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Top US court prepares a deregulatory deluge



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The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Gabriel Rubin

WASHINGTON, June 14 (Reuters Breakingviews) -What will U.S. businesses do if the federal regulations governing their practices are suddenly up for debate? They’ll probably start by hiring some good lawyers. After that, like a football coach with unlimited challenges, they’ll set to work deconstructing every rule their businesses currently comply with, looking for ways in which agencies took matters into their own hands to craft regulation out of ambiguous laws. Then they’ll go to court, and after long waits, they stand a strong chance of winning — and dismantling the structures that have governed American business for decades. That’s what is at stake in an upcoming decision by the U.S. Supreme Court.

Businesses face a major sea change in American law when the Supreme Court decides whether to overturn a major precedent, known as “Chevron Deference," before the end of its term this summer. The precedent, from 1984, dictates that courts should defer to executive branch agencies’ expertise when it comes to interpreting laws passed by Congress, when Congress’ intent is unclear. Essentially, courts gave wide leeway to agencies like the Environmental Protection Agency or Securities and Exchange Commission to use powers delegated to them by Congress to administer the law.

Two small fishing companies have challenged that precedent, claiming that paying for a monitor on a herring boat required by the National Marine Fisheries Service amounted to regulation that is too onerous. As the case illustrates, the ruling will affect not only the EPA and the SEC, but also myriad other federal agencies.

The Supreme Court, especially in its current iteration, has already chipped away at the Chevron case. It has given plaintiffs more opportunities to challenge the constitutionality of regulatory agencies’ actions and practices in federal courts. But this year’s ruling could turn the tide even further, delivering a generational victory to the conservative legal movement’s project of, in their words, dismantling the American administrative state.

Legal scholars anticipate that the current right-leaning orientation of the high court will lead to a rollback of agency powers, clipping the wings of regulators and leading to a mammoth traffic jam of businesses racing to challenge decades-worth of rules in federal court. The uncertainty that comes with throwing out a rule book will give some general counsels heartburn. The application of the law will be highly variable, as emboldened and politicized jurists take matters into their own hands. Cases will proceed slowly, but for businesses eager to slash compliance costs, most of the results will be worth the wait.

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CONTEXT NEWS

The Supreme Court is expected to issue a decision before the end of its term this summer that will likely limit the authority of federal regulatory agencies to interpret laws passed by Congress.

The loss of the so-called “Chevron Deference,” a precedent from 1984, will lead to a slew of rules being challenged in federal courts. Overturning, or at least weakening, the precedent has been a key goal of many conservative groups for decades.



Editing by Lauren Silva Laughlin, Sharon Lam and Pranav Kiran

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