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Judicial Deference to Inconsistent Agency Statutory Interpretations
Abstract
Although administrative law doctrine requires courts to defer to an agency’s reasonable statutory interpretation, the doctrine is unclear as to whether an agency gets less deference when it changes its own prior interpretation. We formally analyze how judicial deference to revised agency interpretations affects the ideological content of agencies’ interpretations. We find a nonmonotonic relationship between judicial deference to inconsistent agency interpretations and interpretive extremism. This relationship arises because as courts become less deferential to revised interpretations, the initial agency finds it more attractive to promulgate a moderate interpretation that will not be revised. However, the less deferential the courts, the more extreme this moderate interpretation becomes. Normatively, our results suggest that an interest in responsiveness of interpretive policy to the preferences of the incumbent leadership favors deference to revised interpretations, whereas an interest in ideological moderation favors a somewhat less deferential posture to interpretive revisions.
Como o Direito Administrativo deve lidar com a incerteza genuína, em que as probabilidades não podem ser associadas aos resultados? Eu argumento que há uma importante categoria de decisões de agências sob incerteza na qual ser arbitrário é racional. A arbitrariedade racional surge quando nenhuma razão de primeira ordem pode fundamentar a escolha da agência, embora a agência tenha válidas razões de segunda ordem para fazer determinada escolha. Quando essas condições prevalecem, até mesmo um jogo de “cara ou coroa” pode ser uma estratégia perfeitamente racional de tomada de decisão para agências. Os tribunais devem adotar uma postura de deferência às decisões racionalmente arbitrárias. Há um papel próprio para as cortes de garantir que agências tenham recursos adequadamente investidos na coleta de informações, o que pode dissipar a incerteza. Ainda assim, o valor de investimentos adicionais na coleta de informações, em alguns casos, será genuinamente incerto. Se assim for, os tribunais devem ter deferência às escolhas de segunda ordem das agências sobre investimentos informacionais pelos mesmos fundamentos que justificam a deferência às escolhas de primeira ordem sob incerteza feitas por agências.
It is often asserted that separation of legislative powers tends to make legislation both more moderate (because concessions to all veto players are needed to secure enactment) and less frequent (because sufficient concessions are sometimes infeasible). The formal analysis in this article shows this claim to be incomplete and sometimes incorrect. Although greater separation of powers makes legislation more difficult to enact, it also makes legislation, once enacted, more difficult to repeal. Attenuating the threat of repeal means that when one faction has sufficient power to push through extreme policies, it is more likely to do so than would be the case if legislative power were more concentrated. These two effects cut in opposite directions, and it is difficult to say, as a general matter, which will predominate. Indeed, increasing the fragmentation of legislative power may sometimes increase both the expected frequency and the expected extremism of legislative enactments.
Political scientists have long relied on organization theory as their foundation for understanding public bureaucracy. This approach makes good sense, but so far the payoffs have been rather limited. The surface problem is that organization theory, as the creature of sociologists, social psychologists, and, in more recent years, economists, has developed around explanatory concerns having little or nothing to do with government. The more fundamental problem is that political scientists have allowed this to happen by largely abandoning the field of organizations.
COMMENTATORS chastised President William Clinton for the flurry of regulatory activity in the final months of his administration. That last-minute action included, among other activities, finalizing energy efficiency standards for washing machines and workplace ergonomic regulations to protect against musculoskeletal injuries.1 Mere hours after President George W. Bush's inauguration, then-Chief of Staff Andrew Card fired off a memorandum to the heads of federal executive agencies directing them to send regulatory actions to the Federal Register only if a Bush appointee gave approval, to withdraw regulatory actions that had already been sent to the Federal Register but had not yet been published, and to freeze the effective dates of final actions that had been published but had not yet taken effect.2 President Clinton's rulemaking activities in his closing days were not unique. Slightly over eight years earlier, in the waning months of an administration that had instituted a regulatory moratorium, President George H.W. Bush's Secretary of Transportation proposed loosening the rules on how long truck drivers could stay on the road between rest breaks, prompting a flood of comments.3 The Department of Transportation did not finalize the rulemaking proposal, and the Clinton administration formally scrapped it two weeks after entering office.4 The Secretary of Transportation behind this attempt at last-minute (de)-regulatory activity was Andrew Card.
