The Scope of Chevron
Prepared for the Scope of Judicial Review portion of the ABA Administrative
Law Sections Project on the Administrative Procedure Act
Steven Croley, University of Michigan Law School
Fifth Draft: July 2001
Introduction
In Chevron v. Natural Resources Defense Council, 467 U.S. 837 (1984), the Supreme Court provided a two-step formulation for judicial consideration of an administrative agencys interpretation of a regulatory statute. According to Chevrons now-boilerplate language:
First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, . . . 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 . . . the question for the court is whether the agencys answer is based on a permissible construction of the statute.
467 U.S. at 843-44 (footnotes omitted).
Since the Chevron decision, courts and commentators have dissected, analyzed, puzzled over, and debated the implications and significance of the doctrine. Whatever its nuances, plainly the doctrine appears to contemplate a less active role for the judiciary in interpreting regulatory statutes, at least relative to other kinds of statutes. Just what that role will be naturally depends on how exactly the Chevron doctrine is understood and applied.
On the most general level, the doctrine raises three major issues: (1) What is the scope of the doctrine, or in other words, to which agency interpretations of regulatory statutes does it apply?; (2) Assuming Chevron applies, how will a reviewing court determine whether Congress has spoken to the interpretive question at issue? -- ChevronStep One; and (3) Assuming Chevron applies and that a reviewing court has determined that Congress has not spoken to the question at issue, when will the court defer to the agencys interpretation, and when instead will the court conclude the agencys interpretation was unreasonable or impermissible? -- Step Two. The following analysis takes up that first question. The observation that agencies interpret statutes in a wide variety of settings -- during a notice-and-comment rulemaking, in connection with formal adjudication, pursuant to interpretive rules or statements, through informal decisionmaking vehicles, during the course of litigation, and so on -- and similarly that agencies interpret different types of regulatory statutes -- statutes over which an agency has special authority and expertise, for example, or statutes whose administration is shared with other agencies -- raises questions about when reviewing courts will show Chevron deference. What follows identifies which agency interpretations will enjoy Chevron deference and which will not. At the same time, the analysis below identifies several types of agency interpretations about which the law is not perfectly settled and which therefore may or may not get Chevron deference.
I. Chevron Deference Extends Most To An Agencys Interpretation of a Statute The Agency Administers Where That Interpretation Was Developed Through Notice-and-Comment Rulemaking.
Chevron itself involved a rulemaking by the EPA, pursuant to which the EPA interpreted the term source in the Clean Air Act Amendments of 1977. Since Chevron, the type of agency interpretation most certain to enjoy Chevron deference is an interpretation made in connection with notice-and-comment rulemaking. This comes as no great shock. Substantive rulemaking most clearly entails agency exercise of policy judgment, under authority delegated by Congress, and carried out in the open environment of the rulemaking process. As the Chevron Court emphasized, it is in such circumstances where considerations of agency expertise and political legitimacy most counsel in favor of deference. 467 U.S. at 843-44, 865-66. Chevron deference in the context of substantive rulemaking is by now common and unproblematic. See, e.g., AT&T Corp. v. Iowa Utilities, 525 U.S. 366 (1999); Smiley v. Citibank, 517 U.S. 735 (1996). See also Robert A. Anthony, Which Agency Interpretations Should Bind Citizens and the Courts?, 7 Yale J. on Reg. 1, 44 (1990). Indeed, it may be no exaggeration to say that substantive rulemaking provides agencies with the best guarantee of enjoying Chevron deference. Chevron deference is so closely associated with agency interpretations effected through substantive rulemaking that courts have at times mistakenly suggested Chevron deference requires such rulemaking. See, e.g., In re Appletree Markets, Inc., 19 F.3d 969 (5th Cir. 1994). Even though Chevron deference is not limited to interpretations developed through substantive rulemaking, however, courts often emphasize their preference for rulemaking as particularly deserving of Chevron deference. See, e.g., Smiley v. Citibank, 517 U.S. at 741 (extending Chevron deference to a full-dress regulation, issued by the Comptroller himself and adopted pursuant to the notice-and-comment procedures of the Administrative Procedure Act designed to assure due deliberation . . . . ); Doe v. Mutual of Omaha Ins. Co., 179 F.3d 557, 563 (7th Cir. 1999) (refusing to extend Chevron deference to Justice Departments interpretation of Americans with Disabilities Act, as expressed in the Departments amicus brief and technical assistance manual, notwithstanding court thought precedent might permit such deference, on grounds that extending deference would undermine democratic legitimacy given that agency possessed rulemaking powers and yet had not exercised those rulemaking powers to address the interpretive issue on which its brief takes a radical stance).
