Loper Bright and the Potential Impact on False Claims Act Litigation
Loper Bright and “Chevron Deference”
Over the last 40 years, federal courts have deferred to “reasonable” agency interpretations of ambiguous statutes — even when the courts disagree with those interpretations — under the Supreme Court’s decision in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). In June 2024, however, the Supreme Court overruled Chevron and held that courts may no longer defer to an agency’s statutory interpretation simply because the interpretation appears to be reasonable. In Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024), the Court ruled that judges, not administrative agencies, must decide questions of law. Accordingly, federal courts must now reject agency positions that conflict with the courts’ own independent interpretation of relevant statutes.
Although the abandonment of “Chevron deference” likely will have major effects in a wide range of areas, it is too soon to tell what those effects will be; they will be determined on a case-by-case basis. In particular, it is unclear to what extent Loper Bright will have an impact on litigation under the federal False Claims Act (“FCA”), either in enforcement actions brought by the government itself or in qui tam actions brought by private whistleblowers on the government’s behalf.
The Potential Impact on FCA Litigation
Federal agencies interpret and enforce the statutes under which they operate. Typically, they also promulgate and enforce detailed regulations that implement those statutes. In FCA cases brought by the government or by a private whistleblower, the plaintiff may allege that the defendant violated a relevant statute, a regulation promulgated under the statute, or both. In such cases, the defendant may now argue that the statutory provision in issue is ambiguous, and that the agency’s interpretation of the statute or its implementing regulations are improper and therefore unenforceable under Loper Bright.
Defendants undoubtedly will press such arguments, but it is important to recognize Loper Bright’s limitations. In particular, the decision addresses only an agency’s legal interpretations, not its factual determinations. Furthermore, a doctrine known as “Skidmore deference,” was left intact by Loper Bright. In Skidmore v. Swift, 323 U.S. 134 (1944), the Supreme Court held that an agency’s interpretive judgments as to particular issues are entitled to some degree of deference in view of several factors, including the agency’s “specialized” knowledge, the “thoroughness” of its consideration of the issue, “the validity of its reasoning,” and its consistency with the agency’s other decisions. Id. at 139-40. Skidmore deference is weaker and more indeterminate than Chevron deference, but Skidmore’s references to “specialized” knowledge and administrative consistency should provide support for a wide range of agency decisions.
Moreover, the Supreme Court in Loper Bright held that its ruling will not operate retroactively. The Court stated: “we do not call into question prior cases that relied on the Chevron framework.” 144 S. Ct. at 2273. Precedents that uphold an agency’s statutory interpretations or implementing regulations are still subject to stare decisis, and courts will require “special justification” to overrule those precedents beyond “[m]ere reliance on Chevron.” Id. Consequently, defendants face an uphill battle in attempting to apply Loper Bright to agency positions that have survived previous judicial review.