5 Reasons Why the Victory May Be Costly
While the business community celebrated this decision after decades of frustration over bureaucratic red tape, they may one day look back at the Loper Bright decision as a costly victory. Here are five reasons why – plus the impact on corporate counsel and what you can do to minimize risks.
1
2
Agencies Might Be Too Tied Up in Court to Perform Crucial Services In addition to developing and enforcing regulations, federal agencies also carry out valuable services that businesses and the general public might rely upon (such as performing reviews, granting approvals, issuing permits, etc.). Impact: We are already seeing a stream of lawsuits and legal filings from business groups and others challenging all kinds of regulations, which means that many agency leaders are now tied up in litigation and distracted from their everyday work. Since each agency only has so many resources, businesses might suffer from long delays in crucial services. Action items: Work with outside counsel and business groups to track key litigation and anticipated delays. Partnering with industry or other trade associations to leverage their unique and specialized resources to stay updated on developments. You may also want to monitor for updates from agencies themselves, keep connected with contacts at relevant agencies, strategize with your business unit leaders on how to handle delays, and assess the impact on any pending or upcoming matters with the applicable agencies.
Fewer Regulations Could Allow for Greater Enforcement Rather than “making new law” through the tiresome (and perhaps fruitless) process of passing new regulations, we’ll soon see federal agencies turn their attention to pushing their priorities through enforcement and litigation. Impact: Agencies might shift their resources to enforce existing regulations and crack down on industries more aggressively. Fewer regulations to focus on means that investigators could place more attention on those that remain. Action items: Lead your team in a compliance audit to help ensure your organization is following all applicable rules and regulations. You may also want to oversee an update to your policies and procedures to handle audits, subpoenas, and agency requests. Additionally, consider developing compliance training for key employees to help prevent violations and prepare for potential investigations.
Quick Background: SCOTUS Strips Power From Federal Agencies For 40 years, the Supreme Court required courts to routinely defer to an agency’s “reasonable” interpretation of ambiguous provisions in federal law, providing federal agencies (and the White House) a powerful instrument to shape the law as they saw fit. This deference allowed agencies to issue rules, regulations, and guidance that carved new paths that were not always anticipated by congress or the general public. But the 2024 Supreme Court term saw SCOTUS toss out Chevron deference and tip the scales of power away from the executive branch. Instead, SCOTUS’s Loper Bright decision empowers federal courts across the country with a burst of newfound freedom and power by ruling that the courts are the ultimate arbiters of what federal law is. Judges now can use their independent judgment to decide if an agency has stepped out of bounds, casting aside any hint of deference. Read more about this game-changing decision and how it could impact your workplace.
Made with FlippingBook - Share PDF online