The hundred-years war: the ongoing battle between courts and agencies over the right to interpret federal law.

Author:Modesitt, Nancy M.
 
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  1. INTRODUCTION II. THE HISTORY AND TYPES OF NONACQUIESCENCE A. The Struggle to Define the General Standard for Court Review of Agency Interpretations of Federal Statutes B. The Slow Realization of the Nonacquiescence Problem III. THE THEORETICAL AND PHILOSOPHICAL DEBATE OVER NONACQUIESCENCE IN THE ABSENCE OF CHEVRON DEFERENCE AND A PROPOSED RUBRIC A. The Theoretical and Philosophical Assessment of Nonacquiescence B. Justifying Agency Nonacquiescence: A Cost-Benefit Rubric IV. PERILOUS NONACQUIESCENCE: THE EEOC EXAMPLE A. The EEOC Nonacquiescence Policy B. The Framework Applied to the EEOC's Policy 1. The EEOC's Interpretations of Title VII Are Not Entitled to Chevron Deference 2. The Benefits of the EEOC's Nonacquiescence Policy a. Special Expertise--Generally b. Special Expertise--Empirical Data i. Methodology ii. Results TABLE 1 Overview of Research Results TABLE 2 Common Types of Category I OFO Decisions that Lack Substantive Analysis c. Administrative Efficiency d. Substantive Justification 3. The Costs of the EEOC's Nonacquiescence Policy are Significant a. Costs of Dual Bodies of Law Interpreting Title VII b. Contextual Concerns: Repeat Players and Lack of Policing 4. Resolving the EEOC Problem V. CONCLUSION I. INTRODUCTION

    For much of the last century, there has been an ongoing battle between federal courts and agencies over the right to interpret federal statutes. (2) At times, courts have deferred to agencies' interpretations. At other times, courts have demanded that agencies follow court interpretations. In some instances, this has resulted in the development of two distinct bodies of law interpreting federal statues: one created by federal courts and another by federal agencies.

    For example, imagine Susan Smith, a woman subjected to sexual harassment while working for the federal government who suffers severe emotional distress as a result of the sexual harassment. She is entitled to damages for her emotional distress, but the damages award is determined by comparing her symptoms to the symptoms of other employees in other employment discrimination cases and is limited by the amounts awarded in those earlier cases--not on the merits of Susan's own claim. (3) However, if Susan were to work for a private employer in Virginia, her emotional distress damages would not be limited to an award comparable to those in earlier cases; instead, the amount would be determined by the factfinder with very little limitation. (4) The reason for the difference is that a federal agency has announced one method of calculating emotional distress damages, using other cases as a benchmark for awards, while the Fourth Circuit has taken a completely different approach of evaluating each case on its merits. (5) This is despite the fact that the right to emotional distress damages is the same for public and private employees. (6)

    The development of these different bodies of law, with different legal rules, is an exemplar of the results of this ongoing war between federal courts and federal agencies over which entity has the primary authority to interpret federal statutes. Fairly recently, the U.S. Supreme Court granted a significant victory in this war to agencies. In National Cable & Telecommunications Ass'n v. Brand X Internet Services. (7) the Court held that, where an agency's interpretation of law is entitled to deference under the well-established Chevron (8) standard, (9) a federal court of appeals' interpretation is not entitled to trump the agency's interpretation based on stare decisis. (10) Rather, the agency interpretation is entitled to court deference so long as it meets the standards established in Chevron. (11)

    However, for the thousands of agency actions and interpretations of law not entitled to Chevron deference, (12) it has yet to be determined which governmental body--federal court of appeals or agency--is the final arbiter of federal law. At least one federal agency, the Equal Employment Opportunity Commission (EEOC), has taken the position that it need not even consider federal court of appeals precedent, much less defer to it. (13) This Article posits that a wholesale refusal to defer to federal court of appeals precedent, exemplified in the EEOC policy, is improper where the agency is not entitled to Chevron deference. Instead, an agency should provide a significant and substantial justification for each decision not to defer to decisions issued by the federal courts of appeal.

