Regulatory Compliance in a Post-Chevron World: Fasten Your Seatbelts
Tax attorney Joshua Odintz and Public Policy & Regulation attorney Andy Emerson were interviewed by Corporate Compliance Insights about what federal regulatory compliance will look like following pivotal U.S. Supreme Court decisions curbing agency authority. The Loper Bright and Corner Post rulings, which overturned Chevron deference and determined the statute of limitations to challenge regulations begins when a company is affected, along with the Jarkesy decision limiting the U.S. Securities and Exchange Commission's (SEC) use of in-house courts, create uncertainty for rulemaking and compliance.
Mr. Odintz commented on the debate surrounding what deference will be given to executive agencies moving forward. Many have turned to Skidmore deference, which asks courts to consider an agency's consistency in interpreting statutes, as the next line of defense. Mr. Odintz said he expects the Supreme Court to issue future rulings clarifying the contours of Skidmore, though the process will likely take several years.
"One of my good friends, a tax controversy lawyer, said, 'Tax controversy is like being an archaeologist; you have to wait several years and then you start digging through the rubble to find out what happened.' And that's really also true with these types of claims," he explained.
Mr. Emerson agreed with Mr. Odintz that the rulings' true effects will be made known with time, though he noted they do raise some immediate questions for companies, in particular for risk and governance counsel.
"Fundamentally, you're still going to be implementing the same compliance program today as you would, but what you need to be thinking about is what does your budget for compliance programming look like next year?" he said. "How do you evaluate where you might want to see a change? And as you're thinking through it, use that time to evaluate what might be changing in the regulatory environment."
READ: Regulatory Compliance in a Post-Chevron World: Fasten Your Seatbelts
Holland & Knight announced the formation of its Chevron Deference Working Team in advance of the U.S. Supreme Court's June 28, 2024, Loper decision, which overturned the Chevron deference doctrine and will lead to a period of regulatory changes and potential legal challenges for some time.