II. Chevron Deference Extends Also to An Agencys Interpretation of a Statute The Agency Administers Where That Interpretation Was Developed In the Course of Formal Adjudication, Provided That Adjudicating Agency Was Delegated Lawmaking Power.
The Supreme Court has made it clear that Chevron deference is not to be confined to interpretations occasioned by agency rulemaking, however, but extends also to agency interpretations made in connection with a formal adjudication, including enforcement actions. See, e.g., INS v. Aguirre-Aguirre, 526 U.S. 415, 425 (1999) (Board of Immigration Appeals order); National Railroad Passenger Corp. v. ICC, 503 U.S. 407, 418-19 (1992) (ICC order); DeBartolo Corp. v. Florida Gulf Coast Bldg. & Const. Trades Council, 485 U.S. 568 (1988) (NLRB order); INS v. Cardoza-Fonseca, 480 U.S. 421, 446 (1987) (INS hearing); Securities Indus. Assn v. Bd. Of Governors Fed. Reserve Sys., 847 F.2d 890, 893 (D.C. Cir. 1988) (bank activity approval). INS v. Aguirre-Aguirre is illustrative. There, the Court reversed and remanded a decision setting aside a determination of the Board of Immigration Appeals on the grounds that the BIA incorrectly interpreted the statutory language serious nonpolitical crime. In so doing, the Court explained that Cardoza-Fonseca establishes that the BIA should be accorded Chevron deference when it gives ambiguous statutory terms concrete meaning through a process of case-by-case adjudication,526 U.S. at 425 (quoting Cardoza-Fonseca, 480 U.S. at 448-49), even though the Court in Cardoza-Fonseca ultimately rejected the agencys interpretation. The Court in Aguirre-Aguirre reiterated this principle: [B]y failing to follow Chevron principles in its review of the BIA, the Court of Appeals erred. Id.
There is one catch, however. Chevron deference to interpretations expressed through formal adjudications requires that the interpreting agency have some policymaking power, as opposed to purely adjudicatory powers. If the agency is solely an adjudicator, not contemplated by Congress to set policy through the adjudication process by, for example, resolving interpretive questions in the course of its adjudications, courts are unlikely to extend Chevron deference. On the difference, see, e.g., United Steelworkers of Am. v. Schuylkill Metals Corp., 828 F.2d 314, 319 (5th Cir. 1987); William Bros., Inc. v. Pate, 833 F.2d 261, 264 (11th Cir. 1987). This distinction is relevant only with respect to agencies in a split-enforcement statutory scheme. One example is the Federal Mine Safety and Health Review Commission, an adjudicating agency whose counterpart, the Mine Safety and Health Administration, also within the Department of Labor, has been delegated the task of policymaking. Similarly, the Occupational Safety and Health Review Commission hears adjudications, while the Occupational Safety and Health Administration sets policy. In Martin v. OSHRC, 499 U.S. 144 (1991), the Court held that OSHA but not OSHRC was entitled to deference with respect to the interpretation of rules promulgated by OSHA, given the policymaking role Congress contemplated for OSHA instead of OSHRC. Id. at 152-53. Cf. U.S. v. Haggar Apparel, 526 U.S. 380 (1999) (Court of International Trade must show Chevron deference towards Customs Service). Lower courts have made similar distinctions, see, e.g., Merck & Co., Inc. v. Kessler, 80 F.3d 1543 (Fed. Cir. 1996); Director, OWCP v. General Dynamics Corp., 982 F.2d 790, 795 (2d Cir. 1992); Brock v. Cathedral Bluffs Shale Oil Co., 796 F.2d 533, 537 (D.C. Cir. 1986).
III. Chevron Deference Does Not Extend To Agency Interpretations of Statutes That Apply to Many Agencies And Are Specially Administered By None, Though Whether Chevron Deference Extends To Statutes Jointly Administered By More Than One Policymaking Agency Is Not Well Settled.
