THE BRAND X EFFECT: DECLINING CHEVRON DEFERENCE FOR EPA AND INCREASED SUCCESS FOR ENVIRONMENTAL GROUPS IN THE 21ST CENTURY.

• Author: Johnson, Stephen M.

CONTENTS INTRODUCTION I. CHEVRON AND BRAND X II. CHEVRON AND JUDICIAL REVIEW OF EPA'S DECISIONS A. Glicksman and Schroeder's Review of EPA's First Twenty Years B. Schroeder and Glicksman's Follow Up Empirical Study C. Czarnezki Empirical Study of Environmental Cases D. Wagner Empirical Study of Challenges to EPA's Air Tories Rules E. Barnett and Walker Empirical Studies of Chevron Decisions in the Federal Circuit Courts III. UPDATING THE SCHROEDER AND GLICKSMAN STUDY A. Focus of the Study B. Methodology for the Study C. Findings 1. Decreased Deference for EPA--A Brand X Effect? 2. Statutory Interpretation Tools 3. Who Sues EPA and Who Wins CONCLUSION INTRODUCTION

Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc. (1) is the most frequently cited Supreme Court administrative law decision (2) and has generated substantial scholarship over the past thirty-four years. (3) Almost three decades ago, Robert Glicksman and Christopher Schroeder examined the nature of judicial review of the actions of the Environmental Protection Agency ("EPA") by the federal courts during the agency's first twenty years of existence, focusing, in part, on the changing nature of that review in light of the Chevron decision. (4) Glicksman and Schroeder concluded that the courts aggressively reviewed EPA's actions during the agency's early years, interpreting the environmental statutes according to their broad purposes and declining to accord deference to the agency. (5) By the end of the study period, though, they concluded that courts adopted a more deferential view toward EPA's decision-making and focused less on the purposes of the statutes in their review of the agency's decisions. (6) Glicksman and Schroeder suggested that the change was motivated by many factors, including a change in the judicial attitude towards agencies after Chevron. (7)

Schroeder and Glicksman followed up their 1991 theoretical examination of the nature of judicial review of EPA decision-making with a more detailed empirical examination. (8) In a 2001 article, they examined all of the federal circuit court cases decided between 1991 and 1999, and a sampling of cases decided between 1986 and 1988, in which EPA or the EPA Administrator appeared as a party, to determine whether courts were deferring more frequently to EPA after Chevron and to determine what tools of statutory interpretation courts were employing to review the agency's decisions. (9) Schroeder and Glicksman concluded that a "Chevron effect"--an increase in agency affirmances due to greater deference to agency decision-making--persisted through the study period. (10) They also concluded that courts were relying heavily on textualism in interpreting statutes during the study period, and gave little weight to non-textual tools, such as legislative history. (11)

Schroeder and Glicksman are not alone in focusing their energies on analyses of the nature of judicial decision-making in Chevron cases. In 2008, Jason Czarnezki reviewed environmental law cases decided by federal courts between 2003 and 2005 involving EPA, the Army Corps of Engineers, and the Department of Interior. (12) He examined the cases through a different lens than Schroeder and Glicksman, focusing on whether judges' policy preferences, or other factors, influenced their decision-making in Chevron cases. (13) He also explored whether judges rely on legislative history or a statute's purpose to interpret the statute in those cases to achieve policy preferences. (14) Several other academics have focused on whether ideology affects judicial decision-making in Chevron cases, and have not limited their focus to cases involving EPA or environmental agencies. (15)

In the nearly two decades since Schroeder and Glicksman concluded their study of federal circuit review of EPA decisions in the 1990s, the manner in which courts apply the Chevron analysis has evolved and legislative, judicial, and academic hostility to the decision has grown. (16) It seems appropriate, therefore, to update the Schroeder and Glicksman study to determine whether the nature of judicial review of EPA's decisions has changed as Chevron has evolved. Kent Barnett and Christopher Walker recently conducted a comprehensive review of federal circuit court Chevron decisions between 2003 and 2013. (17) While their study provides very useful data regarding the nature of judicial review across all agencies over that time period, it does not focus directly on judicial review of EPA's decisions, except in a table that breaks down affirmance rates for twenty-eight agencies. (18) Using the same data, they reviewed the manner in which circuit courts apply Step Two of Chevron and concluded, among other things, that courts continue to focus on the purposes of statutes in that portion of the Chevron analysis. (19)

This Article updates the Schroeder and Glicksman study by analyzing all the federal circuit court decisions between 2000 and 2016 involving Chevron challenges to EPA decisions. It looks to determine whether the nature of judicial review in those cases is changing as legislative, judicial, and academic hostility or skepticism towards Chevron has grown, and whether courts are relying less frequently on legislative history or statutory purpose in interpreting statutes in those cases.

