Strange Bedfellows: How a Supreme Court Ruling Found Its Perfect Match in the Trump Administration

Across sectors, corporate compliance leaders are facing a convergence of factors as the seismic 2024 Supreme Court ruling in Loper Bright that overturned the decades-old Chevron doctrine has found an eager partner in the deregulatory agenda of President Donald Trump’s second White House term, legal and compliance observers told CCI.

The administration has been “pretty extensively” invoking Loper Bright in an attempt to justify deregulation, said Max Sarinsky, regulatory policy director of the Institute for Policy Integrity at New York University Law School. 

Trump Administration actions to that effect include a February executive order directing agencies to identify regulations conflicting with Loper Bright and other Supreme Court decisions, an April presidential memorandum instructing immediate repeal of “facially unlawful” regulations and an October Office of Management and Budget (OMB) memo establishing accelerated 14-day and 28-day review timelines for such repeals. Most significantly, Sarinsky said, these directives, particularly the February order and October OMB memo, are “telling agencies to eliminate regulations that they think might be inconsistent with Loper Bright and to do so without the notice and comment rulemaking [process].”

That uncertainty ripples through compliance programs, creating new challenges for professionals trying to build controls on potentially unstable regulatory ground, experts said.

“The long and short of it is that compliance officers ultimately have to be following what happens to rules after they’re finalized, more than they used to in the past,” said Jeff Wurzburg, partner at Norton Rose Fulbright.

The Loper effect

In its June 2024 decision in Loper Bright Enterprises v Raimondo, the high court overturned the long-standing Chevron doctrine that instructed federal courts to defer to an agency’s reasonable interpretation of an ambiguous law. Instead of deferring to agencies, the six-justice majority ruled that the courts themselves should decide whether to stick with agency interpretations or introduce their own.

In the year-plus since the decision, there has been a major shift in administrative law, with no additional direction at this point from the Supreme Court to guide rulemaking, Wurzburg said.

Sarinsky said that while he does not take issue with the court’s “meaningful yet measured” Loper decision, one of the benefits of the Chevron doctrine, so named for the 1984 Supreme Court ruling in Chevron v Natural Resources Defense Council, was that if an agency had an interpretation of a statute, “the chances were fairly high that that interpretation would prevail in courts across the country.” Thus, Chevron provided more certainty for the regulated community and the public because the courts had less discretion to overturn agency interpretations.

Given that courts are now empowered to make that determination and that judges nationwide “do not have homogenous views on how to interpret law,” decisions may vary widely depending on the court filed in and the judges who are hearing the case, he said.

Andy Emerson, partner at Holland & Knight, agrees. In this environment, judicial interpretations of federal regulation nationwide have been inconsistent, he said. 

“At this point we’re at the opening stages of the interpretive process, which means that we have even greater inconsistency, and it is more difficult to ensure that you’re in compliance” with a particular law, Emerson said.

Administrative law has become more focused on core arguments of statutory authority and congressional intent, with less deference to agency rulemaking and associated guidance, Emerson said. At the same time, how such statutes should be interpreted in practice remains unclear without a solid body of caselaw to rely on. The result, he said, is that there is a broader variety of arguments than might have been the case in earlier decades.

Agency applications & key exceptions

Federal agencies need to move faster to comply with executive orders directing them to “streamline reviews of deregulatory actions,” especially regulations that in their current view are facially unlawful, according to the Oct. 21 OMB memo. The memo re-emphasizes directives in Trump’s April 9 executive order, in particular, which lists 10 Supreme Court decisions with Loper Bright the first on the list. 

“If the regulation is unlawful as, for example, where the rule is inconsistent with the ‘single, best meaning’ of the statute under Loper Bright, direct repeal under the APA’s (Administrative Procedure Act) ‘good cause’ exception is appropriate,” the memo states.

That leaves rules and regulations apparently on shaky ground at present as agencies start to counteract what the OMB memo refers to as “the idea that rulemaking is overly burdened with too many procedural requirements.”

Courts have already begun applying Loper Bright to invalidate agency interpretations across multiple sectors, while agencies themselves are citing the decision to walk back regulations, a trend the Trump Administration is now accelerating. However, the degree of impact is likely to be uneven.

Emerson pointed to the American Water Works Association’s 2024 suit against EPA over Safe Drinking Water Act rules on certain “forever chemicals” known as polyfluoroalkyl substances (PFAS) as an example in which the EPA is declining to defend a rule and the court “has allowed intervenors to do so in its place.”

In September 2025, citing the Loper decision, the EPA asked the DC Circuit Court to vacate its regulations for four of the PFAS chemicals. The agency said its prior reading or position under the Biden Administration was not the single, best meaning of the statute, Emerson said. The case is ongoing.

