Straddling the Federal-State Divide: Federal Court Review of Interstate Agency Actions

Author:Daniel E. Andersen
Position:J.D. Candidate, The University of Iowa College of Law, 2016; M.A., Marquette University, 2013; B.A., Creighton University, 2009
Pages:1601-1650
SUMMARY

Until recently, scholarship on administrative federalism has focused on the vertical divide—the relationship between the federal and state governments. A growing body of literature, however, considers the benefits of horizontal federalism—the relationship between two or more states that work together to address shared issues. The interstate compact formalizes agreements among states about how... (see full summary)

 
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1601
Straddling the Federal–State Divide:
Federal Court Review of Interstate Agency
Actions
Daniel E. Andersen*
ABSTRACT: Until recently, scholarship on administrative federalism has
focused on the vertical divide—the relationship between the federal and state
governments. A growing body of literature, however, considers the benefits of
horizontal federalism—the relationship between two or more states that work
together to address shared issues. The interstate compact formalizes
agreements among states about how they will work together. Often, a compact
creates an interstate agency to carry out its objectives, thus functioning as an
enabling act. This Note examines the nature of interstate compacts and the
agencies they create, as exemplified by the Great Lakes–St. Lawrence River
Basin Water Resources Compact. In light of interstate agencies’ sub-federal
and supra-state status, they are subject to fewer legal and political constraints
than either federal or state agencies. This Note argues that for that reason,
when federal courts review interstate agencies’ interpretations of ambiguous
language in their enabling compacts, they should not apply the typical
Chevron deference afforded to federal agencies. Instead federal courts should
apply a version of the Skidmore balancing test, which allows courts to assess
the soundness of an agency’s decision-making procedures before determining
how much deference to give that agency’s interpretation of its enabling
compact.
* J.D. Candidate, The University of Iowa College of Law, 2016; M.A., Marquette
University, 2013; B.A., Creighton University, 2009. I want to thank Laura Andersen, Francine
O’Brien Andersen, and my colleagues on the Iowa Law Review for their editorial assistance. This
Note is dedicated to my sister, Betsy, always my inspiration; my brother, Jimmy, for his dedication;
my mother, Francine, for her motivation; and my father Brian, for his perspiration (it’s genetic).
A special thank you to my wife, Laura; my brother-in-law, Jason; and my nieces, Chloe, Morgan,
and Katrina for their patience during my many long hours of writer’s block.
1602 IOWA LAW REVIEW [Vol. 101:1601
I. INTRODUCTION ........................................................................... 1603
II. JUDICIAL REVIEW OF AGENCY ACTIONS IN THE FEDERAL–STATE
ADMINISTRATIVE REGIME: A FUNCTION OF VERTICAL
FEDERALISM ................................................................................ 1607
A. THREE LEGITIMIZING THEORIES OF THE FEDERAL–STATE
ADMINISTRATIVE REGIME ...................................................... 1609
B. EXTERNAL CONSTRAINTS ON AGENCY ACTIONS ...................... 1611
C. JUDICIAL REVIEW OF AN AGENCYS STATUTORY
INTERPRETATIONS: TWO STANDARDS OF ADMINISTRATIVE
DEFERENCE ........................................................................... 1615
III. INTERSTATE ADMINISTRATIVE LAW AND THE MULTI-STATE
ADMINISTRATIVE REGIME: A FUNCTION OF HORIZONTAL
FEDERALISM ................................................................................ 1619
A. THE MULTI-STATE ADMINISTRATIVE REGIME ......................... 1620
B. EXTERNAL CONSTRAINTS ON INTERSTATE AGENCY ACTIONS ... 1622
IV. KEY ISSUES CONCERNING JUDICIAL REVIEW OF AN INTERSTATE
AGENCYS INTERPRETATION OF FEDERAL LAW ............................ 1625
A. NOMINE IPSA LOQUITUR: INTERSTATE AGENCIES ARE NEITHER
FEDERAL NOR STATE .............................................................. 1626
B. THREE STRUCTURAL ISSUES PECULIAR TO INTERSTATE
