The End of US Environmental Protection Regulation as We Know It

By Patrick Boyle , Corporate Accountability Attorney at the Center for International Environmental Law, and?Charles Slidders, Senior Attorney, Financial Strategies at the Center for International Environmental Law.

***The following is an excerpt from CIEL's analysis on recent U.S. Supreme Court decisions. Read the full analysis on CIEL's website here.***

The US?Supreme Court recently issued decisions in four cases that could profoundly weaken the administrative state, foreshadowing widespread dysfunction for federal agencies and the vast regulatory regimes they oversee, including federal protections safeguarding public health and the environment.?

The US federal government has more than?439 agencies and subagencies, each with its own sphere of responsibility and expertise. These agencies are responsible for implementing, applying, and enforcing a wide array of regulations across areas such as air quality, clean drinking water, education, energy, financial markets, food safety, and healthcare — regulations that greatly impact American lives.?

These Supreme Court decisions will undoubtedly be used to restrict the ability of federal agencies to interpret, apply, and enforce the laws and regulations crucial to the real-life, day-to-day implementation of our federal government’s most important functions.

Supreme Court Decisions Impacting Federal Agencies

The Supreme Court issued four decisions this past term (2023-2024)?that challenge the authority of federal agencies:

• ?Loper Bright Enterprises v. Raimondo: Overturned the longstanding?Chevron?doctrine, which gave deference to federal agencies. Courts will no longer be required to defer to the specialized technical expertise of federal agencies and their reasonable interpretation of ambiguous statutory terms or unclear definitions provided by Congress.?
• SEC v. Jarkesy: Ruled that the Securities and Exchange Commission (SEC) must provide defendants with a jury trial in enforcement actions seeking civil penalties, limiting the agency’s anti-fraud enforcement capabilities.
• Corner Post v. Federal Reserve: Extends the statute of limitations for challenges to agency actions, leading to prolonged legal uncertainty, even for decades-old regulations.?
• Ohio v. EPA: Halted enforcement of the Environmental Protection Agency’s (EPA) “Good Neighbor” rule — which aimed to implement ozone air pollution standards — because the agency had not provided an adequate explanation of its plan. This case signals the Supreme Court’s willingness to hinder federal agency efforts to regulate pollution on a nationwide basis.

Chevron?Deference and Its Demise

For the past forty years,?Chevron?deference has been the cornerstone of administrative law, and?Chevron v. NRDC?has been cited no less than 18,000 times in other court decisions.?The Supreme Court’s decision in?Loper Bright Enterprises v. Raimondo?abruptly ended?Chevron?deference, significantly shifting power from federal agencies to the judiciary.?

In its decision, the Supreme Court ruled that courts — not agencies — are to determine all questions of law, including the single best interpretation of ambiguous terms, even if those terms are scientific and technical. Justice Elena?Kagan’s dissent?warned that the majority decision would leave courts to determine questions far outside their expertise, including issues of environmental protection, such as how to define a “distinct population segment” of endangered “vertebrate fish or wildlife” pursuant to the Endangered Species Act.?

Shifts in Power and Ongoing Impact

The removal of?Chevron?deference fundamentally shifts power from Congress and the executive to the judicial branch. By upsetting the long-held equilibrium stewarded by the?Chevron?doctrine,?Loper Bright Enterprises v. Raimondo?will restrict the federal government’s operations and hinder environmental regulation.

Presidents depend on the administrative state to apply their policy preferences, and Congress enacts statutes with the understanding that agencies will utilize their experience and expertise to reasonably interpret ambiguities.?Without?Chevron?deference, the Supreme Court will have the final say over policy questions and, in the words of Justice Kagan, becomes the country’s self-appointed “administrative czar.”?

Not only does?Loper Bright Enterprises v. Raimondo?present a serious obstacle to the application and interpretation of federal environmental protection rules, but, together with?SEC v. Jarkesy, it will also limit the ability of agencies to enforce those rules.?