“A year ago everyone expected that Loper would be a sort of a seminal case that would result in a significant amount of litigation activity,” he said, and the thing that can be counted on now is that the agencies’ safe harbors are not necessarily safe anymore.

Wurzburg said that courts may begin to invalidate long-standing regulations citing Loper because they believe that the agency failed to utilize the best reading of their statutes. 

He pointed to an example in Duffus v. MaineHealth. In that case, Edwin George Duffus, an uninsured worker who was admitted to Maine Medical Center (MMC) for 12 days in 2022, sued MMC and its parent, MaineHealth, last year. Duffus alleges that MMC violated the Emergency Medical Treatment and Labor Act (EMTALA) by discharging him knowing that his medical condition was unstable, and that he was eligible for Affordable Care Act insurance to cover his stay but was unaware of this at the time and was not informed by the hospital. Underlying the case is the Centers for Medicare & Medicaid Services’s (CMS) long-standing interpretation of EMTALA regulations, which the hospital apparently relied on. But the court, citing Loper Bright, disagreed with the CMS interpretation and ruled that EMTALA’s text is clear and that the agency exceeded its statutory authority, Wurzburg said.

Not all agencies will be equally affected, though. Jeremy Paner, partner at Hughes Hubbard & Reed, said the Treasury Department’s Office of Foreign Asset Control (OFAC) is the only US agency granted “extreme deference” that goes well beyond what the prior Chevron standard was. This is because of OFAC’s unique role at the intersection of national security, foreign policy and administrative law, he said.

Despite that traditional deference, the Fifth Circuit in November 2024 ruled in Van Loon v. Department of the Treasury that it would follow Loper Bright and decline to defer to OFAC’s interpretation of “property” as it relates to certain cryptocurrency “smart contracts,” Paner said. The case involved Tornado Cash, a cryptocurrency mixing software that OFAC had sanctioned, alleging it facilitated money laundering for North Korea. The court ruled that certain “immutable” smart contracts — software code that cannot be altered or controlled by anyone once created — are not property or services that OFAC may block pursuant to the International Emergency Economic Powers Act, Paner said.

“In my informed opinion, the Fifth Circuit was incorrect in its reading of the definition of ‘property’ and ‘services,’” he said. He said that while the narrow issue was not appealed, he strongly believes the Supreme Court would have reversed the decision.

More broadly, while litigants have challenged OFAC actions by citing Loper, these challenges involve claims that OFAC acted “arbitrary and capriciously” in making determinations that certain persons meet the criteria for being sanctioned, he said. But the Loper decision has no effect on judicial challenges to those determinations, he added.

Compliance program impact

As chief compliance officers trace regulatory risks in their annual risk assessments back to the source — whether this a statute, underlying rules or regulatory guidance — they should be aware that risks and controls that do not tie directly back to a statute may be subject to change if challenged, said Rob Tull, CEO of consultancy Effective Compliance.

“To prevent paralysis and confusion, we are seeing CCOs link critical controls back to the statute, instead of the regulations or guidance, to essentially control the narrative that such controls are sufficient and reasonable for the statute, should the regulation or guidance be invalidated,” he said.

As an example, Tull cited AML regulations: “Look back at your compliance program and risk assessment for what ties back to the Bank Secrecy Act versus what ties back to Treasury guidance on certain things,” he said. While digital assets including cryptocurrency are not covered in that 1970 statute (because the law was written before virtual currency existed), the Treasury Department’s FinCEN has issued lots of guidance on cryptocurrency since the statute was implemented, including how it should be accounted for in AML programs. In that case, a firm would need to discern which parts of its compliance policy relate to the statute, which they can rely on, and which relate to guidance, Tull said.

The re-examination of an organization’s risk assessment also extends to third parties, including software vendors, service providers and business partners, he said.

“Right now, it’s probably the safest time to do those renewals,” Tull said. But CCOs looking at renewals in, say, 18 to 36 months from now may need to consider whether they are signing up for a contract and major costs that are no longer necessary, he said.

In some cases, that contract could cost several hundred thousand dollars. 

“If a rule goes away in a few years because it is challenged, the company has bought something it does not need. But if it cancels the contract and the guidance is not challenged, now I’ve removed my safeguard,” Tull said.

A company that operates nationwide can be left in a particular state of ambiguity over how to make medium- and long-term decisions, he said. CCOs must maintain a cohesive system while adapting to local regulatory or jurisdiction decisions, which may mean that they look to the lowest common denominator across all the regions that they operate in, he said.

“That doesn’t necessarily differ from what CCOs typically do, except that now there is a precedent for states upending federal regulations,” when previously they could rely on the federal regulation as footing, he said.