Industry experts say the ruling could ensure that agency rulemaking hews closer to the intent of lawmakers, while environmental and public health advocates say they anticipate a flood of legal challenges that could result in fewer environmental and health protections, and a potential destabilization of the regulatory environment. 

Steve Hall, executive vice president of the American Council of Engineering Cos., describes the ruling as “a sword that kind of cuts both ways.” 

He says it could enable groups such as ACEC, which represents design firm interests, to challenge regulations that go beyond an agency's legal authority under a given law, but it also could result in judicial and regulatory instability, as well as uncertainty for member firms. “The decision definitely creates for organizations like ACEC a new lane to challenge [regulatory overreach] but we need to be careful how we do that, because it could create a parallel opportunity for instability.” 

Sean Donahue, a partner at Donahue, Goldberg and Herzog, who has represented environmental and public health organization parties in numerous major environmental and clean energy cases in the Supreme Court and in federal courts of appeals, said on a press call that although it’s unclear how the judicial branch will review cases going forward, “there’s no question” that the Loper decision will encourage “a massive effort by parties that are subject to regulation for their pollution or many other areas of regulation to challenge long-established policies, and how that unfolds is really important.” 

He added that the ruling “overturned 40 years of precedent that had been relied on in scores of Supreme Court decisions, many of them unanimous, and hundreds of thousands of lower court decisions.”

Some groups contend that the ruling could create more stability for the regulated community, not less. Kristin Swearingen, Associated Builders and Contractors’ vice president of legislative and political affairs, said the decision will make it more difficult for each new administration to “engage in incessant flip-flopping on issues … leading to unmanageable uncertainty for the employer community.” 

Leah Pilconis, Associated General Contractors of America general counsel, said in a statement that going forward, Congress will likely face more pressure to be specific and clear in writing legislation. “Put simply, [it] will be pressured to leave little to be interpreted by federal agencies," she contends. "On the other hand, agencies will need to provide strong legal justifications for their rules and strictly follow Congress’s direction to pass judicial review.”

Full Implications Still Unknown

Potential test cases of fallout from Loper are now set to be weighed in lower courts. Just days after the ruling, the Supreme Court remanded to the Washington, D.C., federal appellate court a challenge to power supply approval by the Federal Energy Regulatory Commission for a Billings, Mont., solar energy and battery storage facility that required utility NorthWestern Energy to buy its power output. 

The utility and trade association Edison Electric Institute challenged FERC and the appeals court’s deference to the agency’s interpretation of what it considered unclear provisions in the Public Utility Regulatory Policies Act. The case petition for high court review was held until after the Loper ruling, but observers said they are not clear on legal strategy the appellate court would use in its second review. One dissenting judge in the first ruling pointed to colleagues’ dependence on “Chevron maximalism” to uphold FERC, but in a case brief, the solar developer and trade group Solar Energy Industries Association said the agency’s decision was “the best and only sensible reading of the statute.” 

Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School, speculates that FERC’s recently issued power transmission planning and cost allocation rule could be a legal target after Loper. Republican attorneys general and other opponents have questioned FERC authority to issue the rule but have not yet filed a lawsuit.

Another potential test case of the fallout from Loper also is pending review by the D.C. federal appeals court in a lawsuit filed last month by the U.S. Chamber of Commerce, AGC and National Waste Recycling Association. It challenges the U.S. Environmental Protection Agency's designation of two types of PFAS chemicals as hazardous under the nation’s Superfund law, officially called the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). 

AGC's Pilconis says the Loper ruling “bodes well” for the case. 

The EPA designation “is an interesting rule to evaluate because it’s the first time that EPA used Section 102 of the CERCLA law to designate substances as hazardous," says Jessica Rosell, a partner at Lathrop GPM LLP who has specialized in litigating PFAS cases, "I think there’s a real chance for the Loper decision to implicate how courts that are evaluating these challenges will review the agency’s interpretation of Section 102 ... and whether or not EPA was correct or reasonable in evaluating [if] these substances merited a hazardous substance designation.” 

Two U.S. Labor Dept rules are also set to be test cases. One is the just proposed heat standard, says Jordan Barab, a former deputy secretary of labor for occupational safety and health. He says in the absence of deference to agency opinion the Chevron doctrine allowed, it’s unclear what criteria judges will use to determine heat standard legality if it is finalized, then challenged by industry. 

“There’s an incredible amount of work and all kinds of science behind these issues,” he says, but, depending on which courts hear challenges, judges “might decide they know more about how to protect workers than scientific experts and OSHA do.”  Also being weighed in a trial just underway in the New Orleans appeals court is use of Chevron deference in a recent Labor Dept. rule that allows pension fund managers to consider environment, social and governance factors (ESG) in making investment decisons.

Attorney Donahue says Congress could revisit the Administrative Procedures Act, the law underpinning how the government functions, by adding specific language that provides legal deference to the expertise of federal agencies during judicial review of regulations being challenged. 

"That may be necessary particularly if this onslaught of challenges proves to be as destabilizing as many of us fear it may be," he says. 

Also being weighed in a trial just underway in the New Orleans appeals court is use of Chevron deference in a Labor rule that allows pension fund managers to consider environment, social and governance factors in making investment decisons.