Courts have also refused to extend Chevron deference to agency interpretations of statutes that apply to many agencies, and therefore which no single agency is charged to administer. Such statutes include, for example, the Administrative Procedure Act itself, as well as the Freedom of Information Act, the Federal Advisory Committee Act, and the National Environmental Policy Act. Courts have consistently and explicitly declined to show Chevron deference towards agency interpretations of regulatory statutes of general applicability. See, e.g., Metropolitan Stevedore Co. v. Rambo, 521 U.S. 121, 137 n.9 (1997) (APA); DeBois v. USDA, 102 F.3d 1273, 1285 n.15 (1st Cir. 1996) (NEPA); Reporters Comm. For Freedom of the Press v. U.S. Dept. Justice, 816 F.2d 730, 723 (D.C. Cir. 1987) (FOIA); Alaska Ctr. For the Envt v. West, 31 F. Supp. 2d 714, 721 (D. Alaska 1998) (NEPA). In those circumstances where two or a few agencies jointly administer a statute (such as the Longshore and Harbor Workers Compensation Act), however, or especially where more than one agency is authorized to issue regulations under a single act (such as the Americans with Disabilities Act), the issue is not entirely settled. The Supreme Court has identified but not resolved the matter. See Bragdon v. Abbott, 524 U.S. 624, 642 (1998); Sutton v. United Airlines, 527 U.S. 471, 482 (1999). See generally Russell L. Weaver, Deference to Regulatory Interpretations: Inter-Agency Conflicts, 43 Ala. L. Rev. 35 (1991). But at least one lower court has ruled that where agencies that jointly administer a statute coordinate and agree on the interpretation of the statutory term, Chevron deference is appropriate. See Individual Reference Services Group. v. FTC (D.D.C. April 20, 2001) (unpublished Memorandum opinion) at 21.
IV. Chevron Deference Extends To Agency Interpretations of Regulatory Statutes, Not To Criminal Statutes Administered by Courts Rather Than by An Agency Exercising Prosecutorial Power.
Chevron applies to regulatory agencies interpretations of regulatory statutes. Accordingly, courts have refused to show Chevron deference to the Justice Departments interpretations of the criminal provisions of the U.S. Code. Indeed, Chevrons inapplicability to federal criminal law was established in the years immediately following the Chevron decision. See, e.g., United States v. McGoff, 831 F.2d 1071, 1077 (D.C. Cir. 1987) (We are, in short, far outside Chevron territory here.). Courts have provided several explanations for why Chevron deference does not apply to prosecuting agencies. First, Congress has not delegated to the Justice Department the authority to engage in interpretive lawmaking. Rather, courts are the proper administrators of federal criminal statutes. See Crandon v. United States, 494 U.S. 152, 177 (1990) (Scalia, J., concurring). Second, the rule of law requires that criminal law be clear, which in turn implies there is not room for interpretive flexibility commonly associated with deference to administrative agencies interpretations of statutes. See United States v. McGoff, 831 F.2d at 1077. Third, prosecutorial entities such as the Justice Department would have too many incentives to interpret criminal statutes expansively, see Crandon v. United States, 494 U.S. at 177-78; United States v. Harden, 37 F.3d 595, 599 & n.2 (11th Cir. 1994); United States v. McGoff, 831 F.2d at 1077, although whether that general tendency distinguishes prosecutorial agencies from regulatory agencies is not so obvious. At any rate, for all of these reasons courts have never thought that the interpretation of those charged with prosecuting criminal statutes is entitled to deference. Crandon v. United States, 494 U.S. at 177 (Scalia, J., concurring). See generally Dan M. Kahan, Is Chevron Relevant to Federal Criminal Law?, 110 Harv. L. Rev. 469 (1996) (arguing, explicitly against the tide of precedent, that Chevron should be extended to cover federal criminal statutes); Sanford N. Greenberg, Who Says Its a Crime?: Chevron Deference to Agency Interpretations of Regulatory Statutes the Create Criminal Liability, 58 U. Pitt. L. Rev. 1 (1996) (arguing against extending Chevron to criminal statutes). On the other hand, lower courts have shown Chevron deference to criminal statutes the interpretation of which was rendered an agency other than the prosecuting agency. See Alliance for Cannabis Therapeutics v. DEA, 930 F.2d 936, 939 (D.C. Cir. 1991) (extending Chevron deference to formal order by the Drug Enforcement Agency classifying marijuana under the Controlled Substances Act). See also United States v. OHagan, 521 U.S. 642 (1997) (deferring to SECs interpretation of fraudulent).
V. Chevron Deference Does Not Extend To Agency Interpretations of Statutes Whose Very Terms Were Previously Interpreted by Courts: Chevron Does Not Upset Stare Decisis.
Courts have also refused to extend Chevron deference to agency interpretations of statutory provisions that have previously been interpreted by a court, especially the Supreme Court. Here the issue concerns the relationship between Chevron deference, on the one hand, and the doctrine of stare decisis, on the other. In Lechmere Inc., v. NLRB, 502 U.S. 527 (1992), for example, the Supreme Court made clear that Chevron deference will yield to stare decisis. Acknowledging that the NLRB is entitled to Chevron deference when interpreting the general provisions of the National Labor Relations Act, 502 U.S. at 536, the Court nevertheless explained it would withhold deference for provisions of the act the Court had already interpreted, id. at 537 (Once we have determined a statutes clear meaning, we adhere to the determination under the doctrine of stare decisis, and we judge the agencys later interpretation of the statutes plain meaning.). See also Neal v. United States, 516 U.S. 284, 295 (1996).
