Commentary from Professor Hickman, as it occurs to her
As a professor, I talk with reporters often. I consider it part of my job, and I like doing it. But occasionally mistakes happen. This week, in reporting about the Supreme Court’s grant of certiorari in CIC Services v. IRS, a reporter misattributed to me an argument that wasn’t mine and with which I disagree. The reporter quickly and graciously admitted error and has fixed the article. But I want to address the argument at stake in a blog post, to be clear about where I stand. I have never argued and do not believe that whether the Anti-Injunction Act bars pre-enforcement judicial review of tax regulatory actions turns on a finding that penalties under the Internal Revenue Code are not taxes as the Anti-Injunction Act uses that term. My arguments for reading the Anti-Injunction Act to allow pre-enforcement judicial review of tax regulatory actions under the Administrative Procedure Act are entirely different and do not depend at all on a distinction between taxes and penalties.
The Anti-Injunction Act, 26 U.S.C. s. 7421(a), provides that, except as provided elsewhere in the Internal Revenue Code, “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed.” CIC Services and other cases challenging rules and regulations that impose reporting requirements do not directly concern the computation of anyone’s tax liability. And, at first blush, it might seem reasonable to argue that the penalties that the Code imposes for noncompliance with reporting requirements are not taxes, and thus challenges to those reporting requirements cannot be limited by the Anti-Injunction Act. After all, in NFIB v. Sebelius, the Supreme Court decided that the Anti-Injunction Act did not apply because the “shared responsibility payments” at issue were penalties rather than taxes.
As with many arguments that seem sensible at first, however, just a little digging uncovers substantial weaknesses. Drawing a distinction between taxes and penalties in the Internal Revenue Code has always been tricky. Congress has often used “additions to the tax” and “penalty” more or less interchangeably in imposing civil penalties across various Code provisions, and Congress’s choice of label has not always been outcome determinative before the Supreme Court. For those who are interested in learning more about the history of the tax/penalty distinction and the Anti-Injunction Act, Jerry Kerska and I wrote about it at some length and with extensive footnotes here.
But whether penalties are taxes for Anti-Injunction Act purposes, while perhaps not entirely irrelevant, nevertheless does not decide the question about pre-enforcement judicial review that is before the Court in CIC Services. Whatever one chooses to label the exaction for noncompliance with IRS Notice 2016-66 or other pronouncements like it, as I see things, the issue before the Court is whether pre-enforcement judicial review under the Administrative Procedure Act restrains that exaction’s assessment and collection. My answer, grounded in statutory text, history, and purpose, is no, pre-enforcement review doesn’t do that.
The Anti-Injunction Act was adopted in 1867 as part of a comprehensive statutory scheme for administering the Civil War income tax, with “assessment” and “collection” as functions defined in some detail by the early revenue laws and, later, within the Internal Revenue Code. Proper interpretation of the Anti-Injunction Act requires an understanding of the history of the assessment and collection functions, and tax administration more generally, as they have evolved over the past 150 years, as well as the events that prompted Congress to adopt the Anti-Injunction Act in the first instance and how they compare with contemporary circumstances. In the same article, Jerry Kerska and I painstakingly track the text, history, and purpose of the Anti-Injunction Act as part of the early revenue laws, the Internal Revenue Code, and the system of tax administration they established to demonstrate that Congress intended the word “restraining” in the Anti-Injunction Act to reflect a greater temporal proximity to actual enforcement efforts than one typically sees with pre-enforcement challenges under the Administrative Procedure Act. We also explain how our reading of the Anti-Injunction Act reconciles it with the Administrative Procedure Act and the Supreme Court’s decisions in Abbott Labs v. Gardner and Direct Marketing Ass’n v. Brohl, rather than placing the Anti-Injunction Act at odds with them. My amicus briefs before the Sixth Circuit and the Supreme Court on this issue have made these same arguments.
In law and in academia, people are known for their ideas and arguments. Those who have read my academic work and amicus briefs are familiar with my ideas and arguments regarding Anti-Injunction Act interpretation, but not everyone reads those sources. The Internet being what it is, errors in news articles tend to stick around, despite best efforts to correct them. Hopefully this post will help in this instance.
