In-House Counsel Must Guide C-Suite Approach Post-Loper Bright

From the moment the US Supreme Court decided Loper Bright Enterprises v. Raimondo, in-house counsel began fielding a variety of questions from their business units, including whether certain regulations are now automatically invalid—they aren’t—and whether new opportunities to challenge regulations have emerged—they have.

Association of Corporate Counsel members have identified several challenges and opportunities their organizations will face due to the Supreme Court’s departure from Chevron USA Inc. v. Natural Resources Defense Council, Inc. They are also exploring how in-house counsel can help guide their organizations through this new, uncertain terrain.

Four factors have emerged as key practices for in-house counsel to adopt now as they guide the C-suite. These factors are based on my discussions with other in-house counsel, and on a program I moderated at the ACC’s annual meeting in Nashville, Tenn., with in-house counsel Prianka Sharma of the American Road and Transportation Builders Association, Tom Ward of the National Association of Home Builders, along with Josh Fougere, a partner with Sidley Austin.

Education Is Key

Educating business teams on what Loper Bright does—and doesn’t—achieve is a top priority for many in-house counsel. While the jurisprudence around Loper Bright is still developing, there are several short-term steps in-house counsel can take to inform their business units.

For one, they are emphasizing that Loper Bright doesn’t invalidate any regulations on its own; litigation will be required to address specific rules of concern. Second, in-house counsel should caution their internal clients that currently there is no clear guidance on how the lower courts will interpret Loper Bright. While the decision has been cited in more than 100 cases so far, there is still much we don’t know about how courts will navigate regulatory challenges under Loper-Bright.

As new information arises, in-house counsel should stay aware of decision trends, especially when this information impacts the organization’s regulatory priorities.

New Opportunities

The decision creates new opportunities to challenge agency regulations, especially when combined with another recent ruling, Corner Post v. Board of Governors of the Federal Reserve. Although not receiving the same level of attention as Loper Bright, in Corner Post the Supreme Court held that the six-year statute of limitations for Administrative Procedure Act challenges begins when the complainant is injured by a rule, not when the rule is promulgated. This ruling significantly expands the pool of potential litigants who can challenge longstanding regulations.

New Challenges

In-house counsel must remind their internal clients that while it may now be easier to challenge certain regulations, there is also a greater risk that rules organizations have relied on for years could be more vulnerable to attack.

This may include some permitting programs or other authorizations that are critical to how an organization does business. Legal departments should closely monitor any developments related to the regulations that govern the business.

Patience Is a Virtue

Litigation and rulemaking take time—years, in fact. For litigation, it also has a high cost. In the coming months, we will begin to see how courts apply Loper Bright across various cases and fact patterns. As with Chevron, it will take years to fully understand the scope and impact of this ruling on regulatory law, and how businesses and federal agencies react.

Organizations are well-served by in-house counsel who educate business leaders on the risks and costs associated with challenging a federal regulation. Certain regulations can be so debilitating to an organization that bringing litigation is worth the risk and expense. In-house counsel should make sure business leaders have a full understanding of the costs and duration of litigation before bringing suit.

In-house counsel have an important role to play in educating their organizations on what this decision means, and to help identify the potential opportunities and risks that may result. Even in this uncertain time, in-house counsel can work proactively to provide valuable insights to their organizations on how to navigate regulatory challenges in the early days of the post-Chevron era.

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

Amy Chai is associate general counsel and director of advocacy initiatives at the Association of Corporate Counsel.

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