GCs’ Loper Bright Next Steps Include Tapping Government Affairs

The US Supreme Court’s decision in Loper Bright Enterprises v. Raimondo, which overturned the long-established Chevron doctrine, has significant implications for businesses operating in the US, their in-house legal teams, and their relationship with their government affairs teams.

US agency interpretations of any ambiguities in federal law are now subject to legal challenges. Beyond a potential uptick in litigation, overturning Chevron deference will probably impact how Congress drafts legislation because Congress historically didn’t need to specify how the law would be implemented.

Now, legislation likely will need more detail on the power granted to agencies, which would allow organizations to play a bigger role in the legislative process. General counsel are uniquely suited to help lead efforts to develop a post-Loper Bright strategy because of the intimacy they have with how laws and regulations impact an organization.

GCs can demonstrate their value and strategic mindset by pulling together a cross-functional team and strengthening the relationship with government affairs colleagues to determine the best way forward. Companies should prioritize several actions.

Evaluate your current government affairs and regulatory tracking. GCs should use a cross-functional team—including a government affairs colleague—to evaluate current efforts. How does the organization influence federal and state legislation, and is there a process in place to identify opportunities to influence legislation?

Who makes those determinations; does the team have the right people in place if the organization wants to expand its efforts; how many trade associations is the organization a part of; and how active are the associations in influencing legislation and policy? Also, how strong are the relationships the government affairs group has with lawmakers?

It is now even more critical for organizations to effectively monitor legislative activities across federal and state governments. We likely will see some states stepping up their regulatory efforts to fill gaps that federal regulators may no longer be able to cover.

Monitoring federal regulation is also important, because the language passed in future bills likely will be more proscriptive and have a substantial impact on agencies’ powers. The team should determine how the organization tracks regulations.

Does it have a formal process for tracking regulations? How many people participate in tracking regulatory activity? Is there coordination across the organization, and does the organization rely on vendors or software as part of its tracking?

The team needs to understand the landscape—including their organization’s previous successes and failures.

Identify high-impact regulatory areas for potential action. Next, the team should discuss what to prioritize. Organizations now have an opportunity to influence the legislative process more heavily, so organizations should determine where efforts make sense.

What regulatory areas are most expensive to comply with, and what regulatory areas could require a change in how the organization operates? Could some regulatory areas give us a competitive advantage over our peers? What are our stakeholders’ expectations?

Organizations should aim to build a strategy around the regulatory areas that are most significant and may warrant increased government affairs efforts.

Develop post-Loper Bright strategies. GCs should use the information learned to facilitate a discussion with the cross-functional team about what is in the organization’s best interest going forward.

For example, the organization may want to bolster efforts to influence legislation in areas that would provide a competitive advantage. Or perhaps it has identified areas where increased regulation would require significant operational changes and would want to focus government affairs efforts there.

Organizations should also consider resourcing. Does the organization have the people it needs to effectively influence legislation? Will a more active approach require more people?

Does the potential change in the legislative process require more subject matter experts in particular areas; what are the budget implications and should the organization rely more heavily on trade associations?

Organizations should consider specific cost-benefit scenarios. Those that don’t have an internal government affairs group should consider building one, depending on the appetite to influence legislation and available resources.

Even if a dedicated function isn’t an option, it is important to enhance engagement with trade associations and connections with other companies with similar interests—perhaps by appointing a member of the legal department to regularly communicate with trade groups and attend industry events.

This government affairs strategy shouldn’t be considered in a vacuum. The organization may also want to litigate regulations as a means of influencing in this post-Loper Bright world. The team needs to understand from government affairs colleagues if litigating regulations could impact government affairs’ efforts and, if so, how.

Litigation can also be expensive and could impact available funds. It comes down to whether the organization wants to play offense with influencing or take a more defensive approach through litigation.

By methodically tracking legislation and an organization’s government affairs activity, identifying the highest impact regulatory areas and developing post-Loper Bright strategies with key organizational leaders, GCs will play a pivotal role in navigating this changed landscape.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Alissa Lugo is a senior director, analyst with the legal and compliance group at Gartner.

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