Chevron Deference Struck Down

In 1984 the Supreme Court ruled that courts should defer to a Federal agency’s opinion when a law is ambiguous.  That decision was known as the “Chevron Deference”. The effect of that  decision was to give regulatory agencies (who are staffed with technical experts) deference in courts, when they were challenged on how the law should be enforced.

Chevron had stood for 40 years when on June 28, 2024 the Supreme Court’s Loper decision struck down the Chevron Deference.  What’s different with Loper is that the deference that the courts were supposed to give federal agencies is now gone.  The impact  of the Loper decision will vary depending on the agency involved.  What is clear is that federal agencies will have a tougher time defending their decision, and that the effect will be big. 

“I think that the Loper Bright decision is definitely going to scramble the omelet at most agencies,” says Gordon Todd, co-chair of the regulatory litigation practice group at the law firm Sidley Austin. “The extent to which it does so is very much an open question.”

My own personal experience from decades in US-FDA regulated industries impels me to emphasize the magnitude of the Loper decision.

Chemical & Engineering News describes the problems inherent in SCOTUS’s opinion, “In her dissenting opinion, Justice Elena Kagan cites Teva Pharmaceuticals USA Inc. v. US Food and Drug Administration, which raised the question of when an α-amino acid polymer qualified as a protein, such that the FDA would regulate it as a biological product. “I don’t know many judges who would feel confident resolving that issue,” Kagan writes. “First question: What even is an alpha amino acid polymer?””

Just to pile on, we should also note that EPA said that carbon dioxide emissions are a pollutant that will cause major damage to the health & safety of all of us.  In 2022 SCOTUS ruled against EPA.  In addition, Justice Alito has said that “Carbon dioxide is not a pollutant”.

I’m sure that the six justices who said yes to Loper would say, “Yeah, but we can bring in expert witnesses to fill us in on the science details.” 

Well, let me tell you, I’ve been an expert witness on many occasions.  Lawyers can find an expert witness who will say anything they want.  Then you have two ‘experts’ with opposing opinions doing a steel cage match.  Judges, justices, or juries can then pick the one they agree with.

Exactly what problem SCOTUS was trying to solve is a mystery.  The Court held that Chevron was inconsistent with the constitutional obligation of courts to interpret the law.  The job of Congress is to make laws, and I agree that the job of the courts is to interpret the law. 

However, for decades companies have been getting their day in court if they don’t agree with FDA’s decisions.  The FDA works through the court system to request a seizure, which is then carried out by U.S. Marshals.  In certain cases, FDA may request through the U.S. Department of Justice that the court grant an injunction to stop or prevent violation of the law, such as to prevent violative products from entering interstate commerce.

The point is that the Judiciary is involved with FDA enforcement every step of the way.  But there’s more:

Let’s review the law-making process for a minute.  What happens when Congress is completely incapable of creating a workable law because they simply don’t have the technical expertise to write it? Which BTW has been the case for at least a hundred years.

The answer is that Congress passes a law that clearly establishes the general performance standards that they want to accomplish.  Part of that law directs the appropriate federal agency to write operational regulations that industry can understand and follow, and also be enforced by the agencies.

Here’s what happens when Congress passes a law requiring FDA action. 

1. FDA’s lawyers examine the law passed by Congress to determine the extent of powers DELEGATED TO FDA BY CONGRESS.
2. FDA’s technical experts write a draft regulation.
3. FDA publishes the draft requesting comments from the public.
4. FDA produces the final regulation incorporating (or not) the public comments.

The key point here is that Congress delegated limited authority to FDA.  It makes total sense, right?  Congress knows nothing about Food and Drugs.  Now SCOTUS has yanked that authority from FDA and, more importantly, from Congress. 

The effect of Loper is unknown.  It will certainly tip the balance in courts more toward companies.  It will be chaos until the courts sort it out.  Chaos is not friendly to innovation.  The decades-long lead times needed for new drugs makes market forecasts critical to investors.  Uncertainty will cause investors to direct their money elsewhere.

What impact will this have on the mutual recognition agreements between US-FDA and the European Medicines Agency (EMA) and other equivalent agencies around the world? EMA currently does not inspect US drug producers because they can rely on US-FDA inspections.  Will this eventually lead to the resumption of EU Inspections in USA simply because the Agencies can no longer rely on the GMP reports issued by the USFDA.  And would a company from outside USA (but with deep pockets) be able to overturn the import bans that are frequently deployed to protect US consumers from sub-standard products?

I’m no lawyer, but The Loper decision seems like a big Constitutional change.  And I see only higher costs for American taxpayers and worse outcomes for American patients.

How about you?  What’s your experience?  Comment below.