Chevron Step 1 – Has Congress clearly spoken to the precise issue at question?

1. Chevron Step 1 – Has Congress clearly spoken to the precise issue at question? • Step 1 primarily involves fights over statutory interpretation – 2 general approaches • Throw everything you have at the statute and eventually emerge with what you think is the right answer. Clear = right • After a relatively quick examination of the statute, you eventually emerge with an obvious answer. Clear = obvious • Cases discussed: • MCI v. ATT & Babbitt v. Sweet Home – straightforward examples of judicial fights over prong 1 statutory interpretation • FDA v. Brown & Williamson – seems a perfect candidate for “clear = obvious” approach at prong 1. But SCT says that a seemingly clear statute does NOT give FDA power to regulate tobacco. • Is SCT’s decision not to find an implicit delegation of power to the FDA based on the “economic and political” importance of tobacco?

2. Mass. v. EPA (p. 181) • CAA § 202(a)(1) – EPA administrator shall “by regulation” prescribe… standards applicable to “emission of any air pollutant” from new motor vehicles that “in his judgment cause … air pollution, which may be reasonably anticipated to endanger public health or welfare [includes weather or climate]” • CAA § 7602(g) “air pollutant” is “any air pollution agent or combination of such agents, including any physical, chemical, biological, radioactive... substance or matter which is emitted into or otherwise enters the ambient air.” • Precise Issue – Does the statute authorize EPA to regulate greenhouse gases?

3. Mass. v. EPA (p. 181) – the statutory interpretation issue • Majority - Chevron Step 1 • Relies on statutory text – definition of “air pollutant” • Greenhouse gases CLEARLY fall within that definition (are matter emitted into ambient air) & statute says EPA shall regulate “any air pollutant” if conditions met. • EPA’s claim it has no authority does not give effect to the statute’s clear intent • Scalia – Chevron Step 1 • Also uses statutory text – definition of “air pollutant” includes other language. Gases must be an “air pollution agent” and matter emitted into ambient air. • The term “air pollution” is ambiguous;SCT should accept EPA’s definition because it’s reasonable (“impurities” near earth’s surface that create dirty air)

4. Mass. v. EPA & implicit delegations of “issues of great economic/political importance” • EPA argues that it lacks the authority to regulate greenhouse gases based on Brown & Williamson. Why? • Does that argument work as well in Mass. v. EPA? • In both B&W & Mass. v. EPA, majority engages in independent reading of the statute and finds that the agency’s reading conflicts with the statute’s intent/purpose/meaning – whether the statute was seemingly clear (B&W) or arguably less clear (Mass v. EPA). • Is there something about the agency interpretation involved that might make the Court unwilling ever to defer to an agency in these situations?

5. Chevron deference – a possible summary up to this point and some relationships to history • Chevron Step 1 – primary issue is one of statutory interpretation • Justices disagreed over interpretive methodology & on the ultimate conclusion (i.e., whether the statutes clearly spoke to an issue) • BUT in all of these cases SCT engaged in independent review of the statute at step 1 (much like Hearst & pure legal questions) • Only if the statute did not clearly speak to the issuedid justices defer to agency(similar deference to 2nd question in Hearst re application of law to particular settings) • Some additional thoughts on Chevron Step 1 • SCT may (?) use a canon of construction NOT to give agencies implicit interpretive authority over questions of great “economic and political” significance • But Mass v. EPA (combined with B&W) suggests that those cases are as much about SCT’s desire to independently review agencies’ claims about the scope of their jurisdiction

6. Chevron Step 2 – application issues • Step 2 - If the statute is silent/ambiguous re the precise question, court should defer to the agency’s construction as long as it is “permissible” or “reasonable.” • Notes 2-3 (pp. 175-76) show SCT has made little headway in defining what “reasonable” or “permissible” is • Courts approach “permissible” with different senses re meaning but are pretty deferential to agency for reasons of institutional competence, etc. • But Step 2 does not involve total deference. Agencies must provide a minimal explanation of the regulation’s permissibility. • Chevron is one of the few examples of SCT’s approach to step-2 • Discussed that EPA reviewed question for a long time, set forth reasons for using new definition and why dual definition wasn’t as good, how new reg would still accomplish the purposes of the Act • In general, other courts are often more cursory than this – simply looking for a short explanation of how the rule “fits” within the statute.

7. The possible, emerging relationship between Chevron step 2 and “hard look” review • In Judulang v. Holder, 132 S. Ct. 476 (2011), Justice Kagan writing for the Court, intimated that the Chevron Step-2 reasonableness analysis and “hard look” review are essentially the same thing: • Were we to [analyze this case under Chevron rather than “hard look” review], our analysis would be the same, because under Chevron step two, we ask whether an agency interpretation is “‘arbitrary or capricious in substance.’” • SCT has not explicitly applied “hard look” review at step-2 but some lower courts have. And Chevron’s explanation of why the EPA’s reg passed step-2 seemed more like “hard look” review than the ‘deference’ (“permissibility” analysis) that a lot of people associate with Chevron step-2. • Trend may be toward explicitly linking the two reviews. • Continued trend might strengthen (i.e., make less deferential) the review that many courts use at step 2 – or it could weaken “hard look” review.

