Administrative severability clauses.

AuthorTyler, Charles W.
PositionIntroduction into II. The Strange Dearth of Administrative Severability Clauses B. Neglect in the Agencies, p. 2286-2322

ARTICLE CONTENTS INTRODUCTION I. SEVERABILITY IN ADMINISTRATIVE LAW A. The Severability Decision 1. The Severability of Statutes 2. The Severability of Administrative Rules B. The Who-Decides Question 1. Agency Intent 2. Workability of the Remainder a. Expertise b. Accountability c. Rule of Law d. Efficiency II. THE STRANGE DEARTH OF ADMINISTRATIVE SEVERABILITY CLAUSES A. De Novo Review by the Courts B. Neglect in the Agencies III. DEFERENCE TO ADMINISTRATIVE SEVERABILITY CLAUSES A. Disassociating Statutory and Administrative Severability Clauses 1. Attention Paid to Severability Clauses 2. Time Pressure 3. Centralization B. A Chevron-Style Framework for Severability Clauses 1. Step One: Address Legal Defects a. Identifying Defects b. Remedying Defects 2. Step Two: Defer to the Agency 3. Step Zero: The Limits of the Deference Framework CONCLUSION APPENDIX: ADMINISTRATIVE SEVERABILITY CLAUSES BY AGENCY INTRODUCTION

"Judicial review controls administrative action in the same way that tornadoes control the rice crop in Arkansas: they appear unpredictably, wreak havoc, and then depart. "

--Jerry Mashaw (1)

This Article explores a topic overlooked in legal scholarship: severability clauses in administrative regulations. "Administrative severability clauses," as we call them, are provisions of administrative rules that clarify whether an agency intends for a rule to remain in effect if a court were to invalidate a portion of the rule. (2) A recent example, to which we return at several points in the Article, helps to illustrate the function and potential importance of these clauses.

The Environmental Protection Agency (EPA) recently published a proposed rule, commonly referred to as the "Clean Power Plan." (3) Political analysts have dubbed it the "centerpiece" of the Obama Administration's strategy on climate change. (4) The Clean Power Plan aspires to reduce greenhouse gas emissions by thirty percent below 2005 levels before 2030 by requiring states to meet certain carbon pollution emissions goals. (5) To set those goals, the EPA has identified four measures, which the proposed rule terms "building blocks" and which the agency has determined together make up the "best system of emission reduction." (6) The building blocks are: (x) making existing coal plants more efficient; (2) using existing gas plants more effectively; (3) increasing reliance on renewable and nuclear energy sources; and (4) improving end-use energy efficiency. (7) Like many environmental regulations, the Clean Power Plan is an example of cooperative federalism. While states are free to formulate their own plans for reducing greenhouse gas emissions, they must implement plans that will at least match the emissions reductions that the EPA has determined could be achieved by implementing the four building blocks.

Since the EPA's emissions goals are derived from the building blocks, regulated entities opposed to the Clean Power Plan--and there are many--are likely to challenge the building blocks in court. The agency may therefore be concerned that a court will vacate the entire Clean Power Plan if a court finds that just one of the building blocks is invalid. Likely in order to manage this risk, the EPA inserted a severability clause into the proposed rule's text. The clause provides that if a court invalidates one or more of the building blocks, the remainder of the rule should stay in effect, and the states' adjusted emissions targets should be based on the remainder of the building blocks. (8)

The Clean Power Plan's severability clause will become relevant in litigation if a discontent stakeholder challenges the rule and the reviewing court sets one or more of the building blocks aside. The court will then have to make what we call the "severability decision"; it will have to choose between invalidating only the challenged provision, invalidating the challenged provision and several other provisions, or invalidating the entire rule.

In the absence of the severability clause, the severability decision requires a reviewing court to apply a fairly well-established doctrinal framework. But when a rule contains a severability clause, such as the one contained in the Clean Power Plan, it raises an important question that courts and commentators have largely overlooked. Who should decide whether an invalidated provision of a rule is severable? We call this the "who-decides question." The who-decides question implicates the level of deference that a reviewing court should give to a promulgating agency's opinion on the severability of a rule expressed in a severability clause.