This Article articulates and analyzes the possibility of what we call the unbundled executive. The unbundled executive is a plural executive regime in which discrete authority is taken from the President and given exclusively to a directly elected executive official. Imagine a directly elected War Executive, Education Executive or Agriculture Executive. We show that a partially unbundled executive is likely to perform better than the completely bundled executive structure attendant in the single executive regime. By better, we mean that the standard arguments used to justify a single strong unitary executive in the United States -accountability, energy, uniformity, coordination, and so on-actually justify a specific type of plural executive, not the single executive structure favored in Article II. Our thesis then is both unusual and controversial in that there has been virtually no serious theoretical challenge to the single executive structure for more than a century. The entire unitary executive debate assumes a cornerstone that we suggest is incorrect and consequential.
This Article presents a positive theoretical analysis of the relationship between the textual plausibility of an administrative agency's statutory interpretation and the procedural formality with which the agency promulgates that interpretation. The central claim is that, from the perspective of an agency subject to judicial review, textual plausibility and procedural formality function as strategic substitutes: greater procedural formality will be associated with less textual plausibility, and vice versa. Greater textual plausibility increases an agency's chances of a favorable judicial ruling but entails some sacrifice of policy discretion. Procedural formality is costly, but a reviewing court may give an agency more substantive latitude when the agency promulgates an interpretive decision via an elaborate formal proceeding. The court may view formal process as a proxy for variables that the court considers important but cannot observe directly, such as the significance of the interpretive issue to the agency's policy agenda. Because procedural formality and textual plausibility are both costly methods for increasing the agency's odds of surviving judicial review, a rational agency will choose the optimal mix of textual plausibility and procedural formality. Changes that increase or decrease the costs or benefits associated with one of these two variables will therefore have an indirect effect on the other variable as well. This Article develops the theoretical basis for this strategic substitution effect and explores its ramifications for administrative law.
In the landmark case Chevron, U.S.A. v. National Resource Defense Council, Inc., the Supreme Court articulated a deferential standard for reviewing an agency's interpretations of statutory language within that agency's area of concern as long as Congress was silent or ambiguous on the matter and the agency's interpretation was reasonable. Using the Food and Drug Administration as a primary case study, Dr. Shuren contends that one of the main reasons for granting agencies broad judicial deference in the implementation of statutory mandates is that agencies are the governmental entities best equipped to respond to changing circumstances. Dr. Shuren contends that courts should grant sufficient deference to agencies' modifications of prior statutory interpretations in order to ensure adequate agency flexibility to meet new challenges within existing statutory delegations of authority.
The "Chevron" decision, which boils down to the rule that federal courts must respect any reasonable interpretation by an administrative agency of its own statute, is discussed. This decision and its relationship to the modern system of administrative government in the US is examined.
The Supreme Court's 1984 decision in Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc. contains a revolutionary analysis of the role of agencies and courts in interpreting statutes. Professor Merrill's Article surveys the actual practice of the Supreme Court since Chevron and shows that the Court does not in fact follow the framework of that case on any consistent basis. He argues that the divergence between theory and practice reflects unease with Chevron's implications for the balance of power between the branches of government and suggests the need for a new model. The last two sections of the Article set forth an alternative to Chevron-the executive precedent model. Under this conception, executive interpretations would be viewed as a form of precedent and would be treated by courts the same way as precedents of courts of concurrent jurisdiction: not legally binding, but entitled to a presumption of correctness, and given more or less deference depending on a variety of contextual factors. Professor Merrill argues that the executive precedent model would avoid Chevron's failings, provide an explanation for the multiple "deference" factors developed in the pre-Chevron era, and offer better incentives for all institutional actors.
