What the Overruling of the Chevron Doctrine Could Mean for HVAC Regulations

The Chevron Doctrine was established in 1984 through the Supreme Court case Chevron v. Natural Resources Defense Council. Most recently, in June of 2024, it was overruled in Loper Bright Enterprises v. Raimondo. 

Chevron basically states that if the statute of federal legislation is ambiguous or there are administrative gaps, the courts are to defer to the regulatory agencies’ reasonable interpretations. 

In Loper v. Raimondo, a 6-3 decision by Chief Justice John Roberts overruled the doctrine. Roberts wrote that the act “requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous; Chevron is overruled.”  

What deciding not to follow the “Chevron deference” doctrine really means, in layman’s terms, is that courts will no longer defer to the perspective of federal agencies like the Environmental Protection Agency (EPA), the Department of Labor (DOL), the Occupational Safety Health and Administration (OSHA) for interpreting ambiguous statue. Instead, they’ll use their own judgment to interpret laws — meaning that decisions and rulemaking by federal agencies as such are now more likely to be successfully challenged. Chances are, this will result in an uptick of litigation that challenges rules and decisions by these agencies.  

As far as what this means for the HVACR industry, time will tell. Some in the industry have already started to challenge certain regulations, and in time, many others will likely follow suit. But when the HVACR industry will start to feel the effects of this decision, is another story — and, ultimately, up to the judicial system. 

Recent Overturn  

According to Aaron Hilger, CEO of Sheet Metal Air Conditioning Contractors’ National Association (SMACNA), while the Supreme Court ending the 40-year-old Chevron Doctrine may reduce or at least redefine the power of federal agencies to interpret ambiguous federal laws, it hasn’t had a significant immediate impact on the HVAC industry yet.  

While Charles R. White, vice president of regulatory affairs at the Plumbing-Heating–Cooling Contractors National Association (PHCC) doesn’t believe at this point they’ve seen Loper Bright applied to their regulations, eventually it will be.  

And he’s right. In fact, some associations like the Air Conditioning Contractors of America (ACCA) have already hit the ground running.  

“In July, ACCA sent a letter to the White House to encourage the administration to reconsider burdensome regulations following the Supreme Court decision on Loper Bright,” said Kate Wessels, vice president of communications, marketing and partnerships at ACCA.  

In the letter, ACCA urges the administration to review and consider several regulations, including the ban on non-condensing furnaces, OSHA’s walkaround rule, the new overtime rule, and proposed cylinder tracking and return mandates. 

“It appears that the Chevron Doctrine could have had some impact on EPA’s recent rule that ended up not requiring a tracking system for cylinders or mandating cylinder return,” Wessels said. 

Existing Regulations 

Now, Loper Bright doesn’t invalidate or eradicate any existing regulations — it just makes it easier for them to be challenged. While the full impact of this decision is yet to be seen in the HVAC industry, many others will soon follow ACCA’s lead. 

In addition to what ACCA has already encouraged the administration to reconsider, Wessels said, “Other regulations that affect our industry include the joint employer rule, the Corporate Transparency Act, and various other standards that impact small businesses and contractors, often without sufficient consideration of their economic impact.” 

Existing regulations may be challenged by advocates who want different outcomes. Hilger said this could create challenges and opportunities for SMACNA members and the industry at large. 

“For instance, a somewhat vague regulatory guideline limiting current or future chemicals and refrigerants used in air-conditioning systems could be challenged by contractors and/or manufacturers,” Hilger said. “If a successful challenge to a less than specific statute occurred, the industry could continue to use and service existing units with existing refrigerants for longer periods of time. That could be beneficial from a cost perspective for customers and could also impact environmental conditions.” 

Regulations that were already drafted and tested in court before the Chevron repeal, like the recent Biden administration regulations regarding the Davis-Bacon Act (wage rates for federally funded construction projects), could also be challenged.  

Ultimately, any regulation is fair game. 

“I think there could be any number of challenges, should a party wish to pursue this,” White said. “OSHA’s Heat Injury and Illness rule is a possibility, but I think that is a hard one since it involves worker safety. DOE things like the gas furnace rule or commercial water heater, maybe, but there is plenty of history leading up to these actions — again, this is probably an uphill battle. It is hard to predict who may wish to put the resources towards a challenge or how the Supreme Court will react.” 

The Process 

Since its inception, the Chevron Doctrine has granted a broader role to the EPA and other agencies interpreting environmental regulations, and some of the first cases brought to the courts could be from advocacy groups challenging environmentally ambiguous rules.  

