On July 27, 2011, the United States District Court for the District of Columbia in Sherley v. Sebelius (Civ. No. 1:09-cv-1575) held that the National Institutes for Health Guidelines for Human Stem Cell Research (“Guidelines”) are neither invalid for violating the Dickey-Wicker Amendment (“Dickey Amendment”) nor the Administrative Procedures Act (“APA”). In reaching this holding, the Court opined that the language of the Dickey Amendment does not prohibit the funding of research involving human embryonic stem cells within the limitations imposed by the Guidelines, but does prohibit NIH funding of research in which an embryo is subject to risk of injury or death in that research, for example, research regarding preimplantation genetic diagnosis. Researchers involved in prenatal genetic testing should therefore be mindful of this opinion and its explicit exclusion of the use of federal monies.

The decision follows a remand from the stay and vacation of an injunction imposed by the District Court which effectively withdrew all federal funding supporting research involving human embryonic stem cells.  The District Court had initially determined that the Guidelines violated the Dickey Amendment’s prohibition on federal funding for research in which a human embryo or embryos are destroyed because the term “research” encompasses all research in which an embryo is destroyed, not just a piece of research in which the embryo is destroyed.  After concluding that all embryonic stem cell research is research in which the embryo is destroyed according to the Dickey Amendment, the Guidelines were held to violate the statute and plaintiffs had shown a strong likelihood of success on the merits.  Plaintiff’s motion for summary judgment was therefore granted and an injunction was imposed.  The distribution of all NIH funding supporting human embryonic stem cell research was halted until the injuction was stayed by the appellate court.

On appeal, the District of Columbia Court of Appeals vacated the injunction and held that contrary to the District Court’s analysis, the plaintiffs were not likely to prevail on the merits because the Dickey Amendment is ambiguous and the NIH seemed to have reasonably concluded that although the amendment bars funding for the destructive act of deriving an embryonic stem cell from an embryo, it does not prohibit funding of a research project in which an embryonic stem cell will be used.  The D.C. Circuit Court determined that the word “research” as used in the statute was flexible enough to describe either a discrete project or an extended process. 

The District Court’s recent opinion addressed all points raised by the D.C. Circuit Court and followed the appellate court’s guidance, even where it clearly disagreed. 

Jurisdiction and Standing

The District Court dismissed defendant’s argument that it lacked subject matter jurisdiction over the lawsuit because plaintiffs lacked standing under Article III of the Constitution.  Plaintiffs had argued that the promulgation of the Guidelines increased competition for research funds upon which they relied and that this economic injury was sufficient harm.  The defendants countered that this harm was prospective harm to the plaintiffs and therefore did not satisfy the injury-in-fact requirement of Article III standing.  The District Court noted that the D.C. Circuit Court made clear that increased competition alone is an “actual, here-and-now injury” which changed the playing field requiring plaintiffs to invest more time and resources than they would have otherwise expended.

The Dickey Amendment and Chevron Deference

The Dickey Amendment reads in part that federal funds may not be used for

“(1) the creation of a human embryo or embryos for research purposes; or

(2) research in which a human embryo or embryos are destroyed, discarded, or knowingly subjected to risk of injury or death greater than that allowed for research on fetuses in utero….”

Plaintiffs had argued that the Guidelines violated the Dickey Amendment in two separate ways.  First, they argued that the Dickey Amendment unambiguously prohibits federal funding for human embryonic stem cell research because such is research in which an embryo is destroyed.  Second, funding is barred because it is research in which a human embryo or embryos are knowingly subjected to risk of injury or death. 

The defendants disagreed and argued that because the language of the statute is ambiguous, judicial deference to their agency’s interpretation of the statute is required under Chevron U.S.A. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).  Under Chevron, judicial review of an agency’s interpretation of a statute under its administration is limited to a two step inquiry.  At the first step, the court must inquire if Congress has directly spoken to the precise question at issue.  If so, the court must give effect to the unambiguously expressed intent of Congress.  However, if the statute is silent or ambiguous on the specific issue, the court must defer to the agency’s interpretation of the statute if it is reasonable and consistent with the statute’s purpose.

The District Court sided with defendants on this issue but noted that it was bound by the D.C. Circuit Court’s opinion vacating the award of the preliminary injunction to plaintiffs.  The District Court stated that the D.C. Circuit Court stated clearly that the term “research” in the statute is ambiguous, and that “absent a compelling reason to depart from that holding, the Court is constrained to adopt it at this stage of the proceedings.”  The District Court also noted that plaintiffs failed to offer any new information or reasoning that was unavailable to the appellate court that would cause the District Court to depart from the appellate court’s holding as to the meaning of “research.”

Having determined that the statute is ambiguous, the District Court then determined that it must defer to the NIH’s interpretation of the statute if the interpretation is based on a permissible construction of the statute.

Again, the District Court stated that the D.C. Circuit Court’s opinion determined that deference was due to the NIH’s interpretation of the Dickey Amendment.  The D.C. Circuit Court had determined that the NIH’s use of the term “research” in the Guidelines implicitly but unequivocally gave it narrow scope, thus ensuring no federal funding will go to a research project in which an embryo is destroyed.  Again, the District Court noted that plaintiffs had not offered any new evidence that would allow the court to depart from the D.C. Circuit Court’s decision to afford deference to the NIH’s interpretation of the statute. 

Regarding whether the Dickey Amendment is clear on the issue of what research is intended by the phrase “research in which a human embryo or embryos are … knowingly subjected to risk of injury or death…” the District Court determined that the phrase was ambiguous and therefore subject to further analysis.  In reaching this conclusion, the District Court interpreted this phrase of the statute as restricting the types of research for which funding is prohibited to research that knowingly subjects a human embryo to risk of injury or death within the research.  An example of such provided by the District Court and as noted by the defendants is preimplantation genetic diagnosis or “PGD.”  PGD is a procedure used with embryos fertilized in vitro to determine if they carry mutations predisposing them to hereditary diseases.  PGD requires the removal of one cell from the embryo and therefore poses a risk of harm to the embryo.  However, the District Court noted that if human embryos are knowingly subjected to risk not in the research itself but from or as a result of it, federal funding would not be prohibited.  

The District Court concluded that the NIH reasonably interpreted the Dickey Amendment’s “knowingly subjected to risk” language to permit federal funding for embryonic stem cell research because “research” is narrowly defined to exclude research involving embryos. 

The Administrative Procedures Act

The District Court also disagreed with the plaintiffs that the NIH did not follow the APA’s notice and comment requirements by failing to respond to relevant and significant public comments.  The Court stated that the NIH was not bound to consider and implement comments on the issue of whether any federal funds should be used for embryonic stem cell research as such was inconsistent with President’s Obama’s Executive Order that modified the prior administrations limitations on funding. 

The Final Word?

In sum, the District Court, following the interpretation and guidance of the D.C. Circuit Court, held the Guidelines valid.  This opinion therefore removes a significant amount of uncertainty as to the continued federal funding of embryonic stem cell research.  Even where the court disagreed with the interpretation of the statute and Congressional intent offered by the parties, it provided a clear legal basis for following the D.C. Circuit Court’s opinion. 

The only issue newly addressed by the District Court is the issue — to what extent can funds be used in “research in which a human embryo or embryos are … knowingly subjected to risk of injury or death?”  However, in opining that the NIH provided a reasonable interpretation of this portion of the statute and therefore is deserving of judicial deference, the District Court appeared to apply a similar analysis as provided by the D.C. Circuit prior opinion and remand.  Thus, it is unclear whether any grounds are available to plaintiffs to continue this challenge in the courts.