Adapting to administrative law's Erie doctrine

Northwestern University Law Review

Volumn 101, Issue 3, 2007, Pages 997-1055

  Watts, Kathryn A ^a  

^a NORTHWESTERN UNIVERSITY   (United States)

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EID: 34548241368     PISSN: 00293571     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (46)

1. Marbury v. Madison, 5 U.S. 137, 177 (1803).
2. 467 U.S. 837 (1984).
3. See Cass R. Sunstein, Chevron Step Zero, 92 VA. L. REV. 187, 189 (2006) (arguing that Chevron went "so far as to create a kind of countet-Marbuty");
4. see also Richard W. Murphy, A "New" Counter-Marbury: Reconciling Skidmore Deference and Agency Interpretive Freedom, 56 ADMIN. L REV. 1, 37 (2004) (noting the "tension between the Marbury norm that [courts] control legal meaning and the Chevron norm that agencies control policymaking, which in turn, sometimes controls legal meaning").
5. Voluminous scholarly commentary underscores the significance of Chevron. See, e.g., David J. Barron & Elena Kagan, Chevron's Nondelegation Doctrine, 2001 SUP. CT. REV. 201 (2002);
6. Elizabeth Garrett, Legislating Chevron, 101 MICH. L. REV. 2637 (2003);
7. Michael Herz, Deference Running Riot: Separating Interpretation and Lawmaking under Chevron, 6 ADMIN. L.J. AM. U. 187 (1992);
8. Antonin Scalia, Judicial Deference to Administrative Interpretations of Law, 1989 DUKE L.J. 511;
9. Mark Scidenfeld, A Syncopated Chevron: Emphasizing Reasoned Decisionmaking in Reviewing Agency Interpretations of Statutes, 73 TEX. L. REV. 83 (1994);
10. Cass R. Sunstein, Law and Administration After Chevron, 90 COLUM. L. REV. 2071 (1990).
11. 545 U.S. 967 (2005).
12. Id. at 982-84 (emphasis added).
13. Only some agencies will benefit from Brand X's new rule because only some agencies are eligible for Chevron deference. See generally Thomas W. Merrill & Kristin E. Hickman, Chevron's Domain, 89 GEO. L.J. 833, 848-49 & nn.83-84 (2001) (listing the Equal Employment Opportunity Commission as an example of an agency that consistently has been denied Chevron deference). In addition, some statutes, such as the Administrative Procedure Act and the Freedom of Information Act, do not fall within Chevron's reach because they are not administered by a single agency but rather "apply to all or virtually all administrative agencies." Id. at 893.
14. Marbury v. Madison, 5 U.S. 137, 177 (1803).
15. Brand X, 545 U.S. at 982-84. Where Congress has chosen not to delegate lawmaking powers to an agency and the agency could not authoritatively interpret ambiguity in a statute pursuant to Chevron, the judicial role in the interpretive process remains unaffected by Brand X. In those situations, because Congress has chosen not to delegate legislative power to the relevant agency, the appropriate inference is that Congress would want the courts to interpret the statute "as faithful agents of Congress" when adjudicating matters implicating statutory ambiguities. Thomas W. Merrill, Rethinking Article I, Section 1: From Nondelegation to Exclusive Delegation, 104 COLUM. L. REV. 2097, 2173 (2004).
16. Administrative agencies are just beginning to recognize the import of Brand X and to rely on the decision to promulgate regulations that run contrary to statutory interpretations issued by the courts.
17. See, e.g., Proposed Rules, Department of Health and Human Services, Medicare Program; Competitive Acquisition for Certain Durable Medical Equipment, Prosthetics, Orthotics and Supplies, 71 Fed. Reg. 25,654, 25,660 (May 1, 2006) (relying on Brand X in support of proposed rule that would run counter to the decisions of three district courts).
18. See, e.g., AARP v. EEOC, 390 F. Supp. 2d 437, 442 (E.D. Pa. 2005) (noting that Brand X "dramatically altered the respective roles of courts and agencies under Chevron").
19. 47 U.S.C. § 153(30) (2000);
20. see also In re StarNet, Inc., 355 F.3d 634, 639 (7th Cir. 2004) (noting ambiguity in the term "location").
21. See Brand X, 545 U.S. at 1015-17 (Scalia, J., dissenting).
22. Id. at 1016-17.
23. Id. at 1017-18, n.12.
24. Id. (noting that a judicial decision deferring to an agency's position under Chevron "does not even 'purport to give the statute a judicial interpretation'");
25. see also Rebecca Hanner White, The Stare Decisis "Exception " to the Chevron Deference Rule, 44 FLA. L. REV. 723, 726 (1992) ("If the Court's prior opinion upheld the agency's interpretation as one reasonable reading of the statute, but not the only one possible, and the agency thereafter adopts a different interpretation, the new reading is entitled to deference under Chevron, free from the constraints of stare decisis."); Merrill & Hickman, supra note 7, at 916 (arguing that if a court upholds an agency interpretation under Chevron as a reasonable statutory construction, the court's acceptance of the agency's interpretation does not "foreclose the possibility that a different agency interpretation would also be reasonable").
26. Brand X, 545 U.S. at 1017-18, n.12 (Scalia, J., dissenting).
27. Id. at 1017.
28. Justice Scalia is the only Justice who took the view that an agency should not be able to trump any judicial interpretations. Two other Justices (Souter and Ginsburg) did not express an opinion on the stare decisis issue; they joined only the portion of Justice Scalia's dissent that argued that the FCCs interpretation was implausible. Id. at 1005. In contrast, one Justice (Stevens) took the view that agencies should be able to trump lower court interpretations but not necessarily Supreme Court interpretations. Id. at 1008 (Stevens, J., concurring). The remaining five members of the Brand X Court-Justices Thomas, Kennedy, O'Connor, Rehnquist and Breyer - all seem to support applying the Court's new rule to all judicial interpretations, including Supreme Court precedent.
