Loper Bright & Corner Post Review: Supreme Court’s Overturning of Chevron Doctrine Spells Uncertainty for Food Industry Regulations

At a Glance

• The Supreme Court’s decisions in Loper Bright and Corner Post foreshadow increased litigation and uncertainty regarding the enforceability of federal executive branch agency rulemaking broadly, but food companies should continue to comply with applicable USDA and FDA regulations until a decision from a court specifically finds them unenforceable.

Loper Bright Review: The Death of Chevron Deference?

On June 28, 2024, the U.S. Supreme Court overturned the Chevron doctrine of agency deference in its Loper Bright Enterprises v. Raimondo decision. The doctrine takes its name from a 1984 Supreme Court case, Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc, 467 U.S. 837 (1984), which announced a bright-line rule governing whether a regulation promulgated by an executive branch agency, like FDA or USDA, was enforceable based on the scope of statutory authority Congress delegated to the agency. Chevron held that if a court concluded that a statute was silent or ambiguous as to an issue (Step One), then the court must defer to an agency’s permissible construction of the statute in the regulations it promulgated (Step Two). In overturning Chevron deference, Loper Bright announced that courts “must exercise their independent judgment in deciding whether an agency has acted within its statutory authority.”

The Loper Bright decision, however, did not actually itself analyze the underlying regulation at issue or whether that regulation was within the scope of its authorizing statute. Thus, even the nation’s premier scholars in administrative law are debating exactly what the Supreme Court’s opinion will mean in practice.¹ The growing consensus is that some form of agency deference will apply, notwithstanding the Court’s general prescription for “independent” review. That is, notwithstanding Justice Gorsuch’s announcement, “Today, the Court places a tombstone on Chevron no one can miss,” (slip op., Gorsuch, J., concurring, at 1), academic experts remain skeptical that courts will not apply some deference in practice.

Corner Post: “Open Season” for Facial Challenges to Decades-Old Regulations

Although the Court signaled that its Loper Bright decision would not retroactively disturb cases that had already relied on Chevron deference, its decision in Corner Post, Inc., v. Board of Governors of the Federal Reserve System opens the door to challenges to decades-old regulations. In Corner Post, the Court ruled that the six-year statute of limitations for facial challenges to a regulation accrues only when the plaintiff has been “adversely affected or aggrieved by agency action” under the Administrative Procedure Act (APA). For example, in Corner Post itself, the plaintiff had not existed at the time of the final agency action on the rule at issue, and thus was not subject to the six-year statute of limitations until the plaintiff was itself adversely affected by the regulation.

The effect of the Corner Post decision, however, is not limited to plaintiffs who newly challenge longstanding regulations. Because a successful facial challenge can result in the complete vacatur of the regulation, the regulation would become unenforceable not only as to the plaintiff that sued but to everyone and every entity.²

Justice Jackson’s dissent summarizes the interplay of the two decisions:

After today, even the most well-settled agency regulations can be placed on the chopping block. . . . Any established government regulation about any issue—say, workplace safety, toxic waste, or consumer protection—can now be attacked by any new regulated entity within six years of the entity’s formation. A brand new entity could pop up and challenge a regulation that is decades old; perhaps even one that is as old as the APA itself. No matter how entrenched, heavily relied upon, or central to the functioning of our society a rule is, the majority has announced open season. . . . Now every legal claim conceived of in those last four decades—and before—can possibly be brought before courts newly unleashed from the constraints any such [Chevron] deference. . . . Any new objection to any old rule must be entertained and determined de novo by judges who can now apply their own unfettered judgment as to whether the rule should be voided.

(slip op. at 20–21, 23.)

What Loper Bright and Corner Post Mean for Food Regulations

Loper Bright addressed a regulation regarding the Atlantic herring fishing industry, so it has no immediate or direct impact on any USDA or FDA regulations, which remain in effect. Food companies should continue to follow agency regulations unless and until a court rejects existing rules and regulations.

Nevertheless, the Loper Bright decision will make it easier to contest regulations and to challenge these agencies’ abilities to promulgate new regulations absent a clear grant of statutory authority. For example, Loper Bright may affect whether FDA’s proposed rule defining the term “healthy” will be enforceable. However, 21 U.S.C. § 343(r) provides a clear statutory grant for FDA to promulgate regulations for certain definitions that must be followed for a food product to avoid being declared “misbranded.” Thus, even after a theoretical challenge under Loper Bright, FDA’s new definition may still stand (assuming it is promulgated). The same may be true of USDA’s meat inspection regulations, which also enjoy a broad grant of authority under 9 U.S.C. § 606.

In fact, these two statutes highlight the advantage of having been written long before Chevron and the APA; because they were not drafted at a time when Chevron deference was assumed, the statutes are clear regarding what the agencies can do. That is not to say that there are not ambiguous gaps in the language of these statutes that could be subject to challenge, but regulations relying on these statutes are probably more likely to survive a challenge due to more robust legislative drafting.

By contrast, the authorizing statute governing Food Safety Modernization Act regulations, 21 U.S.C. § 350g, codified in 2011, has smaller, more piecemeal grants of authority. These piecemeal delegations mean that each regulation, if challenged in litigation under the APA, could be subject to intensive analysis as to whether FDA had the authority to promulgate each particular regulation.

In short, Loper Bright and Corner Post suggest the likelihood of future uncertainty in FDA and USDA enforcement. However, until a decision specifically strikes down a regulation, food companies should continue to adhere to that law. If, as in Corner Post, a food company becomes “aggrieved” by the enforcement of those regulations or guidance, litigation under the APA may be an option.