US Supreme Court tosses “Chevron doctrine”

July 1, 2024

The US Supreme Court (SCOTUS) overturned the “Chevron doctrine” last week, opening the door to significant changes in federal policy affecting home builders. The Chevron doctrine gave deference to agency interpretations of federal law. This latest decision returns that power to the courts.

Courts, not agencies, have final say on federal policy

In a 6-3 decision in Loper Bright Enterprises, et al. v. Raimondo, SCOTUS determined that the 1984 opinion in Chevron U.S.A. Inc. v. Natural Resources Defense Counsel, Inc. does not align with the federal Administrative Procedures Act. Instead, the court ruled that the courts have the final interpretation of laws.

The Chevron doctrine, or “Chevron deference” as it is colloquially referred to, required courts to defer to “permissible” agency interpretations of the statutes those agencies administer, even when the court would read the statute differently.

Chevron required courts to defer to the Environmental Protection Agency on issues relating to the Clean Air Act, rather than their own (and perhaps differing) opinions on the statute at issue.

The Loper Bright decision makes clear that sitting courts make the final decision on what a federal statute means. They do not need to defer to the agency, administering the regulatory framework.

The decision divided the court on ideological/political grounds, with all six conservative justices supporting the majority opinion.

No Chevron doctrine: Good news for builders

“Thousands of federal agencies impact home building in Washington state and across the country,” said Sydney Phillips, BIAW’s Associate General Counsel. “This decision largely strips them of their power, possibly resulting in significant, and most likely positive changes, in federal regulatory decisions as lower courts weigh in on the implications of various federal statutes. BIAW’s legal team looks forward to assisting our members as they navigate changes to federal policy.”