The Supreme Court’s decision in County of Maui v. Hawaii Wildlife Fund has prompted a flurry of discussion on Twitter and elsewhere about whether Justice Breyer’s majority opinion in the case adopted the position that the government can waive or forfeit eligibility for Chevron deference by failing to argue for it, and thus overturned the D.C. Circuit’s rejection of Chevron waiver last year in Guedes v. Bureau of Alcohol, Tobacco, Firearms & Explosives. Chevron waiver is a topic of some debate these days. The D.C. Circuit has addressed the issue most prominently and extensively, in Guedes and elsewhere. The Tenth Circuit endorsed it just last week in Hays Medical Center v. Azar, arguably in dicta, but also arguably establishing a circuit split with the D.C. Circuit. Law reviews at Harvard, Stanford, and Chicago all published short notes or essays last year discussing the issue. I have given the issue its own subsection in the Administrative Law Treatise. In my view, however, it would be premature to claim that the Supreme Court has embraced the Chevron waiver argument.
County of Maui is not the first time the Chevron waiver question has arisen in a Supreme Court opinion. Just last month, Justice Gorsuch rather overtly signaled his support for Chevron waiver in a statement respecting the Supreme Court’s denial of certiorari in Guedes. I discussed that statement in another blog post. Justice Gorsuch’s treatment of the issue in Guedes was unequivocal but brief, and he wrote for himself alone.
Justice Breyer’s reference in County of Maui, though on behalf of five Justices, was much less clear — a mere observation that the Solicitor General had not asked for Chevron deference. But the EPA “Interpretive Statement” at issue would not have been eligible for Chevron deference in any event, as Justice Breyer seems to have recognized by citing Mead and Skidmore:
"Neither the Solicitor General nor any party has asked us to give what the Court has referred to as Chevron deference to EPA's interpretation of the statute. See Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 844 (1984). Even so, we often pay particular attention to any agency's views in light of the agency's expertise in a given area, its knowledge gained through practical experience, and its familiarity with the interpretive demands of administrative need. See United States v. Mead Corp., 533 U.S. 218, 234-235 (2001); Skidmore v. Swift & Co., 323 U.S. 134, 139-140 (1944). But here, as we have explained, to follow EPA's reading would open a loophole allowing easy evasion of the statutory provision's basic purposes. Such an interpretation is neither persuasive nor reasonable."
As I have documented elsewhere, Justice Breyer has always held a fairly idiosyncratic view of Chevron and Skidmore as a single standard, with Chevron‘s emphasis on the exercise of delegated power merely adding another factor to be considered in deciding whether or not to defer. For that matter, minor disagreements regarding Chevron‘s operation and scope abound among the Justices. Because Chevron, Skidmore, and Mead are “meta-standards,” the Justices may disagree over how these standards work or even which to apply but still agree to accept or reject an agency’s particular statutory interpretation in a given case. Whereas commentators may analyze and critique every snippet of Supreme Court rhetoric, the Justices seem more willing to let minor disagreements over dicta go unremarked, rather than write separately over every questionable turn of phrase. For this reason alone, one should always be leery of overreading an ambiguous turn of phrase about Chevron in a single Supreme Court opinion.
Moreover, none of the briefing before the Court mentioned the Chevron waiver concept. Neither the Petitioners nor the Solicitor General as amicus said anything at all about deference doctrine. The Respondents said only that, as mere “guidance,” the EPA’s Interpretive Statement was “not an exercise of congressionally delegated authority to fill an interpretive gap in the statute” and thus “was not entitled to deference under Chevron” in light of Mead. Given the complete lack of briefing on Chevron waiver in this case, the mere observation that the Solicitor General did not ask for Chevron deference in a case where it wasn’t available anyway is pretty slim evidence that the Court has suddenly embraced a new requirement that the government actively argue in favor Chevron deference before its interpretations will be Chevron-eligible.
