Chevron’s Death Fuels Right’s Push to Curb State Agency Clout

Conservatives and business groups on a years-long mission to roll back judicial deference to state agencies watched as the US Supreme Court scrapped its own federal precedent—and then got back to work.

Idaho, Indiana, and Nebraska had already enacted laws this year to eliminate judicial deference. Arizona, Tennessee, and Wisconsin passed similar measures in the last decade.

Florida amended its constitution in 2018 to require courts not to defer to state agencies. Top courts in at least seven states have also weakened deference standards in recent years.

Proponents of eliminating judicial deference say the high court’s opinion in Loper Bright Enterprises v. Raimondo helps propel their state campaign, where the vast variety of deference standards has created an uneven and somewhat confusing patchwork.

“For years conservatives and libertarians have been pushing state courts to get rid of deference, and it’s created this movement across the country,” said University of Michigan Law Professor Christopher J. Walker. “The big question after Loper Bright,” he said, “is what state supreme courts and state legislators are going to do with this message from the US Supreme Court.”

Free-market groups, including the Goldwater Institute and the Pacific Legal Foundation, as well as conservative lawmakers sharing draft legislation through the American Legislative Exchange Council (ALEC), have spurred the efforts in mostly conservative-leaning states.

Amid the effort, regulated industries and state agencies are bound to face the same uncertainty in state courts that pervades the federal courts, Brooklyn Law School Professor William D. Araiza said.

“The US Supreme Court said, ‘We’re not overruling any case using Chevron,’ but it’s kind of open season on those cases, and there’s going to be a big push to have those cases overruled,” he said. “That will be the same dynamic at the state level.”

That’s a good thing, according to Beth Milito, the executive director of the National Federation of Independent Business’s Small Business Legal Center. Her group’s members complain more about state regulatory actions than federal ones, and they’re leaning into the shift.

“This will give new energy to challenges,” and “slow down the regulatory machine,” Milito said.

State Patchwork

Most states still maintain some level of judicial deference to agency actions, but the number is dwindling.

The US Supreme Court in its 1984 Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc. decision held that if a statute is silent or ambiguous on an issue, courts should defer to agency’s interpretation “based on a permissible construction of the statute.”

Across states with some level of judicial deference the levels vary, with several courts giving consideration as strong or stronger than Chevron. The Pennsylvania Supreme Court had been applying similar rules there for at least sixty years before the Chevron ruling.

Several states have a middling deference, something Michigan’s Supreme Court calls “respectful consideration.” In a 2008 decision, that court interpreted deference to be slight, similar to the US Supreme Court’s 1944 ruling in Skidmore v. Swift & Co.

Under Skidmore, judges may choose to be guided by persuasive agency interpretations. The Michigan high court then shifted course in a 2014 decision, reinterpreting “respectful consideration” in stronger way, instructing lower courts to reject agency determinations only if they conflict with “legislative intent.”

New Laws

Arizona enacted the first law banning agency deference in most disputes in 2018. The Goldwater Institute, which helped craft the bill, sees state regulations as more burdensome for small and medium-sized businesses than federal rules.

“How many Americans interact with the federal Clean Water Act on a frequent basis? Not many, but practically all Americans will have an issue with a business license, occupational license or permit,” Jonathan Riches, the organization’s vice president for litigation and general counsel said.

All of the state measures have language similar to model legislation by ALEC, mandating that courts scrap agency deference by reviewing agency interpretations on their own.

Texas state Representative Brian Harrison (R) wants his to be the eighth state to enact such a change. Harrison plans to reintroduce his deference-ending bill that didn’t make it to the floor last session.

“Anytime two parties walk into the courtroom I want Lady Liberty to be as blind as possible,” Harrison said. “And the courts sure as hell should not be able to do legally sanctioned cheating on behalf of the government.”

At least one opponent of the conservative push, New Mexico state Sen. Antoinette Sedillo Lopez (D), is drafting a bill that would preserve her state’s robust deference standard.

“When the Supreme Court reversed Chevron I viewed it as a huge attack on agencies’ work on things like environment and public health,” said Sedillo Lopez, a former New Mexico Law School professor. “I’m worried about what is going to substitute for agency discretion and understanding.”

Some law professors are skeptical that Loper Bright will have much impact because of how diverse and complex state agency rulemaking processes are. Attorneys also argue state deference standards matter less than the judges who wield them.

In California, generally judges elected by liberal-leaning communities tend to uphold agency determinations though California has no Chevron-style deference, attorneys say. That’s one reason why California can maintain the most robust administrative state in the country, professors and litigators say.

In Texas, however, the all-Republican Supreme Court invoked a high deference standard to uphold a fracking permit and tie the hands of lower courts from a liberal county hearing challenges to the energy industry.

“The significance of Loper Bright, and lesser deference standards, isn’t that it weakens agencies,” said James Goodwin, policy director for the liberal Center for Progressive Reform. “It’s that it empowers judges.”

Separation of Powers

Businesses and conservative groups also have won state high court victories from Kansas to Delaware limiting or eliminating agency deference, in the last 25 years, mostly in Republican-controlled courts.

Ohio saw the latest high-profile case, in which the Pacific Legal Foundation advanced the claims of an engineering firm denied a state permit. They won a 2022 unanimous decision overturning agency deference.

Most of these cases are brought and won using separation-of-powers arguments. Challengers contend that court deference to agencies eliminates a necessary check on aggressive regulators when they go beyond their mandates from the legislature.

Business-aligned litigators hope to use Loper Bright to supplement these arguments in future state court cases, said Oliver Dunford, Pacific’s senior attorney in the group’s separation of powers practice. They believe the decision could be compelling in the dozens of states with administrative process laws modeled after the federal Administrative Procedure Act.

“We’re always looking to bring cases,” Dunford said. “If good opportunities arise in the states we’re not going to ignore them.”