Should chevron have two steps?

Indiana Law Journal

Volumn 89, Issue 2, 2014, Pages 605-642

  Re, Richard M ^a  

^a HARVARD UNIVERSITY   (United States)

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EID: 84897745659     PISSN: 00196665     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (83)

1. Agency deference cases always involve a threshold inquiry into whether deference is appropriate at all. Some commentators refer to this inquiry as "step zero." See Cass R. Sunstein, Chevron Step Zero, 92 VA. L. REV. 187 (2006).
2. By contrast, other commentators refer to this threshold issue as the question of whether a particular case falls within "Chevron's domain." See Thomas W. Merrill & Kristin E. Hickman, Chevron's Domain, 89 GEO. L.J. 833 (2001). Because it is simpler not to count this ever-present threshold issue as a distinct "step," this Article follows the latter approach.
3. Chevron U.S.A. Inc. V. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43 (1984).
4. For a prominent example of the academic literature trying to make sense of Chevron's two steps, see Ronald M. Levin, The Anatomy of Chevron: Step Two Reconsidered, 72 CHI.-KENT L. REV. 1253, 1254-55 (1997) (arguing that step two should be considered identical to arbitrary-and-capricious review); see also infra note 6 (citing other treatments).
5. Matthew C. Stephenson & Adrian Vermeule, Chevron Has Only One Step, 95 VA. L. REV. 597 (2009).
6. Id. at 597 n. 3 (collecting sources). For early suggestions that the two Chevron steps might be interchangeable, see Sweet Home Chapter of Cmtys. for a Great Or. V. Babbitt, 30 F.3d 190, 193 (D.C. Cir. 1994) (Williams, J.), rev'd, 515 U.S. 687 (1995)
7. Clark Byse, Judicial Review of Administrative Interpretation of Statutes: An Analysis of Chevron's Step Two, 2 ADMIN. L.J. 255, 256 n. 10 (1988).
8. Entergy Corp. V. Riverkeeper, Inc., 556 U.S. 208, 218 n. 4 (2009) (citation omitted).
9. United States v. Home Concrete & Supply, LLC, 132 S. Ct. 1836, 1846 n. 1 (2012) (Scalia, J., concurring in part and concurring in the judgment).
10. See Kenneth A. Bamberger & Peter L. Strauss, Chevron's Two Steps, 95 VA. L. REV. 611 (2009).
11. See Jack M. Beermann, End the Failed Chevron Experiment Now: How Chevron Has Failed and Why It Can and Should Be Overruled, 42 CONN. L. REV. 779, 835 (2010) ("Chevron thus has anywhere from one to four steps depending on what and how one counts. After twenty-five years, we should expect more clarity regarding the application of a framework doctrine like Chevron").
12. See Pearson v. Callahan, 555 U.S. 223, 227 (2009).
13. Id. at 605-06. The U.S. Solicitor General recently offered a succinct statement of the traditional view that Chevron calls for an interpretive exercise at both steps. See Transcript of Oral Argument at 34-35, City of Arlington v. FCC, 133 S. Ct. 1863 (2013) (No. 11-1545) (Solicitor General Verrilli: "Step 1 of Chevron... of course... us[es] the normal tools of statutory construction," and "Step Two of Chevron... asks whether the agency's interpretation of the provision at issue... [is] within the bounds of what the language can reasonably accommodate... [.]").
14. Chevron U.S.A. Inc. V. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43 (1984).
15. E.g., Elizabeth Blackwell Health Ctr. for Women v. Knoll, 61 F.3d 170, 193 (3d Cir. 1995) ("The Supreme Court's decision in [Reno v. Koray, 515 U.S. 50 (1995)] is a classic Chevron step one holding" because the agency's view was upheld as "not ambiguous.").
16. Chevron U.S.A. Inc. V. Natural Res. Def. Council, Inc., 467 U.S. 837, 865-66 (1984) ("While agencies are not directly accountable to the people, the Chief Executive is, and it is entirely appropriate for this political branch of the Government to make such policy choices - resolving the competing interests which Congress itself either inadvertently did not resolve, or intentionally left to be resolved by the agency...").
