Intrastatutory federalism and statutory interpretation: state implementation of federal law in health reform and beyond.

• Author: Gluck, Abbe R.

ESSAY CONTENTS INTRODUCTION I. FEDERALISM AND FEDERAL LEGISLATION THEORY A. Preliminary Matters: Is Intrastatutory Federalism "Federalism" at All? B. The Absence of Intrastatutory Federalism from the Doctrines and Theories of Statutory Interpretation 1. The Absence of Intrastatutory Federalism from the Doctrines of Statutory Interpretation and Administrative Law a. Canons That Concern State-Federal Relations b. Canons That Concern Agency Implementation 2. The Absence of Intrastatutory Federalism from Modern Theories of Statutory Entrenchment II. FEDERALISM AS A TOOL OF NATIONAL POWER: ENTRENCHMENT AND ENCROACHMENT THROUGH STATE IMPLEMENTATION A. Nationalizing the "States as Laboratories" Account B. Federalism as a Tool of National Statutory Entrenchment 1. Entrenchment Through Polycentricity 2. Entrenchment Through the Statutory Bureaucracy 3. Entrenchment Through Deliberation C. Federalism as a Tool of Federal "Field Claiming" (or Encroachment) D. State Implementation as an Expression of Federalism Values III. HEALTH REFORM'S MANY THEORIES OF STATE AND FEDERAL RELATIONS A. Brief Overview of the Statute B. Multiple Theories of State-Federal Relations in the ACA 1. Why So Many Different Federalisms? 2. The ACA's Five Uses of the State-Federal Relationship a. Parallel Federalism as Both Boundary-Shifting and Federalism-Respecting b. Field-Claiming Federalism c. Hybrid Federalism 3. Experimentation, Entrenchment, and Encroachment Through the ACA's Federalisms a. States as Laboratories in the ACA b. States as National Entrenchers in the ACA c. Nonstate, Nonfederal Implementers d. The ACA's Parallel Federalism and Field-Claiming Moves as Boundary Shifting IV. DOCTRINAL IMPLICATIONS A. Why Statutory Interpretation Doctrine ? B. Which Statutory Interpretation Doctrines? 1. The Federalism Canons and the Problem of Broad Default Rules 2. The Administrative Law Canons: Mead as a Vehicle for a Statute-Specific Approach to State and Federal Agency Deference a. Potential Constraints on Chevron for Federal Agencies b. A Chevron for the States i. Accountability ii. Uniformity iii. Institutional Differences Between State and Federal Agencies c. What About All of the Other Nonfederal Implementers? 3. The Continuing Utility of the Canons C. Practical Applications 1. Tensions Between Chevron and the Federalism Presumptions 2. Courts That Have Considered a Chevron for the States 3. Whether Federal Statutes Can Empower State Implementers To Do What State Law Does Not Authorize 4. Confusion About Whether State or Federal Law Is Created by State Implementation Actions D. Toward a More Complete Theory of Intrastatutory Federalism 1. Interagency Statutory Interpretation 2. Theories of Modern Legislation and the Challenge of Aspirational Statutes CONCLUSION INTRODUCTION

On the one hand, legislation theory is a stubborn old dog. Indeed, its appearances are so persistently one-dimensional that they continue to give almost no indication that the states have any role whatsoever to play in interpreting federal statutory law. On the other hand, and at the same time, legislation theory is eagerly exploring its relationship with other domains, including constitutional law and administrative law. Increasingly, scholars are arguing that federal statutes are now the primary way in which quasi-constitutional norms are introduced and that federal agency implementation of those statutes is central to their entrenchment. And yet, putting these two hands together, it becomes evident that legislation's constitutional and administrative explorations have not offered any substantial account of federalism, an omission that implies that the states are irrelevant if one's concern is only with the interpretation and implementation of federal statutory law and the way that national values are created and entrenched in American legal culture.

