Defining deference down, again: Independent agencies, chevron deference, and fox

Administrative Law Review

Volumn 62, Issue 2, 2010, Pages 433-449

  May, Randolph J ^a  

^a Free State Foundation   (United States)

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EID: 79959404138     PISSN: 00018368     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (95)

1. Randolph J. May, Defining Deference Down: Independent Agencies and Chevron Deference, 58 ADMIN. L. REV. 429 (2006).
2. Id. at 432. Brand X refers to the Supreme Court's decision in National Cable & Telecommunications Ass'n v. Brand X Internet Services, 545 U. S. 967 (2005).
3. My previous article discusses the Brand X decision in considerable detail. For present purposes, it suffices to note that the Supreme Court, in reviewing a decision of the Federal Communications Commission (FCC) interpreting a provision of the Communications Act, held that, when in conflict, Chevron deference trumps the doctrine of stare decisis. Chevron deference refers to the standard of deference to be accorded actions of administrative agencies when they interpret ambiguous statutory provisions. See Chevron U. S.a. Inc. v. Natural Res. Def. Council, Inc., 467 U. S. 837, 842-45 (1984).
4. May, supra note 1, at 453.
5. Of course, "If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." Chevron, 467 U. S. at 842-43. Determining whether the intent of Congress is clear is step one of Chevron.
6. Id. at 843. When the intent of Congress is not clear, what constitutes a "permissible" construction of a statute at the step two inquiry naturally may not be selfevident. For most scholars, permissibility equates with the same type of reasonableness analysis that courts undertake in deciding whether an agency decision is arbitrary or capricious under § 706 (2) (a) of the Administrative Procedure Act (APA), 5 U. S. C. § 706 (2) (a) (2006).
7. See Ronald M. Levin, A Blackletter Statement of Federal Administrative Law, 54 aDMIN. L. REV. 1, 37-38 (2002) ("If the statutory meaning on the precise issue before the court is not clear, or if the statute is silent on that issue, the court is required to defer to the agency's interpretation of the statute if that interpretation is 'reasonable' or 'permissible' ('step two' of Chevron).... Courts may look, for example, to whether the interpretation is supported by a reasonable explanation and is logically coherent. In this regard, the step two inquiry tends to merge with review under the arbitrary and capricious standard....").
8. Chevron, 467 U. S. at 844.
9. The key point here is that, apart from the vagaries of defining permissibility or reasonableness in any given case, when Chevron applies, it requires a highly deferential review that generally is outcome-determinative. As Jeffrey Lubbers points out in his authoritative text, "The Supreme Court has only rarely set aside an agency action under step two." JEFFREY S. LUBBERS, A GUIDE TO FEDERAL AGENCY RULEMAKING 499 (4th ed. 2006).
10. Chevron, 467 U. S. at 865-66. To reinforce the political accountability rationale, the Court added that "federal judges-who have no constituency-have a duty to respect the legitimate policy choices made by those who do." Id. at 866.
11. See SECTION OF ADMIN. LAW & REGUIATORY PRACTICE, AM. BAR ASS'N, A GUIDE TO JUDICIAL AND POLITICAL REVIEW OF FEDERAL AGENCIES 56 (John F. Duffy & Michael Herz eds., 2005)
12. ("Thus, Charon has significant institutional implications, shaping the relationship among the branches of government and serving as a kind of 'counter-MarAury' for the regulatory state."). The reference to Chevron as a kind of counter-A/arAu-' is from Cass R. Sunstein, Law and Administration After Chevron, 90 COLUM. L. REV. 2071, 2075 (1990)
13. ("Chevron promises to be a pillar in administrative law for many years to come. It has become a kind of Marbury, or counter-AfarAu-, for the administrative state."). By counter-Marbury, Professor Sunstein meant to contrast Marbury's oft-repeated dictate that it is for the judges to "say what the law is", Marbury v. Madison, 5 U. S. (1 Cranch) 137, 177 (1803), with the highly deferential Chevron review standard that tilts toward allowing the agencies to say what the law is.
14. See May, supra note 1, at 442-45, where I discussed the nature of the independent regulatory agencies, describing the features, such as staggered fixed terms and bipartisanship requirements, which are intended to make them independent. A significant feature is the provision, found in several of the independent agency statutes, that prevents the President from removing commissioners except upon "good cause." Such a removal limitation was upheld against constitutional attack in Humphrey's Executor v. United States, 295 U. S. 602, 631-32 (1935).
