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Friday, June 26, 2015

Chevron's Magical Disappearing Act?

I want to add a few words to Adam Zimmerman's post here on Chevron and King v. Burwell and Chris Walker's post at Yale JREG on the same topic.  There's something that yesterday's blockbuster cases share:  Neither one relies on the Chevron doctrine to uphold the government's statutory interpretation.   

As Adam and Chris discuss, Chevron made a brief appearance in King when the Court explained it did not apply because the interpretive question had "deep 'economic and political significance.'"  In Texas Department of Housing and Community Affairs v. Inclusive Communities Project, Inc., yesterday's decision interpreting the Fair Housing Act, the Court didn't apply Chevron and didn't even explain why.  And that's surprising because, as I discussed here yesterday, HUD had promulgated a rule addressing the interpretive question before the Court. 

What accounts for Chevron's magical disappearing act in Texas Department?

Maybe the briefs didn't discuss it?  No, that's not it.  The petitioner's opening brief (at 17 n.9) "assume[d] . . . that the Chevron framework remains applicable."  The respondent's brief (beginning at 66) devoted an entire argument to show that "HUD's determination . . . is an authoritative interpretation entitled to Chevron deference."  The Solicitor General's amicus curiae brief (at 15) offered this as its first argument:  "HUD's regulation, promulgated after notice-and-comment rulemaking pursuant to express statutory authority, is entitled to deference under Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984)."  

Here's where the question gets a little more interesting.  Adam and Chris discuss King v. Burwell's invocation of Brown & Williamson and the exception to Chevron for questions of "economic and political significance."  In Texas Department, the petitioner's reply brief (at 18) made the following argument:  "HUD's position requires this Court to locate an enormous delegation in statutory language that is poorly suited to the task.  Congress does not delegate 'decision[s] of . . . economic and political significance' in 'cryptic . . . fashion,' FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 160 (2000)[.]"  I don't read Brown & Williamson to preclude deferring to HUD on whether the Fair Housing Act encompasses disparate-impact liability.  But did Justice Kennedy, who wrote the majority opinion in Texas Department, think there was something to the petitioner's argument?  We don't know because Kennedy's opinion cited Chevron only once (at 10), and that was when it discussed a separate opinion in Smith v. City of Jackson, 544 U.S. 228 (2005). 

We're left, then, with the puzzle of this post's title.  Maybe the Court avoided Chevron because a district court concluded in November 2014 that the Fair Housing Act prohibits only intentional discrimination and therefore vacated HUD's rule, though even the petitioners in Texas Department didn't make much of that.  See Pet. Br. 11, 17 n.9.  Maybe the majority thought the Act was clear, particularly in light of its purpose and legislative history.  If so, then ignoring Chevron was a way to preclude a future HUD from changing its interpretation of the statute.  Or maybe, to borrow from Adam's post, Texas Department, when read alongside King, "reflects growing unease" among some Justices "with opinions that defer to agency's interpretations of statutes and rules." 

Which brings me to Justice Alito's dissenting opinion in Texas Department.  Alito doesn't cite Chevron.  But he does argue that HUD's interpretation isn't entitled to deference because of an "unusual pattern" of behavior at HUD.  In a nutshell, Justice Alito suggests HUD adopted its regulation in anticipation of the Supreme Court deciding the issue.  That's a reason not to give Skidmore weight to an agency's interpretation, he points out.  And, he suggests, it's a reason not to give Chevron deference here.  (At oral argument Chief Justice Roberts and Justice Scalia also piped up when Justice Alito asked the Solicitor General, "Should we be concerned here about the use of Chevron to manipulate the decisions of this Court?"  Arg. Tr. 45-46.)

King extends one exception to Chevron --- perhaps we should call it the "deep questions" exception.  Texas Department doesn't tell us why Chevron didn't apply, and Justice Alito's "unusual pattern" argument isn't precedential.  But maybe there's more than one emerging exception to Chevron deference in yesterday's blockbuster decisions. 


