The MSA, implemented by the National Marine Fisheries Service (NMFS) as part of the Department of Commerce, requires the development of fishery management plans through regional marine fisheries councils that set annual catch limits to reduce overfishing. Relevant to the Loper Bright Enterprises, Inc. case is a provision under the MSA that a plan may also require that “one or more observers be carried on board” domestic vessels “for the purpose of collecting data necessary for the conservation and management of the fishery.”

The law has specific provisions for three groups that must cover costs of these observers: foreign vessels fishing in the exclusive economic zone (where observers are mandatory), vessels participating in certain programs that impose total allowable catch quotas, and vessels in the jurisdiction of the North Pacific Council; in the latter two groups, the MSA expressly caps the costs at 2-3% of the value of fish harvested. However, the opinion notes that:

“The MSA does not contain similar terms addressing whether Atlantic herring fishermen may be required to bear costs associated with any observers a plan may mandate. And at one point, NMFS fully funded the observer coverage the New England Fishery Management Council required in its plan for the Atlantic herring fishery. In 2013, however, the council proposed amending its fishery management plans to empower it to require fishermen to pay for observers if federal funding became unavailable. Several years later, NMFS promulgated a rule approving the amendment.

“With respect to the Atlantic herring fishery, the Rule created an industry funded program that aims to ensure observer coverage on 50 percent of trips undertaken by vessels with certain types of permits. Under that program, vessel representatives must “declare into” a fishery before beginning a trip by notifying NMFS of the trip and announcing the species the vessel intends to harvest. If NMFS determines that an observer is required, but declines to assign a Government-paid one, the vessel must contract with and pay for a Government-certified third-party observer. NMFS estimated that the cost of such an observer would be up to $710 per day, reducing annual returns to the vessel owner by up to 20 percent.”

In their case, filed in February 2020, the Atlantic herring fishing company Loper Bright Enterprises challenged the Department of Commerce on this rule arguing that the MSA does not authorize NMFS to mandate that they pay for observers required by a fishery management plan. In the Relentless case, the fishing vessels regularly take longer trips to sea and declare multiple fisheries per trip to cover the different species they might catch; if they declare Atlantic herring, they are required to have an observer onboard and to pay them for all days, even if herring are not caught. Both cases heard in lower courts were granted judgment for the Department using case law from a 1984 Supreme Court decision, known as the “Chevron doctrine” – the petitioners then appealed the decision to the Supreme Court, which heard arguments in the cases in January 2024 before issuing its opinion in late June.

As background information included at the beginning of the Supreme Court opinion in the Loper Bright Enterprise case, the Syllabus prepared by the Reporter of Decisions states that, “Under the Chevron doctrine, courts have sometimes been required to defer to “permissible” agency interpretations of the statutes those agencies administer—even when a reviewing court reads the statute differently.” Specifically, the 1984 decision by the Supreme Court in the Chevron USA, Inc. v. Natural Resources Defense Council case develops a two-step approach for reviewing agency action. The first step is if Congress directly spoke to the precise action, in which case the intent is clear. However, in a case where “the statute [was] silent or ambiguous with respect to the specific issue,” a reviewing court could not “simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation.” Instead, a court had to defer to the agency if it had offered “a permissible construction of the statute.”

The Syllabus goes on to note that the subsequent decisions using the Chevron doctrine attempted to reconcile with the Administrative Procedure Act of 1946 that was enacted “as a check upon administrators whose zeal might otherwise have carried them to excesses not contemplated in legislation creating their offices.” The Syllabus states that:

“Chevron cannot be reconciled with the APA by presuming that statutory ambiguities are implicit delegations to agencies. That presumption does not approximate reality. A statutory ambiguity does not necessarily reflect a congressional intent that an agency, as opposed to a court, resolve the resulting interpretive question. Many or perhaps most statutory ambiguities may be unintentional. And when courts confront statutory ambiguities in cases that do not involve agency interpretations or delegations of authority, they are not somehow relieved of their obligation to independently interpret the statutes. Instead of declaring a particular party’s reading “permissible” in such a case, courts use every tool at their disposal to determine the best reading of the statute and resolve the ambiguity. But in an agency case as in any other, there is a best reading all the same—“the reading the court would have reached” if no agency were involved…

"Because Chevron’s justifying presumption is, as Members of the Court have often recognized, a fiction, the Court has spent the better part of four decades imposing one limitation on Chevron after another. Confronted with the byzantine set of preconditions and exceptions that has resulted, some courts have simply bypassed Chevron or failed to heed its various steps and nuances. The Court, for its part, has not deferred to an agency interpretation under Chevron since 2016. But because Chevron remains on the books, litigants must continue to wrestle with it, and lower courts—bound by even the Court’s crumbling precedents—understandably continue to apply it.”

In the 6-3 majority decision, the justices overruled the doctrine, holding: “The Administrative Procedure Act requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous.” The opinion also notes that “(W)e do not call into question prior cases that relied on the Chevron framework. The holdings of those cases that specific agency actions are lawful—including the Clean Air Act holding of Chevron itself—are still subject to statutory stare decisis [the doctrine governing judicial adherence to precedent] despite our change in interpretive methodology.”

Justices Kagan, Sotomayor, and Jackson (who did not participate in the Loper Bright Enterprise case and joined the opinion only as it relates to the Relentless, Inc. case) cite language from the case in their dissent: “Judges are not experts in the field, and are not part of either political branch of the Government.” They continue, stating:

“Those were the days, when we knew what we are not. When we knew that as between courts and agencies, Congress would usually think agencies the better choice to resolve the ambiguities and fill the gaps in regulatory statutes. Because agencies are “experts in the field.” And because they are part of a political branch, with a claim to making interstitial policy. And because Congress has charged them, not us, with administering the statutes containing the open questions. At its core, Chevron is about respecting that allocation of responsibility—the conferral of primary authority over regulatory matters to agencies, not courts.

“Today, the majority does not respect that judgment. It gives courts the power to make all manner of scientific and technical judgments. It gives courts the power to make all manner of policy calls, including about how to weigh competing goods and values. (See Chevron itself.) It puts courts at the apex of the administrative process as to every conceivable subject—because there are always gaps and ambiguities in regulatory statutes, and often of great import. What actions can be taken to address climate change or other environmental challenges? What will the Nation’s healthcare system look like in the coming decades? Or the financial or transportation systems? What rules are going to constrain the development of A.I.? In every sphere of current or future federal regulation, expect courts from now on to play a commanding role. It is not a role Congress has given to them, in the APA or any other statute. It is a role this Court has now claimed for itself, as well as for other judges."

How the Supreme Court ruling will affect the development of legislation in Congress, and the subsequent federal rule-making process, will be determined in the coming years.