By Peter M. Shane, Ohio State University's Moritz College of Law
The Supreme Court's May 20, 2013, decision in City of Arlington v. FCC1 resolved an issue that few non-lawyers (and probably not that many lawyers) followed. The Court held that federal judges should be deferential to agencies in interpreting the ambiguous statutes they administer even when the ambiguity relates to the very scope of the agency's own power. The Court thus eliminated one potential line of argument for litigants challenging how federal administrative agencies implement the law. Unless Congress says otherwise, petitioners now cannot elicit a more intense judicial second-guessing of agency legal interpretation on the ground that the issue involved is one of agency “jurisdiction.”
Harvard law professor Cass Sunstein, the former administrator of OMB's Office of Information and Regulatory Affairs (and a Bloomberg View columnist), interprets City of Arlington as “an important victory” for the Obama administration.2 That is probably true. Sunstein further asserts that the decision “will long define the relationship between federal agencies and federal courts.” On that point, well, maybe. It takes some context to see why.
Everyone who has passed through high school civics has heard our constitutional separation of powers described this way: “Congress makes the laws. The executive branch implements the laws. The courts interpret the laws.” If, however, the word “laws” refers to all those government-issued commands that bind the public under pain of penalty for disobedience, then that simple description is largely wrong. At the federal level, most such commands do not emanate from Congress. They come from bureaucratic agencies that Congress has created and authorized to make rules and regulations. The annual volume of new “laws” embodied in agency regulations reliably dwarfs the legislative output of Congress.
The Supreme Court has actually upheld this state of affairs as consistent in principle with the civics book version of separation of powers. That is because, in theory, the scope of an agency's power—what the Federal Communications Commission, or the Environmental Protection Agency, or about a hundred other such entities may regulate—is supposedly limited by the statutory charter that Congress has enacted to set up and empower the agency. Congress, in this scheme, “makes the law” when it sets legislative limits on the possible rules and regulations that an agency may issue. The agency, when it issues rules, is just “implementing the law.” This is so, even though, as Chief Justice John Roberts wrote in dissenting in the City of Arlington case: “[T]he citizen confronting thousands of pages of regulations … can perhaps be excused for thinking that it is the agency really doing the legislating.”3
The reason why agencies look like they are legislating is simple: Many, perhaps most, of the statutory provisions that purport to delimit what agencies may do are riddled with ambiguity. In order to “implement” a statute, an agency thus has to engage in an often complex and policy-laden process of determining what the statute could mean. For example, the Federal Communications Act authorizes the FCC to “prescribe such rules and regulations as may be necessary in the public interest to carry out [the] provisions”4 of the Act.
How far the “public interest” standard goes in delimiting the FCC's implementation of the many provisions of the Federal Communications Act is simply not obvious.
The specific Federal Communications Act provision involved in City of Arlington requires state or local governments to act on zoning applications for building wireless towers and antennas “within a reasonable period of time after the request is duly filed.”5 The FCC, relying on its regulatory power, issued a ruling that a “reasonable period of time” is “presumptively (but rebuttably) 90 days to process a collocation application (that is, an application to place a new antenna on an existing tower) and 150 days to process all other applications.”6Its initiative implicitly raises the question whether the FCC's authority to prescribe rules in the “public interest” allows it to transform the statutory “reasonable period of time” standard into a near-hard-and-fast rule that applies across the board. The technical issue in City of Arlington was how much difference it should make to the reviewing judges that the FCC itself gave that question an affirmative answer.
The City of Arlington argued the FCC should get no deference on the point because the question whether it is entitled to promulgate specific rules for wireless siting decisions goes to the very scope of the agency's jurisdiction. In the city's view, courts should resolve that question on their own. The FCC argued, in turn, that courts should uphold the FCC's view of its regulatory power so long as it represents a non-arbitrary interpretation of the statute's ambiguous language. In other words, even if the FCC's reading of its statute is not an inevitable reading, courts should uphold it as long as it is a plausible reading.
