Did X mark the spot? Brand X and the scope of agency overrides of judicial decisions.

• Author: Sze, Wesley
• Position: NOTE

Table of Contents Introduction I. Doctrinal Background II. Empirical Methodology A. The Primary Source: Federal Register Rulemakings B. Identifying Relevant Rulemakings C. Selection Criteria D. Coding of Variables E. Methodological Limitations III. Empirical Findings and Discussion A. Frequency of Brand X Overrides B. Brand X's Effect C. Features of Brand X Overrides 1. Frequency by agency 2. Frequency by court 3. Frequency by statute 4. Agency reasoning IV. Typologies of Agency Overrides A. Resolving Court Splits B. Addressing Serial Litigation C. Alternative to Direct Appeal V. Implications Conclusion Introduction

Every so often the Supreme Court issues a decision that reshapes how we conceive of the balance of powers within our system of government. In 2005, the Court seemed to hand down one such decision in National Cable & Telecommunications Assn v. Brand XInternet Services. (1) In Brand X, the Court held that agencies could override court precedent by displacing preexisting judicial interpretations of ambiguous statutes with their own independent interpretations of law. (2) When an agency disagrees with the judiciary's construction of a statute, Brand X allows an agency to pass its own conflicting--yet authoritative--interpretation and thereby annul the stare decisis effect of the judicial precedent. (3)

While the Brand X majority framed its rule as the inevitable outgrowth of the Court's long-established line of Chevron cases, the decision's retreat from the judiciary's authority "to say what the law is" (4) did not go unnoticed. Justice Scalia dissented, arguing that the decision likely signaled an unconstitutional encroachment on judicial power. (5) He feared that by making "judicial decisions subject to reversal by executive officers," Brand X would encourage agencies to ignore and even overturn judicial precedent. (6) This, he remarked, was not only "bizarre," but also "probably unconstitutional." (7)

The Court's Brand X decision, augmented by Scalia's dissent, was instantly heralded as "the most significant" administrative law decision during the Supreme Court's "[Fall] quarter." (8) There was "no doubt as to Brand X's standing as a major administrative law case" (9) that seemed destined to become a "watershed decision." (10)

Unsurprisingly (and true to Justice Scalia's prediction (11)), the decision produced no shortage of scholarship analyzing its thorny implications. (12) Even ten years later, Brand X continues to attract attention. One scholar recently described the decision as a "'WOW' moment" that had "enormous repercussions" on the balance of power between agencies and courts. (13) In addition, two present-day Supreme Court Justices--including the author of the opinion itself--have recently written separately to lambaste the Chevron doctrine upon which Brand X rests. (14)

But despite the intense reaction to the decision's purported implications on agency-court relations, it remains unclear whether Brand X was really a watershed moment that "recast" (15) agency power. While much ink has been spilled over the decision's doctrinal implications, there has been no empirical understanding of whether it has actually lived up to its reputation as a landmark administrative law case. Only in the past decade have scholars begun to develop an empirical understanding of how administrative law doctrine shapes agency behavior. (16) This is an area where "[m]uch more work needs to be done." (17)

This Note presents the first empirical analysis of Brand X-type agency overrides (18) of judicial statutory interpretation decisions. It addresses whether Brand X has been as significant as its commentary would suggest, uncovering whether the decision's alleged "enormous repercussions" on separation of powers and judicial supremacy have actually changed the way agencies treat judicial precedent. More generally, this Note explores the broader question of how developments in administrative law doctrine influence the on-the-ground primary behavior of agency decision makers.

