For 40 years, U.S. federal agencies have been able to make decisions and set regulation based on their interpretation of “ambiguous” statutes of laws they are required to regulate against, based on the precedence set by the 1984 Chevron Decision by the Supreme Court. The decision enabled federal agencies (which are given their authorities due to their considered expertise) to do business without having to apply to the court (with questionable subject matter expertise) for interpretation of every aspect of a law for which they are seeking to set or enforce regulation.
With the June 28, 2024, Supreme Court decision to overturn the Chevron precedence, federal agencies no longer hold that authority, and the impact on the food industry (among all others relying on federal agency oversight) remains uncertain. Following are some further details and perspectives on potential fallout.
In reversing the decision, the Supreme Court Opinion invoked the Administrative Procedure Act which “requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous.” This overturns the 40-year precedent cited by federal courts more than 18,000 times, that, in a dispute, a court was to rule for the agency’s interpretation of a statute if the matter at question had not been specifically addressed by Congress.
While this may not seem to be extensively onerous, it could impact not only new, but existing regulation and its enforcement. For example, a court could conduct its own review and determine that it does not agree with the agency interpretation of a provision in a regulation and nullify it; it could determine the agency did not have the authority to set a particular regulation at all, invalidating the regulation and all enforcement. If fully implemented, the decision could slow all new regulation and guidance as agencies attempt to get the court’s interpretation of an ambiguity.
For the food industry in particular, there could be significant impact on food safety. For example, in developing the regulations of the Food Safety Modernization Act, FDA had to interpret the Congressional statutes to befit, and enable compliance by, the varied segments of the food industry. Reversing the ability of the agencies to use their expert interpretation when setting regulation opens the door for any lobbying organization, advocacy group, or special interest group to challenge any regulation for their own gain, leaving the decision to a court which is likely to have little to no expertise in the matter.
In opposition to the reversal, the dissenting opinion by three members of the Supreme Court states that, in serving as a cornerstone of administrative law for 40 years, the Chevron decision “has become part of the warp and woof of modern government, supporting regulatory efforts of all kinds—to name a few, keeping air and water clean, food and drugs safe, and financial markets honest. And the rule is right.” Because Congress does not, and cannot, write perfectly complete regulatory statutes, leaving statutes to inevitably contain ambiguities, the Chevron deference reflects what Congress would want, and is thus “rooted in a presumption of legislative intent,” the dissent states, noting that it is the agencies, rather than courts, that have relevant scientific or technical knowledge, expertise, and detailed understanding of complex and interdependent regulatory programs to enable them to make the most relevant interpretation. Additionally, it states, agencies report to a President, who answers to the public, whereas courts have no such accountability. “Put all that together and deference to the agency is the almost obvious choice, based on an implicit congressional delegation of interpretive authority.”
We agree that it is the agencies who have the expertise and experience to best interpret an ambiguity, so are closely watching the repercussions of the reversal. We would expect that the impact on the food industry will be determined by the impetus of interested parties and the courts to put it to the test. It is likely that groups are, even now, writing up challenges. However, while the courts are being told to not defer to agency interpretation “simply because a statute is ambiguous,” this does not mean that the court can’t rule with the agency, assenting to its expertise.
There is little doubt that agency interpretations and resulting regulations will now be put to the test in court, so it’s primarily a matter of watching and waiting.
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