When administrative actions are challenged in federal court, judges are instructed by Congress to “decide all relevant questions of law” and “hold unlawful … agency action … found to be in excess of statutory jurisdiction.”7 This prescription for the judicial role echoes Chief Justice John Marshall's words: “It is emphatically the province and duty of the judicial department to say what the law is.”8
This command is complicated, however, by another very old idea about the proper role of courts. It is the notion that interpretations of the law by those charged with implementing them are entitled to significant deference by judges. As Justice Robert Trimble wrote in 1827: “In the construction of a doubtful and ambiguous law, the contemporaneous construction of those who were called upon to act under the law, and were appointed to carry its provisions into effect, is entitled to very great respect.”9 Thus, the threshold question facing judges asked to review the FCC's ruling on reasonable timeliness for the processing of wireless siting permits is this: How much should I be influenced by the fact that the FCC has already determined what the law means—specifically, that the statute empowers the FCC under its “public interest” mandate to transform the statutory “reasonable period of time” requirement into a specific quantitative rule?
The legal rules that respond to the question, “How deferential should a judge be to an agency?” fall under the heading of what lawyers call “scope of review.” “Scope of review” doctrine tells a judge how to calibrate the intensity of his or her inquiry into the legal validity of the agency action the judge is reviewing. No verbal formula can be entirely effective in imposing a precise constraint on a judge's cognition. The words used to articulate the appropriate scope of review are perhaps best understood, to paraphrase Justice Felix Frankfurter, as an attempt to set a particular judicial mood.10 Until the 1950s, it's a fair statement that the intended mood for judicial review of administrative agencies was quite deferential to the bureaucracy.
Then, something important happened. During the 1960s, Congress—for the first time since the New Deal—began a major expansion of the administrative bureaucracy. Not only were many new agencies created, but those agencies frequently regulated large swaths of the economy, and reached into a vast array of health, safety, and public welfare issues, such as civil rights, environmental protection, and consumer product safety. Moreover, unlike the New Deal agencies (and their predecessors), which tended to issue rulings on a case-by-case basis following administrative procedures that closely resembled judicial trials, the new agencies tended to implement their authorizing statutes by promulgating broad rules of general applicability. Even older agencies like the Federal Trade Commission and the FCC, which had operated primarily through administrative adjudication, started using administrative rulemaking as a major tool of legal implementation, with enormous potential impacts on society.
What followed, perhaps most conspicuously in the U.S. Court of Appeals for the District of Columbia Circuit, was the evolution of a new understanding of the court-agency relationship. The courts used their leverage over judicial review to impose significant procedural safeguards on the agencies, linked loosely to the requirements of the federal Administrative Procedure Act11, but clearly going beyond what the enacting Congress might have imagined in 1946. Judges also more frequently second-guessed how agencies were reading their enabling statutes. Courts started thinking of themselves as partners with agencies in the process of legal implementation.
By the late 1970s, however, the Supreme Court decided, in effect, that this “partnership” trend had gone too far. In 1984, the Court moved to re-calibrate the court-agency relationship with what has become its most frequently cited administrative law decision, Chevron v. Natural Resources Defense Council.12 In emphatic language, the Court wrote:
When a court reviews an agency's construction of the statute which it administers, it is confronted with two questions. First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute.13
In other words, if a statute really can mean only one thing, then the court's job is to make sure agencies adhere to that meaning. But in all other cases, a reviewing court should determine only if the agency interpretation is “permissible,” not whether it's “best.”
A huge amount of judicial and scholarly ink has been spilled parsing the meaning of Chevron’s now-canonical paragraph, as well as its theoretical foundations. But the message to lower courts was clear: Lighten up. Chevron actually seemed startling in the near-boundless scope it appeared to endorse for judicial deference to agencies. If an agency gets deference whenever a statute “is silent or ambiguous with respect to the specific issue” at hand or whenever “Congress has not directly addressed the precise question at issue,” that could plausibly mean that agencies would always be entitled to judicial deference to the ways in which they interpret the statutes they administer. After all, cases are unlikely to be litigated where statutes specifically resolve the precise question at issue in unambiguous terms.
