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Tuesday, May 22, 2012

More News From the World of Chevron

The Supreme Court decided a couple of cases yesterday relying on NRDC v. Chevron to uphold agency interpretations of the statutes they administer.  One of them, Astrue v. Capato, included a tidbit that might interest administrative law folk.

The issue in Capato was whether children conceived after the father's death (the father's sperm having been pre-frozen) were entitled to social security survivor benefits.  The agency declined the claim, because under the relevant state's intestacy law, the children were not entitled to inherent -- that being the relevant statutory criterion for eligibility for survivor benefits.

The Court, speaking through Justice Ginsburg, unanimously upheld the agency's denial of benefits.  The Court pretty clearly thought that the agency had the better reading of the statute, but it also observed that, even if the result was not mandated by the statute, the agency's reading was permissible under Chevron step 2.  The Court's step 2 analysis was pretty straightforward, except for a little twist at the end.

In concluding the step 2 analysis, the Court concluded that the challenged regulations were "neither 'arbitrary or capricious in substance, [n]or manifestly contrary to the statute.'" That's language that ultimately traces to the Court's seminal decision in U.S. v. Mead Corporation, which sets the modern rule for when an interpretation gets Chevron deference.

So what's the twist?  The language in Mead sets forth all the basic ways in which an agency regulation can be challenged: "as procedurally defective, arbitrary capricious in substance, or manifestly contrary to the statute."  533 U.S. at 227.  So the statement is basically a compendium of the basic ways in which a court can reject agency action.  By omitting the "procedurally defective" language, and then combining the "arbitrary capricious . . . or . . . contrary to statute" language as a description of what a court does under Chevron, the Court seems to have taken another step in its gradual acceptance of the idea that "arbitrary and capricious" review is the same as Chevron review.

This is not the first time the Court has suggested as much.    The Court took the same step in MayoFoundation v U.S., last year.  Even more so, again last year, in Judulang v. Holder  the Court relied on Mayo for the proposition that Chevron step 2 review equates to arbitrary and capricious review.  That statement provoked some interest among admin law observers; the Court's statement yesterday, while less dramatic, marks the Court's continuing move in that same direction.

Posted by Bill Araiza on May 22, 2012 at 04:16 PM | Permalink

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Comments

Very interesting--thank you for making me aware of that language in Capato.

I'm grateful (for clarity's sake) that the Court is making it more and more explicit that the analysis under Chevron step 2 and the analysis under the APA arbitrary and capricious standard are the same thing.

I understand that in practice steps one and two of Chevron often converge into a single inquiry. But it seems that agencies, at least theoretically, should receive more deferential treatment overall when the the analysis is strictly under the APA arbitrary and capricious standard, since the analysis under Chevron step 1 (is the statutory language at issue is ambiguous?) isn't deferential to agencies.

(On the other hand, I can think of lots of examples of courts applying the arbitrary and capricious standard in ways that weren't as deferential as one might reasonably expect, so perhaps, even if there is still a theoretical difference in the amount of judicial deference agencies receive under the two standards [Chevron steps 1 & 2 vs. arbitrary & capricious], there may be little practical difference.)

Posted by: Melissa | May 23, 2012 2:36:21 PM

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