On June 28, 2024, the U.S. Supreme Court issued a landmark decision in the case of Loper Bright Enterprises v. Raimondo, 2024 WL 3208360 (U.S. 2024), which overturned its 1984 decision in Chevron USA Inc. v. National Resource Defense Council, 467 U.S. 387 (1984). In its decision, the high Court abandoned the so-called “Chevron Doctrine,” its 40-year-old precedent that required courts to defer to federal agencies’ interpretations of otherwise ambiguous statutes. According to the Court, Chevron conflicted with the Administrative Procedure Act (APA), whose judicial review provisions require courts to apply their judgment (and not defer to agencies) in deciding matters of law. Although courts will benefit from a relevant agency’s experience, they will no longer be bound by the agency’s interpretation of the statute.
Therefore, because of the Loper decision, the judiciary, not the executive branch, is now responsible for interpreting ambiguous federal statutes without deference to the federal agency’s interpretation. However, the Court was careful not to question any previous court rulings that relied on Chevron, specifically stating that those rulings stand.
The Loper decision ensures that courts will determine whether a federal agency acted within its authority under the APA in enacting a regulation. Many regulations that agencies promulgate are also likely to face court challenges, which could make it much more challenging for agencies to implement laws passed by Congress.
At this point, companies should continue to comply with existing laws and regulations, which remain in full force and effect. Federal agencies that currently regulate companies and workplaces will continue to do so. Simply put, despite the Loper decision, businesses need not immediately change their everyday business practices.
However, as noted above, agency regulations, including those that affect health and retirement plans, may increasingly be subject to court challenges. These challenges could lead to court decisions that limit or completely overturn some regulations over time. When those decisions occur, companies must follow them to the extent that they impact their business operations.
Furthermore, the Supreme Court’s subsequent decision in Corner Post, Inc. v. Bd. of Governors of the Fed. Reserve Sys., 2024 WL 3237691 (U.S. 2024), relaxed the timeframes for filing lawsuits under the APA. This court ruling also could increase the number of challenges to regulations that affect health and retirement plans.
HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and H.R./employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.
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