On June 28, 2024, the U.S. Supreme Court issued its decision on the two enjoined cases, Loper Bright Enterprises v Raimondo and Relentless, Inc. v Department of Commerce (hereafter, referenced as “Loper Bright”), ending Chevron deference, a longstanding cornerstone of administrative law. Under Chevron, if courts determined that Congress had left ambiguous in legislation an issue related to administrative authority, then they would be obligated to defer to the expert agency’s interpretation of the law. However, in Loper Bright, the majority ruled that “agencies have no special competence in solving statutory ambiguities” but that “Courts do” as justification for overruling Chevron. In asserting their judicial authority, the Court has not only undermined the expertise and technical capability of federal agencies, but has also threatened the ability of agencies to issue regulations meant to protect the public. Nevertheless, in response to Chevron being overturned, opportunities exist to empower federal agencies such as the U.S. Food and Drug Administration to continue to develop regulations based on scientific evidence and responsive to public need.

Origins and Use of Chevron Deference

In 1984, the Supreme Court established Chevron deference through a unanimous decision in the case of Chevron USA Inc v Natural Resources Defense Council. The Court had been tasked to resolve whether the Environmental Protection Agency should be given deference for their interpretation of an unclear provision of the Clean Air Act affecting sources subject to air pollution standards. In issuing this landmark decision, the Supreme Court recognized that Congress is often not able to write thorough and precise legislation that can anticipate the ever-evolving landscape of scientific and technical matters that agencies are expected to regulate. Chevron deference instead acknowledged the expertise and experience of agencies in being able to appropriately interpret legislation and issue regulations to resolve public health, environmental, and other regulatory challenges. 

Over the past decade, the Supreme Court has increasingly shifted away from applying Chevron in its decisions around administrative agency interpretation. Nevertheless, even in recent years, lower courts including the courts of appeals continue to apply Chevron deference at similar rates to that earlier years. In nearly 85% of cases around agency interpretation in 2020 and 2021, lower courts have applied Chevron in making their decisions. Moreover, when utilizing this deference framework, courts were more likely to rule in favor of agency interpretation. 

One study examining the application of Chevron and subsequent decisions found that the agency involved in the statutory interpretation as well as the subject matter were corelated with case outcomes. Among the leading subject matters where courts more often deferred to agency interpretation were telecommunications, Indian affairs, federal government, pensions, education, health and safety, and entitlement programs. Win rates for cases around agency interpretation where Chevron was applied were highest among the Interstate Commerce Commission (ICC) (now referred to as the Surface Transportation Board (STB)), Federal Communications Commission (FCC), Treasury Department, National Labor Relations Bureau (NLRB), Commerce Department, Defense Department/Armed Services, and FDA.

Use of Chevron Deference in Cases Involving FDA

Regulated industries have frequently raised legal challenges against regulations published by FDA where the agency details their technical interpretation of the Food, Drug, and Cosmetic Act (FDCA) and defines the scope of their regulatory authority. FDA has a uniquely broad mandate in protecting the public’s health through the regulation of medical and consumer products including drugs, vaccines, medical devices, tobacco, food, cosmetics, and supplements, among others. As such, the bill includes several provisions thought by the courts to be ambiguous. Under Chevron, courts are tasked to determine whether such interpretation of ambiguous statute by a federal agency is reasonable. When FDA issues these statutory interpretations through regulations focused on the authorization and surveillance of medical products and other consumer goods, the agency relies on a bevy of wide-ranging technical experts including clinicians, scientists, trialists, biostatisticians, engineers, and others. This complexity in regulatory decision-making has often led the courts to defer to the FDA. Fundamental questions around FDA’s interpretation of their regulatory authority, as raised by Justice Kagan during oral arguments as well as in her dissent, have previously been adjudicated in the Court. In such cases, the majority found that FDA’s interpretations of the definition of a drug versus a dietary supplement or whether an amino acid polymer qualifies as a biological product was in fact, reasonable. Since 2000, in cases related to FDA’s administrative authority where Chevron has been referenced, courts have more often deferred to the agency, recognizing its scientific and technical expertise.