Indeed, the idea of Chevron waiver itself seems to have emerged initially more from inartful judicial rhetoric and inadequately-reasoned analytical leaps than from deliberate arguments. Consider the experience of the D.C. Circuit, which seems to be where the doctrine originated, and which to date has made the most definitive statement on the subject. In Peter Pan Bus Lines v. Federal Motor Carrier Safety Admin. (2006), the D.C. Circuit declined to evaluate the reasonableness of an agency regulation under Chevron step two after the agency had contemporaneously justified its decision in the regulation’s preamble by declaring the statute unambiguous. Separately, in Intercollegiate Broadcasting System v. Copyright Royalty Board (2009), which had nothing to do with agency statutory interpretation or Chevron, the D.C. Circuit noted “the axiom” that nonjurisidictional issues may be waived. Several years later, in Lubow v. Department of State (2015), after observing that the challenging party had accepted without argument that Chevron applied, the D.C. Circuit cited Intercollegiate and Peter Pan in suggesting that Chevron is nonjurisdictional and that “a party can forfeit an argument against deference by failing to raise it.” Finally, in Neustar, Inc. v. FCC (2017), the D.C. Circuit cited Lubow in holding that the FCC had waived any entitlement to Chevron deference by not expressly advocating for it. The FCC in Neustar had cited Chevron and recited its two steps as the relevant standard of review, but the court deemed that “nominal reference” inadequate. The court offered little reasoning, however, beyond a parenthetical to the Lubow citation — “Chevron deference is not jurisdictional and can be forfeited” — even though Lubow involved a challenger failing to raise an objection to Chevron deference, rather than a government failure to claim Chevron deference.
Almost immediately — perhaps having realized it had made a significant doctrinal statement with little supportive reasoning — the D.C. Circuit walked back its Neustar holding regarding Chevron waiver. In SoundExchange v. Copyright Royalty Board (2018), and then in the aforementioned Guedes decision (2019), the D.C. Circuit discussed Neustar and Chevron waiver at great length and expressly rejected the proposition that the government can waive Chevron deference by failing to argue for it adequately in a legal brief. First, in SoundExchange, the court noted that the government did not claim Chevron deference because it did not frame the case as involving statutory interpretation at all. Nevertheless, the court insisted that its opinion in Neustar “did not indicate a ‘magic words’ requirement for Chevron deference”; what mattered was whether the agency, in the action being challenged, clearly “exercis[ed] its lawmaking authority.” The SoundExchange court then contended that “Chevron is a standard of judicial review, not of agency action” and that “we can apply Chevron deference to the agency’s interpretation even if there is no invocation of Chevron in the briefing in our court.”
In Guedes, the D.C. Circuit went even further in repudiating Chevron waiver. The court first distinguished waiver from forfeiture: “A waived claim or defense is one that a party has knowingly and intelligently relinquished; a forfeited plea is one that a party has merely failed to preserve.” The court described SoundExchange as holding “that an agency’s lawyers cannot forfeit the applicability of Chevron deference” except by failing to exercise delegated power as described in Mead. The Guedes court then went on to hold the same with respect to Chevron waiver. The court’s analysis was extensive — too long to cover fully in an already-overlong blog post. The general gist of the court’s reasoning, however, was that Chevron is “a doctrine about statutory meaning” akin to a canon of construction, advising “how courts should construe a statute” when that statute is ambiguous and Congress has given an agency responsibility to utilize its expertise to fill statutory gaps. Just as courts “give no mind to a litigant’s failure to invoke interpretive canons such as expressio unius or constitutional avoidance,” it is up to courts rather than litigants to decide whether Chevron applies. The court also made the point that Chevron is rooted in “the expertise of the agency, not its lawyers” — in other words, that courts defer to the exercise of agency expertise in the first instance, not to the litigation strategies pursued by agency lawyers later on.
