Loper Bright’s Rorschach Test Inside a Crystal Ball

Last June, the U.S. Supreme Court overturned a foundational precedent in federal administrative law: Chevron v. Natural Resources Defense Council. The Court’s Chevron decision, handed down in 1984, had grown to become the most cited and analyzed of all administrative law precedents. It canonically held that courts must defer to administrative agencies’ reasonable interpretations of ambiguous statutory provisions rather than choose their own interpretations from among reasonable alternatives. When the Court overturned Chevron last year—in the case of Loper Bright Enterprises v. Raimondo—it declared that Chevron’s mandatory deference was incompatible with the Administrative Procedure Act (APA), which provides in Section 706 that judges should decide ‘all relevant questions of law’. The Loper Bright Court placed emphasis on the word ‘all’ and held that Chevron could not be squared with judges’ traditional role in interpreting the law.

Many lawyers, legal scholars, and political leaders responded to Loper Bright by predicting that the administrative law landscape in the United States will permanently and dramatically shift, with substantial implications for vast swathes of tax law, financial regulation, and other fields of law affecting highly regulated businesses.

Some commentators on the political right have viewed the Loper Bright decision as unlocking a bias that long favored government regulators, thereby providing a lever for the Trump Administration to “liberate individuals and businesses from illicit regulations never passed by Congress and stimulate the U.S. economy.” In some ways, observers on the political left apprehensively agree, predicting that Loper Bright would result in a massive shift in power from administrative agencies to a conservative U.S. Supreme Court that does not understand the challenges agencies have in implementing statutes, with the sky effectively falling on the U.S. administrative state as we had come to know it.

Still other commentators’ reactions have been much more subdued. They see in Loper Bright little that should bring about much change from a world with Chevron still intact. According to one prominent observer, courts and agencies will continue to do pretty much what they have always done under Chevron but instead of referring to ‘Chevron deference’, they will speak of ‘Loper Bright delegation’.

Which of these divergent views is correct? Answering this question calls for peering into what we have called in a recently published law review article a ‘Rorschach test inside a crystal ball’. The crystal ball, of course, is a metaphor for looking into the future and thinking about what Loper Bright will mean operationally for the myriad fields of corporate law and regulation that it ostensibly affects. The Rorschach test inside that crystal ball conveys how murky the future is—and how lawyers and scholars nevertheless might confidently see patterns even in what are, essentially, random inputs.

Part of the difficulty lies with the enigmatic nature of the Loper Bright decision itself. Yes, the Court clearly states in its majority opinion that ‘Chevron is overruled’. But that opinion also contains passages that seem still to align fully with the Chevron framework. One passage expressly limits the retroactive effect of the Court’s decision. Although normally the overruling of a judicial precedent undermines all other decisions based on that precedent, the Loper Bright Court states the opposite: ‘We do not call into question prior cases that relied on the Chevron framework’. Already lower courts have begun to split on how far this caveat reaches, and the Trump Administration has taken controversial steps that seemingly evade its spirit by ordering agencies to revisit old regulations in light of Loper Bright.

Furthermore, the Loper Bright Court recognizes that, even though courts have the ultimate responsibility for discerning the ‘best reading’ of statutes, sometimes that best reading will be that Congress intended for agencies to give life to ambiguous statutory provisions: ‘In a case involving an agency, of course, the statute’s meaning may well be that the agency is authorized to exercise a degree of discretion. Congress has often enacted such statutes’. In such cases, the courts’ role is simply to police the boundaries of agency discretion and make sure it is exercised with reason, a standard that reads a lot like Chevron.

Finally, the Court embraced an earlier precedent—Skidmore v. Swift—which counseled caution in courts’ review when agencies had already given careful consideration to how their statutes ought to be understood. The Loper Bright majority specifically said that agencies’ understandings about the meaning of their statutes should still be accorded ‘due respect’ to the extent that agency interpretations have the power to persuade. It noted that such respect might be especially prudent when agencies have long had a consistent approach to interpreting ambiguous statutory provisions.

