What the Legal Challenges on the Future of FDA Regulations Mean: Part Two

This article is the second of a two-part series to help the industry in understanding the potential reversal of Chevron vs NRDC and its impact on the regulatory landscape.

In a snapshot, potential major impacts include:

·????? Courts may more actively evaluate the scientific basis used to create regulations impacting FDA’s health and safety decisions which could lead to patient harm because poor interpretations of scientific data could be made by judges who do not have the education or knowledge to make such decisions.

·????? The FDA may then be forced to step up legislation requests to reduce ambiguity in the FDCA, Public Health Service Act, and other governing Acts.

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Chevon and Deference

We continue our review to help the industry understand the potential reversal of Chevron vs NRDC and its impact on the regulatory landscape. Fast forward, some members of the US House of Representatives communicated support for Loper Bright by stating it does not delegate authority and Chevron incentivizes agencies to usurp legislative powers. Additionally, a group of Senators has defended the Department of Commerce by suggesting that the attack on Chevron comes as part of an “industry-driven deregulatory agenda.”

The Senators contend that Chevron is critical to the continued functioning of the regulatory state which protects the health and safety of millions of Americans. They argue that eliminating Chevron would remove critical technical expertise from interpretative decisions in administrative agencies and would result in static and inflexible implementation of statutes unable to adapt appropriately to changes in the world and our understanding of regulatory needs.

Then the US Chamber of Commerce, in support of Relentless, argued that Chevron was originally conceived as an extension of statutory construction and an application of Congressional intent, but that courts now invoke it far too frequently. The Chamber further argued that the extent of deference under Chevron raises concerns about who wields “ultimate interpretive authority” within the US constitutional framework.

Highlights of the Oral Arguments

And now to the arguments. On January 17, 2024, Paul Clement, Esq. represented the plaintiffs and argued that the action taken by the NMFS was equivalent to one of the causes that led to the Declaration of Independence. He stated that the “necessary and appropriate” language in a statute allows an agency to escape the “power of the purse” which is Congress’s main check against the Executive branch. He went on to assert that Chevron violates the Constitution since Article III empowers judges to say what the law is, and Chevron violates the Administrative Procedures Act which states that courts (not a federal agency) will resolve ambiguities in statutes.

Solicitor General Elizabeth Prelogar represented the Department of Justice on behalf of the Department of Commerce. She stated that Chevron is a bedrock principle of administrative law that provides a framework for judicial review of an agency’s interpretation of statutes and Congress could alter or eliminate the Chevron framework at any time. Additionally, Chevron is an entitled precedence established by the Court that Congress could override by legislation.

She argued that precedent goes back to the Marshal court and allow courts to challenge any governmental abuse by application of mandamus[1]. General Prelogar discussed traditional limits on mandamus jurisdiction and stated that mandamus is an extraordinary remedy that supports the use of deference to agencies’ use of reasonable regulations. As such, district courts have no jurisdiction over a suit seeking an extraordinary remedy against the United States if the plaintiff has an adequate legal remedy (such as seeking monetary damages). The power of the district court to compel a mandatory order is limited to the enforcement of plainly defined duties. Mandamus can also be used by an appellate court to keep a lower court from interposing unauthorized obstruction to enforcement of a higher court.

Due process is not violated because deferential standards of review are not biased.

Thousands of judicial decisions have relied upon Chevron. Congress could modify or overrule the Chevron framework at any time. General Prelogar concluded testimony on how the Supreme Court could modify the Chevron deference rules and stated that Chevron respects the separation of powers and due process principles.

During the oral arguments the US Supreme Court justices made these key comments.

·????? Justice Thomas stated that Chevron is a violation of the separation of powers.

·????? Justice Roberts wanted to modify Chevron by setting a high bar where Congress has specifically delegated authority to an agency to interpret ambiguity.

·????? Justice Alito and Kavanaugh thought Chevron gave too much power to unelected bureaucrats.

·????? Justices Gorsuch and Kavanaugh worried about policy instability due to changes every four years when a new administration is elected.

·????? Justice Barret appeared to support narrowing Chevron due to her endorsement of the “major questions doctrine.”

·????? Justices Kagan and Sotomayor support Chevron deference to interpretation of law, in some cases.

The majority of the Justices appear to be willing to reevaluate the scope of Chevron deference since the Supreme Court has not used these tests in recent case decisions.

Legal Options Available to the Supreme Court

Depending on the outcome, courts may more actively evaluate the scientific basis used for decisions impacting FDA’s health and safety decisions which could lead to patient harm because poor interpretations of scientific data are made by judges who do not have the education to make such decisions. The FDA will then be forced to step up legislation requests to reduce ambiguity in the FDCA, Public Health Service Act, and other governing Acts.

In the meantime, there are three possible options that the Court is likely to decide on this case. Each of these options will have a direct effect upon FDA regulations.

1.??????? The Chevron case decision is upheld. If that action is taken, approximately 17,000 lower court decisions that used Chevron deference could not be challenged in court. All Executive Branch agencies, such as the FDA, will need to be careful and make sure that regulations utilize the draft, comment, and detailed response to public comments on regulations to avoid another challenge to the Chevron doctrine.

2.??????? The Chevron deference is narrowed significantly and FDA’s use of guidance or letter decisions on thorny issues, which are considered informal rule making, could be challenged in court more frequently. The FDA will lose their advantage in court when challenged by industry and will lose more cases. The FDA may seek more proactive discussion with industry before it issues regulations to better ensure that consensus is reached to avoid court actions.

3.??????? The Court rejects the use of Chevron deference by lower courts and would significantly impact where the majority of challenges to FDA regulations are heard. There could be a flood of litigation challenging FDA decisions and regulations. If the Court upholds the use of the Chevron deference, companies will find it more difficult to challenge new FDA regulations.? This would be especially true if the FDA uses its current public notice and comment method to establish new regulations.

The Supreme Court will decide this case by June or July 2024.

[1] ?A writ of mandamus is a remedy that can be used to compel a lower court to perform an act that is ministerial in nature and that the court has a clear duty to do under law.