The Article also focuses on an issue that has not been addressed by many of the other empirical studies of Chevron decision-making. Wendy Wagner has frequently suggested that regulated entities have superior opportunities to participate in agency decision-making processes and to influence the outcome of that process. (20) Decisions based on such unequal participation, though, may be legally suspect when challenged. In a recent article that examined a small set of Clean Air Act rulemakings, she noted that public interest groups brought most of the challenges to those rules and were successful in all of the lawsuits except one. (21) Inspired by her findings on a small scale, this Article explores which groups (environmental groups, regulated entities, or states) challenged EPA decisions most frequently during the study period and which groups were most successful in their challenges.

Unlike many of the other empirical Chevron studies, this Article does not focus on whether ideology impacts judicial decision-making in Chevron cases (22) or whether courts are ignoring Chevron in cases where it should apply. (23)

A review of the federal circuit court Chevron decisions between 2000 and 2016 involving challenges to EPA actions yields some interesting findings. First, the rate at which courts affirmed EPA's decisions during the study period (70.9%) (24) was lower than the rate at which they affirmed EPA's decisions during the 1990s (75.7%). (25) What was most striking about the decrease, though, was the timing of shift. In cases decided before the Supreme Court issued its decision in National Cable & Telecommunications Ass'n v. Brand X Internet Services, (26) courts were affirming EPA's decisions at a higher rate (76.6%) than they were during the 1990s. (27) However, in the cases decided after Brand X, the rate at which courts affirmed EPA's decisions dropped by almost 10% (to 67.45%). (28) The decrease in deference occurred as the number of challenges resolved at Step One of the Chevron analysis increased, as might be predicted after the Brand X decision. While 32.7% of the challenges were resolved at Step One during the 1990s in the Schroeder and Glicksman study, (29) 41.57% of the challenges were resolved at Step One in the 2000-2016 period. (30) The rate at which courts resolved the Chevron challenges at Step One rose from 33% before Brand X to almost 50% after Brand X (31) It seems, therefore, that the "Chevron effect" observed by Schroeder and Glicksman in the 1990s is fading after Brand X. Courts may be returning to the more aggressive judicial review of EPA decisions noted by Glicksman and Schroeder in their article reviewing the challenges to EPA's decisions over the agency's first twenty years.

A review of the 2000-2016 Chevron decisions also indicates that courts are relying heavily on textualism and less frequently on legislative history and statutory purposes when reviewing EPA's decisions. (32) The decline is not large when compared to the findings of Schroeder and Glicksman or Czarnezki. (33) It appears, though, that during the study period, courts cited legislative history or purpose in an opinion more frequently when the courts were upholding the challenges of environmental groups or rejecting the challenges of regulated entities. (34) Glicksman and Schroeder discussed the proclivity of courts to read statutes broadly to achieve their environmental purposes during the early years of EPA, but few studies have revisited that issue. (35)

Finally, an analysis of the 2000-2016 Chevron decisions provides some interesting data regarding the success rate of various types of challengers to EPA actions. During the study period, 51.47% of the challenges were brought by environmental or public interest groups, (36) 42.94% were brought by regulated entities, (37) and 17.65% were brought by states or local governments. (38) While courts affirmed EPA's actions at a 70.9% (39) rate throughout the study period, EPA was most successful when defending challenges brought by regulated entities, as courts affirmed EPA's actions at a 82.9% rate in those challenges. (40) When EPA's actions were challenged by environmental or other public interest groups, the agency's rate for affirmance dropped to 62.9%. (41) The group that was most successful when challenging EPA's actions during the study period, though, was states, as EPA prevailed in only 55% of the challenges brought against them by states. (42)

These findings should prompt EPA to consider whether it is devoting sufficient attention to the purposes of the environmental statutes and to the issues raised by parties other than...