Experience Stern | Faculty & Research

Last week, in a case called Loper Bright Enterprises v. Raimondo, the U.S. Supreme Court overturned the so-called Chevron doctrine, reversing a 40-year-old precedent that afforded federal agencies a degree of discretion in interpreting ambiguous laws in their areas of expertise. Governments must balance the benefits of allowing businesses to innovate and thrive and the need to enforce regulations that protect vital public interests. The Chevron deference rule, cited as authority in more than 7,000 federal cases, was predicated on a sensible insight—namely, that for agencies to be effective in regulating corporate conduct, they need to have the ability to establish reasonable rules even when Congress has not provided clear guidance. Post-Chevron, and especially if Donald Trump is elected later this year, we can count on less environmental protection, diminished food safety requirements, and laxer standards governing the approval of new drugs.

The Chevron doctrine has been in the crosshairs of business interests for decades, from the energy sector to pharmaceuticals. While government regulations that reduce carbon emissions or enhance consumer health and safety are good for society, they often lead to increased business costs and reduced corporate profits. An important reason so many corporate leaders support Donald Trump, and are helping fund his campaign, is that they share his determination to roll back regulatory authority. The three conservative Supreme Court justices Trump appointed created a super majority on the Supreme Court that favors a scaling back of the government’s role in enforcing corporate accountability.

The tension between government oversight in the public interest and the corporate profit drive has existed for more than a century. In 1906, Upton Sinclair published “The Jungle,” a novel that revealed the grossly unsanitary conditions at meatpacking plants in Chicago. Sinclair’s exposé prompted Congress to the adopt the Meat Inspection Act to regulate food production, among other Progressive legislation.

Read the full Forbes article.
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Michael Posner is the Jerome Kohlberg Professor of Ethics and Finance, Professor of Business and Society and Director of the NYU Stern Center for Business and Human Rights.