In the modern regulatory state, federal administrative agencies wield immense power. Congress not only explicitly grants agencies authority, it also passes ambiguous statutes; the opportunity to interpret these ambigu-ous statutes provides an additional source of power. The Supreme Court, under the well known Chevron doctrine, 1 implicitly extended this power by holding that courts must defer to reasonable agency interpretations of am-biguous statutes. According to the Chevron Court, agencies should interpret ambiguous statutes because they bring more expertise to bear on such ques-tions, because they are politically accountable, and because Congress, by leaving a statute ambiguous, has delegated interstitial policy-making to the agencies. What happens if an agency decides to revise its interpretation of an ambiguous statute? Before Chevron, courts traditionally gave revised inter-pretations less deference than they gave to agencies' initial interpretations of statutes. 2 It is unclear, however, whether this tradition can or should sur-vive Chevron, especially since Chevron itself involved a revised agency in-terpretation of a statute. 3 Furthermore, the reasons the Chevron Court of-fered to justify deferring to agency interpretations of statutes also justify deference to revised agency interpretations. In the decade since Chevron, courts have struggled over whether to give "Chevron deference" to revised interpretations: the Supreme Court has proffered several seemingly inconsistent views, 4 while lower courts seem to focus on one or another of these views without grasping the problem in its B.A. 1991, Reed College; M.A. 1993, The University of Pennsylvania; J.D. Candidate 1997, The University of Chicago. 1 Chevron USA Inc v NRDC, 467 US 837 (1984). See text accompanying notes 31-37 for a descrip-tion of the Chevron doctrine. 2 See, for example, United Transportation Union v Lewis, 711 F2d 233, 242 (DC Cir 1983) ("A statutory construction to which an agency has not consistently adhered is owed no deference."); Frank Diehl Farms v Secretary of Labor, 696 F2d 1325, 1330 (11th Cir 1983) ("We are more reluctant to defer to an agency's more recent interpretation as authoritative when it conflicts with earlier pronouncements of the agency."); Watt v Alaska, 451 US 259, 273 (1981) ("The Department [of the Interior]'s current in-terpretation, being in conflict with its initial position, is entitled to considerably less deference."). 3 Chevron, 467 US at 853-59 (EPA changed its interpretation of the statutory term "source."). 4 See Part I.
A longtime favorite among teachers and students, Economics of the Public Sector returns to the classroom in a fresh edition that has been fully revised to reflect the latest developments in public policy and economic research. Professor Stiglitz builds on the book's classic strengths: an integrated approach to public economics, a readable and inviting style, and careful attention to real-world problems and applications.
ABSTRACT Despite its apparent importance for administrative systems, consistency - as a judicial doctrine in administrative law - is in a state of disarray. The introduction of the expansive version of judicial deference to agencies' interpretations in Chevron v. NRDC left unclear the question of the status of inconsistency as a ground for judicial review. Chevron has been followed by a series of conflicting decisions on this question. The recently introduced revision in the doctrine of judicial review in U.S. v. Mead Corp. added a layer of complexity onto the already confused law in this field. It appears that, 20 years after Chevron, the question under what circumstances inconsistency should serve as a ground for judicial review is left largely unanswered. The purpose of the current article is to provide a coherent framework for the discussion on the place of consistency in administrative law. I argue that instead of answering the question of consistency by some general, previously-set and often irrelevant formulas of judicial deference, courts should conduct a consistency analysis within which they would examine a set of considerations. Among these considerations are the place of consistency within the specific legislative framework, the bureaucratic and structural implications of consistency, the procedural modes of action chosen by the agency and the relative advantages and disadvantages of judicial intervention to enforce consistency with regard to the relevant field of regulative activity.
An independent judiciary with the power to constrain the executive and legislative branches is commonly thought to be the foundation of government under the rule of law. However, it is not obvious why those with political power would ever tolerate the constraints imposed by an independent court. I offer an explanation for independent judicial review that is based on ongoing political competition between risk-averse parties. An independent judiciary is a mechanism through which these political competitors can enforce mutual restraint. But support for independent judicial review is sustainable only when (1) the political system is sufficiently competitive, (2) judicial doctrine is sufficiently moderate, and (3) parties are both sufficiently risk averse and forward looking. I employ a simple formal model to show how these variables influence the political sustainability of independent judicial review, and I also present the results of a preliminary empirical test that confirms the central hypotheses.
