As Reed Smith has previously covered, an issue before the Supreme Court that could be decided this week could bring a seismic shift in the balance of power between agencies and courts, upend regulatory certainty, and open new opportunities for regulated industries, including health care. 

The Supreme Court’s pending decision in a pair of cases governing Commerce Department regulations warrants attention because it may bring new uncertainty to the operating environment, and could change how all regulated industries interact with agencies, lawmakers and courts, as outlined below:

  1. Currently, Chevron deference, a core principle of administrative law for forty years, has told courts that where a statute is ambiguous, the court should defer to the agency on any reasonable reading of that statute, even if the court disagrees with the reading.  
  1. The Supreme Court will soon issue an opinion in two cases—Relentless v. Dep’t of Commerce, and Loper Bright Enters. v. Raimondo—in which the petitioners have asked the Court to overrule Chevron deference. 
  1. The Supreme Court seems to be seriously considering whether to overturn or modify Chevron deference, although there were vigorous questions about the effects of doing so during oral arguments.   A decision is expected in the coming weeks.
  1. If judges, not agencies, will have the final say in what ambiguous statutes mean, that will carry potential implications and opportunities for health care and other highly-regulated industries, which include:

Potential Implications

  • May chill agencies from more expansive coverage and other interpretations.
  • May lead to challenges of longstanding agency decision-making upon which the industry may be relying (e.g., FDA approvals).
  • May allow state regulations to fill the gaps, which would create more of a patchwork approach for purposes of compliance across states.
  • Will favor the use of clear and specific statutory language, to the extent achievable through the efforts of Congress and collaboration across parties.

Potential Opportunities

  • More opportunities to challenge rules and regulations from agencies that burden regulated industries.
  • More benefit from working with lawmakers on clear and specific language in legislative drafting.
  • More opportunities to support for approaches that benefit regulated industries, whether by submitting comments to proposed rules or through amicus briefs in litigation, which help persuade a court in any post-Chevron landscape. 

We are closely watching this and after the Supreme Court’s decision, plan to offer a webinar on the implications for the healthcare industry.