Interpreting regulations.

Author:Stack, Kevin M.
Position::Introduction through II. The Distinctive Legal Character of Regulations, p. 355-382

The age of statutes has given way to an era of regulations, but out jurisprudence has fallen behind. Despite the centrality of regulations to law, courts have no intelligible approach to regulatory interpretation. The neglect of regulatory interpretation is not only a shortcoming in interpretive theory but also a practical problem for administrative law. Canonical doctrines of administrative law--Chevron, Seminole Rock/Auer, and Accardi--involve interpreting regulations, and yet courts lack a consistent approach.

This Article develops a method for interpreting regulations and, more generally, situates regulator3' interpretation within debates over legal interpretation. It argues that a purposive approach, not a textualist one, best suits the distinctive legal character of regulations. Administrative law requires agencies to produce detailed explanations of the grounds for their regulations, called statements of basis and purpose. Courts routinely use these statements to assess the validity of regulations. This Article argues that these statements should guide judicial interpretation of regulations as well. By relying on these statements as privileged sources for interpretation, courts not only grant deference to agencies but also treat these statements as creating commitments with respect to a regulation's meaning. This approach justifies a framework for interpreting regulations under Chevron, Seminole Rock/Auer, and Accardi that is consistent with the deferential grounding of these doctrines, and provides more notice to those regulated than does relying on the regulation's text alone.

This Article also shows how regulatory, purposivism constitutes a new foothold for Henry Hart and Albert Sacks's classic legal process account of purposivism. Hart and Sacks's theory is vulnerable to the criticism that discerning statutor3, purpose is elusive because statutes do not o[ten include enacted statements of purpose. Regulatory, purposivism, however, avoids this concern because statements of basis and purpose offer a consistent and reliable source for discerning a regulation's purpose. From this perspective, the best days for Hart and Sacks's legal process theory may be ahead.

TABLE OF CONTENTS Introduction I. The Interpretation of Regulations: An Overview of the Problem A. Chevron's Silence B. Seminole Rock's Inadequacy C. Accardi's Complexity D. The APA's Neglected Interpretive Mandate II. The Distinctive Legal Character of Regulations A. The Twofold Character of Regulations B. The Institutional Place of Regulations III. Legal Process Purposivism Revisited A. The Purposive Technique B. The Grounds for Purposivism IV. Purposive Regulatory Interpretation A. Purposive Regulatory Interpretation: The Technique B. Purposive Regulatory Interpretation: Legal Process Grounds C. Deference and Commitment in Purposive Regulatory Interpretation D. Responding to Textualist Challenges E. Is This Purposivism or Textualism? V. Purposivism's Place in Administrative Law A. Interpreting Regulations Under Chevron B. A Solution for Seminole Rock C. A Middle Ground for Accardi D. Administrative Flexibility and the Rule of Law E. Incentives for Strategic Manipulation F. Preemption and the Legal Status of Statements of Basis and Purpose Conclusion Introduction

As statutes gradually supplanted the common law during the twentieth century, (1) lawyers and judges devoted increasing attention to methods of statutory interpretation. By the century's end, statutory interpretation had ballooned into one of the most contested issues in judicial practice and scholarly debate. (2) The ascendance of statutory interpretation occurred, however, as regulations issued by administrative agencies eclipsed statutes as sources of law. (3) With the rise of regulations, lawyers and judges now routinely confront questions of interpretation on this next frontier--that is, the interpretation of regulations themselves.

