FOR IMMEDIATE RELEASE
June 28, 2024
CONTACT
Carter Dougherty
carter@ourfinancialsecurity.org
Supreme Court Expands Power of Right-Wing Judges to Hamper Regulation
Today’s Supreme Court ruling in Loper Bright Enterprises v. Raimondo will give judges who are already concocting ridiculous reasons to strike down sensible protections, particularly in the notoriously pro-industry Fifth Circuit, greater leeway to strike down common-sense measures that protect people and communities.
Before today’s decision, the Chevron legal standard required courts to defer to regulators in the case of an ambiguous statute on the grounds that Congress vested these agencies with the capacity needed to write complicated rules. With Loper Bright in hand, judges are required to “exercise their independent judgment” when deciding whether an agency has acted within its statutory authority, even if judges lack the necessary expertise, and even if that judge might prefer deference to agency decisions.
“Congress has appropriately given latitude to federal agencies to protect the public and the public interest, and the public relies on them to provide clarity, address emerging issues, and ensure safety standards in highly technical policy areas,” said Patrick Woodall, managing director for policy at Americans for Financial Reform Education Fund. “Dedicated lifelong agency staff, scientists, and technical experts bring decades of expertise and experience that simply cannot be adequately replaced by a federal judge, least of all the ideologically pro-industry ones that are eager to stop any and all regulations.”
Indeed, the pro-industry judges are already striking down important public protections and are sure to magnify the impact of Loper Bright. The judicial discretion created by the Supreme Court in this case will allow judges to complicate or make impossible common-sense regulations. Much existing litigation now flows through the New Orleans-based Fifth Circuit, which has proven highly receptive to industry lawsuits that undermine protections for everyday people.
“There is every reason to expect that this ruling will embolden Wall Street, predatory lenders, and other industries to litigate against even the most common-sense consumer protections,” said Christine Chen Zinner, consumer policy counsel at AFR-EF. “The Fifth Circuit has not been shy about vacating regulations that are plainly legal under laws aimed at protecting the public interest. Now the Supreme Court has handed those judges yet another tool to stop those rules.”
Already, the Fifth Circuit has issued numerous decisions affecting the proper functioning of regulators, notably one calling into question the constitutionality of the funding of the Consumer Financial Protection Bureau. (The Supreme Court reversed that decision.) It has also stopped sensible protections for consumers on credit card late fees and struck down efforts to rein in stock buybacks. And it suspended rules created by the Securities and Exchange Commission for simple disclosure of fees and returns to investors, such as pension funds and endowments, in private equity and hedge funds.
“The Fifth Circuit has already done tremendous damage to the cause of investor protection by stopping the SEC’s private funds rule,” said Andrew Park, senior policy analyst at AFR-EF. “The end of Chevron will only make investor protections of all kinds harder to implement and keep in place.”
The Supreme Court’s decision underscores the urgent need for Congress to codify the Chevron standard into law by passing the Stop Corporate Capture Act (H.R. 1507). The bill would ensure greater public input into regulatory decisions, promote scientific integrity, and improve regulators’ ability to protect workers, consumers, public health, and our environment.
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