AGENCIES .............................................................................. 1628
1. Interstate Agencies Do Not Necessarily Speak
with the Force of Federal Law .................................... 1628
2. Interstate Agencies Are Not Subject to the
Federal APA ................................................................. 1630
3. Interstate Agencies Are Subject to Fewer Checks
and Balances than Federal Agencies ......................... 1631
C. THE STRUCTURAL ISSUES OF INTERSTATE AGENCIES
UNDERMINE THE PROCEDURAL REGULARITY AND CHECKS AND
BALANCES THAT ENSURE ADMINISTRATIVE LEGITIMACY ......... 1633
D. JUDICIAL PRECEDENT IS LIMITED AND NOT DISPOSITIVE .......... 1635
V. STRADDLING THE HORIZONTAL–VERTICAL DIVIDE: WHY THE
FEDERAL COURT SHOULD REJECT CHEVRON DEFERENCE AND
APPLY SKIDMORES BALANCING APPROACH WHEN REVIEWING
MULTI-STATE ADMINISTRATIVE INTERPRETATIONS .................... 1640
A. “UNANIMITY AMONG THE FOXES OUGHT NOT PREJUDICE
THE HENS”—WHY THE COURTS SHOULD APPLY FEDERAL
STANDARDS TO DISPUTES CONCERNING INTERSTATE
AGENCIES .............................................................................. 1642
2016] STRADDLING THE FEDERAL–STATE DIVIDE 1603
B. COURTS SHOULD NOT APPLY CHEVRON DEFERENCE BECAUSE THE
ABSENCE OF CHEVRONS UNDERLYING JUSTIFICATIONS ENDANGERS
THE CONSTITUTIONAL LEGITIMACY OF AFFORDING A HIGH DEGREE
OF DEFERENCE TO INTERSTATE AGENCY ACTION ..................... 1643
C. THE COURT SHOULD APPLY SKIDMORES FLEXIBLE BALANCING
TEST BECAUSE IT PROVIDES PROCEDURAL PROTECTIONS AND
MAINTAINS POLITICAL-PROCESS LEGITIMACY ......................... 1645
VI. CONCLUSION .............................................................................. 1650
I. INTRODUCTION
The City of Waukesha, Wisconsin is in the market for new water.1 Once
famous for its mineral springs, Waukesha now draws water from a depleted
sandstone aquifer contaminated by levels of radium that are dangerously in
excess of state and federal limits.2 Under a federal deadline for supplying
residents with “radium-safe water,” Waukesha has set its sights on the waters
of Lake Michigan, one of the world’s largest sources of fresh water located just
15 miles to the east.3
Despite Waukesha’s proximity to Lake Michigan, the city faces significant
legal hurdles in accessing the lake’s water.4 Waukesha is located just outside
the Great Lakes Water Basin.5 For that reason, under the provisions of the
Great Lakes–St. Lawrence River Basin Water Resources Compact (“GLWC”)
of 2008, the city must apply for an out-of-basin diversion from an interstate
agency made up of representatives from the eight states bordering the Great
Lakes.6
1. Sarah Gardner, Waukesha Fights for a Share of Lake Michigan’s Water, MARKETPLACE (Feb.
4, 2015, 5:00 AM), http://www.marketplace.org/2015/02/04/sustainability/water-high-price-
cheap/waukesha-fights-share-lake-michigans-water.
2. Id.; see also Don Behm, Great Lakes Organization Starts Review of Wisconsin City’s Request for
Water from Lake Michigan, DULUTH NEWS TRIB. (Jan. 7, 2016, 6:25 PM), http://www.duluthnews
tribune.com/news/3919510-great-lakes-organization-starts-review-wisconsin-citys-request-water-
lake-michigan.
3. Don Behm, DNR to Advance Waukesha Water Diversion Bid to Great Lakes Governors,
MILWAUKEE–WIS. J. SENTINEL (Dec. 8, 2015), http://www.jsonline.com/news/waukesha/dnr-to-
advance-waukesha-water-diversion-bid-to-great-lakes-governors-b99630401z1-360964451.html;
see also Gardner, supra note 1. Lake Michigan is one of five lakes in the Great Lakes water system,
which accounts for more than one-fifth of the planet’s surface freshwater. JARED TEUTSCH, ALL.
FOR THE GREAT LAKES, ON TRACK? ENSURING THE RESILIENCE OF THE GREAT LAKES COMPACT 1
(2013), http://www.greatlakes.org/document.doc?id=1410 (“The Great Lakes . . . contain 84
percent of North America’s surface freshwater and 21 percent of the surface freshwater worldwide.”).
4. See Gardner, supra note 1.
5. See Behm, supra note 3.
6. Great Lakes–St. Lawrence River Basin Water Resources Compact (“GLWC”), Pub. L.
No. 110–342, §§ 1, 2.2–.3, 122 Stat. 3739, 3739, 3744 (2008). The GLWC is an interstate
compact governing the Great Lakes water system. TEUTSCH, supra note 3, at 1–2. Ratified by the

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