On June 28, the Supreme Court issued a decision in Loper Bright Enterprises v. Raimondo, which overturned the legal doctrine known as Chevron Deference. Since 1984, it required Courts to give broad deference to a government agency’s interpretation of ambiguous Federal law. Under Loper Bright, courts must now instead “exercise independent judgment … [and] not defer to an agency interpretation of the law simply because the statue is ambiguous.”
It’s shaken up the industry. In a July 9 AdvaMed webinar, Selina P. Coleman, partner at the Life Sciences Health Industry Group, called it “a landmark supreme court decision, which is ushering in a seismic shift in the balance of power between agencies and courts.”
This decision could have a wide-ranging impact on many aspects of business in America, including medical devices and healthcare technology management. It might also elevate the importance of standards, making them more vital in the lawmaking process, and affecting the role of the work standards developers like AAMI regularly accomplish.
The potential new role of standards
To start, overturning Chevron deference does not change the function of regulatory agencies, nor does it limit Congress’s power. Agencies like EPA and FDA retain the rulemaking authority granted to them by congress. Once established and made known, agency rules still have the force of law.
Now, though, courts can exercise more discretion in reviewing any challenges to agency interpretations of law, reducing the likelihood that an agency issuing a new rule will go unchallenged.
The role of voluntary consensus standards in supporting medical device regulation may not lessen in this new environment. “When FDA recognizes a standard, they’re saying they will accept conformance with that standard as evidence to support a manufacturer’s claim of compliance with related regulations. But meeting the standard is not required. You don’t have to use the standard,” explained Joe Lewelling, vice president of industry at AAMI. “Right now, it is not clear that Loper Bright would hinder FDA’s current practice.”
In fact, standards might become more important, he said.
“They will allow the FDA, in partnership with the medical device stakeholders, to declare what is necessary for safety and effectiveness without putting those specific details in the statutory requirement as well,” he explains.
Diane Wurzburger, vice-chair of industry for AAMI’s Board of Directors, is the executive of regulatory affairs, developed markets, and global strategic policy for GE HealthCare. She agrees that standards will continue to be very important as they bring “an aspect of objectivity.”
“Many standards set criteria that are black and white,” she told AAMI News. “Very simplified, it’s ‘yes’ or ‘no’ – it’s either going to meet the spec or it doesn’t meet the spec” – which is a level of clarity desired by regulators and companies alike.
Ending Chevron deference allows different interpretations of a regulation and “that’s where there may be an opportunity for a work product of AAMI [or another standard developer] to help clarify what an interpretation means or is intended to be,” she added.
How will it make a difference? To be determined
What will actually happen is up in the air, in part because the ruling is so recent, and it did not wipe any current regulations off the books. The decision in Loper Bright Enterprises v. Raimondo only applies to new or pending litigation, and did not retroactively affect rulings on past challenges to regulation. However, a ruling issued by the Court three days after Loper Bright in Corner Post Inc. v. Board of Governors, found that the six-year statute of limitations to challenge agency rules under the APA was triggered not by the issuance of the regulation but from the date a party suffered injury as a result of the rule. This finding greatly expands the universe of regulations that may be challenged. As such, a new business may challenge an old regulation that was formerly upheld under pro-Chevron framework.
“It could work in several directions, so it’s very complicated and may not have the impact everybody predicts the same way,” said Jeff Gibbs, director at Washington, D.C.-based law firm Hyman, Phelps & McNamara. “We live in a very big country with a lot of legal issues and a lot of legal systems. It’s not a simple decision that’s just going to have a clearly visible outcome.”
Patricia Griffin is general counsel for the American National Standards Institute (ANSI), which coordinates the U.S. voluntary consensus standardization system. She told AAMI News that “there are many unknowns regarding Loper, including whether the decision will have any impact on the federal government’s reliance on voluntary consensus standards, what kind of deference will remain now that Chevron is gone, how many new challenges will be permitted under Corner Post (issued after Loper), how congress and the judiciary will respond to the challenges brought about by these landmark decisions, whether voluntary consensus standards will become more important in the regulatory/congressional context, or how these cases impact current debates about standards Incorporated By Reference.”
She noted that amicus briefs may carry more weight in the future, because these filings may provide more context for judges interpreting statutes.
At the July 9 AdvaMed seminar, David A. Bender, senior associate at the Life Sciences Health Industry Group, presented an analysis of past challenges to FDA, CMS and EPA. He found that when circuit courts applied Chevron deference in their ruling, agencies won over 93% of cases. Agencies only won 38.5% of cases when courts reviewed agency action de novo. Since 2000, FDA won in every appellate opinion that applied Chevron deference.
With Chevron deference ended, Coleman posits that there will be “more emphasis on technical legislation drafting to the extent that clarity can be achieved through Congress and stakeholder support.” Industry stakeholders, including standards developers, may also be called on to collaborate with lawmakers to help work clarified, specific language into legislative drafting.
“Industry input will become more valuable on the front end before statutes are enacted to try to get things right the first time, which we know can be a tall order,” she said.
Wurzburger expects it to take six months to year to see some clarity.
“Maybe there’s going to be some cases to help us understand of how those decisions are going to be made,” she said. We can’t say “whether some courts will continue to provide deference to the agencies while others will not.”
But the impacts may not be as widespread as if Chevron hadn’t already been weakened by decades of other court rulings, added Lewelling.
“Chevron had been dying the death of 1,000 cuts for some time now … Loper Bright wasn’t the first case restricting it’s impact, but it does appear to put the nail in the coffin of the Chevron deference.”
