Joseph Mazzarella: The Loper Decision & Future of AI Regulation

Extract from Joseph Mazzarella’s article “The Loper Decision & Future of AI Regulation”

Artificial intelligence is poised to rapidly transform nearly all aspects of society. However, it also brings new risks. As governments work to develop and implement laws that mitigate these evolving risks, expert regulatory oversight will be crucial. While the EU has already passed a comprehensive AI Act that invokes a significant risk-based regulatory regime, the United States has yet to do so. How the US addresses AI will inevitably involve regulatory oversight due to the complex technical nature of AI, its rapid advancement, and the numerous ways it may be applied.

 Against this backdrop looms the Supreme Court’s recent decision in Loper Bright Enterprises v. Raimondo. On its face, it raises serious concerns about the future ability of agencies to exercise their traditional discretion in interpreting statutory ambiguity to address unforeseen or unintended gaps. This issue becomes even more critical in areas where technical expertise is necessary to fully evaluate and assess implications beyond the grasp of the unacquainted.

In Loper, the court held that the Administrative Procedure Act (APA) requires courts to exercise their independent judgment in determining the bounds of an agency’s statutory authority, and courts may not defer to an agency’s own interpretation of the scope of its statutory authority merely because the statute in question is ambiguous. This marks a reversal of the court’s 1984 decision in Chevron U. S. A. Inc. v. Natural Resources Defense Council, where it held that if statutory ambiguity is present courts should defer to the interpretive judgment of the agency if the agency’s interpretation is plausible, even if other plausible interpretations may exist. 

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