Chevron's bankruptcy may affect business regulation

In the United States, anyone who has driven a car knows the oil and gas company Chevron. But for legal professionals, the name Chevron is associated with an important legal principle - Chevron respects the principle. The US Supreme Court recently overturned the long-standing Chevron principle, a ruling that could greatly reshape the way US government agencies operate and companies regulate.

Firstly, Chevron's principle of respect originates from the landmark Supreme Court ruling, Chevron USA Inc. v. Natural Resources Defense Council. This judgment establishes a legal principle that courts should respect the interpretation of vague regulations that administrative agencies are responsible for enforcing. This principle is based on the idea that institutions have expertise in their regulatory field and are therefore better suited than courts to interpret the complexity of certain laws. According to Chevron's regulations, if a regulation is ambiguous, as long as it is reasonable, the court will listen to the agency's interpretation. This method gives institutions great freedom in interpreting and enforcing laws, shaping the modern administrative state of the United States.

Secondly, the verdict in the Chevron case was announced at the time and was considered a loss for environmental organizations, including the Natural Resources Defense Council, as well as a victory for the Reagan administration. This case involves a regulation issued by the Environmental Protection Agency, which allows manufacturers to install or modify a piece of equipment without obtaining a federal permit. Environmental organizations have questioned this regulation on the grounds that it violates the Clean Air Act and will lead to more pollution. However, Judge John Paul Stevens wrote in a unanimous ruling that the court should respect the Environmental Protection Agency's interpretation of the Clean Air Act, as well as other federal agencies' interpretations of other regulations. Although initially not considered a historically significant ruling, Chevron's ruling quickly became an important precedent.

On the other hand, a major shift is that the recent ruling by the Supreme Court overturned Chevron's ruling, declaring that unless Congress explicitly grants that power to an agency, ambiguous laws should be interpreted by the court rather than the agency. The Lopperblatt case involves a group of Atlantic herring fishing companies, questioning the authority of the US National Marine Fisheries Agency to require them to pay for federal observer fees on board. The Supreme Court ruled that courts must exercise independent judgment to determine whether institutions are acting within their statutory authority, marking a return to strict supervision of institutional interpretation by the judiciary. Administrative agencies such as the Environmental Protection Agency and the Securities and Exchange Commission are responsible for enforcing laws in specific areas such as environmental protection and securities regulation, and Congress authorizes these agencies to develop and enforce legally binding rules, typically dealing with complex technical issues beyond Congress's expertise.

Furthermore, ironically, many environmental organizations urge judges not to overturn the verdict in the Chevron case. The Environmental Protection Foundation and the Natural Resources Defense Council have both submitted amicus curiae statements, urging the Supreme Court to take action on this matter. Earthjustice also submitted a joint statement on behalf of environmental organizations such as the Environmental Protection Law Foundation, the Marine Conservation Association, and Save the Bay, defending this principle.

Overall, the decision to overturn Chevron's verdict may have far-reaching implications for the company. With the increasing intensity of judicial review, legal challenges to institutional regulation may increase, leading to increased uncertainty in the regulatory environment. In this uncertain environment, corporate interests may be more likely to challenge government attempts to regulate businesses.