The Tenth Circuit’s opinion last week in Hays Medical Center v. Azar, which arguably established a circuit split with the D.C. Circuit, more closely resembled the D.C. Circuit’s Neustar opinion than either SoundExchange or Guedes in the depth of its analysis of the Chevron waiver issue. The merits of Hays Medical Center concerned whether HHS’s methodology for calculating Medicare reimbursements is arbitrary and capricious under APA s. 706(2)(A) and State Farm. Apparently, in its Hays Medical Center brief, the government attempted briefly to recast the argument as concerning Chevron rather than State Farm. The Tenth Circuit in Hays Medical Center rejected this reframing in a long footnote, saying that the government’s arguments about “reasonableness” were “relevant” for both State Farm and Chevron. The court then proceeded to analyze the agency’s regulation under State Farm. But the footnote went on to contend that the government’s “perfunctory and fleeting invocation of Chevron waives [its] argument for Chevron deference.” The court cited the D.C. Circuit’s Neustar decision for this proposition, but did not acknowledge that court’s more recent and more extensive analysis rejecting Chevron waiver in SoundExchange and Guedes. The Tenth Circuit’s footnote is arguably dicta, and one wonders if the Tenth Circuit would reach the same conclusion if forced to confront the Chevron waiver question squarely. Given that footnote, however, one anticipates the Tenth Circuit will have the opportunity to do just that in the not-so-distant future.
In summary, despite somewhat hazy and under-theorized origins, the Chevron waiver issue seems to have legs. Although the D.C. Circuit has now repudiated Chevron waiver, its flirtation with the idea means that arguments for and against the doctrine are multiplying. The Supreme Court may find it necessary eventually to take up the Chevron waiver question. Justice Gorsuch appears to be receptive to it. Maybe Justice Breyer is as well, although I do not think that Justices Gorsuch and Breyer view judicial deference doctrine very similarly. Still, given the robustness with which the issue is being explored in the circuit courts, along with the realities of the Supreme Court’s often-ephemeral Chevron musings, contentions that a single paragraph — really, a single sentence — in Justice Breyer’s County of Maui opinion adopted Chevron waiver and overruled the D.C. Circuit’s rejection of the same in Guedes seem vastly overblown.
Cross-posted at Yale Journal on Regulation’s Notice & Comment Blog.
It’s always of interest when the Supreme Court takes up an issue on which one has expended substantial scholarly ink. Such is the case for me with Trump v. Pennsylvania and its companion, Little Sisters of the Poor v. Pennsylvania. The Court in this case granted certiorari to address three separate and distinct questions. As a result, for some, this case is about the Affordable Care Act and its associated contraceptive coverage mandate, whether cast as a question of reproductive rights or religious freedom. For others, this case is about nationwide injunctions and represents an opportunity for the Court to provide some much-needed guidance regarding their use by the lower courts. Both are important questions, but I have little to contribute to the debate over those issues. For me, this is a case about interim-final rulemaking — specifically, whether an agency can issue an interim-final rule without notice and comment based on an inadequate claim of good cause, and then go on to “cure” that procedurally-invalid interim-final rule by accepting and taking into account comments on a post-promulgation basis in finalizing the rule.
In this case, a Third Circuit panel considered the validity of interim-final rules that broadened exemptions to the requirement that group health insurance plans cover contraceptive services, as well as whether post-promulgation notice and comment procedures used in finalizing those rules cured the interim-final rules’ procedural deficiencies. The agencies issuing the interim-final rules asserted the APA’s good cause exception on three grounds: “(1) the urgent need to alleviate harm to those with religious objections to the [preexisting] regulations; (2) the need to address ‘continued uncertainty, inconsistency, and cost’ arising from ‘litigation challenging the previous rules’; and (3) the fact that the [a]gencies had already collected comments on” the preexisting regulations. The Third Circuit panel found none of those justifications sufficient to constitute good cause for foregoing notice and comment prior to the issuance of the interim-final rules. Recognized that the issuing agencies had used post-promulgation notice and comment in subsequently finalizing the interim-final rules, the panel noted circuit precedent holding that “post-promulgation notice and comment procedures cannot cure the failure to provide such procedures prior to the promulgation of the rule at issue.” The panel additionally accused the government of lacking “the ‘flexible and open-minded attitude’ the notice-and-comment process requires,” and said that the near-identical content of the interim-final rules and the final regulations “suggest[s] that the opportunity for comment was not a ‘meaningful one’ in the way the APA requires.” Thus, according to the panel, the procedural defects of the interim-final rules rendered the final regulations procedurally invalid as well.