The upshot is that it is possible for different readers of Loper Bright to come away with vastly different understandings of what the Court meant to do. On the one hand, in expressly stating that it was overruling Chevron, Loper Bright would seem to signal that the Supreme Court wants to mark a dramatic shift in legal doctrine. On the other hand, on closer inspection, the logic of the Court’s opinion seems fully compatible with all but perhaps the most caricatured and unserious understanding of what Chevron meant.

Added to this inherent doctrinal ambiguity about what Loper Bright means as a matter of law are the inherent challenges in making empirical forecasts about the future of administrative law and governance in the United States. Loper Bright—and indeed any Supreme Court decision—is but one input into a complex set of interrelationships that we have called the ‘administrative governance game’. This game comprises a complex, multi-player set of dynamics involving numerous institutional actors with competing interests and adaptive strategies. It encompasses not merely courts and agencies, but Congress, presidents, interest groups, voters, and even subgroups within each of these institutions. No action in the game can be considered in isolation; each will be connected with a continuous stream of strategic interactions. Each player’s move in this complex game can be contingent upon anticipating and responding to others’ choices.

Loper Bright’s overturning of Chevron potentially removes a doctrine that provided relative stability to this governance game—a ‘background rule’ that structured options and strategy throughout the administrative process. Yet paradoxically, even determining whether Chevron itself significantly affected administrative work has proven empirically challenging; the doctrine was merely one ‘play’ in an exceedingly complex game. Social scientists have never been able to discern that Chevron made much of a behavioral difference, at least when measured by the win-loss rates agencies experienced in court.

Loper Bright’s effects will similarly depend on myriad potential adaptations: agencies might (or might not) become more cautious in rulemaking; internal agency influence might (or might not) shift from policy experts to lawyers; litigation challenges might (or might not) increase; Congress might (or might not) legislatively reinstate Chevron or expand the judiciary; presidential administration strategies might (or might not) evolve; voter engagement on regulatory issues might (or might not) change; and lower courts might still (or might not) exercise considerable deference to agencies in applying the decision.

These adjustments are mutually dependent and contingent, making causal attribution exceptionally difficult. In addition, the results of the 2024 presidential election, occurring so soon after Loper Bright, will only further complicate attempts at empirical inference. After all, if agencies in a second Trump Administration appear more tentative in their actions and retreat from rulemaking, can we really think that such a result stemmed from Loper Bright rather than priorities of a new administration that would have existed even had Chevron never been overruled?

Putting all this together, we can better understand why looking into a crystal ball containing Loper Bright’s Rorschach Test is so challenging. The administrative governance game comprises a highly dynamic, complex adaptive system. As legal scholar J.B. Ruhl put it nearly thirty years ago, any such system, ‘because of the inherent presence of some chaos and emergence, necessarily is unpredictable’. Just as ‘[d]rastic changes to the system carry high unpredictability’, so, too, can ‘subtle changes to the system’ result in large, unanticipated outcomes—ultimately vexing our ability to make tidy, confident predictions.

Natural ecosystems are classic examples of highly dynamic, complex adaptive systems. How different people perceive the likely effects of human industrial activity on ecological systems has been shown to be shaped by their background assumptions, heuristics, cultural, and ideological predispositions. Much the same can be said of complex adaptive social and legal systems. Different worldviews about how law and politics shape administrative governance are leading to different forecasts about how Loper Bright will affect government in the future. Perhaps the decision will lead to a dramatic legal transformation that will fundamentally alter administrative governance in the United States. But perhaps it will ultimately have little practical impact.

We can say this with confidence: If Loper Bright proves to be hugely consequential, much of its effects will stem from the symbolic significance of overruling Chevron. The decision immediately garnered extensive attention from lawyers, judges, politicians, and the media. (Vogue magazine even featured an article about it!) Without a doubt, Loper Bright has already significantly shaken up legal and popular discourse over the administrative state. It just remains to be seen whether this discursive disruption will lead to more than a temporary unsettling of longstanding relationships in the administrative governance game. Much will depend on whether Loper Bright is ultimately seen to have effected real legal change and, if so, on how resilient the administrative state is to that change. Peering into a crystal ball now, we cannot say for sure.

Cary Coglianese is the Edward B. Shils Professor of Law and Professor of Political Science at the University of Pennsylvania Carey Law School.

Daniel E. Walters is an Associate Professor of Law at the Texas A&M University School of Law.