    Part II explains the historical development of agency nonacquiescence, which is the term used to describe an agency's decision not to follow federal court of appeals decisions14 and concludes with a discussion of the Brand X decision. Part III proposes a rubric for analyzing agency nonacquiescence where Chevron deference is not owed. Part IV analyzes the Equal Employment Opportunity Commission nonacquiescence policy, using this proposed rubric to illustrate some of the significant problems created by an agency's nonacquiescence policy. This Article concludes that the EEOC's policy is inappropriate for a variety of reasons, including reasons based on an empirical review of EEOC decisions made pursuant to the policy.

  2. THE HISTORY AND TYPES OF NONACQUIESCENCE

    Nonacquiescence is the refusal of agencies to follow federal court of appeals decisions interpreting federal law. Nonacquiescence is one aspect of the broader issue of the appropriate relationship between the federal judiciary and agencies, specifically, which branch of the government is or should be the primary interpreter of federal statutes. In order to understand the more specific nonacquiescence issue, a brief summary of the battle between courts and agencies over the general right to interpret federal statutes is necessary.

    1. The Struggle to Define the General Standard for Court Review of Agency Interpretations of Federal Statutes

      In a perfect world, the relationship between judiciary and agency would be established by the Constitution. Unfortunately, while the Constitution provides details on the relationship among the federal judiciary, Congress, and the President, it does not directly address the relationship between the federal judiciary and federal agencies. While generally residing within the purview of the Executive Branch, agencies also have roots in Congress, which legislatively creates their mandates and can control the scope of their power and authority. In addition, many agencies have a quasi-judicial role, deciding disputes that might otherwise be heard by the federal courts. As a result, agencies, the so-called "fourth branch" of the government, occupy a constitutionally uncertain position with respect to the other branches of government. (15)

      Scholars have long noted the tension between courts and agencies as to who has the ultimate authority to determine what the law is: courts, according to the oft-repeated language in Marbury v. Madison that it is for the courts to "say what the law is," or agencies, according to a "counter-Marbury" principle. (16) The pedigree of the former position can be traced back even beyond Marbury itself to the Federalist Papers, which noted that "[t]he interpretation of the laws is the proper and peculiar province of the courts." (17)

      Agencies' unclear relationship with the judiciary was not an issue before the New Deal because of the manner in which agencies operated and the posture in which cases came before the courts. (18) Agencies did not take actions to interpret statutes in a manner that would lead to legal challenges being brought directly against the Executive Branch; this left the judiciary with the exclusive role of interpreter of federal statutes. (19) In addition, the relatively small scale of administrative action before the New Deal and the concomitant rise of the regulatory state made the issue far less pressing a century ago than it is today.

      As the modern regulatory state developed, the question of the appropriate relationship between judiciary and agency, with its newly developed powers, became acute, and the need for answers grew. One potential articulation of the agency-judiciary relationship surfaced in the Administrative Procedure Act (APA), enacted in 1946. One of the APA's provisions appeared to place all authority for interpreting federal law with the judiciary, stating that "[a] reviewing court shall decide all relevant questions of law, and interpret constitutional and statutory provisions...." (20) This language suggested that the judiciary should occupy the premier position with respect to interpreting the law.

      However, this language did not affect the Supreme Court's analysis of the agency-judiciary relationship. Instead, the Court began its own decades-long search for defining principles and rules to determine the appropriate agency-judiciary relationship. Other scholars have detailed much of this history; (21) for the purposes of this Article, a few examples of the Supreme Court's decisions in this area provide a sufficient sense of the confusion permeating the issue.

      One early approach, the Skidmore standard, was to deny giving administrative interpretations of law mandatory authority but to give the administrative interpretation some persuasive authority. (22) In Skidmore, the Court interpreted the provisions of the Fair Labor Standards Act (FLSA) in order to determine whether time employees spent on call was working time for which compensation was required. (23) The district court concluded as a matter of law that on-call time was not working time. (24) The Supreme Court reversed, holding that such a conclusion was inappropriate. (25) A primary support for its conclusion was the district court's failure to consider the guidance provided by the congressionally created Office of the Administrator. (26) The Administrator had issued interpretations of the FLSA and concluded that a per se approach to on-call time was inappropriate; instead, each case should be evaluated on its facts in order to determine...

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