ANALYSIS: Loper and Major Questions, Dismantling on the Double?

The US Supreme Court’s recent ruling ending Chevron deference and weakening the federal administrative state, along with the rise of the major questions doctrine, is poised to influence two cases the court will hear in the upcoming term. While the pending cases cover two very different hot-button issues (guns and environmental regulations), the court will now have additional opportunities to craft rulings that push back on what the majority believes to be improper agency overreach.

The outcomes in these cases may clarify the new extent of the respective agencies’ statutory authority and in doing so, knock down some of those agencies’ rules and regulations.

Gun Regulation and the Major Questions Doctrine

In recent years, conservative-minded courts have expressed no qualms about applying the major questions doctrine to a variety of agency actions. This judicial doctrine is premised on the presumption that Congress doesn’t delegate to agencies issues of major political or economic significance, and therefore the agency must demonstrate that a challenged action was explicitly and specifically authorized by the legislative branch, if it purports to regulate such a major question.

Next term, the Supreme Court may utilize this doctrine to undermine agency action on a thorny political issue: gun control. In April, the court agreed to hear Garland v. VanDerStok, a case challenging the US Bureau of Alcohol, Tobacco, Firearms, and Explosives’ (ATF) authority to issue a rule regulating firearm parts kits.

The ATF refers to these kits as “ghost guns.” The regulation subjects the sale of gun kits to the same requirements as fully assembled firearms, such as conducting background checks, including serial numbers, and keeping records of transactions. The Biden administration justified this rule on the grounds that ghost guns are difficult to trace, and that the kits can be assembled to mimic a traditional firearm.

Gun owners and firearm advocacy groups challenged the rule, arguing that the ATF exceeded its statutory authority to issue the rule, pursuant to the Gun Control Act of 1968. The US Court of Appeals for the Fifth Circuit affirmed a lower court’s ruling that blocked enforcement of the rule.

Echoing what seems to be the prevailing conservative legal approach towards federal agencies, the Fifth Circuit held that because Congress never authorized the expansion of firearm regulation, “the proposed rule constitutes unlawful agency action, in direct contravention of the legislature’s will.” The appeals court went on to hold that, by promulgating this rule, the ATF attempted to subvert the will of Congress and to act unilaterally on gun control policy.

The “clear congressional authorization” standard for an agency to issue regulations is one component of the major questions doctrine. That doctrine has become the default standard on which right-leaning courts have increasingly relied to shoot down agency rules.

Second Amendment issues aside, VanDerStok presents the court with yet another opportunity to dispatch an agency regulation for allegedly exceeding the statutory text’s limits and imposing agency preference without Congressional input.

Environmental Regulations on the Chopping Block

Environmental regulations and the Environmental Protection Agency (EPA) in particular have come under severe scrutiny by the Roberts court in recent years. In the wake of the court’s ruling last term in Loper Bright Enterprises v. Raimondo, it’s all but certain that the EPA’s future rules and interpretations of operating statutes will be either significantly weakened or outright discarded by courts. And next term, the Supreme Court will determine whether the EPA has appropriately interpreted the Clean Water Act (CWA).

The issue in City and County of San Francisco v. EPA centers on whether the CWA allows the EPA to impose certain prohibitions in permits for pollution elimination systems. San Francisco contended that the limitations of the permit issued for its wastewater discharge violated the CWA because the new provisions lack specificity and exceeded the EPA’s regulatory authority under the statute.

If the end of Chevron deference and the court’s previous ruling in Sackett v. EPA are any indication of what is to come, the court is set to deal the agency another blow. In Sackett, another case involving the CWA, the court didn’t defer to the agency’s statutory interpretation of the phrase “waters of the United States.”

One-Two Punch

The end of Chevron agency deference and the outgrowth of the major questions doctrine are potentially a harbinger of how the court will rule in next term’s cases dealing with agency power.

While it remains to be seen whether and how the Supreme Court will justify rulings that potentially strike down the ATF and EPA rules, the court appears eager to embrace the major questions doctrine. Now that Loper Bright requires courts to exercise their independent judgment in deciding whether an agency has acted within their statutory authority, agencies will come under escalating scrutiny.

The court’s operative doctrines now allow the judicial branch to declare invalid agency regulations en masse and override administrative expertise.

Bloomberg Law subscribers can find related content on our In Focus: Chevron, Loper & Agency Deference Page, our Advanced Dockets Search, our Practical Guidance on Using Bloomberg Law Dockets, and generally on our Litigation Practical Guidance library.

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