WASHINGTON — Freight carriers that want to challenge regulations that govern them may have received a significant boost from the U.S. Supreme Court on Friday in a decision that overturns a 40-year precedent of deference given to federal agencies.
The high court decided 6-3 to overrule the Chevron doctrine, a policy challenged in Loper Bright Enterprises v. Raimondo that requires lower courts to defer to regulatory agencies in legal challenges of regulations that agencies have interpreted from ambiguous statutes.
The doctrine allowed federal agencies to interpret unclear laws approved by Congress using a two-part test:
Checking if Congress had clearly addressed the issue.
If not, determining if the agency’s interpretation was reasonable.
Justice Neil Gorsuch, who voted with the majority, wrote in the 114-page opinion that the doctrine “forces judges to abandon the best reading of the law in favor of views of those presently holding the reins of the Executive Branch. It requires judges to change, and change again, their interpretations of the law as and when the government demands. Rather than insulate adjudication from power and politics to ensure a fair hearing … Chevron deference requires courts to ‘place a finger on the scales of justice in favor of the most powerful of litigants, the federal government.’”
The American Road and Transportation Builders Association sees Chevron deference as a mixed bag: “The doctrine had been both useful and abused, enabling sound policies but also stretching an agency’s authority.”
Policies affecting all modes of freight transportation having to do with operations, climate or labor may now have to undergo heightened scrutiny at the agency level before they are rolled out in order to stand up to legal challenges.
The Owner-Operator Independent Drivers Association, which represents small-business trucking companies, is assessing the potential effects of the change.
“The U.S. Supreme Court’s overturning of the Chevron Doctrine will undoubtedly have significant ramifications on federal regulations that affect the trucking industry,” the group said in a statement.
“OOIDA’s legal team is in the process of conducting a thorough analysis of the decision and will provide our members and the larger trucking community clarity on how this could potentially affect their business operations.”
Ken Nahigian, co-founder of the Balancing Act Project, an advocacy group created to help navigate the effects of the policy change, said that companies generally “should probably like this change, because this gives them options, it gives them a voice again if they need to challenge their regulator,” he told FreightWaves.
“In general, any industry that’s regulated would want to have the ability to challenge their regulator if rulemakings are not based on any authorization from Congress — for example, a rulemaking that banned a certain truck size, or if EPA made fuel economy standards that were unreachable.”
But the rule also has a downside: the potential for a flood of litigation that jams courts with lawsuits.
“The Biden administration predicted that overturning Chevron would lead to a ‘convulsive shock’ to the legal system and that ‘litigants would come out of the woodwork,’” Mark Ruge, an attorney with K&L Gates, told FreightWaves in an email.
“It will take a while to find out if those sorts of dramatic predictions are true but one thing is sure — existing agency actions that relied on vague delegations of authority from Congress are potentially vulnerable.”
Ruge, who is also counsel to the American Maritime Partnership, which advocates for the U.S. domestic maritime shipping market, added, “Whether you are in maritime, trucking, or any mode of transportation, any analysis starts with what the Congress said in the underlying statute. The entire policy lifecycle — bill-writing, regulatory interpretations and judicial interpretations — will be impacted by today’s decision. The only remaining question is how much.”
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