While all agree that regulations are primary sources of law, strikingly little attention has been devoted to the method of their interpretation. Courts and scholars have labored over legal interpretation generally and the methodology for statutory interpretation in particular. But regulations--specifically, the rules that administrative agencies produce largely through the notice-and-comment rulemaking process (4)--have been orphaned from those debates. Administrative law has done no better in attending to the interpretation of regulations. Administrative law specifies how agencies must make regulations--that is, the procedural requirements for rulemaking. (5) And courts and commentators have devoted tremendous attention to refining the standards for judging the validity of regulations. (6) But theorizing about how a court--or any other legal actor, for that matter--should interpret regulations has attracted only occasional notice, (7) especially in comparison to the volume of legal work devoted to figuring out how to comply with regulations. We lack a debate over, much less an account of, the basic elements of regulatory interpretation, including "the overall goal of interpretation," (8) "the admissible sources the interpreter may consider in attempting to achieve that goal," (9) and the relationships among those sources. The lack of attention to judicial methods of regulatory interpretation is more than a shortcoming in interpretive theory. It is also a practical problem for administrative law and lawyers who grapple with regulations. Several central doctrines of administrative law depend on courts interpreting regulations. Under Chevron, a court must interpret the regulation to judge whether it is permitted under the agency's authorizing statute, (10) just as a court must interpret a statute to judge its constitutionality. Under Seminole Rock/Auer, a court must interpret the regulation to determine whether the agency's preferred construction is "plainly erroneous or inconsistent with the regulation." (11) Likewise, under the Accardi principle, (12) a court cannot determine whether an agency has failed to comply with its own regulation without interpreting the regulation itself. How a court interprets the regulation at issue can decide the outcome under these doctrines.

Yet courts have not developed a consistent approach to regulatory interpretation under these doctrines or elsewhere. Decisions sometimes rely exclusively on the regulation's text (13) and canons of construction, (14) but in other instances courts invoke aspects of the regulation's procedural history, (15) the court's construction of the authorizing statute's purposes or congressional intent, (16) or the agency's own justification for the regulation, (17) among other tools. (18) Courts not only lack a consistent approach but also generally invoke one interpretive tool or another without stating reasons for doing so--nor manifesting a compunction to consider how similar interpretive issues have been handled in the past. (19) As a result, little law or considered practice on interpretive methodology applicable to regulations is developing. Indeed, it is hard to avoid the impression that the judiciary does not recognize regulatory interpretation as an aspect of judicial practice, like statutory interpretation, that merits independent and systematic consideration. (20)

This Article develops a theory of regulatory interpretation to address this gap in both interpretive theory and judicial practice. Regulations, it argues, are particularly well suited to a purposive method of interpretation. The Article takes as a starting point that a theory of regulatory interpretation must be grounded in the distinctive character of regulations and the institutions that issue them. Regulations are creatures of administrative law, and distinctive features of that legal context suggest a purposive rather than a textualist approach to interpretation. At the most basic level, to issue a regulation, administrative procedure and judicial doctrine require an agency to publish a detailed explanation of the grounds and purposes of the regulation, called a "statement of basis and purpose," (21) also referred to as a regulatory "preamble." (22) Congress, in contrast, faces no analogous requirement to include a statement of purpose in its legislation, and enacts such statements in a minority of statutes. (23) Moreover, when courts judge the validity of regulations, their task is not to determine if there is any conceivable basis for upholding them, as courts do in constitutional review of legislation, but rather to ask whether the agency articulated grounds in its statement of basis and purpose on which the regulations may be upheld. (24) As a result of these doctrines, the text of a regulation and its statement of basis and purpose stand in a unique relationship: together, they constitute the act of regulation, an act that is not complete without either element of this couplet. Based on this premise, it does not make sense to interpret the text of a regulation independently from its statement of basis and purpose.

Now consider a further feature of regulations: like other forms of agency action, a regulation must implement a statute's aims or goals within prescribed means. To be valid, a regulation must be purposive in the sense that it implements, or carries into effect, the authorizing statute. (25) Here again, the contrast with legislation is sharp. Whereas Congress can select its own ends so long as they are constitutionally legitimate, (26) administrative agencies' aims are prescribed by statute. Based on the premise that regulations must be purposive in this sense of carrying into effect the agency's statutory aims, it makes sense to read them in light of their purposes. Bringing these observations together suggests the outlines of an interpretive method: that a regulation should be read in light of its purposes, with the regulation's text and the statement of basis and purpose constituting the privileged...

To continue reading