Once raised, the who-decides question involves some of the most basic issues in administrative law-issues about the allocation of decision-making authority in the federal government. When an agency has expressed its view on severability, should a court defer to the agency, as it would when an agency reasonably interprets an ambiguous statute pursuant to a congressional delegation of lawmaking authority? (9) If a rule is within an agency's bailiwick because it was promulgated pursuant to a statutory delegation of authority, does the severability of the rule also fall within its bailiwick, or is the severability decision intrinsically within the judicial power? Does a severability clause constitute an interpretation of the agency's own rule, qualifying it for Seminole Rock deference (that is, deference accorded to an agency's interpretation of its own regulations)? (10) If courts should give some measure of deference to an agency's opinion on severability, how much? Do some of the agency's statements on severability, but not others, deserve deference?

The visibility of the Clean Power Plan's severability clause notwithstanding, these questions remain mostly under-theorized. Until the last two decades, only three articles had been devoted to severability doctrine in either statutes or rules. (11) And courts have analyzed the doctrine in little more depth. Former Chief Judge of the Ninth Circuit John Clifford Wallace once lamented that "[t]he test for severability has been stated often but rarely explained." (12) To be sure, theoretical analysis of the severability of statutes has become more robust in recent years. The severability doctrine has figured prominently in recent de- bates in both Congress (13) and the Supreme Court, (14) and scholars have responded with full articles on the subject. (15) But the analysis of administrative severability doctrine continues to lag behind. There have been no law review articles addressing severability in administrative law, and we have found only one secondary source even mentioning the difference between the severability analyses in the statutory and administrative contexts. (16)

The dearth of scholarship is probably due, in part, to the answer that the agencies and the courts currently give to the who-decides question. Agencies tend to include severability clauses in their rules infrequently and sporadically. Even when an agency does include a severability clause in a rule, the current doctrine suggests that a reviewing court should not defer to it. Thus, the current judicial doctrine and agency practice regarding administrative severability represents one possible allocation of decision-making authority: namely, courts make the severability decision de novo without regard to the existence of a severability clause. As a result, these relatively insignificant clauses have not received much attention from commentators.

This Article maintains that current judicial doctrine and agency practice regarding severability are misguided. We think that courts should defer to administrative severability clauses and that agencies should more frequently include them in their rules. We propose a deference framework for administrative severability clauses, similar to the Chevron and Seminole Rock frameworks, under which both courts and agencies would play a role in the severability decision.

This Article proceeds in three Parts. Part I explains the severability decision and the who-decides question in more detail. In Part I.A, we discuss the current severability doctrine. As we explain, the doctrinal test for severability consists of two questions: (1) whether the promulgating agency would have intended for the remainder of a regulation to stay in effect; and (2) whether the remainder of the regulation is workable.

In Part I.B, we consider which institution--the reviewing court or the promulgating agency--is best suited to answer each of these questions. We conclude that when a promulgating agency has expressed an opinion on severability through a severability clause, it has offered an answer to the intent and workability questions. Because the promulgating agency is better equipped than a court to assess both its own intent on severability and the workability of a regulatory remainder, the agency's answers to those questions deserve deference. This preliminary discussion will serve as helpful background for our thesis that the current doctrine and practice on severability clauses misallocates decision-making authority and for our proposal of a deference framework for administrative severability clauses.

Part II describes the current judicial doctrine and agency practice on administrative severability clauses and shows that the doctrine and practice do not follow the allocation of decision-making authority suggested in Part I. In Part II.A, we explain that federal courts for decades have declined to take severability clauses in statutes at face value. We then explain that the doctrinal treatment of statutory severability clauses has been applied to administrative severability clauses because courts have reflexively analogized the two.

In Part II.B, we explain that agencies do not generally include severability clauses in their rules. Instead, agencies usually offer their opinions on severability only when required to do so in litigation. Our...

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