On the other hand, the precedent among the circuits is somewhat mixed. Some circuits appear to have followed Lechmere, see Bankers Trust New York Corp. v. United States, 225 F.3d 1368 (Fed. Cir. 2000), while others have suggested that courts prior judicial interpretations of a statutory term do not preclude Chevron deference with respect to that same term later, see Aguirre v. INS, 79 F.3d 315 (2d Cir. 1996). In Satellite Broadcasting v. Oman, 17 F.3d 344 (11th Cir. 1994), the court drew a distinction between prior judicial interpretations based upon a statutes clear meaning, which bind agencies and courts, and prior judicial interpretations of ambiguous statutory terms whose meaning a court derives based on inferences from the statutory scheme and a courts own policy determination, which do not preclude a court from extending Chevron deference to the agencys intervening interpretation. Id. at 348.
While there is no strict contradiction between Chevron deference and stare decisis, the latter as a practical matter widens the net of Chevrons step one, meaning that the scope of Chevron deference will as a result be smaller for statutes whose clear meanings the Court has supplied prior to an agencys interpretation. For helpful discussions, see Richard J. Pierce, Jr. , Reconciling Chevron and Stare Decisis, 85 Geo. L.J. 2225 (1997); Rebecca Hanner White, The Stare Decisis Exception to the Chevron Deference Rule, 44 Fla. L. Rev. 723 (1992). In the nature of things, as more and more statutes are passed and interpreted for the first time post-Chevron, this tension between Chevron and stare decisis will manifest itself less and less often.
VI. Chevron Deference Does Not Extend To An Agencys Interpretation That Represents Merely The Agencys Litigating Posture Rather Than An Interpretation Developed Through Substantive Rulemaking or Formal Adjudication. Interpretations Developed Through a Rulemaking That Was Precipitated by Litigation, However, Will Enjoy Chevron Deference, As Will Interpretations Developed Through Formal Adjudication In the Course Of Enforcement Litigation.
Of those instances where courts have been reluctant to extend Chevron deference to agency interpretations of a statute, courts have been especially unwilling to do so where an agencys interpretation was purely the product of litigation. In general, courts have made clear that where an agency offers an interpretation for the first time in a legal brief or, worse, during oral argument, that interpretation is unlikely to enjoy Chevrondeference.
Bowen v. Georgetown University, 488 U.S. 204 (1988), captures Supreme Court sentiment here. In Bowen, the Court refused to extend Chevron deference to HHSs interpretation of a provision of the Medicare Act, on the grounds that the offered interpretation was merely a litigating position wholly unsupported by regulations, rulings, or administrative practice. 488 U.S. at 212. And while the Court did stress that HHSs litigating position was unsupported by regulations, rulings, or practice -- suggesting by possible negative implication that a litigating position that was supported in those ways may enjoy some deference -- the Court continued more generally: We have declined to give deference to an agency counsels interpretation of a statute where the agency itself has articulated no position on the question, on the ground that Congress has delegated to the administrative official and not to appellate counsel the responsibility for elaborating and enforcing statutory commands. Id. (quoting Investment Company Institute v. Camp, 401 U.S. 617, 628 (1971)). See also Gregory v. Ashcroft, 501 U.S. 452, 485 & n.3 (1991) (refusing to defer to agency interpretation on grounds that interpretation was not embodied in any formal agency issuance but rather constituted mere litigating position); Public Employees Retirement Sys. v. Betts, 492 U.S. 158, 174-75 (1989) (same).
On the other hand, the Supreme Court has made clear that an agencys interpretation developed through a notice-and-comment rulemaking will enjoy Chevron deference even if the rulemaking itself was prompted by litigation. In Smiley v. Citibank, 517 U.S. 735 (1996), the Court upheld the Comptroller of the Currencys interpretation of the National Bank Act adopted via a rulemaking that was triggered by litigation. The Court explained: Nor does it matter that the regulation was prompted by litigation, including this very suit. . . . [W]e have before us . . . a full-dress regulation issued by the Comptroller . . . and adopted pursuant to the notice and comment rulemaking procedures of the [APA] designed to assure deliberation. . . . That it was litigation which disclosed the need for the regulation is irrelevant. 517 U.S. at 741. Sensibly, the Chevronsafe harbor of notice-and-comment rulemaking trumps the judicial skepticism ordinarily associated with interpretations developed during the course of litigation. See also United Seniors Assn v. Shalala, 182 F.3d 965, 970 (D.C. Cir. 1999) (interpretation promulgated as a rule 10 days after oral arguments still warranted Chevron deference where agency had previously expressed similar interpretation in the course of congressional testimony).