Chevron Step 1 & Hearst revisited

1. Chevron Step 1 & Hearst revisited • Chevron Step 1 is often a battleground – issue is statutory interpretation • MCI, Babbitt & Brown & Williamson - Justices didn’t always agree on interpretive methodology or on whether statute clearly spoke to an issue • BUT SCT effectively engaged in independent review of the statute MUCH as courts did in Hearst when pure legal or policy questions were at stake. • SCT thinks deference to the agency is appropriate only when the statute does not clearly speak to the issue– i.e., agency is in a better position to determine what particulars should be • Conflicting interpretive methodologies • Probably just a fact of life w/ judging • BUT B&W (FDA statute) does raise question as to how hard a court should work to find that a statute is “clear.” • Do other later unrelated enactments REALLY shed light in the face of clear statutory text being interpreted? • Perhaps courts should force Congress to draft better statutes

2. Does Chevron deference apply to all agency interpretations of law? No: By its own terms the Chevron opinion required deference only to an “agency’s construction of a statute which it administers.”

3. Examples of agency interpretations where Chevron deference does not apply: • Agency interprets the Constitution to allow a statutory delegation of powers. • Agency interprets an 8th Circuit judicial opinion to allow it to grant a permit waiver in an environmental adjudication. • Agency interprets its own rules to allow it to grant a permit waiver in an environmental adjudication. • Agency interprets the APA to allow it to forego notice and comment rulemaking.

4. When does an agency administer a statute? • An agency administers a statute when that statute is so much a part of the agency’s mission that it can be said to be the agency’s special responsibility. • It is not enough to be the agency’s “special responsibility” that the agency must interpret the statute in performing its duties. • On the other hand, a statute that clearly gives an agency the power to make rules implementing it – e.g., FECA giving the FEC the power to make rules regulating federal election campaigns – or to engage in adjudicatory or enforcement authority clearly is part of an agency’s special responsibility

5. Chevron – Adding Step 0 • 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.” • Does it matter what form the agency interpretation takes in order to trigger the Chevron 2-step inquiry?

6. Christensen v. Harris Co. (2000) – p. 148 • If the agency’s interpretation comes in the form of “force of law” interpretations (rulemaking or binding adjudications), courts should use traditional Chevron 2-step approach • BUT when the interpretation comes in the form of “shadow” law (e.g., policy manual, opinion letter, guidance documents) courts should not use traditional 2-step Chevron analysis • Rather such interpretations are “entitled to respect” but only to the extent that they have the “power to persuade” • Revival of Skidmore deference

7. Why should it matter whether an interpretation has the “force of law” or is a “shadow” law method of interpretation?

8. U.S v. Mead – the facts • U.S. Customs Service issued tariff classification ruling regarding the status of “day planners.” This classification represented a change in prior practice and resulted in an increase in taxable status. • These classifications were interpretations of federal statutory law giving the Sec’y of Treasury the power to “fix the final classification and rate of duty applicable to [certain] merchandise.” • Tariff classification letters, however, were not the product of “notice & comment” rulemaking; nor were they the result of binding adjudications although the Customs Service clearly had been delegated those powers. • Lower court withheld Chevron deference because the ruling letters were not preceded by notice-and-comment rulemaking, "do not carry the force of law" and "are not, like regulations, intended to clarify the rights and obligations of importers beyond the specific case under review." • If this case clearly involved “shadow law” per Christiansen, why did SCT grant cert?

9. Mead’s tweak of Christensen • Issue: Should “shadow law” such as tariff rulings be accorded Chevron deference? • Mead majority: • “Administrative implementation of a particular statutory provision qualifies for Chevron deference 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. Delegation of such authority may be shown in a variety of ways, as by an agency’s power to engage in adjudication or notice & comment rulemaking, or by some other comparable indication of congressional intent.”

10. Mead – Majority reasoning • Nothing in the statute conveyed a congressional intent to authorize Customs to issue ruling letters with the force of law. • Statute’s reference to "binding rulings,“ did not "bespeak the legislative type of activity that naturally binds more than the parties to the ruling.” • Ruling letters might be precedential, but “precedential value alone does not add up to Chevron entitlement.” • Ruling letters are not clearly precedential or binding because they are subject to independent review by the Court of Int’l Trade. • Customs never “set out with a lawmaking pretense in mind when it undertook to make classifications like these.” • “A letter's binding character stops short of third parties; Customs has regarded a classification as conclusive only between itself and the importer to whom it was issued." • The letters come from 46 different Customs offices at a rate of 10,000-15,000 per year • Note – remand back to lower court to determine whether Skidmore deference was appropriate

11. Mead – Scalia dissent • What are Scalia’s objections to the Court’s rule in Mead? Are they convincing?

12. Chevron vs. Mead/Skidmore deference • Chevron • Court gives deference to agency based on its status as an entity who has impliedly been delegated interpretive authority and which has exercised that authority through its delegated means (i.e., rule/order) • Nearly automatic deference if get to Step 2 – “reasonable/permissible” • Mead/Skidmore • Court gives deference to agency interpretation that comes through informal means because the Court thinks that the interpretation is pretty good evidence of a good answer • Skidmore factors – is agency interpretation persuasive? • Is area w/in agency’s expertise? • Is interpretation contemporaneous w/ statute’s enactment? • Is interpretation longstanding or consistent? • Is interpretation supported by reasoned analysis? • What care did agency give to interpretation?