Deregulation Über Alles

It looks like the high court's conservative majority will sharply limit federal agencies' ability to determine health, safety and environmental regulations

The conservative majority on the Supreme Court showed its cards during oral arguments on Wednesday. They plan to eviscerate what’s left of the Chevron doctrine, a 1984 high court decision that says the courts should defer to regulators’ expertise when enforcing laws protecting workers, consumers, patients and the environment, which are often written in general terms.

The main case heard by the court — Loper Bright Enterprises v. Raimondo — was brought by a group of Atlantic herring fishermen upset about having to pay high fees to support a fisheries management program. You can get a sense of the stakes in the case from who gave the fishermen legal support: the Koch brothers-funded Cause of Action Institution and New Civil Liberties Alliance, both of which are dedicated to preventing any regulation that curbs the power of nation’s biggest corporations, especially those that peddle fossil fuels.

Put on the docket last fall, the case drew friend-of-the-court briefs from more than 60 consumer, environmental and public health groups. It was defended by the nation’s solicitor general Elizabeth Prelogar. As reporter Amy Howe noted on the SCOTUSblog: “The Biden administration contends that overturning the existing doctrine would be a ‘convulsive shock to the legal system.’”

When it comes to the nation’s health care system, just how convulsive was covered in a single brief filed by 18 health-oriented organizations, ranging from the American Cancer Society and the American Public Health Association to Physicians for Social Responsibility and the Campaign for Tobacco-Free Kids. A ruling in favor of the plaintiffs would call into question numerous decisions made by the Centers for Medicare and Medicaid Services about how government-funded insurance programs (primarily Medicare, Medicaid, the Children’s Health Insurance Program and the Obamacare exchanges) should be run, the brief noted.

Over many decades, scores of payment decisions made by CMS (doctor’s pay, hospital pay, insurance regulations, among many others) triggered lawsuits by aggrieved parties claiming the agency had been unfair in its decisions. In every case, the lower courts relied on the Chevron doctrine to rule in favor of the agency and its expertise-based right to make those decisions. The brief outlined four such decisions to make its case.

“The circuit court opinions profiled in this brief comprise but a sliver of the many appellate and district court decisions that have upheld agency rules pursuant to Chevron’s analytical framework,” the brief said. “For every one of those disputed rules that remains in place, overturning Chevron would open the door for the losing parties to relitigate the issue.

“Indeed, given the amount of money often at stake in challenges to Medicare and Medicaid rules, a post-Chevron litigation tsunami would seem all but guaranteed,” the brief continued. “The resulting uncertainty would be extraordinarily destabilizing, not just to the Medicare and Medicaid programs but also – given the size of these programs – to the operational and financial stability of the country’s health care system as a whole.”

Will providers and insurers go judge hunting?

Here’s just one of the four examples given in the brief. In 2006 in the case of Bellevue Hospital Center v. Leavitt, a circuit court applied the Chevron doctrine to uphold CMS’ right to define “a ‘geographic area’ under the Medicare statute for purposes of adjusting payment rates to reflect differences in wage levels between hospitals located in different ‘geographic areas.’”

If Chevron were overturned, hospitals in the future might go hunting for a friendly judge who would locate them in an adjacent or more narrowly defined geographic area that generated higher rates. Bellevue, located in New York City but paid based on the broader metropolitan area, might go into court to argue for reimbursement for all the years it was ostensibly underpaid.

“It is vastly preferable for such authority to lie with a centralized agency, staffed with subject matter experts and accountable to the President, Congress, and the courts,” the brief said, “rather than expect that Congress or the courts would be willing or able to assume such a role.”

Of course, those seeking to sink the Chevron doctrine ignore those complexities. Their argument, aimed at the howling libertarian mob, suggests unelected bureaucrats are usurping the role of Congress. But could Congress, in 1970 when the Clean Air Act passed, have known that carbon dioxide would one day be considered a dangerous air pollutant, much less spelled out its regulation in the statute?

The corporate-backed plaintiff lawyers also ignore the fact that regulatory agencies’ behavior has long been controlled by the 1946 Administrative Procedures Act, which set up a strict notice-and-comment rulemaking process for federal agencies, which allows for broad public participation. In 1976, Congress also passed the Federal Advisory Committee Act, which established rules governing conflicts of interest on the committees that agencies rely on to set scientific standards for regulatory actions.

I spent five years in the first decade of this century monitoring such conflicts of interest while working for the Center for Science in the Public Interest. The process was far from immune from corporate lobbying (and lobbying by public interest groups like CSPI).

More often than not, industry-funded scientists were allowed onto committees by agency officials who claimed their “expertise” was needed. And agency officials — those hated bureaucrats — far too often caved into industry lobbying, which downplayed the risks associated with new drugs, chemicals in the environment and hazardous working conditions.

But I’d take that process any day over one that put those decisions into the hands of highly politicized judges who are more enamored of their own pro-industry preferences than the nation’s health and safety.