Parting the Chevron sea: an argument for Chevron's greater applicability to cabinet than independent agencies.

• Author: Bond, Andrew T.

While Chevron in fact involved an interpretive regulation, the rationale of the case was not limited to that context: " 'The power of an administrative agency to administer a congressionally created ... program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by Congress.'" Quite appropriately, therefore, we have accorded Chevron deference not only to agency regulations, but to authoritative agency positions set forth in a variety of other formats.

--Justice Scalia, Christensen v. Harris Cnty., 529 U.S. 576, 589-90 (2000) (Scalia, J., concurring) (quoting Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 843 (1984)).

INTRODUCTION

Consider the following cases over three different administrations and decades:

Under the presidency of Bill Clinton, the Department of Veterans Affairs instituted a compensatory regulation requiring claimants to prove that their disabilities resulted from negligent treatment by the Department of Veterans Affairs or that aggravation of previous disabilities occurred during treatment. (1) The Supreme Court unanimously held that the regulation was inconsistent with the controlling statute, which did not contain any requirement that veterans must prove fault attributable to the Department of Veterans Affairs in causing such injuries. (2)

Under the presidency of George W. Bush, the State of Oregon brought an action seeking a declaratory judgment and injunctive relief to prevent federal enforcement of the U.S. Attorney General's interpretive rule that physicians who assist the suicide of terminally ill patients under the Oregon Death with Dignity Act violate the Federal Controlled Substances Act. (3) The Supreme Court invalidated the Attorney General's rule. (4) Justice Scalia filed a dissenting opinion, joined by Chief Justice Roberts and Justice Thomas. (5)

Under the presidency of Barack Obama, several Medicare providers brought suit against the Secretary of the Department of Health and Human Services, challenging the Department's reimbursement adjustment for hospitals within the providers' networks that serve a disproportionate share of low-income patients. (6) The Supreme Court unanimously upheld the Department's reimbursement adjustment methodology. (7)

These cases highlight the daily task of cabinet agencies (8) to make highly contentious and politically charged policy choices against the backdrop of ambiguous congressional legislation. Just as the judiciary must fulfill its Marbury v. Madison function to "say what the law is," (9) cabinet agencies must fulfill their Chevron function to interpret frequently vague and general statutes enacted by Congress. (10) This challenge, in many ways, is the key legal question of our time: has the judiciary's ability to say what the law is been usurped by the executive's ability to do the same? (11)

Cabinet department decisions to "say what the law is," at their core, are policy decisions. While the Supreme Court gives independent and cabinet agencies Chevron deference under certain circumstances, it seems as though cabinet agencies are inherently a more natural "fit" for receiving Chevron deference. (12)

This Note argues that cabinet agencies are better suited to receive Chevron deference than independent agencies because voters should desire such policy decisions to be made by those closest to electoral accountability, rather than unelected Article III judges with life-tenure. (13) In other words, the judiciary should accept the countermajoritarian difficulty as fundamentally true and review cabinet agency decisions in light of Chevron deference. (14) Part I examines the revolutionary decision of Chevron and its aftermath. Central to Part I is an inquiry into whether Chevron should be applied on a case-by-case or across-the-board basis, and whether Chevron has usurped the judiciary's power to "say what the law is," as cemented by the cornerstone constitutional law case of Marbury v. Madison. This Note contends that Chevron deference should be applied across-the-board, and that Chevron and Marbury are not at odds, but rather compatible precedents for the courts.

Part II defines what constitutes "cabinet" agencies in the scope of this discussion. Defining what constitutes a cabinet agency, in practice, is a difficult distinction. Part III turns to Chevron's greater applicability (or inapplicability, as advanced by several critics) to cabinet agencies than independent agencies. Fundamental to Part III is both a theoretical and practical justification for why cabinet agencies are better suited for Chevron deference.

