ICYMI: Supreme Court Limits Power of Regulatory Agencies

In a major decision Friday, June 28, 2024, the United States Supreme Court in Loper Bright Enterprises v. Raimondo sharply limited the power of federal regulatory agencies to interpret Congressional statutes, finding that courts may not defer to an agency’s interpretation of the law simply because a statute is ambiguous. In doing so, the 6-3 Supreme Court majority overturned the Chevron v. Natural Resources Defense Council case and decades-old legal precedent that required courts to defer to the expertise of federal administrators in interpreting laws passed by Congress. Chevron required courts to defer to the agency if it had offered “a permissible construction of the statute,” even if it was not “the reading the court would have reached if the question initially had arisen in a judicial proceeding.”

As Chief Justice John Roberts wrote, the Chevron framework was “unworkable” and “fundamentally misguided” and allowed federal agencies to change course even without direction from Congress.

This decision will spur extensive legal challenges to regulations issued by federal agencies across industries all across the country. Going forward, the Supreme Court’s decision will only afford federal agencies a diminished level of deference by courts in an agency’s interpretation of laws, where courts will only follow agency interpretation after independently evaluating an agency’s thoroughness, validity, and consistency in interpreting statutes. Former U.S. Solicitor General Paul Clement, who argued in favor of overturning Chevron, remarked that “the Court’s decision puts to rest an interpretive methodology that has seriously distorted how the political branches operate for far too long. Courts should ask what the law means, not whether it is ambiguous, and in close cases, the tie should go to the citizen, not the government. We are gratified that the Court restored the constitutionally mandated separation of powers.”

The propane industry is governed by an extensive network of federal regulatory agencies whose actions and regulations will be impacted by this ruling. Our legal and regulatory team will continue to analyze the decision and its impact on our industry and the regulations that govern it. Questions? Contact Director of Regulatory Affairs and Associate General Counsel Kate Gaziano.