Stare decisis, Chevron, and Skidmore: do administrative agencies have the power to overrule courts?

• Author: Dame, Paul A.

[B]ecause there is no Judge Subordinate, nor Soveraign, but may erre in a Judgement of Equity; if afterward in another like case he find it more consonant to Equity to give a contrary Sentence, he is obliged to doe it. No mans error becomes his own Law; nor obliges him to persist in it. Neither (for the same reason) becomes it Law to other Judges, though sworn to follow it.

--Thomas Hobbes (1)

Stare decisis provides some moorings so that men may trade and arrange their affairs with confidence.

--Justice Willism O. Douglas (2)

INTRODUCTION

Contrary to the hopes of Thomas Hobbes, expressed in the above quote from his landmark work Leviathan, stare Decisis (3) has fulfilled the role sketched by Justice Douglas and remained a bulwark of the Anglo-American legal system for centuries. In the latter half of the twentieth century, a new area of law has begun to take form alongside the time-tested pillars of our legal system, arising to deal with the development of the modern administrative state. The Supreme Court has responded by creating a muddled and byzantine administrative law jurisprudence that leaves many seminal questions unanswered. One of the foremost of these questions is how the venerable doctrine of stare decisis interacts with the practice of giving deference to administrative agency interpretations of the statutes Congress charges them to administer.

The uncertainty in this area of the law is strikingly illustrated by two quotes. The first is by one of the leading lights of the current Supreme Court and a renowned expert on administrative law, Justice Antonin Scalia. Dissenting in a recent case, Justice Scalia asserted:

I know of no case, in the entire history of the federal courts, in which we have allowed a judicial interpretation of a statute to be set aside by an agency--or have allowed a lower court to render an interpretation of a statute subject to correction by an agency. (4) In stark contrast is the holding of the Eleventh Circuit in Satellite Broadcasting & Communications Ass'n of America v. Oman. (5) Confronted with regulations promulgated by the Copyright Office that directly conflicted with prior circuit precedent, a three judge panel unanimously concluded:

Although the new regulations conflict with our interpretation of the term "cable system" in [NBC v. Satellite Broadcasting Networks], they are neither arbitrary, capricious, nor in conflict with the clear meaning of the statute. They are therefore valid exercises of the Copyright Office's statutory authority to interpret the provisions of the compulsory licensing scheme, and are binding on this circuit. (6) This Note examines Supreme Court decisions addressing stare decisis and administrative agencies, the statutes governing such agencies, and the policy considerations underlying the actions of both the Court and Congress in order to analyze whether administrative agencies are able to "overrule" courts in limited settings. More specifically, this Note will consider the effect of post-Chevron precedents created by application of the recently reutilized doctrine of "Skidmore deference" in administrative law. This analysis leads directly to the conclusion that the Eleventh Circuit's holding in Satellite Broadcasting properly recognized the existence of an ability, albeit sharply limited, of administrative agencies to "overrule" judicial precedent, which is particularly applicable in the case of precedents granting deference under Skidmore. Specifically, it will be argued that the "overruling" procedure recognized by both the Eleventh Circuit and Justice Scalia (in a hypothetical in his Mead dissent) does not pose a significant threat to the values served by stare decisis and that any negative effect in this area is far outweighed by the benefits such a procedure will confer in terms of flexibility in administrative law.

Part I will provide the background information necessary to fully explore the interaction of the doctrine of stare decisis and the law governing administrative agencies. Particularly, Section IA will examine the process of administrative rulemaking by analyzing the provisions of the Administrative Procedure Act that define and govern agency rulemaking and judicial review of that process. More specifically, this section will set out the statutory definition of rulemaking, and examine Appalachian Power Co. v. EPA, (7) a recent case that has had a significant impact on rulemaking. This section will also summarize the academic debates surrounding these definitions and their application. Section IB will present an overview of the doctrine of stare decisis including judicial and academic perspectives.