But make no mistake: every branch of state government is squarely in the midst of creating, implementing, and interpreting federal statutory law. The most obvious manifestation of this is the number of federal statutory cases adjudicated by state courts, a point to which I have called attention in the past. (1) But there is another important dimension to this story, and one with many more players: namely, the federal statutory interpretation that takes place not in the courts, but on the ground, by the state governors, state legislators, and state administrative officials whom Congress increasingly places on the front lines in the implementation--and so by necessity, the interpretation--of federal statutory law. (2)

For all the focus in recent statutory interpretation doctrine and theory on the administrative state and on dialogic interpretation, we have virtually no doctrines or theories that acknowledge, much less account for, the role of state implementers in the hermeneutical project of federal statutory construction. Nor do we have any doctrines that attempt to recognize, much less negotiate, the relationship that is created between state and federal agencies when Congress gives them both concurrent authority to implement federal law but is ambiguous about how that authority should be allocated. Nor still, despite all of our public, doctrinal, and scholarly focus on federalism, do we have any story of what this Essay calls "intrastatutory federalism"--an informal, nonconstitutional federalism narrative that acknowledges the various ways in which Congress uses state implementers to entrench new national programs, and how those choices should color the interpretive role that states play in the development of federal statutory meaning.

Legislation theory and doctrine for the most part have seen the world as one in which federal judges and federal agencies interpret federal statutes and state judges and state agencies interpret state statutes-a world in which the New Deal and Civil Rights Eras marked the beginning of a nationalist legislative agenda that did not include the states and, indeed, was intended to supersede them. This perspective is in dramatic need of correction. From the federal quarantine laws of the 1800s, (3) to the family and old-age assistance programs of the New Deal Era, to the environmental statutes of the 1970s, (4) to the 2010 health reform legislation, state actors have been enacting state laws and regulations, creating new state and local bureaucracies, and participating directly in the federal regulatory process--all as part of their duties to implement federal statutes. But somehow the point that has been emphasized across virtually all other areas of public law--that the "dual" or "separate" spheres model of federalism does not capture the reality of modern American lawmaking--has bypassed theories of how federal laws should be interpreted.

This Essay uses the 2010 health reform statute as its primary case study to introduce these ideas. I have chosen this legislation not because it is unique; this Essay's explorations easily could be done with many other statutes, including the Clean Air Act, (5) the Clean Water Act, (6) the Telecommunications Act of 1996, (7) or the Medicaid statute, (8) and the legal challenges to the health reform statute certainly complicate this analysis. (9) I have chosen the health reform legislation, however, because, regardless of whether it is ultimately upheld or struck down, it is the most recent, high-visibility example of the stunningly complex and varied ways that "federalism" manifests from the inside of federal statutes.

The legislation--the Patient Protection and Affordable Care Act (ACA)(10)--is the first major piece of national social rights legislation since the 1960s, (11) and it is a virtual tapestry of federalism in federal statutory design. Some parts of the ACA are unequivocally designed around a presumption favoring state implementation; some parts are clearly intended to be federally led; and still other parts lie in a gray area, somewhere in between. (12) The statute also posits concurrent regulation by the states and the lead federal administrative agency, the Department of Health and Human Services (HHS), but at times it gives little explicit guidance about which actor--state or federal--should take the lead in various areas or about how much interstate regulatory variation Congress intended to encourage or allow. As just one example, consider the ACA's requirement that the states establish health insurance exchanges (one-stop shopping portals for small business and individual insurance purchase). Despite the ACA's explicit mention (six times!) of "state flexibility" in the context of the exchanges, (13) the states have been afraid to move ahead with implementation out of fear that HHS will nevertheless constrain interstate variation through federal regulation.

Statutes like the ACA reveal descriptive gaps that, in turn, raise new normative questions for both statutory interpretation and federalism. As a descriptive matter, statutes like the ACA substantiate the central role that Congress long has asked the states to play in federal statutory implementation. They also reveal that the typically undifferentiated category of "cooperative federalism" has far more internal nuances than we currently acknowledge. Indeed, the ACA exemplifies how a spectrum of federalism can exist even inside a single federal statute and highlights that Congress utilizes the states within statutes in highly varied ways.

As a normative matter, then, statutes like the ACA pose some challenges. For statutory interpretation, the challenge is this: once we recognize that Congress utilizes the states to implement federal statutes, but that Congress's charge can take many different forms, how should those statutory-design decisions affect how these statutes are interpreted? Should federal agencies have less discretion, for example, to use their regulatory power to constrain interstate implementation variation in statutes that give states a lead implementation...