Subsequent cases clarified, however, that Chevron did not go that far. Judges could still be persuaded, despite some semantic ambiguity in a statute's bare wording, that a statute is not legally ambiguous. The context within which the relevant wording appears, or the relationship of the relevant statute to other statutes, or the institutional history of the statute's enactment, or some combination of other interpretive factors might conclusively foreclose the agency's preferred statutory reading. In such cases, Chevron would technically apply, since its first requirement is the search for statutory clarity. But such cases would not entail “Chevron deference.” A judge persuaded that the statute unambiguously means something different from what an agency contends could impose a different interpretation on the agency.
Chevron had a dramatic effect in the lower courts, greatly increasing agencies' “win rate” in disputes over statutory interpretation.14 But it also produced a certain backlash. Scholars (and judges) began to argue that not all agency interpretations of law should be regarded as equally deference-worthy. In a major 2001 case,United States v. Mead Corp.,15 the Supreme Court itself cut back on Chevron, holding that “administrative implementation of a particular statutory provision qualifies for Chevron deference [only] when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority.”16 More concretely, Mead implied that agency legal interpretations outside the rigorous processes of agency adjudication and rulemaking might be entitled to some respect, but not to full-blown Chevron deference where alternative interpretations of law might seem to a judge to be more persuasive.
Following this logic, what the City of Arlington argued—and what the dissent urged—is that Chevron deference is not appropriate where an agency's interpretation of law relates to its very jurisdiction, that is, to the scope of its administrative authority. If Chevron deference is based on the idea that Congress has delegated interpretive authority to the agency, then there is always a threshold question presented whether Congress actually has delegated such authority to the agency with regard to any particular provision of law. This question is logically a question for a court to answer on its own. As Chief Justice Roberts put the matter: “Agencies are creatures of Congress; ‘an agency literally has no power to act … unless and until Congress confers power upon it.’ Whether Congress has conferred such power is the ‘relevant question[ ] of law’ that must be answered before affording Chevron deference.”17
As a matter of analytic logic, the Roberts position seems compelling, except for one key problem. As pointed out by Justice Scalia, writing for the majority, there is no manageable judicial standard “to guide [an] open-ended hunt for congressional intent” with regard to the allocation of interpretive authority regarding individual provisions of a statute.18 According to the majority, when Congress confers rulemaking authority on an agency, interpretations of law that arise during rulemaking must be assessed under Chevron: “[A] separate category of ‘jurisdictional’ interpretations does not exist.”19 The effect of a contrary ruling, the Court concluded, “would be to transfer any number of interpretive decisions—archetypal Chevron questions about how best to construe an ambiguous term in light of competing policy interests—from the agencies that administer the statutes to federal courts.”20
In the short term, City of Arlington looks like good news for the Obama administration. Its major legislative achievements—the Patient Protection and Affordable Care Act and the Wall Street Reform and Consumer Protection Act—both convey substantial new regulatory authority to the federal executive branch. A 6-3 Supreme Court decision reaffirming Chevron on the eve of a new wave of rulemaking cannot help but set a more receptive judicial mood. That the majority opinion unites Justices Scalia and Thomas on the right, with Justices Kagan, Sotomayor, and Ginsberg on the left may set that mood yet more emphatically. The latter three are presumably comfortable with the room Chevron creates for bureaucratic initiative. Professor Sunstein attributes the Scalia-Thomas position to these Justices' preferences for clear legal rules. Another possibility, however, is that Justices Scalia and Thomas, even if less receptive than their colleagues to regulatory ambition, are perhaps the Court's most staunch defenders of executive branch power. If you regard agencies' exercise of policy discretion (even in the form of purported statutory interpretation) as an extension of presidential authority, then it would not be surprising to see strong presidentialist Justices like Scalia and Thomas embracing Chevron. (Perhaps paradoxically, this by no means implies that Justice Scalia or Justice Thomas is reliably deferential even as they purport to apply Chevron to individual cases.) For his part, Justice Breyer, who concurred separately in City of Arlington, prefers a multi-factored standard rather than a bright-line rule for deciding on the applicability of Chevron; in City of Arlington, he concluded that the relevant factors supported deference to the agency.