17. See Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545 U.S. 967, 984 (2005)
18. (explaining that "a precedent holding a statute to be unambiguous forecloses a contrary agency construction" (citing Neal v. United States, 516 U.S. 284 (1996))).
19. Chevron U.S.A. Inc. V. Natural Res. Def. Council, Inc., 467 U.S. 837, 842 (1984).
20. See, e.g., Judulang v. Holder, 132 S. Ct. 476, 483 n. 7 (2011) ("[U]nder Chevron step two, we ask whether an agency interpretation is 'arbitrary or capricious in substance.'") (citation omitted) (internal quotation marks omitted)
21. AT&T Corp. V. Iowa Utils Bd., 525 U.S. 366, 391-92 (1999)
22. Chamber of Commerce of the U.S. V. FEC, 76 F.3d 1234, 1235 (D.C. Cir. 1996) ("[T]he second step of Chevron... overlaps with the arbitrary and capricious standard"); supra note 4.
23. As Bamberger and Strauss are careful to note, Motor Vehicle Mfrs. Ass 'n of the U.S., Inc. V. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 42 (1983), does not exhaust the range of factors relevant when testing agency interpretations under the APA, even though "State Farm's inquiry into consideration of relevant regulatory factors and explanation based on record evidence certainly plays a significant role in determining the appropriateness of many agency interpretations." Bamberger & Strauss, supra note 15, at 622; see also id. at 625 ("While the statutory language defining [the step two] inquiry is the same language that governed State Farm, the emphasis may vary.").
24. See Bamberger & Strauss, supra note 15, at 602-04, 624-25; see also Peter L. Strauss, "Deference" is Too Confusing - Let's Call Them "Chevron Space" and "Skidmore Weight", 112 COLUM. L. REV. 1143, 1162 (2012) ("Step two, thus seen, is merely what section 706(2)(A) of the APA commands."); Levin, supra note 4.
25. Courts have sometimes followed such a three-step approach. See, e.g., Int'l Bhd. of Elec. Workers v. ICC, 862 F.2d 330, 335-39 (D.C. Cir. 1988).
26. See Bamberger & Strauss, supra note 15, at 623-24; see also Kenneth A. Bamberger, Normative Canons in the Review of Administrative Policymaking, 118 YALE L.J. 64, 66-69 (2008). Bamberger and Strauss also suggest that legislative history may be considered only at step two, see Bamberger & Strauss, supra note 15, at 623-24, even though legislative history (for those who use it) is clearly a traditional tool of statutory construction.
27. Chevron U.S.A. Inc. V. Natural Res. Def. Council, Inc., 467 U.S. 837, 843 n. 9 (1984); see also Bamberger, supra note 79, at 64; Id. at 77 ("The largest group of cases to consider the place of normative canons in review of agency interpretations treats them as the type of 'traditional tools' that courts may use to resolve textual ambiguity..."); Id. at 77-78 nn.40-45 (citing Supreme Court cases).
28. See Solid Waste Agency v. U.S. Army Corps of Eng'rs, 531 U.S. 159, 172-73 (2001)
29. Edward J. DeBarolo Corp. V. Florida Gulf Coast Bldg. & Constr. Trades Council, 485 U.S. 568, 577 (1988)
30. see also Hemandez-Carrera v. Carlson, 547 F. 3d 1237, 1250 (10th Cir. 2008) (McConnell, J.).
31. But see Christopher J. Walker, Avoiding Normative Canons in the Review of Administrative Interpretations of Law: A Brand X Doctrine of Constitutional Avoidance, 64 ADMIN. L. REV. 139 (2012).
32. Similar points are sometimes made regarding unnecessary holdings in the alternative. See, e.g., Karsten v. Kaiser Found. Health Plan, 36 F.3d 8, 11 (4th Cir. 1994) ("Thus, from the perspective of judicial economy, alternative holdings are a welcome blessing for courts at all levels."); see also infra notes 102, 119 and accompanying text.