Part II will focus on the development of administrative law jurisprudence since the Court's landmark decision in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. (8) First, Section IIA will examine Chevron itself and take note of the academic debates that surrounded (and continue to surround) the framework for deference that the Chevron Court established. Second, Section IIIB will examine Maislin Industries, U.S., Inc. v.

Primary Steel, Inc., (9) Lechmere, Inc. v. NLRB, (10) and Neal v. United States, (11) in which the Supreme Court made often-cited statements about the interaction of stare decisis and the Chevron doctrine. In broad terms, the Court in these cases held that stare decisis trumps the Chevron doctrine of deference to agency interpretations of statutes. Third, Section IIC will examine the recent line of cases that have revived the pre-Administrative Procedure Act doctrine of "Skidmore deference" (12) as an intermediate level of deference between Chevron deference and no deference at all. The case in which Skidmore deference made its modern debut in the High Court was Christensen v. Harris County. (13) Just last term, the Court again applied Skidmore in United States v. Mead Corp. (14) over the aforementioned lone dissent of Justice Scalia.

Part III will present an in-depth analysis of both the Eleventh Circuit's decision in Satellite Broadcasting and similar cases, and of Justice Scalia's dissent in Mead. Section IIIA will analyze Justice Scalia's Mead hypothetical about administrative agencies overruling courts and his arguments against letting such agencies "overrule" courts. Section IIIB will examine the arguments for allowing agencies to "overrule" precedent presented by the Eleventh Circuit and other courts.

Part IV will conclude, first, that the administrative law jurisprudence of the Supreme Court does not prohibit the procedure utilized by the Eleventh Circuit and described in Justice Scalia's hypothetical because Maislin, Lechmere, and Neal (on which Scalia relied in his Mead dissent) can be properly characterized as dealing solely with the conflict between agency action and stare decisis in the context of pre-Chevron precedents. Second, the Note will conclude that Justice Scalia's ossification argument in his dissent in Mead is only problematic when a court is confronted with a very limited set of circumstances. The public policy perspective values deference to decision making by those most qualified, and this policy underlies the modern administrative state. This policy militates against mechanically applying a strict and wooden version of stare decisis in administrative law. Finally, this Note will analyze the conflict between this policy and the traditional Marbury v. Madison (15) argument that courts have the final say on the proper interpretation of the laws and conclude that Marbury is of limited impact.

1. BACKGROUND

   1. The Administrative Procedure Act

      In 1946, Congress produced one of its landmark pieces of legislation when it passed the original Administrative Procedure Act (APA). (16) It was evident to Congress in the years following the initial massive expansion of the federal administrative state under President Franklin Delano Roosevelt's New Deal that a new framework for overseeing and regulating administrative agencies was needed. By passing the APA, Congress hoped to "set[] a pattern designed to achieve relative uniformity in the administrative machinery of the Federal Government." (17) A further goal was to "effectuate[] needed reforms in the administrative process and at the same time preserve[] the effectiveness of the laws which are enforced by the administrative agencies of the Government." (18) For the past fifty-five years, the growing number of administrative agencies have labored to implement and fulfill the goals of the APA.

      Agencies have largely done so using the rulemaking structures set out in the APA.

      It is important to thoroughly understand the APA-mandated administrative rulemaking processes before moving on because these procedures provide the framework for analyzing most agency actions. First, the APA, in [section] 551(4), defines a rule as "the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency...." (19) Proposed actions by administrative agencies that fall within this definition must be promulgated according to 553, which sets out specific rulemaking procedures.

      Section 553 divides agency action within the [section] 551(4) definition of "rule" into three categories. (20) The first category includes "interpretive rules, general statements of policy, ... [and] rules of agency organization, procedure or practice ..." which are exempted from the rulemaking procedures set out in the rest of 553. (21) The second and third categories are comprised of the wide range of agency action that may be termed "legislative rules." (22) Section 553 divides this broad category into two types of rules, informal and formal, distinguished by the type of procedures agencies must follow to create them. To informally promulgate a rule, the agency must "follow[] a three-step procedure...