GOP-Picked Judges Take Hard Line on Regulations Post-Chevron (1)

Federal judges have dealt agencies a series of defeats on rules barring gender identity-based discrimination, expanding overtime pay eligibility, and prohibiting nearly all noncompete pacts after the US Supreme Court rolled back judicial deference to regulators’ claims of authority.

Agencies lost in most of 26 rulings in lawsuits targeting regulations in the two months after the high court’s landmark June 28 ruling in Loper Bright Enterprises v. Raimondo. Courts have handed down four decisions striking down rules, 15 orders halting their enforcement, and three rejecting government requests to stay earlier injunctions, according to a Bloomberg Law analysis of direct challenges to agency regulations.

The early results suggest that many judges—especially those appointed by Republican presidents—are using their new discretion to disrupt agency regulations on a range of politically sensitive issues. Most of the courts ruled against agencies’ assertions of authority to issue the regulations.

The agencies’ low win rate raises questions about whether some judges have overcorrected in response to Loper Bright, said Nicholas Bednar, a University of Minnesota administrative law professor.

“Courts may be applying a form of ‘anti-deference’ that encourages greater scrutiny of the government’s position relative to the position of other litigants,” Bednar said.

In Loper Bright, the Supreme Court’s conservative majority boosted judicial oversight of agency actions. The high court barred judges from deferring to reasonable agency interpretations of ambiguous laws, which had been mandated under the Chevron doctrine, saying jurists must independently decide whether an agency acted within its legal authority.

Agency mandates requiring more retirement advisers to put their clients’ interests above all else, limiting the types of activities tip-earning workers can perform at less than the minimum wage, classifying a certain type of firearm as a prohibited machine gun, establishing a new procedure for challenging some rail carrier rates, and providing organizing rights to foreign farm workers on seasonal visas have also been stymied by courts since Loper Bright.

GOP Judges Dominate

The extent to which any one judge applies an “anti-deference” variation of Loper Bright may turn on the jurist’s skepticism about the administrative state, Bednar said. Getting a better understanding of that dynamic will take more cases decided by judges across the ideological spectrum, he said.

So far, most of decisions are in cases involving Republican-led states, conservative advocacy organizations, or business groups that sought friendly forums to challenge Biden administration rules. About half of the rulings were related to lawsuits against measures to bar anti-transgender bias in education and health care.

Republican-appointed district court judges and appellate panels controlled by GOP-appointed judges issued 24 of the 26 decisions in lawsuits directly challenging rules in the first two months of the Loper Bright era. Agencies prevailed in three of those rulings, while splitting the two decided by Democratic-appointed judges.

“You’d expect this type of forum shopping and there’s nothing in Loper Bright to discourage it,” said Bridget Dooling, an administrative law professor at Ohio State University. “If anything, Loper Bright encourages it.”

The Federal Trade Commission’s ban on noncompetes was evaluated by two different district court judges. US District Judge Ada Brown, a Trump appointee, axed the rule, while US District Judge Kelley Hodge, a Biden appointee, declined to block it.

Early Reasoning

The degree to which Loper Bright affected rulings on regulatory challenges is clearer in some of the decisions than in others.

The US Court of Appeals for the Fifth Circuit, for instance, nixed a Labor Department rule on tipped wages that a district judge had previously upheld as reasonable based on the Chevron doctrine.

The vast majority of decisions came down to whether the agency had the necessary statutory backing. One of the exceptions was a ruling by US District Judge Lisa Wood, a George W. Bush appointee, blocking the Labor Department rule granting some organizing rights to foreign workers, in an injunction covering 17 states.

The Labor Department had the authority to issue the rule, Wood held. But she also found that the regulation violated a federal law that governs labor-management relations in the private sector. Wood said that the Republican-led states were likely to win on the merits of their claim.

Court rulings continue to show district and circuit judges reviewing rules without any deference, rather than turning to the mild deference that some prior courts gave to agencies under the Supreme Court’s 1944 decision in Skidmore v. Swift & Co. That ruling called on courts to give weight to agency stances according to their persuasiveness.

For judges who rely on textualism—a mode of interpretation that focuses on the words of a law, while often ignoring other sources to derive its meaning—Skidmore’s “power to persuade” language is meaningless, said Victoria Nourse, an administrative law professor at Georgetown University Law Center. They believe only the text can persuade, she said.

Chevron‘s Legacy

The Sixth Circuit has separately addressed—without deciding —an open question after Loper Bright, namely whether earlier decisions upholding regulations via Chevron deference remain good law. That case wasn’t a direct challenge to an agency rule.

The Sixth Circuit considered Tennessee’s request to block a Department of Health and Human Services order denying the state family-planning funding for failing to comply with a 2021 regulation related to abortion referrals. The court had upheld the rule under Chevron last year in Ohio v. Becerra.

“Regardless of whether Ohio binds us,” the Sixth Circuit said, “we find its conclusion upholding the 2021 Rule—and by extension its enforcement against Tennessee here—persuasive.”

Chief Justice John Roberts wrote in the Loper Bright majority opinion that Chevron-based decisions are still binding under the doctrine of stare decisis, which directs courts to follow previous rulings. That instruction was delivered in nonmandatory guidance known as dicta, however, not as part of the decision’s required holding.

“This is a real Achilles’ heel in the Loper Bright opinion,” said Cary Coglianese, a law professor who directs the University of Pennsylvania Carey Law School’s program on regulation. “It leaves a lot of room for mischief.”

The Sixth Circuit took an “exceptionally cautious” approach by saying its earlier decision on the HHS rule was persuasive even if it wasn’t binding, said Andy Grewal, a University of Iowa law professor. That should ensure its holding in the Tennessee case is durable if past case law relying on Chevron deference loses its binding power, he said.

If another court departs from precedent that’s based on Chevron deference, it probably would be done narrowly—something more like “this prior case does not withstand ordinary stare decisis analysis” rather than “Loper Bright means it’s open season on Chevron-reliant decisions,” Grewal said.