On June 28, 2024, the U.S. Supreme Court made a significant ruling in Loper Bright Enterprises v. Raimondo, overturning the longstanding Chevron decision.
For the past 40 years, Chevron deference had directed courts to defer to administrative agencies’ interpretations of ambiguous statutes. Here’s what you need to know:
Chevron Doctrine Explained
The 1984 Chevron case established a two-step approach for interpreting federal statutes implemented by agencies. Courts first determine if Congress directly addressed the statutory question. If not, they defer to the agency’s permissible interpretation. Chevron has been cited extensively in both Supreme Court and lower court cases.
The Recent Reversal
The Court’s decision in Loper Bright Enterprises rejects Chevron deference. Going forward, new cases involving statutory interpretation won’t rely on Chevron. Existing settled judgments based on Chevron are unaffected.
Impact on Oil and Gas Companies:
In Western Pennsylvania, where the oil and gas industry thrives, this ruling has implications. Companies may face greater scrutiny as courts no longer automatically defer to agency interpretations. Legal challenges related to environmental regulations, permits, and compliance may change.
What Lies Ahead
Courts will now play a more active role in interpreting statutes and agencies’ decisions will face heightened scrutiny. Oil and gas companies should seek legal advice to navigate this new landscape.
The demise of Chevron deference marks a sea of changes in statutory interpretation, affecting not only environmental law but also industries like oil and gas. Companies operating in Western Pennsylvania must adapt to this shift and stay informed about evolving legal standards.
About Schneider Downs Energy & Resources Services
The Schneider Downs Energy & Resources industry group provides specialized financial advice and services to our clients in the oil and gas, mining and aggregates, forest products and alternative fuel and energy industries throughout the Columbus and Pittsburgh regions. Our extensive knowledge of industry issues enables us to provide proactive audit, tax and management consulting services.
To learn more, visit our Energy and Resources Industry Group page.
