For critics of the court’s recent decisions, that’s some consolation.
“California is, in a way, better situated than some other states because it is big enough and it has enough expertise in state government to actually provide state law protections that can kind of compensate for weakened federal ones,” said Sean Donahue, a lawyer who represents the Environmental Defense Fund. “That may not be true in some smaller states.”
California has plenty of practice playing the role of Blue State bulwark against federal regulatory shifts to the right. During the Trump administration, the state’s Democratic leaders beefed up many state rules in the face of real or anticipated rollbacks out of Washington, D.C.
But as the state discovered then, there is a limit to how far California can go its own way. Many federal statutes explicitly prohibit states from overriding them. Such federal preemption has been decreed by the courts in other cases.
“Sometimes yes, California can go on its own,” said Ashutosh Bhagwat, an administrative law professor at UC Davis. “Sometimes it absolutely can’t, and sometimes it’s complicated.”
Three rulings against the bureaucracy
In what may be the most consequential of the session’s three regulatory rulings, the court’s conservative majority swept aside a 40-year-old judicial rule of thumb, known as “Chevron deference.”
The concept, named for the 1984 case that spawned it, required judges to defer to a federal regulator’s interpretation of how to implement a Congressional statute. In a high school civics class version of government, Congress passes the laws and the executive branch, with the President sitting at the top, simply enforces them. But enforcement is rarely simple. Congressional laws can be vague or fail to anticipate every eventuality, technological development or unforeseen problem. Since the New Deal, the federal government’s powers and responsibilities have expanded and grown more complex.
Chevron deference is the notion that if a statute is ambiguous and an agency’s interpretation is reasonable on its face, courts should let the bureaucracy call the shots.
No more.
In his opinion, Supreme Court Chief Justice John Roberts wrote that courts may “respect” federal agency expertise, but cannot automatically defer to it (PDF). “Agencies have no special competence in resolving statutory ambiguities. Courts do,” he wrote. The upshot: Regulated industries now have a better shot at successfully challenging the federal rules that govern them.
Building on the theme of putting a leash on federal bureaucrats, the majority also ruled against the Securities and Exchange Commission and put new limits on when agencies can use in-house administrative courts (PDF) to levy fines, instead requiring agencies to take alleged rule breakers to court.
In a third opinion, the Supreme Court ruled that the six-year statute of limitations for when an aggrieved business can challenge a federal regulation starts ticking whenever that suing party is first affected by the rule. Financial regulators in that case had argued that the shot clock starts when the rule itself is enacted, giving regulations a degree of finality once that time expires.
All three rulings were decided 6–3, with the court’s conservatives in the majority.
Climate change regulations especially vulnerable
In her dissent in the statute of limitations case, Justice Ketanji Brown Jackson, a Biden appointee, warned that together with the end of Chevron deference, the court’s rulings would unleash a “tsunami of lawsuits (PDF) against agencies” with the “potential to devastate the functioning of the Federal Government.”
Legal experts are still debating just how consequential these rulings will be. Granting less flexibility to federal regulators and opening them up to the threat of indefinite legal challenge from regulated industries implicates an unknowably vast universe of rules. But no one knows which rules are most vulnerable until they wind up in court.
“We’ll probably see now a wave of litigation challenging regulations that many had thought of as being long-settled, and how that shakes out in terms of its application to California businesses and California residents and consumers, we just don’t know,” said Julia Stein, an environmental law professor at UCLA.
Climate change regulations may be especially ripe for challenge. Lacking much actual legislation on the subject from Congress, the Environmental Protection Agency has resorted to creative interpretations of old environmental statutes, like the 1970 Clean Air Act, to justify its rules governing greenhouse gas emissions.
Such creativity may no longer fly, at least with conservative judges.
Federal regulators are “kind of hamstrung in the ability to take innovative approaches,” Stein said, now that the Chevron decision is history. “States, like California, are going to try to make up for that on the back end through their own authority and regulatory power, but it won’t be nearly as effective as if both those entities were working together.”
When a state can set its own rules isn’t always clear. Almost 60 years ago, Congress granted California the authority to set its own emission standards for vehicles. But a California mandate requiring major truck manufacturers to ramp up the sale of zero-emission vehicles might be an early test case, since experts are divided as to whether an interpretation of the Clean Air Act properly allows for such a law.
California, above and beyond
There are areas of the regulatory universe where California law clearly can, and often does, go far above what the feds require.
Labor law is one example.
Most California workplace laws are more protective of employees than federal rules. Not only is the state’s $16 minimum wage more than double that required nationwide, the state also maintains and enforces its own rules on overtime pay, independent contractor status, workplace discrimination and workplace safety.
Most recently, the federal Occupational Safety and Health Administration proposed a rule requiring employers to protect workers from heat illness. California’s own workplace safety agency has had such a rule in place since 2005 for outdoor workers and is expanding it to those working indoors this year.
Those rules will stand regardless of legal challenges at the federal level.