My interest in interim-final rulemaking and post-promulgation procedures stems partly from a longstanding and frequent Treasury Department practice of issuing what it labels as “temporary” tax regulations with only post-promulgation notice and comment and without a valid, contemporaneous assertion of the APA’s good cause exception. I have written at length criticizing this practice as contrary to the Administrative Procedure Act. I am pleased to say that Treasury announced last year that it would no longer issue temporary regulations without also claiming good cause, although the one instance of Treasury issuing temporary regulations and asserting good cause since then has its own issues. Regardless, whenever Treasury puts out a temporary regulation without notice and comment, it is required by statute also to issue a notice of proposed rulemaking and finalize the regulations within three years, taking into account the comments it receives in that post-promulgation procedure. Hence, the question has arisen: if temporary Treasury regulations historically have violated the APA’s procedural requirements, then do Treasury’s post-promulgation notice and comment procedures fix the problem? This was a background issue in the litigation culminating in the Supreme Court’s decision in United States v. Home Concrete & Supply, LLC, which was resolved in 2012 on other grounds, with the circuits below disagreeing over how to handle the procedural problem.
The issue of interim-final rules with post-promulgation procedures is not limited to the tax context. According to a 2012 GAO study and report, a significant plurality of agency regulations from 2003 to 2010 (35% of major rules and 44% of nonmajor rules) were issued without notice and comment, and most of those regulations (77% of major rules and and 61% of nonmajor rules) relied on the good cause exception when doing so. There is no reason to believe that agencies have changed that practice since then. Consistent with a 1995 ACUS recommendation regarding agency use of interim-final rulemaking, the GAO observed that agencies more often than not used post-promulgation notice and comment when finalizing regulations issued initially as interim-final or temporary rules. When an agency validly asserts good cause for foregoing notice and comment when issuing interim-final or temporary rules, post-promulgation notice and comment procedures are not required by the APA. But an agency that voluntarily pursues those procedures demonstrates good faith and good governance. The circuit courts have struggled, however, with what to do with final regulations promulgated in this way when the issuing agency’s good cause claim is later found to be inadequate.
A few years ago, Mark Thomson and I published an article in Cornell Law Review identifying four main approaches adopted by circuit courts regarding the implications of post-promulgation notice and comment procedures for the validity of final rules originating as procedurally-invalid interim-final or temporary rules:
- Rejecting post-promulgation notice and comment procedures categorically as an adequate substitute for pre-promulgation notice and comment, meaning that final rules based on procedurally-invalid interim-final or temporary rules are themselves categorically tainted;
- Treating post-promulgation notice and comment categorically as curing or mooting procedural defects in interim-final rules;
- Evaluating final rules adopted in this way case by case and upholding such rules when the court is convinced that the agency kept an “open mind” with respect to comments it received during the post-promulgation comment period; and
- Acknowledging that post-promulgation notice and comment is an inadequate substitute for pre-promulgation procedures, but applying harmless error analysis, including requiring the challenging party to demonstrate prejudice, in deciding whether to give the agency a pass and uphold the final rule anyway.
All of these approaches have their pros and cons. Categorically invalidating all such rules fails to take into account the murkiness of the good cause exception and risks wasting government resources and discouraging good faith efforts of agency officials. Categorically allowing post-promulgation notice and comment to cure agency procedural failures gives agencies free rein to ignore the APA and upend pre-promulgation notice and comment procedures altogether. The open mind standard and particularly harmless error analysis, as applied to date, ask little of the agency at fault and overly burden challengers seeking to effectuate their procedural rights. In our article, Mark and I advocated a different, middle-of-the-road approach that would not categorically reject all rules of this ilk but that nevertheless would embrace a stronger presumption of invalidity and force the agency to bear the burden of demonstrating the harmlessness of its error based on a set of factors, including its responsiveness to post-promulgation comments received and its motives in foregoing pre-promulgation procedures and asserting the good cause exception in the first instance.