1. THE CHEVRON DECISION AND ITS AFTERMATH

   Part I briefly summarizes the Supreme Court's pivotal decision in Chevron. It then looks at the decision's decades-long aftermath, including whether Chevron should be applied in a case-by-case or across-the-board fashion. This Part concludes with an inquiry into whether Chevron undermined the judiciary's power, per Marbury v. Madison, to "say what the law is."

   1. The Chevron Decision

      The dispute presented in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc. revolved around the Environmental Protection Agency's (EPA) definition of "stationary source" under the Clean Air Act. (15) The EPA exercised its power of informal rulemaking and adopted a liberal interpretation of "stationary source" ("liberal" as in a view more favorable to the energy industry). (16) The Natural Resources Defense Council (NRDC), in addition to other groups, petitioned the D.C. Court of Appeals to review the EPA's inter pretative rule defining "stationary source." (17) The Court of Appeals found the statute (18) and legislative history (19) to be inconclusive as to the definition of a "stationary source." It also held that the EPA's interpretation of "stationary source" was at odds with the general "purpose" of the Clean Air Act. (20) The court declared the regulation inconsistent with Congress's purpose in enacting the Clean Air Act and vacated the EPA's regulation. (21)

      In a unanimous opinion, the Supreme Court overturned the decision of the Court of Appeals. (22) Justice Stevens stated that once the Court of Appeals determined that Congress did not have a clear intent with regard to the EPA's lenient view of what constitutes a "stationary source," (23) the Court of Appeals should not have asked, "whether in its view the concept is 'inappropriate' in the general context of a program designed to improve air quality." (24) Instead, the correct question was "whether the Administrator's view that it is appropriate in the context of this particular program is a reasonable one." (25) This inquiry underlies what would become known as Chevron's two-step framework.

      Justice Stevens articulated a two-step framework with which courts should analyze the actions of an agency when its interpretation of a statute is in question. The first step is for the court to consider "whether Congress has directly spoken to the precise question at issue." (26) If Congress's intent is clear, then the court (and the agency) must "give effect to the unambiguously expressed intent of Congress." (27) This would be the end of the judicial inquiry, and the court need not enter into step two of the framework.

      If, however, Congress's intent is not clear, "the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation." (28) This second step of the framework is where the Court of Appeals erred. If the statute is ambiguous or silent with regard to the issue at question, then the "question for the court is whether the agency's answer is based on a permissible construction of the statute." (29)

      To summarize, the basic holding of Chevron is fairly straightforward: "Step One" requires courts to determine if Congress has "directly spoken to the precise question at issue." (30) If Congress has directly spoken, that is the end of the judicial inquiry, and Congress's interpretation governs. However, if Congress has not directly spoken, then "Step Two" directs courts to ask whether the agency's interpretation is "based on a permissible construction of the statute." (31) If the construction is permissible (or reasonable), then the court must uphold the agency's interpretation.

      Justice Stevens's articulation of the two-step framework is broad and not constrained to the precise facts of the case at hand. (32) Even though the framework seems simple in the abstract, its application across the several decades that have followed since Chevron has been anything but straightforward.

   2. Chevron's Aftermath

      The decades after Chevron have resulted in the application of the case's two-step framework in a fairly inconsistent fashion. Indeed, the dilemma of Chevron seems to center around two distinct questions: (i) when does Chevron govern the case at issue (the so-called "Chevron Step Zero"), (33) and (ii) whether Chevron deference should be a case-by-case inquiry (as advanced by Justice Breyer) (34) or an across-the-board presumption (as argued by Justice Scalia). (35) These questions are intimately related and will be discussed in turn.

      1. Chevron Step Zero

         Chevrons "Step Zero" inquiry deals with the question that courts ask before arriving at the two-step framework: does Chevron even apply to the case at issue? (36) If the answer is yes, then the court's analysis proceeds as it did in Chevron itself. If, however, the answer is no, then courts typically apply the Skidmore v. Swift & Co. standard, or even engage in de novo review. (37) Skidmore's approach considers the "rulings, interpretations and opinions" of agencies to be "not controlling upon the courts by reason of their authority." (38) Additionally, the weight that courts place on the judgments of agencies "will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and...