Judicial Engagement
Judicial engagement is a much more delicate and expensive process than the other two means of shaping policy. That said, it can be an incredibly powerful tool in the moments it intervenes.
This is a significant moment in the history of the federal court’s influence on the regulatory state. In its 2024 term, the Supreme Court handed down two groundbreaking decisions which heavily impact how agencies carry out the objectives Congress sets out for them. The explanations below are not to be construed as legal advice but do provide interesting perpectives on how the FAA will be responding to input in the years moving forward (Loper Bright) and how much private industry can challenge agencies’ rules and regulations (Corner Post).
While Loper and other decisions received a disproportionate amount of coverage in the news, Loper and Corner Post, when viewed together, have the potential to fundamentally transform the balance of power between our branches of government and empower individuals and private companies more latitude to push back against federal regulators.
The full impact and scope of these rulings will likely not be understood for years, as courts, litigants, Congress, and Agencies adjust and shift their strategies. But it is important to continue to carefully review the rulings and to work with our legal and regulatory experts to understand what changes and opportunities this might bring for our industry.
While this is largely seen as a victory for conservatives because of liberal support for Chevron deference, it is worth noting that Chevron was originally seen as a victory for conservatives when it was written. Equally, it is advisable to not presume that this perceived victory for conservatives will remain as such over time.
Below, we provide some background on the two cases and describe a few of the numerous questions that they raise about Federal regulation going forward.
Loper Bright and Corner Post
Loper Bright v. Raimondo struck down Chevron Deference, a principle which had required federal judges to grant broad deference to federal agencies when interpreting vague statutes. When a law involving an agency was written ambiguously, judges were required to accept the agencies’ interpretation of the law in most cases. Chief Justice John Roberts found, instead, that courts have ultimate authority in reading the statutes that authorize Federal regulation and must consider all the relevant facts neutrally. Moving forward, judges will be responsible for resolving statutory ambiguities neutrally, leveling the playing field between regulated parties and government agencies advocating for different readings of federal law.
Corner Post v. Board of Governors of the Federal Reserve System appears to be a more technical matter, extending the time in which companies can object to Federal rules, but might also have more far-reaching implications. Typically, entities affected by a regulation have a maximum of six years to file suit challenging it after it comes into effect. In Corner Post, the court ruled that the six-year statute of limitations to challenge an agency regulation begins when a party is first harmed by the regulation. Prior to this decision, the statute of limitations had begun when the regulation was first published. That change greatly extends the window in which agencies might expect a challenge to their regulations, as they are no longer ‘safe’ after six years. But perhaps more significantly, the ruling appears to imply that newly formed entities could sue even after the six-year clock expires for the rest of an industry.
Depending on how Loper and Corner Post combine to raise a number of profound questions across the federal government.
While the decision in Loper was clear that previous cases resolved under Chevron would remain in place, Chevron was such a colossus astride agency law, that there is an enormous number of regulations that no one has bothered to challenge, but under the more neutral Loper standard, will become appealing targets. The most general question is: if, as it appears, under Corner Post, a new corporate entity (even if formed by long-standing parties to a given regulation) could challenge a regulation regardless of how old it is, and challenge it under the Loper standard, exactly how many new plaintiffs will be drawn into court to challenge agency rules? And how will agencies and the federal judiciary logistically manage that incipient deluge?