The Supreme Court will decide a challenge over how courts assess federal rule-making, setting up a major case for its next term that could change the balance of power between executive agencies, Congress and the judiciary.

The case the court announced Monday, Loper Bright Enterprises et al. v. Raimondo, centers on a challenge to a Commerce Department rule on fishery inspectors. But the justices said they will reconsider a 39-year-old legal precedent that has been used to uphold thousands of agency rules across the entire federal government.

Federal agencies, from the Justice Department to the EPA and the Federal Communications Commission, regularly assert what’s known as “Chevron deference” in defending their rules in court.

That doctrine stems from a 1984 Supreme Court case, Chevron USA Inc. v. Natural Resources Defense Council Inc., in which the court found that judges should defer to the agencies’ interpretations of a law if it is ambiguous.

Republican lawmakers and the conservative legal movement have been critical of the doctrine for years, describing it as a way that regulatory agencies go beyond what Congress intended when it passed laws.

With the high court’s current majority of six justices appointed by Republican presidents, federal agencies have been met with increasing skepticism. Several justices, including Samuel A. Alito Jr., Clarence Thomas and Neil M. Gorsuch, have questioned the Chevron decision.

Doctrine questioned

In Loper Bright Enterprises v. Raimondo, the U.S. Court of Appeals for the D.C. Circuit upheld the Commerce Department rule from a challenge from fishing companies.

The fishing companies in a petition called the rule a “threat to efforts to rein in agency overreach” because it would require them to pay the inspectors overseeing their fisheries directly. That rule is a way to get around Congress deciding how much funding there should be for fisheries inspections, they argued.

The petition said the Chevron doctrine has been a “disaster in practice” and led to the widespread growth of federal agencies.

“Lower courts see ambiguity everywhere and have abdicated the core judicial responsibility of statutory construction to executive-branch agencies,” the fishery companies said. “The exponential growth of the Code of Federal Regulations and overregulation by unaccountable agencies has been the direct result.”

The Biden administration defended the fishery rule as well as the broad agency deference under the Chevron decision in a brief meant to dissuade the justices from agreeing to decide the case. The administration argued that the doctrine has been used in thousands of cases across four decades and is relied on daily nationwide.

“Regulated entities and others routinely rely on agency interpretations that courts have upheld under the Chevron framework,” the brief said.

Justice Ketanji Brown Jackson has recused herself from the case, which means only eight justices will decide. Prior to her confirmation to the Supreme Court, Jackson participated in oral arguments in the case as a judge on the D.C. Circuit.

The case granted Monday would likely be argued sometime in the Supreme Court’s next term, which starts in October, and decided by the end of next June.

Previous challenges

In a 2021 oral argument in the case American Hospital Association v. Becerra, the trio of Alito, Thomas and Gorsuch questioned whether Chevron should stand and what to replace it with.

The court ultimately did not address Chevron when it ruled against Medicare on a drug pricing program last year.

The court last year also advanced what it called the “major questions” doctrine in analyzing federal rule-making in a case known as West Virginia v. EPA. There, the court found that Congress must be explicit when giving a federal agency power to address issues of “economic and political significance” through rule-making.

Congressional Republicans have targeted the doctrine in recent years, including a bill that passed the House in 2017 that would have overturned the Chevron case. That measure did not advance in the closely divided Senate.

Additionally, skeptics of the doctrine have urged the Supreme Court to overturn it, including Sens. Tom Cotton, R-Ark., Marsha Blackburn, R-Tenn., Kevin Cramer, R-N.D., and Ted Cruz, R-Texas, who filed a brief in a case last year over veterans benefits that the court ultimately declined to take up. The group said agency assertions of the doctrine have “undermined its legitimacy.”

“If Chevron requires courts to abdicate their own obligation to adjudicate legal questions by elevating an agency’s views over Congress’s intent to favor veterans, then it patently violates the basic structure of our Constitutional design,” the brief stated.