Climate Disclosure Rules and ESG Investing after?Loper Bright Enterprises v. Raimondo?and?SEC v. Jarkesy

Loper Bright Enterprises v. Raimondo?and?SEC v. Jarkesy?will influence the ongoing challenge to the SEC’s Climate Disclosure Rules, currently pending before the Eighth Circuit Court of Appeals. The SEC’s Climate Disclosure Rules — albeit insipid — require larger companies to disclose material Scope 1 (direct) and Scope 2 (indirect) emissions information. These rules have been challenged by twenty-five states, two Big Oil trade groups, and the US Chamber of Commerce.?

In overturning?Chevron?deference, the Supreme Court held that rulemaking agencies, such as the SEC, must demonstrate unambiguous congressional authority to create a rule, increasing the burden on these administrative agencies to prove they have the authority to implement such regulations. This poses a problem for the SEC, which adopted the Climate Disclosure Rules under the investor protection legislation of the?Securities Act?and the?Securities Exchange Act. The SEC must demonstrate that it has unambiguous statutory authority to make climate-related regulations under these laws.

Even if the Eighth Circuit upholds the Climate Disclosure Rules, their enforcement faces additional obstacles due to?SEC v. Jarkesy. The decision seriously undermines the ability of not just the SEC to bring enforcement actions, but, as noted by Justice Sonia Sotomayor in her dissent,?SEC v. Jarkesy?will also restrict the enforcement capabilities of over two dozen other federal agencies that can impose civil penalties in administrative proceedings. The EPA is one such agency that, until?SEC v. Jarkesy, could impose civil penalties in administrative proceedings when environmental protection regulations have been violated, but it now faces limitations due to the decision.

Extended Statute of Limitations for Challenging Agency Rules

In Corner Post v. Federal Reserve, the Supreme Court held that the limitation period to challenge an agency regulation starts when the party challenging the rule is actually injured by it. Accordingly, instead of the clock starting at publication, it starts at a different time for each potential litigant.?

This?decision dramatically expands the universe of existing regulations vulnerable to legal challenges by eliminating existing time restrictions on when court challenges to regulations can be brought. It will precipitate legal uncertainty and undermine the predictability of the law and agency regulations.?

Good Neighbors No More:?Ohio v. EPA

While the focus has been on the above-mentioned cases, another decision has received less attention but is just as significant for federal environmental regulation:?Ohio v. EPA?inhibits the EPA’s ability to regulate air pollution on a national basis.

The Court split five-four. Justice Amy Coney Barrett — a reliable member of the Court’s conservative clique —noted that?Ohio v. EPA?is “fact-intensive and highly technical” and — somewhat at odds with the majority opinion she joined in?Loper Bright Enterprises v. Raimondo?— that the Court “should proceed all the more cautiously in cases like this one with voluminous, technical records and thorny legal questions.”?

In?Ohio v. EPA, the Court provided a preview of the post-Chevron?difficulties courts will confront in grappling with technical questions best left to agency experts. Justice Neil Gorsuch, the author of the majority opinion, demonstrated that judges are not best placed to determine highly technical non-legal questions: he was clearly confused about the pollutant in question. The?original opinion?referred to “nitrous oxide” (laughing gas) five times instead of “nitrogen oxide,” an air pollutant that the EPA’s policy aimed to reduce. After the error gained traction on social media, the Court issued a corrected opinion.

Uncertainty for US Environmental Regulations?

The?Loper Bright Enterprises v. Raimondo?and?SEC v.?Jarkesy?decisions mean that federal agencies will not receive deference in interpreting their enabling legislation and no longer have the ability to enforce those regulations before administrative law judges. After?Corner Post v. Federal Reserve,?it is unclear when — or if — agency regulations will be free from potential legal challenges. And, in?Ohio v. EPA, the Supreme Court inhibited the EPA’s ability to regulate air pollution on a national basis.

These recent Supreme Court decisions represent a seismic shift in the regulatory landscape and pose a particular threat to the federal government’s environmental protection regime. By limiting the power of federal agencies and extending the statute of limitations for challenging agency actions, these rulings introduce significant uncertainty and could provide an avenue for winding back environmental regulations that are already on the books. The full impact of these decisions will unfold over time, but their immediate effect is a substantial weakening of federal regulatory power and a suite of new tools for those seeking to challenge federal regulation.

Read the full analysis on CIEL's website here.