Judicial Review
| Author | Kathryn A. Watts |
| Profession | Associate Dean for Research and Faculty Development and Associate Professor of Law, University of Washington School of Law, and Richard Murphy, AT&T Professor of Law, Texas Tech University School of Law |
| Pages | 49-93 |
In 2011, the Supreme Court issued a number of opinions that include
interesting tidbits and guidance on scope of review doctrines and access to
courts issues. In addition, the lower federal courts grappled with a variety of
scope of review and access to courts questions this past year. All of the Su-
preme Court’s major decisions in these two areas from the past year are
discussed below, as well as a somewhat arbitrary sampling of notable opin-
ions from the lower federal courts, with Part I focusing on scope of review
developments and Part II focusing on access to courts.
Highlights you will find discussed below include: (a) Chevron applies
with full force in the tax context;1 (b) more tea leaves on the relation of
Chevron Step-Two to arbitrariness review;2 (c) Justice Scalia’s separation-of-
powers concerns regarding Auer deference;3 (d) yet another Supreme Court
case illustrating deep divisions among the justices on the nature of constitu-
tional standing doctrine;4 (e) a lovely Judge Posner opinion hinting that maybe
we ought not have any constitutional standing doctrine at all;5 (f) some thought-
provoking circuit court opinions on when risk of injury can satisfy the injury
* By Kathryn A. Watts, Associate Dean for Research and Faculty Develop-
ment and Associate Professor of Law, University of Washington School of
Law, and Richard Murphy, AT&T Professor of Law, Texas Tech University
School of Law (Committee Co-Chairs).
1. Mayo Found. for Med. Educ. & Research v. United States, 131 S. Ct. 704
(2011) (discussed at Part I.A.1., infra).
3. Talk Am., Inc. v. Mich. Bell Tel. Co., 131 S. Ct. 2254, 2265–66 (2011)
(Scalia, J., concurring) (discussed at Part I.B.1., infra).
4. Ariz. Christian Sch. Tuition Org. v. Winn, 131 S. Ct. 1436 (2011) (discussed
at Part II.A.1., infra).
5. Am. Bottom Conservancy v. U.S. Army Corps of Eng’rs, 650 F.3d 652 (7th
Cir. 2011) (discussed at Part II.A.5.a., infra).
Judicial Review*
49
CHAPTER 3
50 Developments in Administrative Law and Regulatory Practice
requirement for constitutional standing;6 and (g) clarification of the jurisdic-
tion of the Court of Federal Claims.7
PART I. JUDICIAL DEVELOPMENTS INVOLVING SCOPE-
OF-REVIEW DOCTRINES
Although no earth shattering or blockbuster cases involving scope-of-
review doctrines were handed down this past year, the federal courts did
nonetheless decide some interesting cases involving a variety of scope-of-
review doctrines, including Chevron,8 Skidmore,9 and Auer10 deference as well
as arbitrary and capricious review. Some of the more notable things we learned
this past year include: Chevron deference applies with full force in the tax
context; Justice Breyer continues to fuzz the line rather than clearly delineate
between Chevron and Skidmore; Justice Kagan might see Step Two of Chev-
ron as involving the same analysis as arbitrary and capricious review; Justice
Scalia would be willing to reconsider Auer deference if asked; and arbitrary
and capricious review continues to mean very different things in different
contexts.
A. Chevron and Skidmore Developments
1. Chevron Applies with Full Force in the Tax World
Perhaps the Court’s most noteworthy Chevron case of the 2010 Term
came in Mayo Foundation for Medical Education & Research v. United
States.11 The question presented in the case was “whether doctors who serve
as medical residents are properly viewed as ‘student[s]’ whose service Con-
gress has exempted” from Federal Insurance Contributions Act (FICA) taxes
6. Id.; Amnesty Int’l USA v. Clapper, 638 F.3d 118 (2nd Cir. 2011), petition
for reh’g in banc denied, No. 09–4112–cv., 2011 WL 4381737 (Sept. 21,
2011) (discussed at Part II.A.5.a–b., infra).
7. United States v. Tohono O’Odham Nation, 131 S. Ct. 1723 (2011) (dis-
cussed at Part II.B.3., infra).
8. Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984).
10. Auer v. Robbins, 519 U.S. 452 (1997).
11. 131 S. Ct. 704 (2011).
51Chapter 1: Adjudication
under 26 U.S.C. § 3121(b)(10).12 That section exempts from taxation “ser-
vice performed in the employ of . . . a school, college, or university . . . if
such service is performed by a student who is enrolled and regularly attend-
ing classes at such school, college, or university.”13
Since 1951, the Department of Treasury had interpreted the student ex-
ception to exempt from taxation students who work for their schools “as an
incident to and for the purpose of pursuing a course of study” at the school,
and the Department determined whether an individual’s work was “incident
to” his studies using a case-by-case analysis.14 However, in December 2004,
Treasury adopted a new amended rule. These new regulations prescribed
“that an employee’s service is ‘incident’ to his studies only when ‘[t]he edu-
cational aspect of the relationship between the employer and the employee, as
compared to the service aspect of the relationship, [is] predominant.’”15 The
rule categorically provided that the services of full-time employees who work
40 hours or more per week are “not incident to and for the purpose of pursu-
ing a course of study.”16
After Treasury promulgated its full-time employee rule in December
2004, Mayo brought an action against the government for a refund of FICA
taxes withheld and paid on medical residents’ stipends during the second
quarter of 2005. Mayo asserted that its residents were exempt and that the
Treasury rule was invalid.17
In deciding the case, the Supreme Court started with Step One of Chev-
ron, asking whether Congress had addressed the precise question at issue. The
Court ultimately determined that the statute was ambiguous. The Court then
explained that normally it would turn to Step Two of Chevron and would ask
whether the agency’s determination was reasonable.18 However, in this case,
“the parties disagree[d] over the proper framework for evaluating an am-
biguous provision of the Internal Revenue Code.”19 In particular, Mayo ar-
gued in favor of the multi-factor analysis used to review a tax regulation in
12. Id. at 708.
13. 26 U.S.C. § 3121(b)(10).
14. 131 S. Ct. at 709 (quoting 16 Fed. Reg. 12,474).
16. Id. at 710.
17. Id.
18. Id. at 711.
19. Id. at 712.
Chapter 3: Judicial Review
To continue reading
Request your trial