Supreme Court Herring Case Ruling Rocks Regulatory Landscape

Most of us remember the stories we were told as children to encourage us to eat certain foods. There was the claim that eating carrots was good for your eyesight because you never saw a bunny wearing glasses. And some generations were told to eat their spinach so that they would be strong like the fictional comic strip and cartoon character Popeye the Sailor who gains superhuman strength whenever he consumes spinach.

Sometimes even a great story isn’t enough to convince a child to try certain foods. Such was the case for me with one of my dad’s favorite foods, creamed pickled herring. Despite his best stories and encouragement, I couldn’t bring myself to try it. Just the sight of it in the refrigerator made me look away. There was no way that the white, uncooked fish with bits of grey skin was getting anywhere near my mouth!

I hadn’t thought about pickled herring in years until the Supreme Court of the United States (SCOTUS) issued a major ruling this week on a herring fish industry case, setting the stage for future challenges to a wide range of federal agency rules, from healthcare to telecommunications.

A Red Herring 
The Supreme Court ruled on two commercial fishing industry cases, Loper Bright Enterprises v. Raimondo and Relentless Inc. v. Department of Commerce. At their core, these cases involved a dispute over herring fishing and regulatory fees. The federal government requires commercial fishers to pay some of the costs for legally mandated monitors to observe their operations and prevent overfishing. The fisheries argued that they shouldn’t have to pay these fees (up to $700 per day) because the law doesn’t specify who should bear the cost.

In their ruling, SCOTUS overturned the 40-year-old Chevron doctrine, which had required judges to defer to a federal agency’s interpretation of ambiguous laws. Now, federal courts can substitute their judgment for that of the federal agencies’ subject matter experts.

Casting Off Chevron
The SCOTUS ruling in the herring case creates a new landscape not just for federal fishing regulations, but for all federal agency regulations. Think of all the federal agencies that establish regulations to protect consumers regarding medications, food, financial transactions, personal privacy and more Agencies like the Centers for Medicare and Medicaid Services (CMS), FDA, SEC, FTC and even the IRS will be affected by this decision, which allows judges to substitute their personal preferences for the expertise of federal agency experts when deciding regulatory challenges.

What does this mean for healthcare?

The elimination of Chevron puts consumer protections like the Affordable Care Act (ACA) rules, federal health plan and provider transparency regulations, and the “No Surprises Act” protections against out-of-network billing at risk. CMS initiatives such as the new quality rating system for insurers and Medicare drug price negotiations are also in jeopardy. And these are only a small fraction of what is now at risk.

Untangling the Lines
While many existing regulations will now be open to challenges, not all are up for grabs. Chief Justice John Roberts, in the majority opinion, stated that the decision does “not call into question prior cases that relied on the Chevron framework.” However, this leaves many regulatory disputes and future cases to be decided by judicial preference rather than agency expertise. Judges now have greater latitude to reshape laws and potentially hinder the protections they were designed to provide.

Supreme Court Justice Elena Kagan, in her dissent, highlighted this concern: “In one fell swoop, the majority today gives itself exclusive power over every open issue—no matter how expertise-driven or policy-laden—involving the meaning of regulatory law.” She argued that the ruling replaces a principle of “judicial humility” with one of “judicial hubris.”

For more details on the overturning of Chevron deference and other significant Supreme Court healthcare decisions issued this week, check out Tackling the Decisions.

Happy reading,

Enjoy the weekend!

Best,
Suzanne
Suzanne Daniels, Ph.D.
AEPC President
P.O. Box 1416
Birmingham, MI 48012
Office: (248) 792-2187
Email: [email protected]