The law governing judicial deference to agency statutory constructions is a complex brew of improbable fictions and proceduralism. One reason this state of affairs persists is that courts have failed to resolve a contradiction between two competing, sensible impulses in deference doctrine. Oceans of precedent over the last 150 years have stressed that courts should defer to longstanding, reasonable constructions by agencies of statutes they administer. Then along came Chevron, which extolled agency flexibility and instructed courts to extend strong deference even to interpretive flip-flops. Competition between the virtues of interpretive consistency and flexibility has bubbled through and confused judicial deference analysis ever since. The Supreme Court's recent efforts to limit the scope of Chevron's strong deference to agency constructions that carry the force of law has worsened such confusion, in part because the Court's discussion and application of this concept were incoherent. This Article proposes a commitment approach to this force-of-law limitation that has deep roots in the concept of the rule of law and considerable power to clarify deference doctrine by resolving the clash between the competing values of interpretive consistency and flexibility. For the rule of law to be genuine, the default position must be that laws have general applicability - i.e., the law for X should be the law for Y as well. This truism suggests that an agency's statutory construction properly can enjoy the force of law only where the agency has committed to applying its construction consistently across time and parties. Where an agency's construction is longstanding, the agency's commitment to consistent application is self-evident. The puzzle, of course, is to reconcile this commitment approach with Chevron's praise of interpretive flexibility. One solution is to recognize that an agency can genuinely commit to a new interpretation by adopting it in a manner that makes it costly to change course later. Where agencies commit to consistency in this way, there is less need for courts to engage in independent statutory construction to protect rule-of-law values, which should leave courts freer to accept the premise of strong deference that the best way to determine the meaning of an agency's statute is to trust the agency's own (rational) construction.
The transition between presidencies has long created controversies. Whether the issue is "midnight judges" or "midnight regulations," presidential action at the end of a term has long provoked scrutiny and criticism. Presidents have also raised eyebrows at the beginning of their terms when they assert their authority and try to undo what their predecessor in office left behind. More than one president has taken action aimed specifically at "midnight regulations," such as ordering a freeze on the issuance of new regulations, a review of regulations issued at the end of the prior administration and other similar action. This article looks at the legality and propriety of "midnight regulation" and the devices incoming presidents use to undo "midnight regulation" left behind by their predecessors in office. The article also looks at the reasons why presidential and administrative action tends to increase at the end of a term and the forms that late term action tend to take. We see that sometimes late term action is simply part of an attempt to get more done before the deadline imposed by inauguration day, while in other situations delay may be due to external forces or due to intentional waiting for political reasons. Late term action that should be the greatest cause for concern may be action that appears designed merely to tie the hands of an incoming administration or create political costs without much hope of genuinely projecting the outgoing administration's policies into the future.
This Article examines executive branch agency actions concluded just before a new President takes office, such as "midnight" rulemaking and late-term hiring and promotion, which Professor Mendelson collectively refers to as "agency burrowing." Congress, the media, and some commentators have portrayed such activities as unsavory power grabs that undermine the President-elect's ability to direct the functions of administrative agencies. Rather than dismissing agency burrowing out of hand, however, Professor Mendelson argues for a more nuanced approach. In some cases, burrowing can make positive contributions to the democratic responsiveness of agencies, agency accountability, and the "rule of law." A fuller analysis of burrowing also suggests the need for a more nuanced approach to President-centered theories of the administrative state. Maximum presidential oversight may be insufficient to ensure agency accountability and democratic responsiveness. Instead of focusing centrally on a formal President-agency relationship, we may wish to give greater attention to more functional means of ensuring agency legitimacy such as monitoring, focused public dialogue on issues before agencies, and agency development of self-limiting rules.
How the Chevron decision changed the dynamics of decision making inside agencies.
In this article we evaluate whether the Supreme Court's much-discussed decision in Chevron v Natural Resources Defense Council (1984) signaled a lasting difference in how the justices decide administrative law cases, by comparing and testing the predictions of three distinct theories of Supreme Court behavior. The legal model predicts an increase in deference to administrative agencies. This prediction is shared by the jurisprudential regime model, which also predicts that the justices evaluate key case factors differently before and after Chevron. The attitudinal model predicts no change in the justices’ behavior as a result of Chevron. Although we find that attitudes matter, the fact that we also find support for the legal and jurisprudential regime models undermines the assertion of the attitudinal model that law cannot explain Supreme Court votes on the merits.
This paper analyzes the extent of agency discretion under different assumptions concerning judicial review: a) discrete judicial decision making; b) multi-member courts; c) decision costs at the Courts; d) multi-layer judiciary. The main results of this paper are: a) discrete judicial decision making and decision making costs at the Court generate agency discretion; b) Agency discretion is reduced, however, by introducing further levels of judicial review; c) Multi-member Courts do not seem to generate important implications for agency discretion.