An early test of City of Arlington’s mood-setting power will be the D.C. Circuit opinion in Verizon v. FCC.21Verizon has challenged the FCC's authority to treat Internet service providers as quasi-common carriers pursuant to its open network rules. Prior to City of Arlington, this might have seemed the kind of jurisdictional dispute to which Chevron deference would not apply. Yet, the City of Arlington majority uses precisely this example to demonstrate why there is no principled difference under Chevron between arguments that an agency has exceeded its jurisdiction and challenges that an agency, within its conceded jurisdiction, has exceeded the permissible range of legal meanings for whatever statutory provision is at issue. Justice Scalia's clear implication is that Chevron applies to this question. The FCC promptly followed up City of Arlington with a letter to the D.C. Circuit supplementing its brief.22
So, with all this good news for the Obama administration, how could Professor Sunstein possibly be wrong in saying that City of Arlington “will long define the relationship between federal agencies and federal courts?” The answer lies in the fact that Chevron deferencēor, if you prefer, City of Arlington deferencēapplies only if a reviewing court finds that the statute is legally ambiguous. As explained above, a judge is not required by Chevron to defer to an agency when the judge is confident of the statute’s one correct reading. Chevron affirms the authority of judges to impose their reading of “unambiguous” statutes on the bureaucracy.
In other words, City of Arlington requires Chevron deference when judges perceive an ambiguous statutory provision as jurisdictional, but it does not limit the judicial capacity to deny that ambiguity exists. Legal ambiguity is itself ambiguous. The long-term outcome of City of Arlington, in cases where judges see statutory language as jurisdictional may be an increase in the number of such cases where judges deny legal uncertainty.
Once a judge pronounces a statute as unambiguous with regard to the question presented, no duty of deference applies.
A trio of well-known administrative law cases well illustrates the point. In Massachusetts v. EPA,23 a 5-4 opinion written by Justice Stevens, the author of Chevron, determined that the EPA was simply wrong in determining that it lacked jurisdiction under the Clean Air Act to regulate automotive carbon dioxide emissions. The five-Justice majority mentions Chevron, but their insistence that the “statutory text forecloses EPA’s reading”24 in an unambiguous way is seemingly belied by four Justices’ disagreement as to plausible statutory meaning.
Another Stevens opinion, pre-dating Chevron, is arguably even more inventive in denying any deference to the agency under review. Writing for the majority in Industrial Union Department v. American Petroleum Institute,25 Justice Stevens concluded that the Department of Labor erred under the Occupational Safety and Health Act of 1970 in imposing a standard for maximum worker exposure to benzene without first determining whether the benefits expected from the new standard bore a reasonable relationship to the costs that it imposed. Although Justice Stevens wrote this opinion four years before Chevron, he presumably was not laboring under a significantly different understanding of his judicial role. Yet, he was able to conclude that DOL had misread its statute only after shoehorning into the statute’s operational provisions a rather dubious implication from one of its definitional sections. His opinion takes a decidedly arduous route to find statutory clarity.
But my personal favorite head-scratcher is FDA v. Brown & Williamson Tobacco Corp.,26 which the City of Arlington majority cites as precedent for applying Chevron to a jurisdictional question. That 2000 opinion, decided 5-4, dutifully cited Chevron before holding that the federal Food, Drug and Cosmetic Act definitely did not authorize the Food and Drug administration to regulate tobacco, and thus the FDA was entitled to no deference for its contrary view. The decision’s most notable feature is the majority’s concession that the statutory language clearly could cover tobacco. Five Justices nonetheless found the statute unambiguously unavailable because Congress’s enactment of other statutes covering tobacco implicitly meant Congress thought that the FDCA did not. (Justice Scalia, the Court’s most insistent statutory textualist, joined Justice O’Connor’s majority opinion without any explanation on his part for completely ignoring the statutory text.)
The moral of the story is this: City of Arlington sends a significant signal to lower court judges that, in reviewing agency readings of ambiguous statutes, they should remain in a deferential mood. But judges and justices persuaded that agencies have gone too far in exercising their powers are not without leverage to rein them in. Judges can “apply” Chevron but not defer. The long-term impact of the City of Arlington thus very much remains to be seen.
Peter M. Shane is the Jacob E. Davis and Jacob E. Davis II Chair in Law at Ohio State University’s Moritz College of Law. The opinions expressed are those of the author.
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