Unfortunately, the Supreme Court may never get around to resolving this issue in Trump v. Pennsylvania. It could decide instead that the Affordable Care Act did not give the issuing agencies the authority to expand the conscience exemption to the contraceptive coverage mandate. Alternatively, and substantially more likely, the Court could decide that the statute specifically authorized the use of interim-final rulemaking with only post-promulgation notice and comment and without a simultaneous assertion of the good cause exception. Indeed, the Affordable Care Act expressly authorized “interim final rules as the Secretary determines are appropriate.” The Third Circuit panel found that statutory language insufficiently explicit to excuse compliance with APA notice and comment requirements. But although agencies occasionally will use an alternative term like temporary regulations, “interim-final rule” is practically an administrative law term of art, used across the regulatory state to describe rules issued with only post-promulgation procedures. Since agencies already have the authority under the APA to adopt interim-final rules with good cause, the language in the Affordable Care Act would be redundant unless it meant something else–e.g., the authority to adopt such rules without asserting good cause. Reading the Affordable Care Act as authorizing interim-final rules without a good cause claim would allow the Supreme Court to find the contraceptive coverage regulations at issue here to be procedurally valid without resolving the current jurisprudential mess regarding interim-final rules and post-promulgation notice and comment. Still, one can hope that the Court will take the opportunity to offer at least a little guidance regarding this extremely consequential — if perhaps a little dry when compared to reproductive rights, religious freedom, and nationwide injunctions — procedural question.
Cross-posted at Yale Journal on Regulation’s Notice & Comment Blog.
The Supreme Court has denied certiorari in Guedes v. Bureau of Alcohol, Tobacco, Firearms & Explosives, also known as the bumpstocks case. The D.C. Circuit relied on Chevron deference in upholding the regulations banning bumpstocks. In a statement respecting the denial of certiorari, Justice Gorsuch objected to the D.C. Circuit’s reliance on Chevron deference.
One of Justice Gorsuch’s reasons for objecting to Chevron deference in Guedes is well known to Chevron observers. Specifically, the interpretation of the relevant statute contained in the regulation could lead to criminal penalties in the future. I wrote about this concern many years ago. Since then, Judge Jeffrey Sutton of the Sixth Circuit has written eloquently about this issue, first in Carter v. Welles-Bowen Realty, and subsequently in Esquivel-Quintana v. Lynch, arguing that the rule of lenity should take precedence over Chevron deference. The Supreme Court dodged that issue in Esquivel-Quintana by concluding that the statute in that case was otherwise clear. Oddly, although Justice Gorsuch in his Guedes statement cited Judge Sutton’s opinion in Esquivel-Quintana, Justice Gorsuch did not mention the rule of lenity by name. The Supreme Court’s statements regarding Chevron, civil cases, and the rule of lenity have been mixed over the years. In 2014, in a statement regarding the Supreme Court’s denial of certiorari in Whitman v. United States, Justice Scalia called upon the Court in future to consider whether courts “owe deference to an executive agency’s interpretation of a law that contemplates both criminal and administrative enforcement,” also citing Judge Sutton. Although Esquivel-Quintana did not yield such consideration, perhaps Justice Gorsuch’s statement in Guedes will prompt litigants to try again regarding the relationship between Chevron and lenity.
Justice Gorsuch’s other point, however, was that the government had waived Chevron deference. He emphasized the government’s statement to the D.C. Circuit that, if the only way that court would sustain the regulation was by extending Chevron deference, then the government would rather the court reject the rule. He then claimed that the Supreme Court “has often declined to apply Chevron deference when the government fails to invoke it.” Well, maybe sort of, but perhaps not exactly.
On numerous occasions, the Supreme Court has ignored or failed to speak of Chevron deference when the Court arguably could have invoked it. Such judicial silence was the case in BNSF Railway Co. v. Loos, which Justice Gorsuch cited, and in which he dissented. Sometimes, even when the Court finds a statute to be clear, it nevertheless will mention that it is viewing the case through the prism of Chevron. But if the Court finds the statute to be clear using traditional tools of statutory interpretation, Chevron has no role to play, so even if the Court would have deferred under Chevron had it found the statute to be ambiguous, the Court need not say so expressly, or even to mention Chevron at all. Judicial silence regarding a doctrine is not precisely the same as expressly declining to apply it. Moreover, judicial silence typically lacks the stare decisis effect of an express statement. To my knowledge, the Court has never expressly declined to apply Chevron deference merely because the government has failed to argue for it. I do not believe that either of the academic articles that Justice Gorsuch cited suggests otherwise.