15. The Supreme Court said that, in light of the removal limitation and other features discussed in my Defining Deference Down article, Federal Trade Commission (FTC) commissioners were intended to be "free from executive control." Id. at 628. The FCC and FTC share many of the same institutional features that lead them to be considered "independent" agencies, including having a bipartisan mix of commissioners that serve for staggered fixed terms. The Securities and Exchange Commission (SEC) and the Commodities Futures Trading Commission (CFTC) also share these features and are considered independent agencies. I discuss the nature of independent regulatory agencies, and especially the FCC, in more detail in Randolph J. May, The FCC's Tumultuous Year 2003: An Essay on an Opportunity for Institutional Agency Reform, 56 ADMIN. L. REV. 1307, 1310-12 (2004).
16. For a very useful comprehensive study of independent agencies, see Marshall J. Breger & Gary J. Edles, Established by Practice: The Theory and Operation of Independent Federal Agencies, 52 ADMIN. L. REV. 1111, 1112-14 (2000).
17. May, supra note 1, at 451.
18. David M. Gossett, Chevron, Take Two: Deference to Revised Agency Interpretations of Statutes, 64 U. CHI. L. REV. 681, 689 n. 40 (1997). (Pubitemid 127445764)
19. Elena Kagan, Presidential Administration, 114 HARV. L. REV. 2245, 2376 (2001). At the time she wrote Presidential Administration, Kagan was a Visiting Professor at Harvard Law School. Later she served as Dean of the law school before becoming Solicitor General of the United States. In the Clinton Administration, she served as Deputy Assistant to the President for Domestic Policy and Deputy Director of the Domestic Policy Council.
20. Id. at 2377.
21. Id.at 2376.
22. Significantly, Kagan refers to the lack of presidential removal power with respect to the commissioners of independent agencies as "the core legal difference between these entities." Id.
23. Id. at 2377. Another of the few isolated references to the question of Chevron deference to independent agency deference came from John Duffy. He stated that "[i]f the courts really followed the common law logic of Chevron, they should have balked at extending Chevron to [Independent] agencies, which have less democratic accountability than agencies like the EPA, whose heads serve at the pleasure of the President." John F. Duffy, Administrative Common Law in Judicial Review, 77 TEX. L. REV. 113, 203 n. 456 (1998).
24. 129 S. Ct. 1800 (2009)
25. rev'g and remanding 489 F.3d 444 (2d Cir. 2007).
26. A federal statute prohibits broadcasting of "any... indecent... language." 18 U. S. G.§ 1464 (2006).
27. See FCC v. Pacifica Found., 438 U. S. 726, 729, 750-51 (1978) (affirming that the FCC's determination that a radio station's daytime broadcast of George Carlin's "Filthy Words" monologue was sanctionable under the indecency prohibition).
28. 129 S. Gt. at 1807.
29. See 5 U. S. C. § 706 (2) (A) (2006) ("The reviewing court shall... hold unlawful and set aside agency action... found to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law....").
30. Fox, 129 S. Ct. at 1810.
31. Id. at 1811.
32. Id.
33. Id.
34. Fox Television Stations, Inc. v. FCC, 489 F.3d 444, 463 (2d Cir. 2007)
35. rev'd, 129 S. Ct. 1800 (2009).
36. See 489 F.3d at 462 (holding that the agency failed to provide a "reasoned analysis justifying its departure from the agency's established practice").
37. Id. at 463.
38. Id.
39. Fox, 129 S. Ct. at 1819.
40. Id. Justice Thomas wrote a concurring opinion "to note the questionable viability of the two precedents that support the FCC's assertion of constitutional authority to regulate the programming at issue in this case." Id. at 1819-20 (Thomas, J., concurring). He asserted that Red Lion Broadcasting Co. v. FCC, 395 U. S. 367 (1969)
41. and FCC v. Pacijka Foundation, 438 U. S. 726 (1978)
42. "were unconvincing when they were issued, and the passage of time has only increased doubt regarding their continued validity." Id. at 1820. I have been a proponent of this view. In support of his assertion, Justice Thomas, id. at 1822, cited my recent article, Randolph J. May, Charting a New Constitutional Jurisprudence for the Digital Age, 3 CHARLESTON L. REV. 373 (2009).
43. I should note here that I understand Justice Breyer objected to Justice Scalia's characterization of his position as advocating a "heightened standard" of review. Fox, 129 S. Ct. at 1831 (Breyer, J., dissenting). Apart from the semantics, for my purposes the point, to employ Chevron-speak, is that it is clear that Justice Breyer advocated a less deferential standard of review than did Justice Scalia, and the difference is in some material way related to the status of the FCC as an independent regulatory agency.
44. Chevron U. S. A. Inc. v. Natural Res. Def. Council, Inc., 467 U. S. 837, 840 (1984).
45. Fox, 129 S. Ct. at 1829 (Breyer J., dissenting).
46. Id.
47. Id. at 1830.
48. Id.
49. See id. at 1832-41. Justice Breyer discussed the FCC's failure, in his view, to sufficiently address the First Amendment implications of the change in its "fleeting expletives" policy and also the adverse financial impact on local broadcasters stemming from the requirements imposed by the new policy, such as the need to purchase time delay equipment. Id.
50. Humphrey's Ex'r v. United States, 295 U. S. 602 (1935).
51. Fox, 129 S. Ct. at 1825 (Stevens, J., dissenting).