Implications of Overturning Chevron on FDA

The majority decision in Loper Bright has shifted statutory interpretation around technical and scientific matters away from federal agency experts to court judges, which raises several concerns around the ability of agencies like the FDA to issue regulations in a timely manner.  More legal challenges as well as the threat of increased litigation could have several undue effects on the agency’s ability to regulate novel medical products as well as other consumer goods with profound impacts on patients, clinicians, and regulated industries. These include:

  • Allowing unregulated products to reach patients: Successful legal challenges that curb FDA’s regulatory authority of particular products could lead to patients being exposed to unregulated products of unknown efficacy and safety. Clinicians will also be further burdened in making recommendations about such unregulated products to patients without the availability of robust evidence typically required and considered by experts within the FDA ahead of market authorization. Instead, this will only shift a greater burden of uncertainty around these products onto patients and clinicians in identifying available evidence of safe and effective use.
  • Preventing timely access to novel products: Conversely, legal challenges to FDA regulations as well as potential appeals to such challenges and differing decisions on similar matters across varied lower courts could introduce delays to the agency’s ability to authorize such products onto the market. This could, in turn, delay timely patient access to novel products as the courts preside over FDA’s scientific decision-making and ability to set regulatory standards for market authorization.
  • Discouraging investment in innovation: FDA regulations detailing approval standards and timelines have provided regulatory industries with clear expectations for market authorization and timelines for when product sponsors would begin to recoup their return on investment. Legal challenges to such regulations as well as confusion stemming from discordant decisions across lower courts in lieu of reliance on technical experts within federal agencies in determining approval standards and timelines could discourage private industry from investing in innovation. This lack of private sector investment may also delay or worse, bar access to novel health technologies for patients.
  • Delaying or preventing the issuance of regulations: Due to Chevron deference being overturned, federal agencies will likely need to conduct additional judicial review of regulations ahead of public release as well as further examination of the litigation landscape to determine whether issuing such regulations would incur legal challenges. This could contribute to further delays in agencies issuing regulations and could have detrimental impacts should regulations need to be issued in a timely manner to address public health emergencies or other crises such as drug or device shortages. Federal agencies may also hesitate to issue regulations without clear Congressional authorization in fear of legal challenges, despite scientific justification or public health need. For example, FDA recently reversed a 2022 marketing ban on JUUL e-cigarettes, partially due to new legal challenges. This decision highlights a potential risk-averse approach the agency might take to issuing regulations in response to lawsuits.
  • Causing changes in agency composition: The lack of Chevron deference will require agencies to further scrutinize potential and existing regulations to anticipate legal challenges and respond to litigation raised against the agency, putting agencies in a defensive posture. This additional judicial review and examination of the legal landscape may necessitate additional legal expertise, thus shifting the composition of scientific agencies like FDA away from technical experts engaged in regulatory decision-making to lawyers and legal scholars. Such a tradeoff may cause agencies such as the FDA to not be as equipped to conduct their usual regulatory functions or address emergent issues, limiting their ability to respond to public health need or regulate novel health technologies.

Potential Implications for FDA Regulation of Artificial Intelligence

To date, FDA has largely regulated artificial intelligence in the context of medical devices, utilizing the existing regulatory framework for premarket review. However, FDA has acknowledged that “traditional paradigm of medical device regulation was not designed for adaptive artificial intelligence and machine learning technologies.” Thus, the agency has largely utilized a risk-based approach to determine whether devices utilizing artificial intelligence and machine learning software require premarket review. Since 2019, FDA has published several reports and guidance documents around a potential regulatory framework for review of these products that allows the agency to keep pace of rapid advancements of these technologies and ensures oversight before and after market authorization that protects patients and public health.

