Toward a context-specific Chevron deference.

• Author: Walker, Christopher J.
• Position: Symposium: A Future Without the Administrative State? Exploring the Administrative State

ABSTRACT

With Justice Scalia's passing, the Supreme Court is less likely to consider overturning the administrative law doctrines affording deference to agency statutory interpretations (Chevron deference) or agency regulatory interpretations (Auer deference). Without Justice Scalia on the Court, however, a different kind of narrowing becomes more likely. The Court may well embrace Chief Justice Roberts's context-specific Chevron doctrine, as articulated in his dissent in City of Arlington v. FCC and his opinion for the Court in King v. Burwell. This Article, which is part of a symposium on the future of the administrative state, explores the Chief Justice's more limited approach to Chevron deference and details how recent empirical studies of statutory and regulatory drafters may well provide some support for a context-specific Chevron doctrine. Although the wisdom of such a reform lies outside the Article's scope, litigants and scholars should pay more attention to the Chief Justice's dissent in City of Arlington, as it may well soon become the law of the land.

TABLE OF CONTENTS I. INTRODUCTION 1095 II. THE CHIEF JUSTICE'S CONTEXT-SPECIFIC CHEVRON DOCTRINE 1098 A. A New Major Questions Doctrine in King v. Burwell 1099 B. A Context-Specific Chevron Deference in City of Arlington 1103 III. LESSONS FROM CONGRESSIONAL AND AGENCY DRAFTERS 1105 A. Findings on Major Questions Doctrine 1107 B. Findings on Context-Specific Chevron Deference 1110 IV. CONCLUSION 1114 I. INTRODUCTION

As the title for this Missouri Law Review Symposium--A Future Without the Administrative State?--reflects, there has been a growing call in the legal academy and within policy circles, mostly from those right of center, to reconsider the foundations of the modern regulatory state. (1) These calls for reform have largely focused on revisiting judicial deference doctrines to federal agency interpretations of law. The reform efforts reached the Supreme Court last year, with Justices Scalia, Thomas, and Alito all questioning the constitutionality of judicial deference owed to agency interpretations of their own regulations (Auer or Seminole Rock deference) (2) and Justice Thomas questioning the constitutionality of deference to agency statutory interpretations (Chevron deference). (3) Indeed, even the other six Justices joined the majority opinion in King v. Burwell, in which the Court ultimately sided with the federal government in interpreting the Affordable Care Act's tax credit provisions but refused to accord any deference to the agency's interpretation of the ambiguous statutory provision. (4) Republicans in Congress have recently followed suit by introducing legislation that would abolish Auer and Chevron deference and require agencies to review de novo all agency statutory and regulatory interpretations. (5)

With Justice Scalia's passing in February, however, judicial efforts to overturn Auer or Chevron seem less likely to succeed. Indeed, three months after Justice Scalia's death, the Court denied review of a petition Judge Easterbrook flagged as a suitable vehicle to reconsider Auer deference, (6) with only Justice Thomas dissenting. (7) As for Chevron deference, the chances for reconsideration, even with Justice Scalia still on the Court, were more remote --though whispers shortly after his death suggested that he may have been reconsidering Chevron deference in addition to Auer deference. (8) In all events, without Justice Scalia on the Court, Chevron and Auer are likely to remain bedrock principles of administrative law for years to come.

A different kind of narrowing of Chevron deference, however, becomes much more likely now that Justice Scalia is no longer on the Court: Chief Justice Roberts's context-specific approach to Chevron deference. This Article addresses that possibility and some empirical support for the Chief Justice's approach. Part II of this Article outlines the Chief Justice's more limited approach to Chevron deference, as articulated in his dissent in City of Arlington v. FCC, (9) as well as Justice Scalia's sharp criticism of it in his opinion for the Court in City of Arlington. Part II also explains how the Chief Justice's opinion for the Court in King v. Burwell reflects a similar context-specific approach, which perhaps has been overshadowed by commentators' focus on the major questions doctrine articulated in the opinion. (10) It then details why a majority of the current Court may well embrace this narrowing of Chevron deference. (11)

Part III provides some empirical support for the Chief Justice's approach. This comes from two, perhaps unlikely, sources: statutory and regulatory drafters. This Part presents the relevant findings from a 195-question survey I conducted of 128 agency rule drafters at seven executive departments and two independent agencies. (12) It likewise reviews the findings from Lisa Bressman and Abbe Gluck's pathbreaking study of congressional drafters. (13) The congressional and agency officials surveyed seem to embrace a more context-specific, expertise-driven approach to Chevron deference, as opposed to the bright-line Chevron rule Justice Scalia rearticulated for the Court in City of Arlington. This Article concludes without taking a normative position on this context-specific Chevron doctrine. Instead, it ends with a call for litigants and scholars to pay more attention, especially in light of Justice Scalia's passing, to the Chief Justice's dissent in City of Arlington.

