Notice & Comment

D.C. Circuit Review – Reviewed: End-of-Summer Opinion Surge

As recounted already, the August opinion rush is in full swing at the D.C. Circuit. The Court issued 17 opinions the week of August 17 (including one opinion re-issued in a public version). Roughly eleven opinions could be described as related to admin law, but given the sheer volume, I’m excluding some cases on jurisdictional/ancillary issues (mootness, jurisdiction over the Copyright Royalty Board, standing, and attorney’s fees following an NTSB proceeding). Below are necessarily quick recaps of the remaining seven admin law cases.

We’ll start with health-care-related cases, all of which relate to prescription drugs and make up the largest share of the admin law opinions for the week:

  • In Teva Pharmaceuticals USA, Inc. v. Kennedy, No. 25-5425, the D.C. Circuit addressed Medicare’s Drug Price Negotiation Program, under which the Centers for Medicare & Medicaid Services (CMS) identifies certain drugs that generate the highest Medicare spending and negotiates their prices. The Court first held that a statutory prohibition on judicial review of the selection of drugs for negotiation “covers CMS’s drug-specific determinations, not the generally applicable legal standards that govern them.” On the merits, the Court upheld CMS’s guidelines governing when different versions of a drug qualify as a single drug for purposes of selection for negotiation, rejecting Teva’s statutory and due process claims. The Court did not rule on the merits of one of Teva’s claims, however, challenging CMS guidance governing when a generic is “marketed,” such that the brand-name analogue is no longer eligible for negotiation. The Court sent that claim back to the district court after reversing the district court’s holding that the claim was prudentially unripe.
  • Servier Pharmaceuticals LLC v. Kennedy, No. 25-5054, addressed a different Medicare program intended to bring down the cost of prescription drugs, the Medicare Manufacturer Discount Program. The question presented was whether CMS erred in finding Servier did not qualify as a “specified small manufacturer,” a status that would have allowed Servier to phase in the discounts over a longer timeframe and for all part D patients. The Court rejected Servier’s claims as contrary to the statutory text and held that CMS did not arbitrarily rely on certain manufacturer codes in determining which manufacturers qualified.
  • Vanda Pharmaceuticals, Inc. v. FDA, No. 25-5041, relates to the FDA’s approval of a new generic drug. The FDA can approve a generic under the Hatch-Waxman Act if, among other things, it has the same labeling as approved for the brand-name drug except for changes required because the generic is produced by a different manufacturer. The label of a brand-name drug (Hetlioz) includes the brand name and dosage in Braille. The FDA approved a generic version with a label that did not contain any Braille, arguing that the different-manufacturer exception permits the generic manufacturer to change parts of the label that were voluntarily added by the brand-name manufacturer (like Braille) that do not jeopardize safety or efficacy. The D.C. Circuit held the FDA’s interpretation was too broad, and that the statute permits only label changes required by the change in manufacturers.

Rounding out the set, we have a grab bag of other issues:

  • In Chamber of Commerce v. EPA, No. 24-1193, the D.C. Circuit rejected multiple petitions for review challenging the EPA’s designation of PFOA (perfluorooctanoic acid) and PFOS (perfluorooctanesulfonic acid)—commonly known as “forever chemicals”—as “hazardous substances” under the Comprehensive Environmental Response, Compensation, and Liability Act. As summarized by the Court, petitioners advanced three claims: “(1) EPA misinterpreted the term “may present substantial danger” in CERCLA’s definition of a hazardous substance; (2) EPA’s cost-benefit analysis provided insufficient notice to the parties; and (3) EPA’s cost-benefit analysis and decision to regulate in the face of uncertainty were arbitrary and capricious.” The Court rejected all three. Of particular note for admin law aficionados more broadly is the Court’s extended discussion of the doctrine requiring an agency to provide notice of the critical information it relies upon (which the Court held EPA satisfied here).
  • Hesai Technology Co. v. U.S. Department of Defense, No. 25-5256, addressed a law requiring the Department annually to “publish a list identifying all ‘Chinese military companies’ operating in the United States.” The D.C. Circuit held that the Department violated Hesai’s right to due process when it designated Hesai as a Chinese military company without providing “notice of the unclassified materials on which [the Department] intended to rely and a meaningful opportunity to respond before finalizing the designation.”
  • In Adsync Technologies, Inc. v. FAA, No. 25-1148, the D.C. Circuit issued a public version of an opinion that had been previously issued under seal. The case involves a company’s challenge to the FAA’s decision to (again) award a contract to its competitor. All we knew before was that the company lost. Now we know why. And if I had to sum it up in three words, they would be “standard of review.” All of the company’s issues were subject to arbitrary and capricious/substantial evidence standards of review. The Court held the agency acted reasonably and supported its decisions with substantial evidence.
  • In Preferred Building Services, Inc. v. NLRB, No. 24-1384, the D.C. Circuit considered a case arising out of two employers firing employees who had engaged in picketing. The employers had argued that the picketing was unlawful secondary picketing (i.e., attempting to coerce a neutral third party into ceasing to do business with the employer). The Board initially agreed with the employers, but the case was remanded by the Ninth Circuit after the union petitioned for review. On remand, the Board changed course and found the picketing was lawful (and therefore, the employers engaged in unfair labor practices). The D.C. Circuit upheld the Board’s post-remand decision, holding that the Board had not impermissibly refused to consider the employers’ evidence and the Board’s findings were supported by substantial evidence. The Court declined to consider the employers’ objections to the remedy because those objections had not been presented to the Board.