The Supreme Court will be putting an end to the 39-year-old Chevron deference that’s been afforded to federal rulemaking agencies. The upshot? Agencies will have a much more difficult time enacting rules that impose substantial costs on an industry sector and (possibly) consumers.
The high court will hear a case this fall involving fishing companies that must pay for the costs of observers who monitor compliance with fishery management plans, under a National Marine Fisheries Service regulation, before issuing a final decision in spring 2024.
Justice Clarence Thomas made no secret of his desire to stick a knife in the heart of the 1984 Chevron v. Natural Resources Defense Council ruling, which he wrote “wrests from courts the ultimate interpretative authority ‘to say what the law is,’ and hands it over to … the executive branch.”
In a nutshell, Chevron gave regulatory agencies wide discretion to dictate how industry does business. Courts took the view that since Congress enacted a particular agency and funds it to regulate a certain area, it’s therefore considered the accepted expert in a legal dispute that ends up being heard in court.
Conservative judges in federal courts below the Supreme Court have veered away from giving agencies Chevron deference in recent years. Rules that are deemed too costly (sometimes well into the hundreds of millions of dollars) or exceeded an agency’s jurisdiction are much more likely to be vacated than in previous decades.
Writing is on the wall for one powerful government agency
Shortly after the decision to review Chevron was announced, the Supreme Court unanimously ruled in favor of an Idaho couple who were fined 16 years ago for filling in their backyard without first obtaining a “dredge-and-fill” permit.
This decision (Sackett v. EPA) should put an end to EPA’s attempts to widen its jurisdiction under the Clean Water Act (CWA) of wetlands (particularly on privately owned land), agricultural ditches and intermittent streams that only flow part of the year.
The high court threw out the “significant nexus” definition (created by retired justice Anthony Kennedy) used to determine if a land feature such as a swamp falls under federal CWA protection. On that question, a 5-4 majority of SCOTUS judges ruled that for a wetland to be protected, it must have an “indistinguishable” and “continuous surface connection” to a protected body of water, such as the oceans or one of the Great Lakes.
By gutting the significant nexus definition, builders and contractors will have a much easier time of determining if they can develop on a parcel of land without creating environmental compliance issues for themselves. The question of whether a water permit is needed will also be a lot clearer to determine for building owners and operators.
No industry sector pushed harder for a rollback of EPA water rules than farmers and ranchers who worried about needing water permits for irrigation ditches and the like. Other sectors standing to benefit from less regulation are oil & gas development, construction, and commercial and home real estate.