Posted by Seth Davis on June 26, 2015 at 02:38 PM | Permalink


Of course, Justice Scalia wrote a unanimous Court opinion 20 years ago that said that notice-and-comment regulations are entitled to deference even if they were spurred by efforts to influence litigation. He said:

Petitioner proposes several reasons why the ordinary rule of deference should not apply to this regulation. First, petitioner points to the fact that this regulation was issued more than 100 years after the enactment of §85, and seemingly as a result of this and similar litigation in which the Comptroller has participated as amicus curiae on the side of the banks. *** Nor does it matter that the regulation was prompted by litigation, including this very suit. Of course we deny deference "to agency litigating positions that are wholly unsupported by regulations, rulings, or administrative practice," Bowen v. Georgetown Univ. Hospital, 488 U.S. 204, 212 (1988). The deliberateness of such positions, if not indeed their authoritativeness, is suspect. But we have before us here a full dress regulation, issued by the Comptroller himself and adopted pursuant to the notice and comment procedures of the Administrative Procedure Act designed to assure due deliberation, see 5 U.S.C. § 553; Thompson v. Clark, 741 F. 2d 401, 409 (CADC 1984). That it was litigation which disclosed the need for the regulation is irrelevant.

Smiley v. Citibank (South Dakota), NA, 517 U.S. 735 (1996).

Posted by: slipperyslope | Jun 29, 2015 3:15:16 PM

I think you're missing the import of the Texas case. What hinged on the Texas ruling was whether the Administration would publish the far-reaching Affirmative Furthering Fair Housing Regulation. It will now do so. If you read that Regulation, you will see that the Government finds, as a matter of fact, that housing is, among other things, freedom from “measurable differences in access to educational, transportation, economic, and other important assets….” 24 CFR 2.154; also see 91.320 and 5.162. A finding of disparate impact means that, according to the HUD language upheld today by the Court, litigants have to show that their housing plan is “necessary to achieve one or more substantial, legitimate, nondiscriminatory interests.”

This is not the language of minimum scrutiny for housing; it is the language of intermediate or strict scrutiny. Lindsey v. Normet, finding that housing enjoyed only minimum scrutiny, held that “Absent constitutional mandate, the assurance of adequate housing and the definition of landlord-tenant relationships are legislative, not judicial, functions.” It also said that “We are unable to perceive in that document [the Constitution] any constitutional guarantee of access to dwellings of a particular quality….” The Court in the Texas case, perceived such a guarantee. That is the importance of the Texas case.

Thus, the proposed Regulation overrides Lindsey, and now housing enjoys a higher level of scrutiny than minimum scrutiny. This means there is now a Constitutional right to housing.

Also, as is well known, the Administration has repeatedly refused to apply disparate impact to the Affordable Care Act. But is medical care one of the "important assets"? If so, scrutiny for medical care is also elevated by virtue of the Texas case. Indeed, that is implied by the coordination with the Continuum of Care set forth in the Regulation ("The jurisdiction shall encourage the participation of local and regional institutions, the Continuum of Care....").

But more fundamentally, let's face it: the Court's analysis in King is a smokescreen. The Court says that the overriding policy of the Affordable Care Act is to maintain the health insurance system. That begs the question: what is the overriding policy of maintaining the health insurance system? The answer is: medical care. So the overriding policy of the Act is medical care. The next question is: does coverage under the Affordable Care Act mean medical care? The answer is Yes. That means medical care is also raised above minimum scrutiny.

Notice what is happening? All the facts mandated to remain in the political system by West Coast Hotel and Carolene Products, are moving into the Court as individually enforceable rights. This eliminates the doctrine of the scrutiny regime. It eliminates the notion that there are political facts with negative rights, and social facts with positive rights. This distinction has disappeared. The scrutiny regime is over, and such concepts as deference, discretion, reasonableness and balancing, are no longer good law.

