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Explore the latest in patent, trademark, and copyright cases on the Merchant & Gould LLP blog. Stay informed with expert insights on intellectual property law updates.

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Last week, the U.S. Supreme Court issued an opinion in <a href="https://www.supremecourt.gov/opinions/23pdf/22-451_7m58.pdf">Loper Bright Enterprises v. Raimondo, Case No. 22-451</a>, and <a href="https://www.supremecourt.gov/opinions/23pdf/22-451_7m58.pdf">Relentless v. Department of Commerce, Case No. 22-1219 (June 28, 2024)</a>, overturning Chevron U.S.A. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 2778 (1984), and holding Chevron deference could not be squared with the Administrative Procedure Act (APA).

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For 40 years, Chevron required courts to defer to an administrative agency’s interpretation of law when deciding challenges to regulations promulgated by the agency. Under Chevron’s two-step analysis, a court first determined if Congress had spoken clearly about the issue of law presented. If it had, the issue was settled. If it had not, the court must defer to the agency’s interpretation, even if this differed from its own interpretation, so long as it was a “permissible” construction of the law at issue.

Both cases decided last week involved a rule promulgated by the National Marines Fisheries Service (NMFS) interpreting the Magnuson-Stevens Fishery Conservation and Management Act (MSA). The rule required some fishing boats to engage and pay for a government-certified third-party observer when fishing for Atlantic herring. The petitioners claimed the NMFS exceeded its authority under the MSA when it issued the rule. The district court granted summary judgment for the Government, and the Court of Appeals for the D.C. Circuit affirmed, because the NMFS’s interpretation of the MSA was owed deference under Chevron.

The Supreme Court disagreed, holding that statutory interpretation was the province of the judicial branch, not the executive branch. The APA requires the “reviewing court,” not agencies, to “decide all relevant questions of law,” including statutory interpretation. 5 U.S.C § 706. Given this mandate, the Court held, Chevron deference “cannot be reconciled with the APA.” Writing for the 6-3 majority, Chief Justice Roberts explained, “[i]t … makes no sense to speak of a ‘permissible’ interpretation that is not the one the court, applying all relevant interpretive tools, concludes is best.” Writing for the minority, Justice Kagan decried the decision as a massive transfer of power: “It is now ‘the courts (rather than the agency)’ that will wield power when Congress has left an area of interpretive discretion.”

Going forward, courts may still look to agency interpretations for guidance, but they are no longer bound by them. While the decision overrules Chevron, it leaves all statutory interpretations previously decided under the Chevron framework intact.

Supreme Court Overrules Chevron

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