Attorney on Law

The Courts Strike Back

Issues of water fluoridation and noncompete agreements continue to undergo legal scrutiny, with no clearcut answers in the offing.

Lance Plunkett, J.D., LL.M.

In a busy season for the judicial branch of government, two major court decisions have changed the playing field on noncompete agreements and on water fluoridation. More such court decisions can now be expected due to the 2024 United States Supreme Court decision in Loper Bright Enterprises v. Raimondo, which overturned the longstanding 1984 Supreme Court precedent of Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc.

The Chevron case created something known as the “Chevron doctrine,” a judicial principle that held that courts should give weight and preference to government agency decisions on and interpretations of otherwise ambiguous laws because government agencies possessed expertise in the subject matter areas of the laws they were entrusted to enforce.

The overruling of the Chevron doctrine leaves it up to the courts to determine the meaning of ambiguous laws. While that may seem superficially logical, it overlooks the reality that Congress frequently passes laws premised on the fact that expert agency input will help shape and implement those laws. Therefore, the laws are frequently not written by Congress in prescriptive fashion with attention to detail but are painted in much broader brushstrokes. For the prescriptive style of codification, one needs to look to Europe and other countries that do not follow the common law system of Great Britain and the United States but use the civil law system. Only one state in the United States utilizes a civil law system—Louisiana—which follows civil law derived from the Napoleonic Code in effect from when France controlled the region. It is not clear that the Louisiana legal system inspires great confidence, although it did for Huey Long.

Questioning Safety of Water Fluoridation

With the end of the Chevron doctrine, the courts have now stepped in to give us decisions that reject Federal Trade Commission (FTC) regulations banning noncompete agreements and reject the United States Environmental Protection Agency (EPA) regulations finding water fluoridation to be safe at a level of 0.7 milligrams per liter (mg/L). Both decisions are of interest to dentistry. Because water fluoridation is of keen clinical interest to dentistry, let us begin with exploring the recent court decision from the United States District Court of the Northern District of California—Food & Water Watch, Inc. v. United States Environmental Protection Agency.

In the Food & Water Watch case, litigation commenced way back in April 2017 that dragged on for over seven years, the court determined that water fluoridation at the EPA-determined optimal recommendation of 0.7 mg/L posed an unreasonable risk of harm to the public and that the EPA must engage in regulatory action to address this risk. The federal Toxic Substances Control Act (TSCA) allows for private citizens to file petitions with the EPA to compel consideration of proper regulation of toxic substances. Food & Water Watch filed such a petition in 2016 with the EPA over fluoride in water systems. The EPA rejected the Food & Water Watch petition on fluoride and the 2017 litigation then commenced challenging that EPA denial.

The court found that fluoridation of water at 0.7 milligrams per liter (“mg/L”)—the level presently considered “optimal” in the United States—poses an unreasonable risk of reduced intelligence quotient (IQ) in children. It should be noted that this finding does not conclude with certainty that fluoridated water is injurious to public health; rather, as required by the TSCA, the court found there is an unreasonable risk of such injury, a risk sufficient to require the EPA to engage with a regulatory response. The court did not dictate precisely what that response must be, but noted the TSCA leaves that decision in the first instance to the EPA. The court added that one thing the EPA cannot do, however, is to ignore the risk found by the court to exist. The EPA has not yet said if it will appeal the decision to the United States Court of Appeals for the Ninth Circuit.

Unreasonable Risk

To succeed in a suit brought under the TSCA, Food & Water Watch had to prove, by a preponderance of the evidence, that a risk of injury to human health is present and that such risk is unreasonable. For a risk to be present, they had to show that some segment of the United States population is exposed to the chemical at issue at levels that either exceed or are too close to the dosage at which the chemical presents a hazard. The reasonableness of the risk is informed by several factors, including the size and susceptibility of impacted populations, severity of the harm at issue, and the frequency and duration of exposure. The court noted that there was little dispute in the case as to whether fluoride poses a hazard to human health. The court also noted that there was ample evidence establishing that a mother’s exposure to fluoride during pregnancy is associated with IQ decrements in her offspring.

Of particular importance to the court was the fact that the United States National Toxicology Program (NTP), the federal agency regarded as experts in toxicity, undertook a systematic review of all available literature near the time of publication that looked at whether fluoride poses cognitive harm, reviewing 72 human epidemiological studies considering this question. The court found that the NTP concluded that fluoride is indeed associated with reduced IQ in children, at least at exposure levels at or above 1.5 mg/L.

In addition, the court found that, notwithstanding inherent difficulties in observing effects at lower exposure levels, scientists have observed a statistically significant association between fluoride and adverse effects in children even at exposure levels less than 1.5 mg/L. The court found that the EPA’s pointing to technicalities at various steps of their risk evaluation to conclude that fluoride does not present an unreasonable risk and the EPA argument that the hazard level and the precise relationship between dosage and response at lower exposure levels was not entirely clear was unpersuasive on the entire risk issue.