29. In using the term "provisional," I borrow from Kenneth A. Bamberger, who argued prior to Brand X that "a court's choice of one reasonable construction of regulatory statutes" should be viewed as merely "provisional" - leaving the relevant agency free to adopt a contrary construction. Kenneth A. Bamberger, Provisional Precedent: Protecting Flexibility in Administrative Policymaking, 77 N.Y.U. L. REV. 1272, 1307-11 (2002). Although the Supreme Court did not cite Bamberger's article in Brand X, the Court essentially adopted Bamberger's framework for "provisional" precedent in the administrative realm.
30. See generally RICHARD J. PIERCE, JR., ADMINISTRATIVE LAW TREATISE § 18.5 (4th ed. 2002).
31. Consider, for example, the federal securities laws. Private securities litigation filed in federal district courts by private parties "plays an essential role in federal securities regulation." David S. Ruder, The Development of Legal Doctrine Through Amicus Participation: The SEC Experience, 1989 WIS. L. REV. 1167, 1168. An important portion of private securities suits raises unresolved issues of law-the resolution of which often will affect the Securities and Exchange Commission's own enforcement and rulemaking efforts under the securities laws. Id. The courts, accordingly, frequently face "new and difficult legal questions" in the context of securities litigation between private litigants - questions that have yet to be resolved by the Commission. Giovanni P. Prezioso, General Counsel, Sec. and Exch. Comm'n, Remarks Before the American Bar Association Section of Business Law, General Counsel Forum, (June 3, 2004), http://www.sec.gov/news/speech/spch060304gpp.htm.
32. Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938).
33. See id. at 78, ("Except in matters governed by the Federal Constitution or acts of Congress, the law to be applied in any case is the law of the State."). Erie, in other words, declared that there is no such thing as "federal general common law." Id. See generally Martha A. Field, Sources of Law: The Scope of Federal Common Law, 99 HARV. L. REV. 881, 890 (1986) (discussing the meaning and scope of "federal common law").
34. See Bradford R. Clark, Ascertaining the Laws of the Several States: Positivism and Judicial Federalism After Erie, 145 U. PA. L. REV. 1459, 1461, 1466 (1997);
35. Judith S. Kaye & Kenneth I. Weissman, Interactive Judicial Federalism: Certified Questions in New York, 69 FORDHAM L. REV. 373, 376 (2000).
36. See infra Part III.A.
37. This might occur in a variety of circumstances. A court, for example, might need to reach an independent construction of a statutory ambiguity - even though Congress delegated interpretive powers to an agency - because the agency has yet to construe the ambiguous statutory terms in any form whatsoever. See AT&T Corp. v. City of Portland, 216 F.3d 871, 876 (9th Cir. 2000). Or a court may be forced to render an independent statutory construction because the agency has interpreted the ambiguity only in an informal format that lacks "the force of law" and thus does not bind the courts pursuant to Chevron. See S. Utah Wilderness Alliance v. Dabney, 222 F.3d 819, 829 (10th Cir. 2000).
38. My proposal does not make interaction between courts and agencies mandatory but rather leaves both sides - courts and agencies - with the discretion to decide whether to engage in interaction in a given case. I view such a discretionary approach as preferable to a mandatory approach for two primary reasons, First, giving courts and agencies the power to decide within their discretion when interaction would be appropriate ensures that the benefits and costs of interaction can be weighed on a case-by-case basis. Second, mandating that courts seek out the views of agencies in pending cases might well meddle with the judicial process.
39. In using this term, I follow prior scholars' terminology. See Cynthia R. Farina, Statutory Inter-pretation and the Balance of Power in the Administrative State, 89 COLUM. L. REV. 452, 453-54 (1989);
40. Gregg D. Polsky, Can Treasury Overrule the Supreme Court, 84 BOSTON U. L. REV. 185, 191-99 (2004).
41. This Article in no way questions the continuing validity of courts engaging in independent (and non-interactive) statutory construction where statutory circumstances indicate no congressional intent to delegate legislative power to an agency and where the agency therefore lacks the ability to obtain Chevron deference. In those situations, because Congress has chosen not to delegate legislative power to an agency, the courts should continue to independently interpret any ambiguity in the statutes as faithful agents of Congress. See supra note 9 and accompanying text.
42. See infra Part IV.A.
43. See infra Part IV.B.
44. Skidmore v. Swift, 323 U.S. 134 (1944).
45. See Farina, supra note 29, at 453-54 (contrasting the "independent judgment model" under which "interpretive authority rests principally with the court" with the "deferential model," which requires courts to "accept any reasonable construction offered by the agency");
46. see also Thomas W. Merrill, Judicial Deference to Executive Precedent, 101 YALE L.J. 969, 971 (1992) (noting that "[t]he attitude of courts toward administrative interpretations of statutes has ranged between" deference and independent judgment models).