Winnik panelists discuss the impact of Loper Bright on FCC rulemaking

Agency Determinations Carry Less Weight

Understanding the implications of Loper Bright requires understanding Chevron. The Chevron doctrine involved a two-step analysis. First, courts asked whether Congress had spoken clearly on an issue in a given statute. When Congress had not spoken clearly, courts then determined whether the agency’s interpretation of the statute was reasonable. Loper Bright rejected this framework, shifting authority from agencies to courts. Stempel explained that instead of the Chevron “two-step,” reviewing courts will now conduct a de novo review of agency rules to determine if the agency’s interpretation of the underlying statute is the “best” interpretation. A reasonable agency interpretation is no longer sufficient to withstand a legal challenge if it is not also the best. As a result, agencies may be less likely to prevail on challenges to their interpretations of ambiguous statutory authority. She also observed, however, that Loper Bright will not impact many other areas of administrative law, including questions that involve agencies’ factual determinations or procedural defects.

Loper Bright Does Not Open the Floodgates, But Litigation Will Increase

While most observers expect an increase in litigation following Loper Bright, it may not be the deluge that some have predicted. Power noted that the Supreme Court took pains to clarify that prior decisions upheld under Chevron’s second step are subject to stare decisis, so courts should not overturn decisions simply because of the decisions’ reliance on Chevron.

It also remains to be seen how litigation will develop. Courts will have to address novel questions about when and how parties may ask courts to reconsider prior decisions upholding reasonable agency interpretations on the grounds that such prior decisions were not the best interpretation. At the same time, Stempel cautioned that Loper Bright introduces an element of finality that, along with the uncertainty associated with litigation, may cause potential litigants to question whether litigation is worth it. In the past, it was possible that an agency would adopt a new or different “reasonable” interpretation as circumstances or agency leadership shifted. Now, once the courts reach a final determination about the “best” statutory interpretation, the question will be settled.

Major Questions Doctrine Will Still Be a Limiting Factor

The Major Questions Doctrine arose in part because courts were uncomfortable with the implications of Chevron deference to reasonable agency interpretations, when the policies addressed issues of “vast economic and political significance.” As a result, the Supreme Court said that a “clear statement” from Congress was necessary in these circumstances. Both Power and Stempel expect the Major Questions Doctrine to play a similar role going forward. Even where courts determine that an agency rule is the best interpretation of a statutory grant of authority, the courts may still ask whether Congress made a clear grant of authority to the agency.

Implications for Rulemaking

Ultimately, Loper Bright likely will impact how agencies such as the FCC conduct the rulemaking process. Stempel suggested that agencies may place greater emphasis on legal analysis during the rulemaking process. At the FCC, this may require earlier involvement by the FCC’s Office of General Counsel. Commenters will want to raise legal issues in their comment letters and ground their positions in textual arguments to ensure that the FCC has enough information to consider and address challenging legal questions during rulemaking. In other contexts, agencies may employ informal guidance more often, now that formal notice and comment rulemaking no longer conveys the benefit of invoking Chevron deference.

Better Legislation

Loper Bright increases pressure for Congress to provide clearer legislative mandates, but that is much easier said than done. In addition to general political polarization, Power noted that the legislative process includes inherent, structural challenges that often make it difficult for Congress to pass clear statutes. For example, to get a law passed, Congress may accept some level of ambiguity, expecting that an agency will work out the details during rulemaking. Statutory ambiguity may also result from changing circumstances, as Congress cannot always anticipate how authority granted to an agency may need to be used in the future. This is particularly true in areas under the FCC’s jurisdiction, where technology is always evolving. Congress may pivot to relying on more express delegations of broad authority, but that approach has also been subject to challenge under the nondelegation doctrine.

What’s Next

The litigation push may start with consumer advocacy organizations rather than industry. Defensive litigation monitoring will be important. Industry may also see opportunities to intervene in support of established rules to maintain stability.

Loper Bright will likely be a factor in legal challenges to several FCC rulemakings, including the digital discrimination, net neutrality, and data breach proceedings.

Authored by John Castle and Ambia Harper.