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U.S. Supreme Court Ends Bureaucratic Agency Stranglehold on Economy

Austin, TX — The Cicero Institute applauds the Supreme Court’s recent decision in Loper Bright Enterprises v. Raimondo, which overruled the Chevron doctrine and restored checks and balances essential for a healthy economy.

Established in 1984, the Chevron doctrine required courts to defer to federal agency interpretations of ambiguous laws. The Loper ruling marks a significant shift in judicial interpretation, ensuring that courts, not agencies, define ambiguous statutes.

In the Loper majority opinion, Chief Justice Roberts emphasized that the Administrative Procedure Act (APA) mandates courts to exercise independent judgment, stating that “Chevron defies the APA’s command that ‘the reviewing court’—not the agency whose action it reviews—is to ‘decide all relevant questions of law’ and ‘interpret…statutory provisions.’” However, Roberts noted that Loper does not question prior cases relying on Chevron.

Loper provides a crucial check against regulatory inertia at the federal level. The Mercatus Center found that federal regulations reduced GDP by 0.8 percent annually over 35 years — roughly the lifespan of Chevron — leading to a 25 percent smaller economy. The Competitive Enterprise Institute estimates federal regulatory costs at $1.939 trillion, or $14,514 per household annually. Economist George Stigler noted that broad regulatory power enables industry capture, “Regulation is acquired by the industry and is designed and operated primarily for its benefit.”

However, Loper does not apply to state regulations, presenting a challenge for state governments. State regulations, often inconsistent and redundant, impede business formation and growth. Yet, this challenge also presents an opportunity for growth and progress. Eight state courts endorse Chevron-like deference, while ten states apply Chevron inconsistently. These states must reassess their regulatory frameworks to avoid uncertainty, paving the way for a more streamlined and efficient system.

“While Loper is certainly a step in the right direction at the federal level, the new Supreme Court standard is only forward-looking and is not binding at the state level, where many courts remain deferential. State policymakers should seize upon Loper’s momentum and strengthen checks and balances in their states by passing smart laws,” says Tanner Jones of the Cicero Institute. He added, “Thirteen states have already limited deference through court precedent, statute, or constitutional amendment, setting an example for others.”

Press Inquiries:
Stefani Buhajla
Director of Communications
Cicero Institute
[email protected]