The court opinion is 80 pages long, with the bulk of it being analysis of expert testimony and expert research publications on whether fluoride has an adverse effect on the IQ of children. The court concluded that the preponderance of the evidence, including testimony from the EPA’s own experts, was that there was a clear correlation between fluoride and lower IQs in children. The court stated that the scientific literature in the record provided a high level of certainty that a hazard is present; fluoride is associated with reduced IQ. The court noted that while there were uncertainties presented by the underlying data regarding the appropriate point of departure and exposure level to utilize in the EPA risk evaluation, those uncertainties did not undermine the finding of an unreasonable risk—in every scenario utilizing any of the various possible points of departures, exposure levels and metrics, the court found a risk is present in view of the applicable uncertainty factors that applied.

In an exceedingly odd comment, the court stated that water fluoridation had a long history in the United States and had been a source of political discord at times, adding

that controversy over fluoridation of drinking water had even found its way into Hollywood, citing the movie Dr. Strangelove (Columbia Pictures 1964), in which the character Gen. Ripper characterized fluoridation as a threat to our “precious bodily fluids” and “the most monstrously conceived and dangerous Communist plot we’ve ever had to face.”

If this is what the Supreme Court had in mind as the replacement of agency expertise with court analysis when it repealed the Chevron doctrine, court opinions should be much more entertaining from now on.

Noncompete Agreements Still Hold

The repeal of the Chevron doctrine is, of course, the proverbial mixed bag. In the case of noncompete agreements, the result is a happier one than for water fluoridation. The United States District Court for the Northern District of Texas has ruled in Ryan LLC v. Federal Trade Commission that the Federal Trade Commission (FTC) rule banning noncompete agreements that was scheduled to take effect on Sept. 4 exceeds the authority of the FTC to adopt and is enjoined from being enforced nationwide. The FTC has appealed the decision to the United States Court of Appeals for the Fifth Circuit. Nevertheless, the rule banning noncompete agreements will not take effect as scheduled and is enjoined from any enforcement by the FTC at this time pending the decision on the appeal filed by the FTC.

The court in Ryan LLC held that the FTC had exceeded its regulatory authority in promulgating such a sweeping ban on noncompete agreements and that the ban was arbitrary and capricious.

The court concluded the text and the structure of the FTC Act revealed that the FTC lacked substantive rulemaking authority with respect to unfair methods of competition and, when considering the text, the court also concluded the FTC exceeded its statutory authority in promulgating the noncompete rule.

In addition, the court found that the evidentiary record did not support the rule, citing that the FTC relied on only a handful of studies that examined the economic effects of various state policies toward noncompetes. The court noted that the record showed that no state had enacted a noncompete rule as broad as the FTC’s rule. The court found that the FTC’s evidence compared different states’ approaches to enforcing noncompetes based on specific factual situations—completely inapposite to the FTC rule’s imposition of a categorical ban, and that the FTC provided no evidence or reasoned basis for a categorical ban.

Furthermore, the court held that the FTC’s lack of evidence as to why it chose to impose such a sweeping prohibition—one that prohibits entering or enforcing virtually all noncompetes—instead of targeting specific, harmful noncompetes renders the FTC rule arbitrary and capricious. The court found that the FTC rule is based on inconsistent and flawed empirical evidence, fails to consider the positive benefits of noncompete agreements and disregards the substantial body of evidence supporting these agreements. The court noted that the FTC’s alleged “compelling justifications” for its decision to not consider other exceptions or alternatives did not adequately justify the FTC rule. In fact, the court found that the FTC dismissed any possible alternatives, concluding that either the pro-competitive justifications outweighed the harm, or that employers had other avenues to protect their interests.

Consequently, the court ruled that it could not conclude the FTC noncompete rule fell within a “zone of reasonableness” or that it was “reasonably explained.” Therefore, the court concluded that the FTC rule was arbitrary and capricious. The court happily cited the Loper Bright Enterprises Supreme Court case in its opinion, although no mention of any Hollywood movies (not even Jerry Maguire “Show me the money!”).

Interestingly, a different federal District Court in Pennsylvania reached the opposite conclusion than the federal District Court in Texas. Presumably, this split in federal District Courts will end up at the United States Supreme Court with all the losing parties appealing. Another spawn of the repeal of the Chevron doctrine in Loper Bright Enterprises. And still room for them to cite Hollywood and The Talk of the Town (“What is the law? It’s a gun pointed at somebody’s head. All depends upon which end of the gun you stand, whether the law is just or not.”).

The material contained in this column is informational only and does not constitute legal advice. For specific questions, dentists should contact their own attorney.