33. PDK Labs., Inc. V. U.S. Drug Enforcement Admin., 362 F.3d 786, 799 (D.C. Cir. 2004) (Roberts, J., concurring in part and concurring in the judgment).
34. E.g., S. Union Co. V. United States, 132 S. Ct. 2344, 2352 n. 5 (2012)
35. (citing Cent. Va. Cmty. Coll. V. Katz, 546 U.S. 356, 363 (2006)).
36. See Allen v. Wright, 468 U.S. 737, 752 (1984)
37. (quoting Chicago & Grand Trunk R. Co. V. Wellman, 143 U.S. 339, 345 (1892)).
38. See generally Pearson v. Callahan, 555 U.S. 223, 227 (2009).
39. Saucier v. Katz, 533 U.S. 194 (2001).
40. Camreta v. Greene, 131 S. Ct. 2020, 2036 (2011) (Scalia, J., concurring) ("The alternative solution, as Justice Kennedy suggests, is to end the extraordinary practice of ruling upon constitutional questions unnecessarily when the defendant possesses qualified immunity... I would be willing to consider it in an appropriate case.") (citations omitted); Id. at 2043-45 (Kennedy, J., dissenting).
41. See Jack M. Beermann, Qualified Immunity and Constitutional Avoidance, 2009 SUP. CT. REV. 139, 142-43 (discussing opportunistic merits decisions in qualified-immunity cases).
42. See Thomas Healy, The Rise of Unnecessary Constitutional Rulings, 83 N.C. L. REV. 847, 872-82 (2005)
43. Pierre N. Levai, Judging Under the Constitution: Dicta About Dicta, 81 N.Y.U. L. REV. 1249 (2006) (extensively criticizing Saucier for mandating the creation of dicta and for its treatment as precedent).
44. Courts sometimes adopt dual holdings separately applying more and less demanding standards of review. E.g., Clapper v. Amnesty Int'l USA, 133 S. Ct. 1138, 1145 n. 5 (2013) ("[T]o the extent that the 'substantial risk' standard is relevant and is distinct from the 'clearly impending' requirement, respondents fall short of even that standard...")
45. United States v. Ozbirn, 189 F.3d 1194, 1200 (10th Cir. 1999) ("We conclude that under the circumstances, Trooper Smith had either probable cause to stop Mr. Ozbirn for committing a violation of a Kansas traffic law, or the reasonable articulable suspicion necessary to justify an investigatory stop.").
46. See, e.g., McClellan v. Miss. Power & Light Co., 545 F.2d 919, 925 n. 21 (5th Cir. 1977)
47. ("It does not make a reason given for a conclusion in a case obiter dictum, because it is only one of two reasons for the same conclusion." (emphasis in original) (quoting Richmond Screw Anchor Co. V. United States, 275 U.S. 331, 340 (1928))).
48. But see Maxwell L. Stearns & Michael Abramowicz, Defining Dicta, 57 STAN. L. REV. 953 (2005) (criticizing "the general understanding that alternative holdings in a case all count as holdings").
49. Cnty. of Sacramento v. Lewis, 523 U.S. 833, 841 n. 5 (1998).
50. Camreta v. Greene, 131 S. Ct. 2020, 2031 (2011).
51. See Ashwander v. Tenn. Valley Auth., 297 U.S. 288, 341, 346 (1936) (Brandeis, J., concurring).
52. Pearson v. Callahan, 555 U.S. 223, 236 (2009).
53. Id. at 239 (quoting Dirrane v. Brookline Police Dept., 315 F.3d 65, 69-70 (1st Cir. 2002).
54. Id. at 240. Pearson raised this point as a general problem, but the more recent Camreta decision shows it to be a case-specific concern. In permitting an appeal by a defendant who had lost on the merits but ultimately won on qualified immunity, Camreta rested on the fact that one of the two defendants had to change the way he did his job in light of the merits decision issued by the court of appeals. See Camreta v. Greene, 131 S. Ct. 2020, 2029 (2011). The other defendant, by contrast, was no longer employed in the relevant job and so apparently lacked standing to seek certiorari. See id. at 2034 n. 9. So, if only the second defendant had been in the case, Supreme Court review would appear to have been impossible. Anticipating that result, perhaps courts should refrain from unnecessarily reaching the merits when they foresee that the defendant will be unable to appeal.