52. In Humphrey's Executor, the Court had said that Congress intended to create "a body which shall be independent of executive authority, except in its selection, and free to exercise its judgment without leave or hindrance of any other official or any department of the government." 295 U. S. at 625-26.
53. Fox, 129 S. Ct. at 1825
54. (quoting Humprey's Executor, 295 U. S. at 628).
55. Id. at 1826.
56. Id Justice Stevens also suggested that the Communications Act, 47 U. S. C. §§ 151-614 (2006)
57. the APA's judicial review provision, 5 U. S. C. § 706 (2) (A) (2006), and the rule of law "all favor stability over administrative whim." Id.
58. Chief Justice Roberts and Justices Thomas and Alito joined this portion of Justice Scalia's opinion. See id. at 1815-19 (plurality opinion).
59. Id. at 1815.
60. Id. at 1815-16.
61. Id. at 1816.
62. The intimation came in the form of Justice Scalia's throwaway line, "Leaving aside the unconstitutionality of a scheme giving the power to enforce laws to agents of Congress...." Id. The line was followed immediately by Justice Scalia's statement that "[i]f the FCC is indeed an agent of Congress", then the fact that Congress made clear its wishes for stricter indecency enforcement should suffice for an adequate reason for changing the agency's policy. Id. (emphasis added).
63. See id. at 1816 n. 4.
64. Id. at 1816.
65. Id;. at 1817.
66. Id. This is a curious statement because Chevron itself involved a statutory interpretation by the Environmental Protection Agency (EPA). The whole point of Chevron is that in light of the political accountability of executive branch agencies such as EPA, their rulings are owed deference as long as they are reasonable. It is somewhat jarring, then, to see Justice Scalia declaring that it is difficult to imagine any closer scrutiny than the Court has given EPA actions.
67. Id. (citation omitted). Justice Scalia supposes that subjecting decisions of independent agencies to closer scrutiny than those of executive branch agencies magnifies separation-of-powers problems, perhaps by calling further attention to these constitutional anomalies in which executive, legislative, and judicial functions are exercised by the same entity. As I made clear in Defining Deference Down, May, supra note 1, at 451, my view is that by giving less deference to independent agencies' decisions, courts might at least mitigate to some extent separation-of-powers concerns. Thus, I stated, "[TJt is odd in a constitutional system with three defined branches for courts to give controlling deference to agencies that, not without reason, are commonly referred to as 'the headless fourth branch.'" Id.
68. Fox, 129 S. Ct. at 1817.
69. 5 U. S. C. § 706 (2) (A) (2006).
70. Chevron U. S. A. Inc. v. Natural Res. Def. Council, Inc., 467 U. S. 837, 844 (1984).
71. Id. at 865.
72. Id.
73. In contrast, in Humphrey's Executor, in the course of highlighting the FTC's freedom from executive control, the Court touted the agency's "body of experts who shall gain experience by length of service" as a distinguishing characteristic of the agency's independence. 295 U. S. 602, 625 (1935).
74. Chevron, 467 U. S. at 866.
75. The term headless fourth branch was used to describe the independent agencies by a presidential management commission in 1937 studying the organization and management of the federal government. pRESIDENT'S COMM. ON ADMIN. MGMT., REPORT OF THE COMMITTEE WITH STUDIES OF ADMINISTRATIVE MANAGEMENT IN THE FEDERAL GOVERNMENT 40 (1937).
76. FCC v. Fox Television Stations, Inc., 129 S. Ct. 1800, 1815 (2009) (plurality opinion).
77. See id. (citing Kagan, supra note 12, at 2271 n. 93).
78. Id. at 1816 n. 4.
79. Kagan, supra note 12, at 2377 n. 506.
80. Id. (citation omitted).
81. May, supra note 1, at 447-48;
82. see also KENNETH CUI. P DAVIS & RICHARD PIERCE, JR., ADMINISTRATIVE LAW TREATISE § 2.5 (3d ed. 1994) ("The characteristic that most sharply distinguishes independent agencies is the existence of a statutory limit on the President's power to remove the head (or members) of an agency.").
83. Humphrey's Ex'r v. United States, 295 U. S. 602, 629 (1935).
84. Kagan, supra note 12, at 2376.
85. 487 U. S. 654, 706 (1988) (ScaliaJ., dissendng).
86. Id. at 706.
87. See id. at 706-07.
88. 295 U. S. at 630.
89. Cf. Bowsher v. Synar, 478 U. S. 714, 726 (1986) ("[W]e conclude that Congress cannot reserve for itself the power of removal of an officer charged with the execution of the laws except by impeachment."). Impeachment proceedings rarely, if ever, have been instituted against independent agency officials. I am unaware of such a case.
90. There is a vast literature on the myriad ways that Congress can exercise influence on agency actions. For a good source, with citation to many authorities, see Jack M. Beermann, Congressional Administration, 43 SAN DIEGO L. REV. 61 (2006).
91. Chevron U. S. A. Inc. v. Natural Res. Def. Council, Inc., 467 U. S. 837, 865-66 (1984).
92. For further analysis on this issue and additional sources, see May, supra note 1, at 450 nn. 117-19.
93. Lawrence Lessig & Cass R. Sunstein, The President and the Administration, 94 COI. UM. L. REV. 1, 101 (1994).
94. Id. at 114.
95. Id.