“Wage and hour regulations are another area that could create challenges for the industry, but those are based upon decades-old laws with frequent legal review and precedent,” Hilger said.  

Whether or not any of these foreseen challenges come to fruition will be determined by the presented arguments challenging regulations, and the court it’s being presented to. Basically, it’ll be determined by the good old-fashioned legal system (just without the interpretation of a regulatory/federal agency). 

“Any regulation that appears to exceed the scope, intent, or reasonable interpretation of a statute should anticipate drawing a challenge by countless advocacy groups or legal organizations,” Hilger said. “The success of anticipated challenges would depend on the strength of legal arguments and the court’s view of how faithful the regulatory language is in following the statutory language.” 

The decision of Loper v. Raimondo may also prompt Congress to be a lot more specific, precise, and detailed in bill drafting in order to see new laws accurately translated by federal agencies and then receive judicial approval. 

While the last few years have seen high levels of regulatory activity, White thinks that the biggest outcome of this decision will be a slowing of regulatory activities.  

“The concern for court oversight will likely drive the agencies toward more research and documentation before releasing rules,” White said. “It could also drive more negotiated rulemaking, which would bring most parties to the table to hammer out a consensus rule.” 

“Overall, requiring new and improved legislative specificity in every statute should be a positive change,” Hilger said. “However, requiring more specific legislating is not enough to limit Congress from its prerogative to make and pass laws as it wishes. Nevertheless, it is better and more transparent when elected legislatures are far clearer in defining their legislative intent, instead of relying on an often-speculative regulatory process.” 

Industry Response  

While it’s hard to tell when the HVACR industry will really feel the effects of the recent overturn, associations are still taking the necessary steps to prepare for any potential changes by educating themselves on existing regulations and keeping their members in the know.  

As far as PHCC goes, White said they don’t think Loper Bright is likely to have a direct impact on its members, but they’ve still kept everyone informed on the ruling. 

Wessels has seen overall support from the HVAC industry on the overturn of Chevron.  

“Here at ACCA, we believe that the new legal framework for authorizing regulations presents a unique opportunity to shift the regulatory power that federal agencies exercise on the HVACR industry,” Wessels said.  

SMACNA has been conducting a comprehensive review of a collection of regulations they believe are important to the industry. Additionally, they are conducting risk assessments as preventative measures.  

“Until the legal teams employed by interested parties challenge regulations, it is difficult to determine next steps for offense or defense and craft specific responses,” Hilger said.  

The Future of HVAC Under Chevron Repeal 

SMACNA doesn’t believe there will be a significant impact on consumers or contractors in the immediate term. And in the long term, a regulatory environment that is less speculative, or guided by far more exacting legislative language, could be positive for both consumers and contractors. However, there is concern about the court’s ability to handle countless, and maybe at times even frivolous, legal challenges to regulations produced by the executive agencies.  

“We will need to see how this develops over time,” Hilger said. “One concern is the deliberative pace, even glacial pace, of the already overburdened court system that could create implementation bottlenecks the executive and legislative branches find unacceptable.” 

ACCA believes the ruling offers a unique opportunity to recalibrate the balance of regulatory power, ensuring that federal agencies operate within the bounds of their legal authority.  

“Our industry has long been subject to extensive regulations from a variety of agencies including EPA, DOE, DOL, and DOT; our hope is that by ensuring these entities are exercising proper constitutional and statutory authority in rulemaking, we may reduce costs and operational challenges for the HVACR industry long-term,” Wessels said. 

Depending on what regulations are successfully challenged, it’s possible the ruling could have an economic impact, but it’s hard to say what that would be. 

“I am not positive, but I expect some parties to give it a shot and see what happens,” White said. “If the actions succeed in overturning rules, we will see more actions. If the regulatory actions slow down, there will be more product stability in the market and fewer redesigns of product lines. With luck, this could result in more stability in product costs.” 

But the ruling will likely not have big enough effects to dent the economy of the strong and growing industry that is HVACR, SMACNA predicts. 

“The quality-driven sector of the HVAC industry for firms with a highly skilled workforce is booming,” Hilger said. “This is due to the countless complex megaprojects, reshoring manufacturing driving investment, and economic growth. … If the Supreme Court’s Loper decision encourages any significant economic boost to construction clients and markets by limiting unnecessary regulations, then it will be positive for the HVAC industry and for contractors and their workforce development.”