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Supreme Court Rebuffs Businesses, Won’t Topple Regulation Precedent

(Bloomberg) — A divided U.S. Supreme Court rejected calls by business groups to overturn two decades-old rulings that have given federal agencies broad power to interpret their own regulations.

Voting 5-4 on the central issues, the court on Wednesday reaffirmed rulings from 1945 and 1997 that require judges to defer to an agency on ambiguous regulations as long as its approach is reasonable.

Chief Justice John Roberts joined the court’s liberals in the majority. Writing for the court, Justice Elena Kagan rejected contentions that federal agencies have grown too powerful and that judges should have the primary responsibility for interpreting unclear regulations.

“It is no answer to the growth of agencies for courts to take over their expertise-based, policymaking functions,” Kagan wrote. Her opinion laid out new guidelines for when courts should yield to agencies.

Business groups said deference to agencies on the meaning of regulations leads to onerous and unpredictable rules and leaves companies vulnerable to penalties when an agency shifts its thinking. Trade groups representing the oil, mining, farming and manufacturing industries were among those urging the court to jettison the prior rulings.

Defenders of the earlier rulings said they give agencies flexibility to account for changing circumstances.

The ruling came on the penultimate opinion day of the court’s nine-month term. The court will issue its final opinions Thursday and is expected to rule on partisan gerrymandering and the Trump administration’s bid to include a citizenship question on the 2020 census form.

The case is Kisor v. Wilkie, 18-15.

(Updates with excerpts from opinion in fourth paragraph.)

To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.net

To contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net, Laurie Asséo, Anna Edgerton

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.


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