To quote Michael Stipe of REM…. “It’s the end of the [administrative law] world as we know it.”

Before breaking for summer, the Supreme Court issued two significant opinions that will substantially affect how we practice environmental law.  Loper Bright Enterprises v. Raimondo decided together with Relentless v. Department of Commerce, and Corner Post, Inc. v. Board of Governors of the Federal Reserve System involved challenges to federal agency regulations. These decisions change how we navigate the federal regulatory process.

Loper Bright 

Petitioners, including Loper Bright Enterprises, are Atlantic herring fishermen in the jurisdiction of the New England Fishery Management Council. These fisheries are regulated by the Magnuson Stevens Act (MSA). Fishery Management Councils, under the MSA, are required to implement Fishery Management Plans (FMPs) which help protect the stock of fish in that fishery to ensure long-term sustainability of the fishery.

As part of these protections in the MSA, Congress provides that an FMP may require observers onboard to ensure fishing vessels are complying with fishing limits and allowances. The MSA explicitly lists three groups that are required to cover the cost of an observer, if one is needed. While silent on the issue of payment, the MSA also allows for an FMP to require an observer on domestic vessels “for the purpose of collecting data necessary for the conservation and management of the fishery.” Loper Bright Enterprises did not fall under one of the groups in the statute required to pay for their observers.

In 2013, the New England Fishery Management Council proposed an amendment to require fishermen to pay for observers if federal funding for them became unavailable. The National Marine Fisheries Service (NMFS) approved the amendment many years later. The amendment required a vessel to contract with a government-certified observer if NMFS determined that an observer was required but declined to assign a government-paid observer. The New England Fishery Management Council amended their FMP for Atlantic herring to require an observer on board vessels in that fishery. The cost of an observer can be as high as $710 a day, reducing total revenue for the vessel by 20 percent.

Loper Bright Enterprises challenged the amendment to the FMP on the grounds that the MSA does not authorize NMFS to mandate fishing vessels pay for observers when they are required by an FMP.

The issue in this case was whether, when faced with a statute that is ambiguous or silent on a specific issue in a lawsuit, federal courts should defer to an agency’s reasonable interpretation of the ambiguous statute. The deference to an agency’s interpretation of an ambiguous statute has historically been known as Chevron deference, named after the 1984 case, Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc. Because the MSA does not require that Atlantic herring fishermen, including Loper Bright Enterprises, cover the cost of observers, and is silent on whether they could be forced to cover the cost, the NMFS promulgated the amended rule based on the premise that the rule is a reasonable interpretation of the MSA.

The Supreme Court did not reach the facts of the case and limited the issue to whether Chevron should be overruled. The Court decided that, when faced with a statute that is ambiguous or silent on a specific issue, federal courts may not defer to an agency’s reasonable interpretation of the statute simply because a statute is ambiguous. The Court explained that the Administrative Procedures Act (APA) requires that courts decide all questions of law when reviewing agency action.

While the Court overruled Chevron deference, it left intact what is misleadingly known as Skidmore deference. Skidmore is not a deferential standard. It simply permits courts to use agency interpretations to inform their own interpretations “to the extent that it rests on factual premises within the agency’s expertise.”  Skidmore recognizes that an agency interpretation is one of many tools which help judges interpret statutes. Agencies have what is said to be a “body of experience and informed judgment,” which is at the disposal of the judiciary in cases of statutory interpretation.

Additionally, Loper does not reverse any prior decisions which relied on Chevron. The Court expressly stated that “the holdings of those cases that specific agency actions are lawful . . . are still subject to stare decisis.”

Corner Post 

Petitioner, Corner Post, is a merchant who accepts payments through credit cards. Payment networks, such as Mastercard and Visa, charge fees to merchants for use of their system to collect payments via credit cards.

In 2011, before Corner Post began doing business, a regulation was promulgated by the Federal Reserve Board, under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which capped fees that payment networks may charge merchants for the use of their payment collection systems. In 2021, Corner Post joined a suit against the Federal Reserve Board alleging that the regulation they promulgated in 2011 is unlawful under the Administrative Procedures Act (APA), because it allows for higher fees than the statute allows.

The issue in this case was whether the statute of limitations for bringing claims under the APA begins at the time of final agency action (when the regulation was promulgated), or when a plaintiff is injured by the final agency action (when Corner Post became subject to the credit card fees).

By deciding Corner Post, the Supreme Court resolved a disagreement among lower federal courts regarding when the clock for the statute of limitations for APA claims begins to run. Some courts had decided that the clock begins on the date of the final agency action, while other courts had decided that it begins on the date that the plaintiff was injured by the agency action.

The Court ultimately decided that the clock for the statute of limitations begins, for the purposes of the APA, when a party is injured by final agency action. In practice, injury can occur many years after an agency implements a regulation, as it did with Corner Post.

The APA statute of limitations at issue states that a civil complaint against the United States must be filed within six years after the right of action first accrues. A right of action “accrues” when a plaintiff has a “complete and present cause of action,” or when he has the right to “file suit and obtain relief.” The Supreme Court found that under the APA, a plaintiff does not have the required “complete and present cause of action” until he suffers an injury from a final agency action. Thus, the Court reasoned that the statute of limitations cannot begin to run until a plaintiff is injured.

This decision leaves many agency actions open to challenge virtually indefinitely into the future.

On the Ground Implications 

Overall, these decisions are a quantum leap in uncertainty for those navigating federal administrative processes.  We will not know the extent of the impacts until cases are brought to lower courts who will then flesh out how far the decisions extend.

For now, it is clear that Loper and Corner Post make it easier for plaintiffs to challenge agency actions which, depending on the context, may have positive or negative impacts for our clients. We have listed a few of those pros and cons below.

Loper

Pro: If a permit applicant is denied a permit and the denial is based on agency interpretation of an ambiguous statute, the agency will not automatically receive deference from the court.

Con: If a client is granted a permit and the permit is challenged by a third party, the agencies’ decision will not receive deference from the court.

Con: Permit applicants will need even more robust applications that tell their story to support issuance in a detailed records review.

Corner Post

Pro: An affected party can challenge a federal rule or permit six years from when their injury occurs, irrespective of the date of agency action. This opens the window to challenge federal regulations that may have caused negative impacts but were previously thought to be barred based on the date of the final rule.

Con: Absent an explicit deadline to challenge, a third party can challenge agency action in favor of a client when the third party is harmed by the rule or permit, irrespective of the amount of time since the agency action.

Make sure to connect with LLW to keep informed of further developments.