Posted by: John Ryskamp | Jun 27, 2015 12:17:19 PM

I guess the revived major questions exception is as good an explanation for the disappearing act as any; isn't disparate impact in housing a question of fairly "deep economic and political significance"? Odd timing's another possibility; Kennedy joined an Alito opinion a few years ago, Christopher v. SmithKline Beecham, that declined to give Auer deference for (partly) timing reasons. And it is the case that for whatever reason, the Court routinely neglects to mention Chevron in a large share of the cases where it would seem to apply, without necessarily signaling anything about Chevron's applicability in like cases going forward, on which see Eskridge's "The Continuum of Deference" (a terrific empirical study of Chevron cases).

But Mead's an interesting suggestion. As City of Arlington interpreted Mead - I would say plausibly, others might say tendentiously - a general grant of rulemaking authority plus exercise of that authority always adds up to Chevron deference. HUD had general rulemaking authority here and used it. Mead itself, by contrast, while stating that these so-called safe harbors are indicia of delegation, can be read to allow for the possibility that a general grant of rulemaking authority in a statute doesn't delegate authority to interpret everything that's in that statute. Roberts (joined by Kennedy) in City of Arlington says in dissent that the Court is supposed to determine, provision by provision, whether a textually plenary grant of rulemaking authority extends to any given provision, and the majority very understandably says that that way lies chaos. (Roberts wasn't very helpful on how courts would carry out his proposal.) That said, if one were ever going to have doubts about whether a general grant of rulemaking authority conferred authority on an agency to make rules on a particular question, this would be the case. HUD enforces the Fair Housing Act and gets to make all sorts of regulations in doing so, but does it really get to regulate on bedrock questions about the scope of civil liability under the Act? Moreover, if you read the Home Builders amicus brief, it turns out that the HUD Rule not only answered the disparate impact question, but purported to announce a three-part burden-shifting framework for litigating a disparate impact claim in court, helpfully resolving a circuit split. Pretty strong stuff. So I do think it's entirely within the realm of possibility that we don't get Chevron deference here because HUD fails the Arlington dissenters' broader reading of Mead. Again though, whither Skidmore? Timing concerns aside, this is a pretty fit case for it, what with dissenters claiming that disparate impact liability means safe havens for rats and hurts the people it's supposed to help. Surely HUD has some fairly informed views on the benefits and costs of disparate impact liability.

Posted by: Asher | Jun 27, 2015 1:05:20 AM

Excuse the typos--I'm writing on a cell phone.

Posted by: Adam Zimmerman | Jun 26, 2015 7:58:16 PM

This is very interesting, Seth. I think I know the answer to this question, but did anyone mention Mead in their briefs? Do litigators just cite Brown and Williamson when they arguments about "major questions"?

I thought Mead created the "framework," if you could call it that, for thinking about when Congress sufficiently delegates power to an agency to warrant Chevron treatment, under a two-part test. US v. Mead, 533 U.S. 213, 237 (2001): (1) "when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and (2) that the agency interpretation claiming deference was promulgated in the exercise of that authority. Then court infamously went on to cryptically say that the such delegations could be shown "by an agency's power to engage in adjudication or notice-and-comment rulemaking, or by some other indication of a comparable congressional intent." City of Arlington seemed to go the other way, by denying judges a role in deciding jurisdictional questions, but now I'm not so sure.

If Mead is applicable for framing these questions about delegation, then maybe it's Mead that's performing the disappearing act. By avoiding Mead, at least in some of these cases, the Court seems to avoid describing what those open-ended phrases about "delegation" or "indications about comparable congressional intent" mean. The only reason why this disappearing act might not be as "magical" as Chevron's, is perhaps because Mead generated so much criticism and is so hard to explain.

I haven't been closely following Mead's development in the courts, however. So, maybe I'm totally off about this. Or maybe this is more of a reason why Congress should, as Kent Barnett has argued "codify Chevmore," passing laws, like Dodd-Frank, that expressly describe the level of deference agencies should get when they interpret laws. Kent H. Barnett, Codifying Chevmore, 90 N.Y.U. L. Rev. 1 (2015).

Posted by: Adam Zimmerman | Jun 26, 2015 7:54:53 PM

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