The United States Supreme Court has issued a number of opinions substantially shifting precedents during its latest term. On June 28, 2024, the Court issued a decision that could potentially have an impact on the regulatory scheme affecting the out of home advertising industry. In Loper Bright Enterprises v. Raimondo (Case No. 22-451), the Supreme Court overruled the longstanding 1984 Supreme Court precedent establishing the Chevron doctrine, which gave deference to a regulatory agency’s interpretation of its rules and laws. Under the Chevron doctrine, a court was required to uphold an agency’s interpretation of ambiguous statutes and could not impose its own judgment. In Loper Bright, the Supreme Court determined that under the separation of powers doctrine, the judicial branch should exercise its own independent judgment in determining the meaning of ambiguous statutory provisions.

Although Loper Bright does not apply to a state court’s review of state agency decisions, such as an agency’s interpretation of state department of transportation regulations, it supports the growing trend of the judicial branch applying independent review of executive agency interpretations of ambiguous laws. A number of states (including Florida, Louisiana, Mississippi, and Tennessee) have already adopted de novo review when reviewing agency determinations, and others (North Carolina, Pennsylvania, and Texas) have employed a “hybrid” approach, giving deference to agency interpretations depending on the interpretation of the agency.

This decision may provide another tool for businesses to use to stand up to adverse regulatory decisions, but the full impact of Loper Bright may take a number of years to play out in the courts.

– J. Allen Smith