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Note from your Adventures In Law Blog editors: Well, just today the Supreme Court overruled the Chevron case in <a href="https://www.supremecourt.gov/opinions/23pdf/22-451_7m58.pdf" target="_blank" rel="noreferrer noopener">Loper Bright</a>, which provided deference to agency interpretations of ambiguous law in the statutes they administer.&nbsp;The AdLaw team has started to dive in, but before we could collect the 114-page decision from the printer, our Appellate and Major Motions Practice had already digested it and provided cogent observations after a first read.&nbsp;We will be sharing our views of what this case means in the upcoming weeks as far as laws that the FTC enforces, but to set the table, <a href="https://www.bakerlaw.com/professionals/andrew-m-grossman/" target="_blank" rel="noreferrer noopener">Andrew Grossman</a>, who co-leads our Appellate and Major Motions team, shared the following observations:

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First, this is a sea change in the federal law of statutory interpretation and will have impacts across many areas of the law. For decades, agencies have enjoyed deference to their statutory interpretations under Chevron, and now that is no more. That will matter in litigation, of course, but also in assessing statutory issues in counseling clients, in negotiations with and proceedings before agencies, and in assessing potential litigation. Until now, the agency had a thumb on the scale with respect to questions of statutory meaning and authority; now it does not — at least, not as a formal matter. Legal questions that had been regarded as “settled” because the agency decided how to interpret a given provision may now be up for grabs. In recent years, agencies have often run through the two-step Chevron analysis in their rules and guidance documents, particularly to justify their more aggressive positions. That sort of analysis should be a tip-off that a given interpretation may now be vulnerable.

Second, the best preview of the post-Chevron world is the Supreme Court’s statutory decisions from the past six or seven years, a period during which the Court has eschewed deference in favor of, effectively, de novo interpretation. In general, the Court has been more attentive to statutory language and less concerned with supra-textual notions of statutory purpose than in the past; has relied heavily on canons of statutory interpretation, particularly in difficult cases; has generally disregarded legislative history; and in many cases has considered statutory structure, such as comparisons with adjacent or related provisions, parallelism, etc. None of this is novel, of course, but it is rather more formalistic, overall, than approaches that hypothesize general statutory purposes and then defer to agencies on the details.

Third, it is unclear how Loper Bright will apply to statutory questions that have already been decided by courts under the Chevron framework. Loper Bright explains that decisions by the Supreme Court relying on Chevron are entitled to stare decisis and so will be difficult to dislodge. But that does not apply to decisions by lower courts. At the same time, courts are likely to give substantial weight to any agency interpretation that has been in force for a long time and has been upheld by prior judicial decisions, even if those decisions applied some measure of deference. So while a free-for-all is unlikely, there will most likely be opportunities to overturn adversely decided statutory issues.

Fourth, the reasoning of Loper Bright suggests that <a href="https://supreme.justia.com/cases/federal/us/519/452/" target="_blank" rel="noreferrer noopener">Auer deference</a> — Chevron’s analogue for questions of regulatory interpretation — is not long for this world. Although the Supreme Court reaffirmed Auer, in large part, just five years ago, that decision’s logic cannot be squared with Loper Bright. There is a good chance that the court will overrule Auer in the next term or two. Accordingly, we should not assume that agencies are entitled to deference for their interpretations of regulatory provisions, and should, in litigation, preserve the argument that Auer (as well as the decision reaffirming it, <a href="https://www.supremecourt.gov/opinions/18pdf/18-15_9p6b.pdf" target="_blank" rel="noreferrer noopener">Kisor v. Wilkie</a>) was wrongly decided, so as to take advantage of any subsequent decision holding as much.

Supreme Court Overrules ‘Chevron’ Deference to Agencies