High Court Decision Opens Opportunities for Regulation Challenges

range of regulations, Chaifetz said.The changes post-Loper Bright and other recent high court rulings provide in-house counsel with a new set of tools when facing agency actions that impact their businesses. With agencies losing deference on ambiguous laws, judges now have more leeway to challenge and countermand agency decisions. This shift not only empowers businesses to push back against regulations but also increases the potential for disputes and uncertainties in federal circuit courts.

For example, the Supreme Court’s decision in Loper Bright Enterprises v. Raimondo instructed judges to independently interpret laws, rather than deferring to agency interpretations. Following this ruling, agencies faced significant losses in challenges to regulations, indicating a shift in favor of plaintiffs. While this change may impact enforcement actions that hinge on technical legal questions, enforcement actions rooted in factual determinations typically remain within agencies’ purview.

Furthermore, beyond issues of statutory interpretation, recent court decisions, such as those surrounding the major questions doctrine and arbitrary-and-capricious analysis under the Administrative Procedure Act, have further limited agencies’ abilities to regulate. These rulings have implications for a wide range of agencies, from the FDA to the SEC, affecting enforcement actions, securities fraud cases, and more.

Additionally, the Court’s altered statute of limitations in Corner Post, Inc. v. Board of Governors of the Federal Reserve System has paved the way for new challenges to longstanding regulations. This ruling allows entities to contest regulations they believe have harmed them, even if they have been in place for years.

In light of these developments, in-house counsel now have a spectrum of options to address agency actions that affect their companies. By leveraging newfound legal tools and potentially forming alliances with established businesses, they can navigate the evolving landscape of regulatory challenges with greater confidence and effectiveness. The current legal climate emphasizes the importance of staying informed and actively engaging with regulatory changes to protect business interests.