55. Given that the main benefit of mandatoriness findings is that they clarify the law, perhaps the Supreme Court should be more eager to issue such holdings than intermediate courts, which should in turn be more eager than trial courts. Cf. Aaron-Andrew P. Brühl, Hierarchically Variable Deference to Agency Interpretations, 89 NOTRE DAME L. REV. 727 (2014).
56. Continuing the analogy between Chevron and qualified immunity, perhaps the government should be able to appeal an unwanted step-one finding that its present interpretation is not just reasonable, but mandatory. See Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545 U.S. 967, 1019 (2005) (Scalia, J., dissenting) ("[D]oes the victorious agency have the right to appeal a Court of Appeals judgment in its favor, on the ground that the text in question is in fact not (as the Court of Appeals held) unambiguous, so the agency should be able to change its view in the future?" (emphasis in original)).
57. For a somewhat similar proposal, see Michael T. Kirkpatrick & Joshua Matz, Avoiding Permanent Limbo: Qualified Immunity and the Elaboration of Constitutional Rights from Saucier to Camreta (and Beyond), 80 FORDHAM L. REV. 643, 678 (2011) (arguing that the "principal determinant of a decision to reach the merits after finding qualified immunity ought to be the availability of adequate opportunities for constitutional elaboration elsewhere," while adding that courts should also consider "such factors as the importance of the constitutional issue, the frequency with which it has been invoked or will likely be invoked again, and the extent to which government officials lack adequate guidance from circuit law") (emphasis added).
58. Pearson v. Callahan, 555 U.S. 223, 239; cf. supra note 60 (discussing how to order the two steps of traditional two-step).
59. See id. at 23SM0 (quoting Home v. Coughlin, 191 F.3d 244, 247 (2d Cir. 1999)).
60. Professors Jacob E. Gersen and Adrian Vermeide have emphasized this point in arguing for replacing Chevron with a supermajority voting rule. See Jacob E. Gersen & Adrian Vermeule, Chevron as a Voting Rule, 116 YALE L.J. 676, 697-98 (2007).
61. Stephen Breyer, Judicial Review of Questions of Law and Policy, 3 8 ADMIN. L. REV. 363, 379 (1986) (emphasis in original).
62. See Stephenson & Vermeule, supra note 5, at 605 ("For one thing, if judges spend an inordinate amount of time trying to figure out the best construction of the statute, it may be difficult for them to shift mental gears to decide whether an agency interpretation that differs from the judge's sense of the best interpretation is nonetheless reasonable." (emphasis in original)); see also Matthew C. Stephenson, The Costs of Voting Rule Chevron: A Comment on Gersen and Vermeule's Proposal, 116 YALE L.J. POCKET PART 238, 241-42 (2007) ("I think (though I cannot prove) that in a typical Chevron case, the judge... stops [analyzing the agency's view] not when she has determined that the agency's interpretation is the best one, but when she has decided that it falls into the realm of plausibility...").
63. Pearson v. Callahan, 555 U.S. 223, 234 (2009)
64. (citing Purtell v. Mason, 527 F.3d 615, 622 (7th Cir. 2008)).
65. For the most recent example, see City of Arlington v. FCC, which referred to Chevron's "now-canonical formulation" involving "two questions." 133 S. Ct. 1863, 1868 (2013) (internal quotation marks and citation omitted).
66. 131 S. Ct. 704, 714 (2011). Notably, Mayo understood step two to encompass arbitrariness review. Id. at 711, 714-15. For an older two-step case, see Barnhart v. Walton, 535 U.S. 212, 217-18 (2002).
67. United States v. Home Concrete & Supply, LLC, 132 S. Ct. 1836, 1846 n. 1 (Scalia, J., concurring in part and concurring in the judgment) (emphasis added).