However, the fall of Chevron deference will likely limit FDA’s ability to issue binding regulations for this quickly evolving area and be further curbed by ongoing legal challenges. Following a formal public notice and comment period, FDA recently finalized a rule to regulate lab-developed tests (LDTs), which are in vitro diagnostic tests “intended for clinical use and that [are] designed, manufactured, and use within a single laboratory.” In this new rule, FDA provides a lengthy defense for classifying LDTs as medical devices and notes that although the agency had not previously regulated such tests, that due to concerns around risks of LDTs to patients, it was necessary to exert its existing enforcement authority for these tests. However, shortly after the final regulation was released, the American Clinical Laboratory Association and one of the trade association’s members filed a lawsuit challenging the regulation, arguing that medical devices can only be considered “manufactured products” or physical items. In their suit, they argue that FDA in their statutory interpretation of what a “medical device” is, unreasonably expanded the definition of a medical device to also include LDTs, which they contend are not physical items.

Should a judge agree with the trade association that FDA can only consider medical devices to be “manufactured products”, then this may likely preclude the agency’s ability to issue regulations around artificial intelligence and machine learning technologies without explicit Congressional authorization. Congress would have to actively defer authority to the agency to allow them to adaptively regulate this area or pass specific legislation that details the FDA’s regulatory scope. However, private companies in this area and their influence on members of Congress may encumber such efforts, preventing FDA from regulating these new technologies. 

Current Challenges and Opportunities to Re-establish Federal Agency Expertise

Members of Congress who favor limiting federal agency authority have already signaled increased oversight over federal agency regulation. Shortly following the Supreme Court decision, Ranking Member Bill Cassidy (R-LA) of the Senate Health, Energy, Labor, and Pensions (HELP) Committee sent a letter to the FDA asking the agency how it will, in response to the Loper Bright ruling, “will adapt to and faithfully implement both the letter and spirit of this decision.” He also introduced the Upholding Standards of Accountability (USA) Act that would require agencies to undergo additional scrutiny during the rulemaking process including testifying before Congress before publishing any regulation and responding to Congressional oversight in a more timely, substantive manner. Senator Eric Schmitt (R-MO) has also formed a working group with other Senators that “will regularly meet to discuss how to assess the monumental decision in Loper Bright, how to best limit the unlawful exercise of power by the administrative state, and how the Senate can more effectively legislate on matters that regularly would’ve been left up to agency deference.” The working has sent letters to 50 federal agencies including the FDA to enquire how they will adhere to the Loper Bright ruling in their regulatory decision-making. 

Conversely, other members of Congress have introduced legislation that would codify the Chevron doctrine. Introduced initially in 2021 by Representative Pramila Jayapal (D-WA) and then again in 2024, by Senator Elizabeth Warren (D-MA) and other colleagues, the Stop Corporate Capture Act would allow federal agencies to issue regulations based on reasonable statutory interpretations as Chevron had permitted. Additionally, the legislation includes provisions that would expand public participation in rulemaking processes, make transparent any conflicts of interests of research and responses that inform federal regulation, and establish enforcement procedures to penalize the submission of misinformation during the rulemaking process. 

Besides legislation that would effectively reinstate Chevron deference, Congress can also ensure that any future bills include language that grants federal agencies authority to issue regulations that define the scope of their regulatory authority. Moreover, in response to ongoing legal challenges, members of Congress can also participate in the judicial process by submitting amicus briefs to make clear their deference to the federal agencies in their interpretation of the statute. Those who may have been present in Congress when particular laws were passed could also relay the legislative history of such bills to provide judges additional context of the legislative intent behind certain provisions that may be purposefully ambiguous to allow agencies the ability to interpret the statute and issue regulations to specify the law’s implementation. Finally, federal agencies should continue to issue regulations based on reasonable statutory interpretations, rooted within science, and responsive to public need despite fear of legal challenges. To bolster support for these regulations, federal agencies should proactively engage the public as well as the broader scientific community in their rationale for issuing regulations. Should regulations face legal challenges, these constituencies can also provide their informed, expert perspectives in defense of the agency through amicus briefs to provide judges ruling on such matters further insight into the impacts of such regulations as well as additional technical expertise.