The U.S. Supreme Court ruled Friday 6-3 to overturn a 40-year-old precedent that has guided the federal regulatory framework as we know it. The ruling on Loper Bright Enterprises v. Raimondo reverses a long-standing legal precedent known as Chevron Deference named for the landmark 1984 decision Chevron v Natural Resources Defense Council. In this case the Court decided that in cases of unclear federal laws, courts should defer to federal agencies for a reasonable interpretation of the law’s meaning.

Chevron Deference has given federal agencies a wide range to interpret federal laws including their enabling statutes and the Uniform Administrative Procedures Act (APA). Under that doctrine, if Congress has not directly addressed the question at the center of a dispute, a court was required to uphold the agency’s interpretation of the statute as long as it was “reasonable”.

This decision will fundamentally alter the ground upon which modern federal regulatory law is built. This new interpretation is a win for the business community across the nation as it puts an end to the instability of regulatory state at the whim of administrations. The precedent will now be consistent for long term planning by businesses and will better align with other fields of legal practice.