On August 11, 2026, Governor Josh Stein signed the Regulatory Reform Act into law, officially replacing North Carolina courts’ previous judicial deference to state agencies with a de novo standard of review.[1] North Carolina now joins the over twenty states that have formally scrapped the deference standard in favor of de novo’s clean interpretive slate.[2]This state decision, however, represents merely a ripple effect of the United States Supreme Court’s earlier striking decision in Loper Bright v. Raimondo.[3]
In 2024, the Court ruled in Loper Bright that the “Chevron deference”—a forty-year old federal administrative law principle that required courts to defer to an agency’s interpretation of ambiguous wording—would no longer be the standard moving forward.[4] While this decision had no immediate binding impact on state court interpretations of agency ambiguities, several states used this decision as reason to adopt a de novo standard of review.[5] For instance, in North Carolina Supreme Court’s first blow to judicial deference, it held in the 2025 Savage v. N.C. Department of Transportation that Chevron’s already shaky foundation for state courts completely crumbled after Loper Bright, leaving North Carolina free to depart from the now-defunct deference standard.[6]
The New Standard
The new standard moving forward for the twenty-one defecting states is far more judge-friendly.[7] North Carolina’s Regulatory Reform Act explicitly states that “courts interpreting [s]tate administrative rules must freely substitute their judgment for that of the agency and employ de novo review.”[8] Of the remaining twenty states, most employ a similar de novo standard that permits judges to interpret ambiguous agency regulations and rules with fresh eyes using any canon of interpretation they see fit.[9] Courts remain free to consider outside agency information or knowledge, but are no longer bound to follow that interpretation.[10]
Two Sides of the Coin
Among the defecting states, a fundamental desire to enforce the separation of powers between branches of government has been cited as a rationale for the change.[11] While executive agencies create the regulations, judges must be permitted to independently interpret them. Proponents of the change claim that states moving away from judicial deference will help curtail administrative agencies from encroaching upon the judiciary’s power.[12] Notably, the state agency officials who craft these regulations are not elected, but hired or appointed. Why then, proponents reason, should an unelected state official’s interpretation carry binding weight in a court proceeding when a duly elected judge is available whose very job is to interpret the law?[13]
While a near-majority of states are making room for independent judicial interpretation, some states in the wake of Loper Bright, such as Minnesota, New Jersey, and Maine, have taken steps to strengthen deference to agency interpretations.[14] A recent New Jersey appellate court case, for instance, affirmed judicial deference to an environmental agency’s interpretation of a regulation, explaining that “the agency that drafted and promulgated the rule should know the meaning of that rule.”[15] This logic gets to the heart of the argument maintained by defending states, which contend that ambiguous regulatory questions should stay firmly in the hands of the agencies themselves.
State agencies often deal with complex matters that require technical expertise and deep institutional experience.[16] This is especially true in intricate fields like taxation, which is highly codified, or environmental policy, which relies on a vast depth of scientific knowledge.[17] The specialized professionals who research and draft these regulations are thought to possess a greater understanding of the regulations’ intended meaning and real-world impacts than a generalist judge.[18]
While many states staked a definitive claim on either end of the deference debate, others occupy a grayer area, deferring to agency expertise in some contexts while granting courts interpretive breathing room in others. However, the number of these middle ground states is diminishing.[19] The post-Loper Bright polarization into two dichotomous camps underscores the key point of tension: agencies are experts in their subjects, while judges are experts in the law. Between the competing values of technical efficiency and democratic accountability, which will states prioritize for their citizens?
Moving Forward
In the states that have introduced the de novo standard through court decision or statutory codification, the impact extends far beyond the theoretical question of who has the final say.
For litigants, without agency interpretations maintaining a binding weight, there is more uncertainty concerning which way the court will come out.[20] With this unpredictability comes a higher likelihood that parties will proceed to litigate in cases centering agency interpretation.[21] Where individuals might have previously considered settling or agreeing to an agency’s terms due to court precedent, they may now consider fighting out their own understandings in front of a judge.[22] Parties now have the benefit or detriment of convincing a judge that their reading of the regulation is the correct one.
For courts, this shift grants judges greater flexibility and fewer constraints when resolving ambiguous regulatory language.[23] This ultimately allows a judge’s interpretation to become the controlling law. While courts remain free to consider an agency’s specialized perspective as a resource, the judiciary maintains the final say. [24]
For agencies, if regulators want their interpretations to remain the guiding framework for enforcement, they need to draft rules unambiguously.[25] This structural change places a premium on clear-cut language that leaves no room for judicial interpretation.[26] For instance, if a state tax agency wants a rule applied in a specific manner, it must rely on precise, effective wording to ensure that courts do not get their say when it comes to interpreting ambiguous language.[27]
Moving away from judicial deference is still in its early stages in both the federal and state court systems. The immediate consequence seems to be an influx of litigation over agency rules while courts experiment to find an interpretive balance. While this appears to be a clear victory for proponents of judicial independence, it remains unclear whether this independence will come at some sort of cost.
[1] Donald Bryson, NC’s Quiet Shift on Regulatory Power, The Carolina J. (Oct. 2, 2026), https://www.carolinajournal.com/opinion/ncs-quiet-shift-on-regulatory-power/.
[2] Nino Marchese, Judicial Deference Reformed: How States are Reclaiming Judicial Autonomy from Bureaucratic Influence, Am. Legis. Exch. Council 1, 9 (2026), https://alec.org/wp-content/uploads/2026/07/ALEC_JudicialDeferenceReformed2026.pdf?ref=broadbandbreakfast.com.
[3] See generally Loper Bright Enters. v. Raimondo, 603 U.S. 369 (2024).
[4] Todd Court et al., In the Wake of the Chevron Decision, Yale Sch. of the Env’t (July 16, 2024) https://environment.yale.edu/news/article/wake-chevron-decision.
[5] Rebecca Newton-Clarke, States’ Retreat From Judicial Deference Creates Leverage in Tax Disputes, Thompson Reuters (May 13, 2026), https://tax.thomsonreuters.com/news/states-retreat-from-judicial-deference-creates-leverage-in-tax-disputes/.
[6] Savage v. N.C. Dep’t of Transp., 919 S.E.2d 144, 149 (N.C. 2025).
[7] Marchese, supra note 2, at 9.
[8] S. 445, 2025–2026 Gen. Assemb., Reg. Sess. (N.C. 2026).
[9] Marchese, supra note 2, at 4.
[10] N.C. S. 445.
[11] Bryson, supra note 1.
[12] Marchese, supra note 2, at 6.
[13] Bryson, supra note 1.
[14] Marchese, supra note 2, at 6.
[15] New Jersey Dep’t of Env’t Protections, 352 A.3d 26, 42 (App. Div. 2026).
[16] William L. Burner, Balancing the Triangle: Restoring Judicial Interpretation Without Ignoring Agency Expertise After Loper Bright, 20 Liberty Univ. L. Rev. 533, 540 (2026).
[17] Newton-Clarke, supra note 5.
[18] Carlos M. Bollar, Charles J. Dennen & Thomas J. Tyrrell, Deference to State Agencies Remains Strong Under New Jersey Law, Archer & Greiner PC (Mar. 3, 2026), https://www.archerlaw.com/print/v2/content/11401/deference-to-state-agencies-remains-strong-under-new-jersey-law.pdf.
[19] Newton-Clarke, supra note 5.
[20] Id.
[21] Id.
[22] Id.
[23] Marchese, supra note 2, at 10.
[24] N.C. S. 445.
[25] Burner, supra note 16, at 554.
[26] Id. at 546.
[27] Newton-Clarke, supra note 5.
