Supreme Court

Three cases before the US Supreme Court this term could have significant repercussions for the long-term care sector, including how much authority federal agencies have to create and enforce regulations that go beyond the intention of Congress. 

Justices heard arguments Tuesday on a case challenging the existence and authority of the Consumer Finance Protection Bureau, which has recently focused its attention on what it perceived as nursing homes’ strong-armed billing and collection practices The agency, which was created in 2011, increased its attention on the sector after a media investigation in 2022 exposed some facilities’ practice of securing from patients’ family and friends and then going after them to collect debts. 

Mark Reagan, managing shareholder of Hooper, Lundy & Bookman, told McKnight’s Long-Term Care News on Tuesday, that the case — CFPB v. Cmty. Fin. Servs. Ass’n of America, Ltd. —  highlights the lines between Congress and the regulatory state. But, he said it’s second in significance to another case that holds the potential to radically alter the regulatory authority of federal agencies. 

“The Big Fish case has the real potential for the Supreme Court to draw clear lines around the circumstances where Congress has clearly spoken, where it has remained silent and the significance of that silence as applied to regulatory power,” Reagan said.  

Binding arbitration implications

The “Big Fish” case is likely the most closely watched lawsuit in this term, observers say. Although the Court has not yet scheduled oral arguments, the announcement early this year that it would review the case sent shock waves through legal and business communities as well as the regulatory agencies. 

The case — Loper Bright Enterprises v. Raimondo — centers around a herring fishing company’s challenge of a requirement from the National Marine Fisheries Service to allow federal observers onboard and to compensate the observers for their time. The company, Loper Bright Enterprises, said the order cuts into their profits and is outside the regulatory authority of the fisheries service. 

For years, judicial review of regulatory matters had been guided by what’s called the Chevron doctrine, which has given significant deference to federal agencies in how they conduct regulatory oversight. Regulated entities have long chafed at that, claiming time and again that agencies act outside congressional intent even If Congress did not provide explicit instructions as to how agencies should function. The “doctrine” was the result of a decision in a 1984 case involving oil and gas giant Chevron in which the Supreme Court ruled that agencies must be able to interpret their own authority.

“In the many years post-Chevron, the regulatory state has grown so immense and so powerful that our Constitutional separation of powers appears out of balance,” Reagan said. “This case may harken that it’s time for some adjustment to the status quo. By granting review, the Supreme Court is looking to sort out the seemingly unlimited power of the regulatory state and its power to define its own authority with limited review and oversight. The case has ‘game-changer’ written all over it and has been a long-time coming.” 

The AARP Foundation, in a detailed preview of the cases that will impact older Americans, noted that the Chevron doctrine was used to affirm a rulemaking from the Department of Health and Human Services to protect residents in long-term care facilities from pre-dispute binding arbitration agreements as a condition for admission. 

“Courts have long grappled with how to apply the Chevron doctrine, in recent years chipping away at the degree of deference given to agency interpretations,” Allie Horwitz, an attorney with the AARP Foundation wrote. “Often, courts have applied Chevron in a manner enabling agencies to more expansively fulfill their mission to protect the rights of older adults. Regardless of the outcome of Loper, whether Chevron is strengthened, weakened, or done away with entirely, this decision will affect the lives of older adults.”

ADA testers test

The third case of interest to the long-term care sector involves individuals who act in a non-official capacity as “testers” of the Americans with Disabilities Act. The plaintiff in the case — Acheson Hotels, LLC v. Laufer — sued a hotel for not having information about accessible rooms or giving an option to book such a room at checkout for online customers. A lower court ruled that since Deborah Laufer, who has various mobility and visual impairments, never intended to stay at the hotel, she did not have legal standing to claim she suffered harm. That ruling was reversed on appeal. The Supreme Court was scheduled to hear arguments Wednesday, despite Laufer attempting to withdraw her complaint. 

In 1982, the Supreme Court upheld the validity of testers but the case on which that ruling stood involved the Fair Housing Act. AARP, in its preview document, noted that, “The United States has taken the position that [the 1982 case] remains good law, but that the ADA is not as explicit as the Fair Housing Act in recognizing the type of informational harm Ms. Laufer alleges.”

Still, the association said the relationship between aging adults and disabilities makes the case relevant. 

“Older adults are especially likely to have disabilities, with more than 30% of adults over age 65, as well as more than 50% of those over age 75, currently having at least one disability,” AARP Foundation attorney Sam Gerleman wrote in the preview. “As the U.S. population continues to age, disabilities will only become more prevalent.”

Reagan, though, had harsh words for testers and said the case could help the long-term care sector avoid expensive legal costs.

“Professional plaintiffs who seek to manufacture ADA litigation without tangible injury or harm represent threats to businesses across the nation, including nursing facilities,” Reagan said. “The Supreme Court will decide whether these website stalkers associated with ADA claims have standing to continue their shakedown of organizations within and outside healthcare. 

“This will come down to the Court’s reading of the language of the statute,” he added. “It presents the opportunity for the sector to avoid incurring legal expenditures that serve to deplete the ability of nursing facilities to support high quality care.”