On January 17, 2024, the Supreme Court of the United States heard oral argument in two cases—Relentless v. Dep’t of Commerce, and Loper Bright Enters. v. Raimondo—that could have far-reaching effects on administrative law jurisprudence and the authority of federal agencies in years to come.
At the core of both cases is the Supreme Court’s Chevron doctrine, which refers to how courts are to review an agency’s interpretation of a statute that it administers. Under the test of Chevron v. Natural Resources Def. Council, if an agency’s construction of an ambiguous statute is deemed to be reasonable, a court defers to the agency’s construction—even if the court believes the agency’s construction was not the best reading of the statute.
Over the last four decades, Chevron deference has faced criticism from those who argue that it is the role of courts, not federal agencies, to say what the law means. Arguing on Wednesday in support of overturning Chevron, counsel for Loper Bright argued that the Court should instead simply ask one question: “What is the best reading of the statute?”
If the Court were to do away with the Chevron analysis, that decision would have far-reaching consequences across regulated industries, including health care, where agencies within the Department of Health and Human Services routinely address through rulemaking areas where Congress has not spoken with precision. These agencies may implement very different policies from one administration to the next and may issue rules that create burdens for health care companies. Currently, with Chevron as the governing standard, if the statute is ambiguous, then it is an uphill battle for health care companies or industry groups to challenge an agency’s approach.
Overturning the Chevron doctrine would make it significantly easier for those in the health care industry to challenge agency rulemakings as improper, although doing so would mark a monumental shift in the power of federal agencies – and the role of the courts – in implementing laws. The Supreme Court’s robust questioning during oral argument shows that it is grappling with these difficult questions and potentially far-reaching ramifications of its eventual decision.
Reed Smith will continue to follow these cases and consider the impact of any developments on our clients in the health care industry. If you have any questions about the implications of these cases for your business, please reach out to the authors or your health care attorneys at Reed Smith.