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Friday, July 03, 2015

Agency Practice and Agency Statutory Interpretation

I say farewell to this month of blogging at Prawfs by posing a question about judicial deference to federal agencies.  The question is:  What role does agency practice play in limiting an agency's interpretive discretion?

This isn't a new question, but I'm asking it anew because of this passage from Justice Scalia's majority opinion for Michigan v. EPA, which rebuked EPA for not considering costs when regulating power plants under the Clean Air Act:

Section 7412(n)(1)(A) directs EPA to determine whether "regulation is appropriate and necessary."  (Emphasis added.)  Agencies have long treated cost as a centrally relevant factor when deciding whether to regulate.  Consideration of cost reflects the understanding that reasonable regulation ordinarily requires paying attention to the advantages and the disadvantages of agency decisions.  It also reflects the reality that "too much wasteful expenditure devoted to one problem may well mean considerably fewer resources available to deal effectively with other (perhaps more serious) problems."  Entergy Corp. v. Riverkeeper, Inc., 556 U.S. 208, 233 (2009) (Breyer, J., concurring in part and dissenting in part).  Against the backdrop of this established administrative practice, it is unreasonable to read an instruction to an administrative agency to determine whether "regulation is appropriate and necessary" as an invitation to ignore cost.

Sounds reasonable.  And puzzling.  Just what work is "established administrative practice" doing here?

Does established administrative practice shed light on Congress's intent?  It isn't hard to imagine Congress incorporating agency practice into statutory law, but I doubt that's what's going on here.  I'd want to know about Section 7412's legislative history , something Justice Scalia doesn't (and wouldn't) offer.

Does established administrative practice suggest a suspicious shift in agency decisionmaking?  When agencies change course, they should explain themselves.  But that's not what's going on here either.  Justice Scalia doesn't tell us that the EPA has "long treated cost as a centrally relevant factor."  In fact, he doesn't tell us which agencies --- some? all? some, some of the time? all, some of the time? --- conduct cost-benefit analysis as a matter of course.  (We don't even get a citation to prove this is a thing that happens.)  And besides, Justice Scalia hasn't been a fan of constraining agencies to follow their precedents. 

The last point answers my next question.  Does established administrative practice operate of its own force to constrain the EPA?  We might imagine a rule of administrative law that constrains an agency to follow the common law established by its fellows.  But that surely is not what Justice Scalia means.

So, it must be that established administrative practice tells us what's a reasonable interpretation of the statute at Chevron Step Two (or "under Chevron," for those who think Chevron has one step).  Yes, that's it: "Against the backdrop of this established administrative practice, it is unreasonable to read an instruction to an administrative agency to determine whether 'regulation is appropriate and necessary' as an invitation to ignore cost."  Puzzle solved.

But how satisfying is the solution?  Maybe we're not giving agency practice independent force when we use it as the "backdrop" to decide what's reasonable statutory interpretation under Chevron.  But we're not far off.  Reasonableness, after all, is a basic requirement of agency decisionmaking. 

I don't want to read too much into Michigan v. EPA in this regard.  Chevron doctrine, as this Term has shown, shuffles and re-shuffles.  But I do want to suggest that if we're going to measure agency reasonableness by "established administrative practice," we take more care to prove a practice exists and to describe its boundaries.  And if "established administrative practice" actually means "administrative common law as developed by courts," then we should say that instead.  (Interestingly, the Reporter's syllabus for Michigan v. EPA says "established administrative law," not "established administrative practice.")

With that, I'll say thank you to Howard and to everyone in the PrawfsBlawg community for the opportunity to converse this past month.  Many thanks, and warm regards.     



Posted by Seth Davis on July 3, 2015 at 02:51 PM | Permalink


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