North Carolina became the fifth state to restrict judicial deference through legislation in 2026 when Gov. Josh Stein (D) signed Senate Bill (SB) 445, the Regulatory Review Act of 2026, into law on Aug. 11. The new law prohibits administrative law judges (ALJs) from engaging in the practice of judicial deference to state agencies’ interpretations of regulations and requires ALJs to use their own reading of the ambiguous regulatory text in what is called de novo review. The North Carolina Supreme Court had already significantly restricted deference in two 2025 cases.
Legislative context
The bill went through various iterations before reaching the governor. Introduced in 2025, its language focused on allowing state hospital regulations to automatically conform to federal waivers. The North Carolina Senate passed this version of the bill 46-0 on April 30, 2025. The North Carolina House of Representatives did not take up the bill until 2026. The lower chamber added the requirement that ALJs use the de novo review standard and other amendments affecting regulations of water pipes, gasoline storage, and education. They retitled the amended legislation the Regulatory Reform Act of 2026 and passed the bill 83-28 on June 3, 2026. Twenty-one Democrats joined 62 Republicans in supporting the bill, two Republicans and 26 Democrats voted no, and seven Republicans were absent.
The Senate rejected this House-amended bill 0-45 on June 6, with 18 Democrats and 27 Republicans voting no. The bill went to a conference committee, which amended it further, including inserting additional statutory language related to the ALJ provision that a “court may be informed by the agency's interpretation of its own rules or regulations but shall apply traditional de novo review to the interpretation of State rules and regulations.” The amended bill also included language requiring cities above 5000 residents to allow accessory dwelling units (ADU), also known as "in-law suites" to be built on residential properties.
The Senate passed the conference committee version 37-0 on July 29 with nine Democrats and four Republicans absent. The House passed the same version 81-28 on August 4, with 18 Democrats joining 63 Republicans in supporting the bill, 28 Democrats voting no, two Republicans not voting, and one Democrat and six Republicans absent.
Gov. Stein did not address the judicial deference portion of the bill in a statement but said — referencing the ADU provisions — that "North Carolina is growing rapidly, and the cost of housing is increasing. We need to build more housing units of all types to drive down rents and mortgages. This bill cuts red tape to help produce more houses and apartments and deliver results for North Carolinians."
What is judicial deference?
Judicial deference is the practice of courts adopting an executive agency’s interpretation of an ambiguous text, such as a statute or regulation. Deference practices are enshrined in specific legal doctrines at both the federal and state levels, such as federal-level Auer deference and now-defunct Chevron deference. Chevron deference doctrine, under which a federal court would defer to an agency’s interpretation of ambiguous statutory text, was struck down by the U.S. Supreme Court in the 2024 Loper Bright Enterprises v. Raimondo decision. Because Loper Bright struck down a federal-level doctrine, it did not affect state-level deference doctrines even if they are analogous to Chevron.
Deference in North Carolina
In North Carolina the 1998 case County of Durham v. North Carolina Department of Environmental and Natural Resources articulated one such state-level Chevron-like deference doctrine. In 2025, the North Carolina Supreme Court struck down the County of Durham precedent in the case of Savage v. North Carolina Department of Transportation. In that case the Court ruled 5-2 that state courts should instead use de novo review, meaning that they should use their own interpretation of statutory text when deciding a case notwithstanding an agency’s interpretation. In the separate 2025 case of Mitchell v. University of North Carolina Board of Governors, the Court also struck down the precedent that state courts should defer to agencies’ interpretation of regulations articulated in the 1994 Morrell v. Flaherty decision. This precedent was similar to federal-level Auer deference doctrine, which remains in force in federal courts. SB 445’s enactment reinforces the precedent of the Mitchell decision, which did not explicitly mention ALJs.
States' recent revision of deference
While state-level deference doctrines were not directly affected by the Loper Bright decision, at least 12 states (including North Carolina) have restricted judicial deference since the case was decided in 2024.