Many statutes are administered by administrative agencies. This paper shows that, when interpreting an ambiguous statute, administrative agencies choose between two strategies of statutory interpretation: the risky strategy, a relatively aggressive interpretation that provokes an appeal by the firm; and the safe strategy, a relatively nonaggressive interpretation that the firm complies with. The paper also shows that a change in the level of judicial deference may result in a shift from the risky strategy to the safe one, or vice versa. Therefore, contrary to the commonly held view, an increase in the level of judicial deference may result in agencies choosing a less aggressive statutory interpretation, and in more court decisions reversing agencies' statutory interpretation. © The Author 2009. Published by Oxford University Press on behalf of the American Law and Economics Association. All rights reserved. For permissions, please e-mail: [email protected]
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In the last quarter-century, the Supreme Court has legitimated agency authority to interpret regulatory legislation, above all in Chevron U.S.A., Inc v Natural Resources Defense Council, Inc, the most-cited case in modern public law. Chevron recognizes that the resolution of statutory ambiguities often requires judgments of policy; its call for judicial deference to reasonable interpretations was widely expected to have eliminated the role of policy judgments in judicial review of agency interpretations of law. But this expectation has not been realized. On the Supreme Court, conservative justices vote to validate agency decisions less often than liberal justices. Moreover, the most conservative members of the Supreme Court show significantly increased validation of agency interpretations after President Bush succeeded President Clinton, and the least conservative members of the Court show significantly decreased validation rates in the same period. In a similar vein, the most conservative members of the Court are less likely to validate liberal agency interpretations than conservative ones and the least conservative members of the Court show the opposite pattern.Similar patterns can be found on federal appellate courts. In lower court decisions involving the EPA and the NLRB from 1990 to 2004, Republican appointees demonstrated a greater willingness to invalidate liberal agency decisions and those of Democratic administrations. These differences are greatly amplified when Republican appointees sit with two Republican appointees and when Democratic appointees sit with two Democratic appointees.
Chevron, U.S.A. v. Natural Resources Defense Council lays out a two-step process that courts must follow when they review a federal agency's construction of a federal statute. We argue that Chevron, rightly understood, has only one step. The single question is whether the agency's construction is permissible as a matter of statutory interpretation. The two Chevron steps both ask this question, just in different ways, and are thus mutually convertible: any opinion written in terms of one step can be written, without loss of content, in terms of the other step. Chevron's artificial division of a unitary inquiry causes material confusion among commentators and courts, and has no benefits; administrative law should jettison the two-step framework.
This paper contributes to the positive political theory of legislative delegation by modeling formally the decision calculus of a rational legislator who must choose between delegation to an agency and delegation to a court. The model focuses in particular on the legislator's interest in diversifying risk, both across time and across issues, and her interest in avoiding interpretive inconsistency. The model emphasizes an institutional difference between agencies and courts that the extant literature has generally neglected: Agency decisions tend to be ideologically consistent across issues but variable over time, while court decisions tend to be ideologically heterogeneous across issues but stable over time. For the legislator, then, delegation to agencies purchases inter-temporal risk diversification and inter-issue consistency at the price of inter-temporal inconsistency and a lack of risk diversification across issues, while delegation to courts involves the opposite trade-off. From this basic insight the model derives an array of comparative statics regarding the conditions under which rational legislators would tend to prefer delegating to agencies over courts and vice versa. These results imply hypotheses as to how real-world variation in political and policy-specific variables, as well as variation in characteristics of judicial and agency approaches to statutory interpretation, may affect legislators' preferences regarding allocation of interpretive authority.
This article examines the effect of the relationship between the president and Supreme Court Justices on justices' voting
in administrative law cases. I evaluate Cohen and Spitzer's theory that justices tailor the pro- or antideference signal sent
to the lower courts based on their relationship with the sitting president. The results show, contrary to the theory of Cohen
and Spitzer, that justices' votes in administrative law cases are influenced by the ideology of the president under whom the
administrative decisions were made rather than by the ideology of the president in office at the time of the Court's decision.
Judicial Deference to Agency Action: A Rational Choice Theory and an Empirical Test
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Chevron and its Aftermath: Judicial Review of Agency Interpretations of Statutory Provisions
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A Foolish Consistency Is the Hobgoblin of Little Minds
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