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Published 19:41 IST, June 30th 2024

US Supreme Court restricts federal oversight on stocks, environment

This term, the Court made broad decisions limiting federal regulation, including stock trading and environmental protections.

Reported by: Business Desk
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Representative
Representative | Image: Pixabay

Court restricts federal oversight: The US Supreme Court's conservative majority has wielded its legal authority this term to limit federal regulatory agencies, solidifying its role in reducing the influence of the "administrative state." This term, the Court issued sweeping decisions that constrain the federal government's ability to regulate various domains, including stock trading and environmental protections, while refraining from expanding abortion rights or gun rights under the Second Amendment before the upcoming presidential election.

Chevron deference overturned

In a ruling, the Court overturned a 1984 precedent on Friday, known as "Chevron deference," which required courts to defer to federal agency interpretations of laws. This change is anticipated to empower challenges to federal regulations across areas such as environmental standards, food safety, and investor protection.

Additionally, the Court ruled that Securities and Exchange Commission actions handling fraud penalties internally, rather than in federal courts, violate the Seventh Amendment's right to a jury trial. This decision could impede other agencies' enforcement efforts.

Legal landscape shifts

Legal experts view these rulings as diminishing the authority of regulatory agencies. Critics argue that by limiting agencies' flexibility in interpreting and enforcing laws, the Court is dismantling the federal regulatory framework incrementally. However, some analysts suggest that while the Court exhibits scepticism toward bureaucratic power, it falls short of abolishing the administrative state entirely.

The Court's conservative majority has consistently prioritised curbing agency power in recent cases, such as limiting the Environmental Protection Agency's authority over carbon emissions from power plants in 2022. These decisions reflect a broader judicial philosophy favouring stricter scrutiny of executive branch actions unless explicitly authorised by Congress.

Courts navigate controversial issues


Despite these shifts, the Court declined opportunities this term to further restrict abortion access or expand gun rights, signalling nuanced approaches to these contentious issues. Future cases on gun control, abortion rights, and transgender rights are expected to shape the Court's agenda in upcoming terms.

Overall, the Supreme Court's recent rulings highlight its evolving stance on federal regulation and its enduring impact on American governance and policy.

(With Reuters Inputs)

Updated 19:41 IST, June 30th 2024