2. THE CHIEF JUSTICE'S CONTEXT-SPECIFIC CHEVRON DOCTRINE

   To appreciate the Chief Justice's context-specific approach to Chevron deference, this Part begins with his opinion for the Court last year in King v. Burwell (14) and then explores how that opinion builds on his 2013 dissent in City of Arlington v. FCC. (15) This Part concludes by exploring the likelihood that the Court may adopt the Chief Justice's more context-specific approach to Chevron deference in the near future.

   1. A New Major Questions Doctrine in King v. Burwell

      Last year, in King v. Burwell, the Supreme Court upheld a Treasury regulation interpreting the Affordable Care Act to allow for tax subsidies in healthcare exchanges established by the federal government. (16) The statute grants premium tax credits to certain taxpayers who are "enrolled in [insurance plans] through an Exchange established by the State under section 1311." (17) To ensure all qualifying taxpayers receive the tax credits regardless of whether their State has established its own exchange, the Treasury Department, through the Internal Revenue Service ("IRS"), promulgated a regulation via notice-and-comment rulemaking. This regulation interpreted the statutory phrase "an Exchange established by the State" to include any "State Exchange, regional Exchange, subsidiary Exchange, and Federally-facilitated Exchange." (18) The challengers to the regulation argued that the agency's interpretation was contrary to the plain text of the statute. (19)

      In a 6-3 decision authored by the Chief Justice, the Court found the statutory language ambiguous. (20) In an interesting twist, however, the Court refused to apply any deference to the agency's interpretation of the statutory ambiguity. (21) Instead, the Court interpreted the statute de novo and concluded that "the context and structure of the Act compel us to depart from what would otherwise be the most natural reading of the pertinent statutory phrase" to "allow[] tax credits for insurance purchased on any Exchange created under the Act." (22) That is because the premium tax "credits are necessary for the Federal Exchanges to function like their State Exchange counterparts, and to avoid the type of calamitous result that Congress plainly meant to avoid." (23)

      Although the Court ultimately agreed with the federal government's interpretation of the Affordable Care Act, it refused to accord deference to the regulation interpreting the statute. In two short paragraphs, the Chief Justice introduced a new "Step Zero" exception to Chevron deference based on the importance of the policy question at issue. (24) Invoking FDA v. Brown & Williamson Tobacco Corp., he noted that, "in extraordinary cases... there may be reason to hesitate before concluding that Congress has intended such an implicit delegation." (25) He went on to explain:

      This is one of those cases. The tax credits are among the Act's key reforms, involving billions of dollars in spending each year and affecting the price of health insurance for millions of people. Whether those credits are available on Federal Exchanges is thus a question of deep "economic and political significance" that is central to this statutory scheme; had Congress wished to assign that question to an agency, it surely would have done so expressly. (26) Put differently, Chevron deference does not apply to certain major questions unless there is clear congressional intent. The Chief Justice further observed that "[i]t is especially unlikely that Congress would have delegated this decision to the IRS, which has no expertise in crafting health insurance policy of this sort." (27) His refusal to apply Chevron deference thus focused on a disbelief concerning congressional intent to delegate by ambiguity, based on two types of evidence: the deep importance of the policy question and the IRS's lack of expertise in the subject matter.

      The major questions doctrine is not new. Even Justice Scalia has invoked it, colorfully explaining in Whitman v. American Trucking Ass'ns that Congress "does not... hide elephants in mouseholes." (28) Indeed, with Justice Scalia writing for the majority in Utility Air Regulatory Group v. EPA (UARG), the Court struck down an EPA interpretation of the Clean Air Act because the issue was one of "vast 'economic and political significance,'" and the EPA's interpretation "would bring about an enormous and transformative expansion in EPA's regulatory authority without clear...