doctrine and arbitrary and capricious arguments.

As to the States’ remaining statutory authority argument, the court framed the “Loper Bright standard” this way:

Loper Bright simply instructs courts to follow “the APA’s basic textual command.” It affirmed “the unremarkable, yet elemental proposition reflected by judicial practice dating back to Marbury: that courts decide legal questions by applying their own judgment.” It clarified that this is exactly what the APA requires. Now, courts employ “no deferential standard” when “answering those legal questions.” Instead, courts may use “all relevant interpretive tools” to find the “best” reading of a statute. No longer is a “permissible” reading enough. . . . In short, courts must “independently interpret the statute and effectuate the will of Congress.”

Applying Loper Bright, the district court reached the same result on the States’ statutory authority argument, ruling that the agency was authorized to issue the regulation. In so doing—and consistent with Loper Bright’s core teaching that a court’s job is to independently say what the law is, as opposed to what it thinks it should be—the district court noted that “it is not the province of the Court to decide the wisest outcome. Rather, it interprets the law as it finds it.”