The Supreme Court recently passed down a decision that may not, on the surface, seem like it will impact your business. It did not get as much media attention as some other Supreme Court decisions this term. But it could upend the way you do business. Our Chicago business lawyer at Ellis Legal explores the impact of the case that overturned Chevron below.
Heavily Regulated Industries
Many of us are in businesses that must comply with heavy federal regulations. Almost every single industry, from energy and power to environmental concerns, to food service and preparation, to websites, transportation and trucking, workplace safety, how workers get paid, vehicle design and manufacture—all of it, and more, must comply with thousands of pages of federal regulations.
It is important to understand how all these regulations and rules came into existence to understand how the recent Supreme Court decision affects your business.
How Rules are Passed
We all know that Congress (or the state legislature, if we're talking about a state law) passes laws.
However, the problem is that the laws Congress passes cannot address all the details that help people (and businesses) understand what is expected of them. Laws often need details, such as the law's exceptions, consequences, definitions, or explanations.
To make that happen, once the law is passed, the President allows his executive agencies to make rules, "fleshing out" or filling in the blanks, for what is not in the actual law that Congress passes. These rules have the same effect as laws—even though they are technically being passed by executive branch agencies and not Congress.
Executive Agency Deference
For many years, under a Supreme Court case called Chevron, courts believed that whatever these agencies did or said was generally going to be treated like a law—that the agencies would be given deference by courts in the event of any lawsuit related to the rules these agencies pass.
But now, under a case just decided by the Supreme Court called Loper Enterprises, that is no longer the case.
The Supreme Court has said that courts do not have to give this deference or this respect to what the agencies do. Now, courts are free to interpret agency rules how they see fit, and they no longer have to assume that whatever the agencies feel or decide or pass is necessarily correct, the way they did previously.
What Will Happen Now?
We don't yet know how this will affect businesses. On the one hand, it could make agency rules easier to challenge and give them less weight, some say lessening restrictions and rules placed on businesses.
But others have concerns that with Chevron's deference gone, businesses will now have more uncertainty—it may be more difficult to know what a court will do and when and if an agency rule is challenged. Businesses may not be certain of what could happen when a particular rule is challenged in court.
We just don't know yet. However, the way that agencies govern private businesses and industries may have changed for the better, and if you are in a heavily regulated industry, now is the time to get good legal counsel.
Don't violate government regulations. Let us help you navigate those waters. Speak with a Chicago commercial litigation law attorney at Ellis Legal at (312) 967-7629 today.