Washington Watch: Recent U.S. Supreme Court Decisions Set to Affect Local Government
The following publication was written by Strategics Consulting for the North Carolina Association of County Commissioners' (NCACC) County Quarterly article series “Washington Watch.”
During its October 2023 to July 2024 term, the Supreme Court of the United States issued several opinions that may significantly impact local governments. These decisions covered a wide array of topics pertinent to local governments and the individuals they govern, from administrative law and federal regulations to new standards for public officials’ social media use, employment liability claims, the assessment of local impact fees and local authority regarding homelessness.
Court observers have noted that this term might prove to be one of the most consequential in American history. Leading the list of notable cases is the Supreme Court’s decision in Loper Bright Enterprises, Inc. v. Raimondo. In a six to three ruling, the Supreme Court overturned the long- standing legal precedent known as the Chevron deference doctrine, which has shaped the federal regulatory system for almost four decades. The Supreme Court also adopted an Ethics Code for the first time ever during this term. Public officials must understand the Supreme Court decisions affecting local governments in order to effectively serve their communities amid shifting legal landscapes. These key decisions from the 2023-2024 term include:
City of Grants Pass v. Johnson – Regulation of Public Encampments: The Supreme Court ruled in this case that local governments can enforce generally applicable laws that prohibit unhoused individuals from camping on public property and that such regulations do not constitute “cruel and unusual punishment” under the Eighth Amendment. The decision should provide more clarity to local governments about their authority to address homelessness as well as allow officials to regulate public health and safety at the local level.
Scheetz v. El Dorado County – Local Impact Fees: The issue in this case involved a challenge to a county’s assessment of impact fees for development permits. The Supreme Court held that local impact fees are permissible monetary extractions, however the fees must bear a relationship to the government’s interest and to the potential impact of the development on the community. Local impact fees are now subject to the “essential nexus” and “rough proportionality” requirements from two previously established cases regarding local impact fees, Nollan v. California Coastal Commission and Dolan v. City of Tigard.
Muldrow v. City of St. Louis – Title VII Employment Claims: The Supreme Court ruling in this case revised the standards by which an employee can bring and settle an adverse employment action against their employer under Title VII of the Civil Rights Act of 1964. The issue involved was whether Title VII prohibits discrimination in lateral transfer decisions and reassignments without a court determination that the transfer decision caused a “material harm.” The new standard requires only that a claimant must show “some harm from a forced transfer.” The decision lowers the bar that Title VII plaintiffs must meet and might result in increased employment claims and liability for local governments.
Lindke v. Freed and O’Connor-Ratcliff v. Garnier – Public Officials on Social Media: In these two cases, the Supreme Court ruled that public officials’ social media use can be considered “state action” under certain circumstances. In the Lindke decision, the Court held that a public official’s social media posts are state action “only if the official (1) possessed the actual authority to speak on the [government]’s behalf, and (2) purported to exercise that authority when [they] spoke on social media.” The O’Connor-Ratcliff decision affirmed a public official’s ability to block users on social media platforms unless the official is exercising authority to speak on behalf of the government. The Supreme Court emphasized that public officials have their own First Amendment rights and that those rights are not relinquished by becoming a public official.
A Closer Look at the Impact of Overturning the Chevron Doctrine
The Supreme Court’s recent decision in Loper Bright Enterprises, Inc. v. Raimondo significantly changes the balance of interpretive authority between the federal judiciary and executive agencies and will reshape the current system of administrative law. The Supreme Court held that the Chevron doctrine violated the Administrative Procedure Act, ending 40 years of legal precedent with a ruling that will directly affect federal agencies and the regulations they implement and enforce. The impact of the Loper Bright decision will eventually extend to the work of local governments in North Carolina.
In a 1984 decision, Chevron USA v. Natural Resources Defense Council, the U.S. Supreme Court determined that courts must defer to federal agencies’ reasonable interpretations of ambiguous statutes. Historically, bills passed by Congress do not spell out the exact details on how that new law should be implemented. A typical law authorizes a federal agency to issue regulations that set forth how a law will be implemented based on the scope of the authority granted to the agency by Congress. This process sometimes required significant interpretation when a law enacted by Congress was ambiguous, leading to disputes between Congress, federal agencies, the judiciary and private citizens.
The Chevron decision established a legal principle allowing agencies to implement laws based on congressional intent from ambiguous language by creating and enforcing regulations based on the agency’s interpretation of the statute. When disagreements arose, the Chevron doctrine required courts to defer to the agency’s interpretation so long as that interpretation was “reasonable,” even if the court would have interpreted the law differently. For decades, thousands of courts across the country have applied Chevron deference to rule in favor of an agency’s interpretation.
The Supreme Court’s ruling in Loper Bright v. Raimondo ended the Chevron doctrine’s deference to federal agencies. This case involved a regulatory action by the National Marine Fisheries Service, which is a federal agency within the Department of Commerce’s National Oceanic and Atmospheric Administration, requiring certain commercial fishing vessels to allow government observers onboard and requiring each fishing company to pay for those onboard observers. The regulation was challenged by several fishing companies who claimed the agency did not have statutory authority to require the companies to bear the costs of the observers but was upheld by lower courts under the Chevron deference. Upon appeal, the Supreme Court decided to hear the Loper Bright case to address whether the Chevron deference doctrine should remain as precedent, be clarified or be overruled. On June 28, 2024, the Supreme Court issued a ruling vacating the lower court decisions and overruled the long-standing Chevron doctrine, setting a new standard requiring courts to exercise independent judgment as to whether agencies are acting within their statutory authority.
Without the Chevron doctrine, the authority to interpret laws will shift substantially away from federal agencies to the judiciary. Many experts expect that there will be more legal challenges to federal regulations across the courts. The six-member majority opinion led by Chief Justice Roberts argued that the Loper Bright ruling would reduce shifting agency interpretations and limit overly broad agency interpretations, while the dissent warned it may lead to increased uncertainty regarding administrative actions by making legal challenges easier.
New legal challenges to existing federal regulations using the Loper Bright ruling might affect state and local governments, particularly regarding programs funded with federal dollars or created by federal law. Potential areas that could be affected include, but are not limited to, procurement and grants administration, Title X and ADA requirements, regulations involving child support enforcement, Community Development Block Grant program regulations, and numerous environmental regulations. Another consequence of this ruling is that bills written by Congress are likely to be much longer to guard against possible challenges based on ambiguous statutory language.
While there is both concern about and support for the decision to overturn the Chevron doctrine, the full impact of Loper Bright remains to be seen. Local governments and public officials in North Carolina will have to closely monitor legal developments and remain aware that current federal regulations continue to apply unless altered by a court or the issuing agency.