68. See, e.g., Higgins v. Holder, 677 F.3d 97, 102 (2d Cir. 2012)
69. Khalid v. Holder, 655 F.3d 363, 366-67 (5th Cir. 2011)
70. Ass'n of Irritated Residents v. EPA, 632 F.3d 584, 596 (9th Cir. 2011)
71. Mei Fun Wong v. Holder, 633 F.3d 64, 74 (2d Cir. 2011).
72. Teva Pharms. USA, Inc. V. Sebelius, 595 F.3d 1303, 1315 (D.C. Cir. 2010).
73. Coal, for Responsible Regulation, Inc. V. EPA, 684 F.3d 102 (D.C. Cir. 2012).
74. *2 (D.C. Cir. Dec. 20, 2012) (Sentelle, C.J., concurring in denial of en banc review) ("[T]he panel's interpretation of the statute is the only plausible one.").
75. Most empirical studies on judicial application of Chevron have focused on bottom-line outcomes and assessed those results in light of independent variables such as judicial ideology. See, e.g., Thomas J. Miles & Cass R. Sunstein, Do Judges Make Regulatory Policy?: An Empirical Investigation of Chevron, 73 U. CHI. L. REV. 823 (2006). These studies, while illuminating in many ways, do not look under the hood of the Chevron inquiry to ascertain, for example, what work is being done at step one as opposed to step two.
76. Stephenson & Vermeule, supra note 5, at 605 n. 30 (citing Orin S. Kerr, Shedding Light on Chevron: An Empirical Study of the Chevron Doctrine in the U.S. Courts of Appeals, 15 YALE J. ON REG. 1, 30 (1998) (reporting that, in 1995 and 1996, published federal court of appeals decisions "condensed the two-step test into a single question of whether the interpretation was 'reasonable' in 28% of the applications"))
77. see also Peter H. Schuck & E. Donald Elliott, To the Chevron Station: An Empirical Study of Federal Administrative Law, 1990 DUKE L.J. 984, 1023 & n. 94, 1025 (1990) (discussing evidence concerning the conventional view that Chevron established a more deferential two-step inquiry).
78. See, e.g., United States v. Collazo-Castro, 660 F.3d 516, 519 (1st Cir. 2011)
79. ("The starting point in interpreting a statute is its language, for '[i]f the intent of Congress is clear, that is the end of the matter.'" Good Samaritan Hosp. V. Shalala, 508 U.S. 402, 409 (1993)
80. (quoting Chevron U.S.A. Inc. V. Natural Res. Def. Council, Inc., 467 U.S. 837, 842 (1984)))
81. United States v. Manzo, 636 F.3d 56, 61 (3d Cir. 2011).
82. The case that Table 7 marks as ambiguous, California Wilderness Coalition v. U.S. Department of Energy, 631 F.3d 1072 (9th Cir. 2011), was the single most difficult case to code. The Chevron issue was whether an agency had engaged in statutorily mandated "consultation." Id. Before addressing this question, the court block-quoted the traditional two-step summary of Chevron deference and noted during its summary of the parties' positions that "[b]oth prongs of the Chevron standard are in play in this case." Id. at 1084. Later, the court said both that it did not "read the statute as encompassing [the agency's] proffered definition" and that it was enforcing "the definition that Congress intended." Id. at 1086-87. The case thus avoided specifying whether it was ruling on step one or two (or both). In any event, the decision's ambiguity simply illustrates that, under traditional two-step Chevron, invalidations under step one and step two are interchangeable. See supra text accompanying note 31.
83. See Kerr, supra note 164, at 30-31. Substantive outcomes also appear to be stable over time: if we count two-step decisions that rule in the agency's favor at step one as mandatoriness findings, then Kerr's data suggest that reasonableness, unreasonableness, and mandatoriness findings respectively comprised about 62%, 27%, and 11% of all Chevron cases - results that closely resemble the data summarized above. See id. at 30-31; see also William N. Eskridge, Jr. & Lauren E. Baer, The Continuum of Deference: Supreme Court Treatment of Agency Statutory Interpretations from Chevron to Hamdan, 96 GEO. L.J. 1083, 1122 (2008) ("[I]n cases where Chevron was the deference regime invoked by the [Supreme] Court, the agency won 76.2% of the time...").