Judicial review of agency legal interpretations

1. Judicial review of agency legal interpretations • To what extent should judges defer to agency interpretations of statutes? • Judges have struggled with this issue for nearly a century: • Note the increased tension over deference to be given agency interpretations of law after the New Deal: • American Trucking: interpretation of statutes “exclusively a judicial function” • Nitrogen Products/Gray: SCT deferred to contemporaneous agency interpretation of the meaning of a statute that the agency was charged w/ implementing

2. Judicial review of agency legal interpretations prior to the APA – important cases/approaches • Hearst - why two different standards of judicial review? • SCT engaged in independent (de novo) review of the meaning of the statutory term “employee” (i.e., doesn’t encompass the common law meaning) • SCT gave substantial deference to the NLRB’s application of the definition of employee to “newsboys” • Skidmore v. Swift • What kind of deference does the SCT give the W&H Administrator’s Interpretive Bulletin (which interprets the term “working time” in the FLSA)? • Why is this deference different than in Hearst?

3. APA § 706 – judicial review of agency legal Interpretations • Section 706 – “To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, . . .” • Makes clear that courts have final authority re interpretation of law • Consistent w/ Marbury v. Madison (as book points out) • But it doesn’t actually set forth a standard of review: • Are courts supposed to review agency legal conclusions de novo? • Was the APA simply designed to incorporate the common law approach (which was relatively amorphous and “multi-factored” as Skidmore and Hearst show)? • Does Chevron – the modern approach –answer any of these questions?

4. Chevron v. NRDC – the facts • 1977 amdts to CAA imposed more stringent air quality requirements on states that had failed to reduce pollution levels below certain ambient standards in “non-attainment” areas • CAA required permits for construction/operation of “new/modified stationary sources of pollution.” • State could issue permit only if the proposed source met the new stringent requirements. EPA initially interpreted “stationary source” to include all individual pieces of pollution-emitting equipment within a plant • In a later rulemaking proceeding, EPA changed its position to use a “bubble” approach, which defined “stationary source” as the entire plant rather than an individual facility within a plant. • This change allowed plants to alter portions of their operation (as opposed to the whole operation) without getting a permit per 1977 amendments. • NRDC (environmental organization) sued, claiming that the agency’s new regulations violated the Clean Air Act.

5. Chevron – the test & it’s application • When a court reviews an agency’s construction of a statute which it administers • Has Congress spoken to the precise issue? If the intent of Congress regarding the precise question at issue is unambiguously clear, the court and the agency must give effect to that intent. • If the statute is silent or ambiguous to the precise question at issue, the court should defer to the agency’s construction as long as it is “permissible” or “reasonable.” • Application • How does the Court apply prong 1? • How does it characterize the issue to be resolved? • Does it believe Congress has unambiguously spoken to that issue? • Where does the Court look to answer that question? • At prong 2, is the agency’s interpretation reasonable? What factors does the Court consider?

6. What is the purpose of Chevron deference and is it a good idea? • Why does the Court defer to agency legal conclusions when the statute is ambiguous? • Is such a delegation consistent with the notion that judges “say what the law is”? What reasons for and against such deference are there?

7. More on the application of Chevron Step 1 • Chevron’s 2-step analysis: When a court reviews an agency’s construction of a statute which it administers • If the intent of Congress regarding the precise question at issue is unambiguously clear, the court and the agency must give effect to that intent. • If the statute is silent or ambiguous to the precise question at issue, the court should defer to the agency’s construction as long as it is “permissible” or “reasonable.” • Step 2 is considered to be pretty deferential to the agency – i.e., if you get to Step 2, the agency often/usually wins. • Not surprisingly, most of the battles about Chevron’s application actually revolve around Step 1 – i.e., has Congress clearly spoken to the issue? • This is true for litigants & the courts

8. How to approach Step 1- Has Congress clearly spoken to the precise question at issue? • Two possible methodologies of statutory interpretation (generally speaking): • After using every interpretative device at your disposal, and after exhausting all of your best interpretative efforts, an answer emerges as correct with some or a very high level of confidence. • Text/language of statutory provision • Context of statutory language w/in statutory section or entire statute • Purpose of the statute • Legislative history • Social policy • Canons of Construction (none of which you are expected to know for this class) • External sources (dictionaries, regulatory background. . .) • After a relatively cursory examination of the statute, an answer emerges as obvious. • Courts can use some of the above devices but they tend to use mainly statutory text and structure.

9. MCI Telecomm v. AT&T • Comm. Act, Sec. 203(a) common carriers must file tariff charges with FCC • Sec. 203(b) allows FCC to “modify any requirement” made under sec. 203 • In the 4th Report & Order, FCC made the tariff filing requirement for MCI optional because MCI was a non-dominant carrier. ATT challenged FCC’s 4th Report & Order as violating Section 203. • Why would Congress have a tariff filing requirement? Why would FCC later exempt small carriers? Why would customers care about it? • The Court’s application of Chevron: • What is the precise question at issue? • How does SCT majority approach/decide whether Sec. 203 clearly spoke to the question at issue? On what does it rely? • How does the dissent approach/resolve the precise question at issue? On what does it rely?

10. Babbitt v. Sweet Home Chapter . . . • ESA Sec. 9(a)(1)(B) – it is unlawful for anyone to “take [endangered species] within the US or its territorial sea” • ESA Sec. 3(19) – “Take” means “harass, harm , pursue, hunt, shoot, wound, kill, trap, capture, or collect. . . .” • Loggers & Landowners challenged Sec’y of Interior regulation which • defined “harm” to include “significant habitat modification or degradation where it actually kills or injures wildlife by impairing essential behavioral patterns . . .” • What is the precise question at issue? • How did majority approach/decide whether the ESA clearly defined “harm”? • How did the dissent approach/decide that issue?