8. Moving on to the question of whether and in what situations Chevron should apply at all Does Chevron deference apply to all agency interpretations of law? No: By its own terms Chevron required deference only to an “agency’s construction of a statute which it administers.” There are many interpretations that do not meet these criteria.

9. Examples of agency interpretations of law where the Chevron two-step approach 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 the APA to allow it to forego notice and comment rulemaking. • Agency interprets its own rules to allow it to grant a permit waiver in an environmental adjudication.

10. When does an agency administer a statute so that Chevron should apply? • 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. • Having to interpret a statute while performing its duties, does NOT rise to the agency’s “special responsibility” • agencies interpret lots of statutes • A statute that clearly gives an agency the power to (1) make rules implementing the statute or (2) to engage in adjudicatory or enforcement authority under the statute clearly is part of an agency’s special responsibility • Note how multiple agencies sharing authority over a regulatory scheme can complicate the issue – p. 179 n.6

11. Chevronanalysis – Adding Step 0 • Even if Chevron typically would apply – i.e., the agency is interpreting a statute that it administers – are there times when the courts should not use Chevron analysis because of the nature of the interpretation? • In other words: • Mustthe agency’s interpretation take a particular form in order to trigger the Chevron 2-step inquiry? • This is where Christensen/Mead and the Beer Trade Act hypos are relevant

12. ChevronStep 0 – a hypothetical • The Beer Trade Commission has issued an interpretive bulletin of Sec. 5 of the Beer Trade Act interpreting the phrase “any person, directly or indirectly, by the use of any means of interstate commerce … in connection with the purchase or sale of beer”in Sec. 5 to allow it to require permits of and impose standards on home brewers. • A group of home brewers has challenged the agency’s action claiming that the agency does not have the authority to issue these regulations. The agency has responded that the statute is ambiguous and it’s interpretation is reasonable. Thus it is entitled to Chevron deference. • Is the agency correct?

13. Christensen & Mead (pp. 187/188) – a summary • If the agency’s interpretation of the statute comes in the form of “force of law” interpretations (usually 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 usually should not use traditional 2-step Chevron analysis • What kind of deference do shadow law interpretations get (assuming that the statute is ambiguous)? • Why should it matter whether an interpretation has the “force of law” or is a “shadow” law method of interpretation?

14. When do agency interpretations have the “force of law”? • Christensen “Force of law” = interpretations through rulemakings or binding adjudications; “shadow law encompassed most other vehicles – e.g., opinion letters, policy manual, guidance documents • Mead– added a slight twist Agency interpretations “qualif[y] 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.” • This inquiry is harder – instead of looking for safe harbors (rulemaking/adjudications), courts must determine if Congress intended a shadow law interpretation to have the force of law. • Note the majority’s examination of the classification letters in Mead

15. Chevron vs. Mead/Skidmoredeference – the differences • Chevron • Court gives deference to agency based on its status as an entity who has impliedly been delegated interpretive authority through an ambiguous statute and which has exercised that authority through the delegated means (usually a rule/order) • Deference so long as interpretation is “reasonable/permissible” – agency usually wins but must provide an explanation of sorts • Mead/Skidmore • Court defers to agency interpretation made through informal/shadow law means because court thinks the interpretation is pretty good evidence the agency is right • Skidmore factors – is agency interpretation persuasive? • Is area of interpretation 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?

16. Seminole Rock/Auer deference – what relationship to Chevron? • Seminole Rock/Auer deference: court should defer to agency interpretation of its own ambiguous regulations unless it is clearly erroneous or inconsistent with the regulation. • Auer deference is even more deferential than Chevron. Why would a court give such deference to agency interpretations of their own regulations?

17. Auer deference & the Beer Trade Act regulations and interpretative bulletin • 27 C.F.R. '123.111: It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mail, in connection with the purchase or sale of beer: • to employ any device, scheme, or artifice to defraud, • to make any untrue statement of material fact or to omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading or • to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person. • The Commission argues that its interpretive bulletin, which interprets not only the Act but also its own regulation (above), should get deference under Auer/Seminole Rock. • Should the Commission’s interpretive bulletin be given Auer deference?

18. Parroting regulations & Auer deference • Gonzales majority: • “[T]he existence of a parroting regulation does not change the fact that the question here is not the meaning of the regulation but the meaning of the statute. An agency does not acquire special authority to interpret its own words when, instead of using its expertise and experience to formulate a regulation, it has elected merely to paraphrase the statutory language.” • What is the Gonzales majority concerned about? • Problems with the majority’s approach?

19. What happens if an agency’s interpretation of its own regulation does not receive Auer deference? • In Gonzales, the A.G.’s interpretive rule was not entitled to Auer deference because the regulation it interpreted was a “parroting” regulation. • As a result, the majority stated that the interpretive rule was really interpreting the statute rather than an independent regulation. • Thus, either Chevron or Skidmore would be appropriate depending on whether the interpretive rule had the “force of law”

20. Chevron/Skidmore & the Beer Trade Act • If the commission’s interpretive bulletin does not get Auer deference, it should get Chevron or Skidmore deference. • Is Chevron likely (assuming we haven’t answered this already)? • Force of law? Congressional intent? • Is the bulletin entitled to Skidmore deference? • Are there arguments that suggest neither kind of deference is warranted – similar to the majority’s primary concern in Gonzales?