Nevertheless, beyond Guedes, the issue of Chevron waiver has been sweeping the circuit courts of appeals. Justice Gorsuch’s short statement in Guedes notwithstanding, whether the government actually can waive Chevron deference remains an open question. Richard Pierce and I have been tracking this issue in our bi-annual supplements to the Administrative Law Treatise. As David Hahn and I observe in a forthcoming article entitled Categorizing Chevron, 81 Ohio St. L.J. (to be published in 2020, but unfortunately not quite ready to be posted on SSRN), how one contemplates that question depends largely on whether one thinks of Chevron as rule of decision, a standard of review, or a canon of construction. We believe the bulk of the doctrinal evidence supports categorizing Chevron as a standard of review, and we argue that standards of review cannot be waived, but rather are to be determined by the reviewing court irrespective of the arguments, or the silence, of the litigants. Regardless, as Justice Gorsuch’s statement in Guedes makes obvious, Chevron waiver is yet another issue regarding Chevron‘s scope to watch.
Cross-posted at Yale Journal on Regulation’s Notice & Comment Blog.
Last week, Aaron Nielson and I posted on SSRN our forthcoming article, Narrowing Chevron‘s Domain, 70 Duke L.J. (forthcoming 2021). Skeptical that the Supreme Court actually will overturn Chevron deference (its rhetoric notwithstanding), we wanted to think carefully about how the Court might curtail Chevron‘s scope to mitigate some of the doctrine’s excesses. Our proposal is for the Court to remove most if not all agency adjudications from Chevron‘s domain. Chevron is a doctrine adopted for and oriented toward agency rulemaking. Extending Chevron deference to adjudications raises a host of problems that are nowhere near so present when applying it to rulemaking. The article is available on SSRN here, and the full abstract is as follows:
Chevron deference has become increasingly controversial. Some Justices on the Supreme Court have stated that they would overrule Chevron, and others have urged that it be curtailed. Unfortunately, neither the Court nor the academy has offered a clear idea of what a modified Chevron would look like. This Article fills the void, arguing that the time has come to narrow Chevron‘s domain by limiting Chevron deference to interpretations announced in rulemaking and not those announced in adjudication.
Under the classic formulation of Chevron, a court should defer to an agency’s reasonable interpretation of ambiguous statutory language. The basis for that formulation comes from the notion that Congress contemplates such deference, at least implicitly, when it delegates broad policymaking discretion as part of charging agencies with implementing and administering statutes. In United States v. Mead Corp., the Supreme Court began defining what has come to be known as Chevron‘s domain — holding that Congress did not intend courts to defer to every agency resolution of statutory ambiguity, but rather only to those articulated in agency actions that carry legal force, thereby reflecting the exercise of congressionally-delegated power. As a consequence of the Mead Court’s analysis, courts typically defer under the Chevron standard to interpretations offered in notice-and-comment rulemakings and in formal adjudications, and apply the less deferential Skidmore standard in reviewing those advanced through less formal formats like interpretative rules and policy statements. Meanwhile, interpretations announced via informal adjudications represent a gray area for Mead‘s analysis.
Mead is right in principle, but particularly with the benefit of hindsight, it did not go far enough in curtailing Chevron‘s reach. Applying Chevron to interpretations announced through adjudication has proven problematic in practice and has fueled a great deal of the anti-Chevron criticism. Meanwhile, Chevron‘s claim to stare decisis in the context of adjudications is surprisingly weak. For all of its rhetoric, the Supreme Court actually has applied Chevron only rarely in evaluating agency adjudications. Chevron is a doctrine concerned most obviously with agency rulemakings, with its applicability to agency adjudications an undertheorized and infrequent afterthought. If Chevron is limited to notice-and-comment rulemaking, Chevron‘s opponents will have much less reason to seek its wholesale abandonment. Accordingly, the soundest way to revisit Chevron is by narrowing its domain.
*In posting the article, Aaron and I inadvertently coined a new term: deferender — combining deference and defender. My friend and co-author on another project, Nick Bednar, really liked the term as representing a defender of judicial deference. So, no doubt coming soon to the Marvel Cinematic Universe and a theater near you: “The Deferenders” starring Anne Hathaway and Jason Bateman, with Bill Murray as Chevron and Maggie Smith as Justice Ruth Bader Ginsburg.