The empirical analysis utilizes a unique dataset of all rulemakings published in the Federal Register where agencies have adopted interpretations of federal statutes that supersede a prior judicial interpretation. It thus builds a catalogue of all rulemakings involving a Brand X override. By collecting information about these rulemakings along several dimensions, the dataset enables a systematic analysis of how agencies have wielded their interpretive authority to override judicial holdings, both before and after Brand X

This methodology is unique in three main respects. First, instead of relying on a stated-preference approach (e.g., through surveys sent directly to agency officials), this Note uses a revealed-preference method by observing actual agency behavior. (19) Although stated-preference studies can give direct insight into the internal thought processes of agency rule drafters, revealed-preference methods more accurately reflect real-world behavior by removing expectancy bias and hypothetical bias. (20) Second, this study is comprehensive in its scope: it covers all agency rulemakings over a fifteen-year period, spanning the entire spectrum of the administrative state. Finally, rather than relying on judicial opinions (which provide only secondary insight into administrative lawmaking through judges' written opinions), this study relies on agencies' own primary source material published in the Federal Register.

The main empirical findings are as follows: First, contrary to what Brand X's opponents have predicted, agencies have very rarely promulgated regulations that override judicial interpretations of federal law. Rather, agency rulemakings are overwhelmingly consistent with preexisting judicial precedent. Of all rulemakings published between 2000 and 2014, much less than one percent of them involved a Brand X-type override. Second, there is little evidence Brand X actually changed the ways agencies treat judicial precedent. Contrary to Justice Scalia's concerns, there is no empirical evidence that Brand X ushered in an era of outlaw agencies. (21) Both pre- and post-Brand X, the rate of agency noncompliance with stare decisis has remained steadily low.

But this is not to say that agency rules never displace judicial interpretations--they have, albeit infrequently. And when they have engaged in Brand X overrides, this Note argues--consistent with the data--that they have done so within the context of broader, well-reasoned rulemakings that give appropriate respect to judicial precedent. Agencies have not used Brand X to thwart stare decisis. Instead, this study reveals that most Brand X overrides are implemented by a relatively small number of agencies to address complex, policy-heavy statutory schemes. And even in those cases, agencies still often explain their departure from judicial precedent by employing a full range of interpretive and policy rationales that reflect a reasoned and thoughtful decision to depart from stare decisis. Taken as a whole, the data suggest that Brand X is primarily invoked in circumstances where it is already appropriate, as a matter of policy and institutional competence, for an agency's determination of law to supersede a court's.

These findings suggest that the anxiety over Brand X is overblown. In recent years, there has been concern over a perceived ceding of judicial power to the administrative state. (22) This Note's findings do not necessarily refute that concern, as Chevron and its progeny may very well have limited the ability of courts to review agency interpretations. (23) Despite these concerns, this study argues that agencies do not actively seek to rebel against courts. (24) Instead, rule drafters continue to consider and incorporate judicial views into their rulemakings, even though Brand X created the theoretical possibility of discounting those precedents.

Part I of this Note presents a brief overview of the Brand X decision and the doctrinal background defining the allocation of interpretive authority between administrative officials and judicial actors leading up to the decision. Part II introduces this Note's empirical strategy, describing the methodology used to identify, categorize, and analyze the universe of agency actions that make up the unique dataset. Part III then reports the results of the empirical analysis. Based on these results, Part IV offers three typologies of agency overrides that illustrate key circumstances when Brand X overrides may be normatively desirable. Finally, Part V discusses the implications of these findings on our understanding of the balance of power between agencies and courts.

1. Doctrinal Background

   Chief Justice Marshall famously wrote that it is "emphatically the province and duty of the judicial department to say what the law is." (25) But he wrote those words more than two centuries ago--long before the rise of the modern administrative state. Today, the reality is that the judiciary is not the only government department authorized to "say what the law is." Administrative agencies have since taken the helm as the "primary official interpreters of federal statutes" by promulgating their own authoritative constructions of federal law independent of the judicial process. (26) Even still, the vestiges of Marbury v. Madison have not been shed easily, and there remains some uneasiness with the idea that administrative officials, and not judges, have the power to declare the law's meaning. (27)

   This struggle over the allocation of power between courts and agencies has been evident in a series of Supreme Court decisions that define each branch's interpretive authority. Beginning with the Court's seminal decision in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., (28) modern administrative law has shifted towards a model of deference to agency interpretations of the statutes they administer. Chevron' basic rule--that an...