On June 28, 2023, the Supreme Court issued a ruling in Loper Bright Enterprises v. Raimondo that overturned the long-standing Chevron U.S.A. Inc. v. Nat. Res. Def. Council, Inc. deference to administrative agencies in interpreting ambiguous statutes. The court’s 114-page ruling stated that it is the courts, not federal agencies, that are best positioned to interpret ambiguity in the statute, even in areas where the agencies are the experts.
Chief Justice Roberts, writing for the majority, criticized the Chevron deference as “unworkable” and overruled it. Moving forward, the Administrative Procedure Act (APA) requires courts to exercise their independent judgment in deciding whether an agency has acted within its statutory authority, and courts may not defer to an agency interpretation of the law simply because a statute is ambiguous.
The Supreme Court upheld another standard known as Skidmore, which grants a measure of deference to an agency’s interpretation of a statute based on the thoroughness of its consideration, the validity of its reasoning, consistency with earlier and later pronouncements, and other factors that give it power to persuade.
The ruling has implications for industries regulated by federal agencies, such as the dietary supplement industry, which is regulated by the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC). Loren Israelsen, one of the key architects of the Dietary Supplement Health & Education Act (DSHEA), stated that the decision would not eliminate the FDA’s expertise, but it would require the Agency to leave certain matters to other dialogue.
Industry experts are still unsure of how the industry could challenge the FDA on specific topics, and the FDA’s move towards guidances for many dietary supplement issues may complicate matters. However, the decision is generally seen as a net-net good thing for the dietary supplements industry.
Specifically, the Chevron deference only applied to the interpretations of federal agencies to statutory ambiguity, and not to technical and scientific opinions. The innovation provision in DSHEA, which allows the industry to sell ingredients that weren’t yet recognized as traditional vitamins, minerals, herbs, or food, is not ambiguous, but the FDA has misread it in the past. The Drug Preclusion provision, which deals with the race to market, is another issue with a big target on its back.
The Loper Bright decision may also open up an opportunity for the industry to challenge what is perceived as FTC overreach on claims. Bass, another key architect of DSHEA, believes that there is an opportunity to explore litigation challenging the FTC’s interpretation of substantiation for claims. Overall, the decision is seen as favorable for the dietary supplement industry as it provides opportunities to strengthen innovation and require more certitude for the industry.
