SCOTUS to decide case on government power

Nearly 40 years ago, in Chevron v. Natural Resources Defense Council​, the Supreme Court ruled that courts should defer to a federal agency’s interpretation of an ambiguous statute as long as that interpretation is reasonable.

This week, the Supreme Court agreed to reconsider its ruling in Chevron. If overruled, it could become harder to sustain governmental regulations.

The Chevron Doctrine

The Chevron doctrine stems from the 1984 Supreme Court case, Chevron USA Inc. v. Natural Resources Defense Council​, in which the court found that judges should defer to the agencies’ interpretations of a law if it is ambiguous. In other words, when a particular issue or question is not crystal clear, federal agencies should be allowed to fill in the details.

The 39-year-old legal precedent has been used to uphold thousands of agency rules across the federal government. Federal agencies regularly assert the “Chevron deference” in defending their rules in court, including areas such as environmental regulations, workplace standards, consumer protections and more.

“If these questions came up in court, under the current Supreme Court precedent, courts are supposed to ‘give deference’ to an agency’s interpretation of the statutes it operates under, with the idea being it is the real ‘expert.’ So while a challenger could successfully argue that its interpretation of a statue was correct and the agency’s was wrong, it is a big, uphill battle. If the Supreme Court overturns that precedent, that hill could be a lot easier to climb,” explained Ivan Wasserman, Managing Partner of Amin Talati Wasserman.

Loper Bright Enterprises v. Raimondo

Loper Bright Enterprises v. Raimondo​ is a case that could put an end to the Chevron Deference. The case is part of a long-running fight between commercial fishing groups and the federal government over who pays for data collection and regulatory compliance. It stems from a lawsuit by a group of fishermen who want to stop the feds from making them pay for the workers.

Lead plaintiff Loper Bright Enterprises of New Jersey and other fishing groups have said federal rules unfairly require them to pay hundreds of dollars per day to contractors. Lower courts have ruled against them.

“What does it mean?”​

Wasserman said overturning this long standing precedent may not have an immediate impact on the dietary supplement industry, but it could have a very significant impact going forward.

“Like most federal legislation, the Food, Drug and Cosmetic Act is often not a model of clarity, and its provisions can be interpreted in different ways. With respect to DSHEA in particular, it is often impossible to determine what Congress meant words and provisions to mean, because, unlike many other laws, it has no official ‘legislative history,’ which are records of the legislative process that can be used to determine legislative intent. Under DSHEA, what does “dietary substance for use by man” mean to determine if something is a ‘dietary ingredient?’ What does ‘marketed’ in the US mean for the purposes of being an old or new dietary ingredient? Importantly and timely for ingredients like CBD, NAC, and NMN, that FDA argues are not allowed in supplements because of the ‘exclusionary clause,’ what does ‘substantial clinical investigations have been instituted on the article and their existence made public’ mean? (What even does “article” mean?)” asked Wasserman.

Industry weighs in​

The United Natural Products Alliance commissioned an informal survey asking its members to pick a side.

With respect to Loper Bright Enterprises v. Raimondo​, respondents could pick one of two options:

• “I agree with the plaintiff that there is no rationale for judicial deference to federal agency interpretations of ambiguous statues.”
• “I believe that federal agencies should have the flexibility to interpret ambiguous statutes as part of their administrative powers.”

The vast majority of respondents sided with the plaintiff, with 75% agreeing that there is no rationale for judicial deference to federal agency interpretations of ambiguous statutes.

Just 25% of industry wants to see federal agencies have interpretive authority.

Conservative majority

The court’s conservative majority already has been exercising its authority on federal regulators, including in last June’s decision that limited the Environmental Protection Agency’s ability to regulate greenhouse gas emissions.

At least four of the court’s conservative members have questioned the doctrine, including Justice Clarence Thomas, Justice Samuel Alito, Justice Neil Gorsuch and Justice Brett Kavanaugh.

The court will not hear the case before the fall. The justices recently finished hearing arguments for the term which is expected to conclude in June. They will spend the next two months issuing opinions and then take their summer break.

“Will it be overturned? Time will tell, but of course this Supreme Court has demonstrated that it is willing to overturn long standing precedent,” said Wasserman.