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Friday, June 22, 2018

Gorsuch’s “Clear Enough” & Kennedy’s Anti-“Reflexive Deference”: Two Potential Limits on Chevron Deference (SCOTUS Term)

The headline administrative law opinion coming out of the Supreme Court yesterday was no doubt Justice Kagan's opinion for the Court in Lucia v. SEC, which held that administrative law judges at the SEC are [at least inferior] officers under the Appointments Clause and thus unconstitutionally appointed by agency officials who are not the head of the agency. SCOTUSblog is running a symposium on the case, including a great post by my colleague Peter Shane in which he coins the term "constitutional dodgeball" to describe the judicial minimalism at play in a number of decisions this Term.

It's also worth checking out Justice Thomas's concurrence, which cites extensively my Yale JREG co-blogger Jenn Mascott's Stanford Law Review article on the definition of "Officers of the United States." I like how Dave Hoffman put it on Twitter:

In this post, however, I want to briefly flag two other decisions from yesterday that illustrate distinct, albeit not new, approaches to limiting the reach of Chevron deference.

First, we have Justice Gorsuch's "clear enough" approach. In Wisconsin Central Ltd. v. United States, a divided 5-4 Court held that employee stock options are not taxable “compensation” under the Railroad Retirement Tax Act because they are not “money remuneration.” In his dissent, Justice Breyer argued that the federal government had the better interpretation; if that interpretation wasn't the conclusive one, it should at least receive Chevron deference.

Justice Gorsuch, writing for the Court, found the statute unambiguous and contrary to the federal government's interpretation. To reach that conclusion, Justice Gorsuch had to look beyond the plain text of the statute, as the statutory text does not expressly say whether "for services rendered" includes stock options. Instead, Justice Gorsuch looked to the whole text, structure, and design of the statute. Or as he put it in rejecting Chevron deference, "in light of all the textual and  structural clues before us, we think it’s clear enough that the term 'money' excludes 'stock,' leaving no ambiguity for the agency to fill."

Justice Gorsuch's more muscular Chevron step one inquiry is not new. This was Justice Scalia's approach, and it has been adopted by a number of other textualist judges who seldom find statutes ambiguous. Most recently, Judge Kethledge (a SCOTUS shortlisterdeclared in the pages of the online companion to the Vanderbilt Law Review that in almost a decade on the Sixth Circuit he "personally [has] never had occasion to reach Chevron’s step two in any of my cases, there have been plenty of cases where the agency wanted us to." For the Scalia-Gorsuch-Kethledge textualists, it is par for the course to find statutes unambiguous at step one and thus not defer to an agency statutory interpretation.

Justice Gorsuch's framing of the step one inquiry as "clear enough" in Wisconsin Central may well affect how lower courts approach Chevron. This language reminds me a bit of Justice Ginsburg's "scant sense" exception to Chevron deference expressed in her 2015 opinion for the Court in Mellouli v. Lynch. Perhaps lower courts will interpret "clear enough" as more searching than "clear" or "unambiguous," thus narrowing the scope of Chevron deference in the circuit courts.

Justice Gorsuch's approach also reminds me of an observation by Judge Kavanaugh (another SCOTUS shortlister) in his Harvard Law Review book review about how different judges set different thresholds for finding clarity (at 2137-38, footnotes omitted):

I tend to be a judge who finds clarity more readily than some of my colleagues but perhaps a little less readily than others. In practice, I probably apply something approaching a 65-35 rule. In other words, if the interpretation is at least 65-35 clear, then I will call it clear and reject reliance on ambiguity-dependent canons. I think a few of my colleagues apply more of a 90-10 rule, at least in certain cases. Only if the proffered interpretation is at least 90-10 clear will they call it clear. By contrast, I have other colleagues who appear to apply a 55-45 rule. If the statute is at least 55-45 clear, that’s good enough to call it clear.

Perhaps the "clear enough" standard will encourage circuit and district judges to lower their thresholds for finding clarity closer to the 50-50 range, thus narrowing the scope of Chevron deference at step one.

Second, we have Justice Kennedy's concerns against "reflexive deference." In Pereira v. Sessions, the Court held that a notice to appear that does not include the time or place of the removal proceedings is not a statutory notice to appeal that would trigger the stop-time rule in the Immigration and Nationality Act. The Court refused to apply Chevron deference because it found the statute unambiguous.

Justice Alito was the sole dissenter, arguing that the case should be decided in the federal government's favor based on "an important, frequently invoked, once celebrated, and now increasingly maligned precedent, namely, Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984)." Justice Alito concluded that this is a run-of-the-mill Chevron deference case, where the statute is ambiguous and the agency's interpretation is reasonable. The only way to reach a contrary conclusion, Justice Alito concluded, is if "the Court has overruled Chevron in a secret decision that has somehow escaped my attention."

The headline-grabbing opinion from Pereira, however, was Justice Kennedy's solo concurrence, in which he added his voice to the judicial chorus for reconsidering Chevron deference. Justice Kennedy's concern is with how the doctrine "has come to be understood and applied," with "[t]he type of reflexive deference exhibited in some of these cases." Reconsideration of Chevron deference, for Justice Kennedy, would involve analyzing "the premises that underlie Chevron and how courts have implemented that decision." "The proper rules for interpreting statutes and determining agency jurisdiction and substantive agency powers," Justice Kennedy explained, "should accord with constitutional separation-of-powers principles and the function and province of the Judiciary."

As my quotations from Justice Kennedy's concurrence hopefully underscore, I do not agree with those, like Joshua Matz, who believe Justice Kennedy is calling for Chevron's demise. Instead, I find myself agreeing more with Jonathan Adler and Jeff Pojanoswki, who view this call for reconsideration to be more about narrowing Chevron deference.

What would that narrowing look like? As opposed to Justice Gorsuch's more searching, "clear enough" step one, I'd expect Justice Kennedy to continue Chief Justice Roberts's narrowing project at Chevron step zero, first articulated in the Chief's dissent in City of Arlington v. FCC and further developed in the Chief's opinion for the Court in King v. Burwell. I view this as a context-specific Chevron deference, in which the reviewing court would focus more on the particular statutory ambiguity at issue and ask itself whether Congress would have really intended for that particular issue to be delegated to the agency for decision. To determine congressional intent to delegate by ambiguity, the court would consider the agency's expertise on the precise issue as well the issue's economic and political significance, among other factors.

As I have detailed elsewhere, this context-specific approach to Chevron deference finds some support in the empirical realities of how folks in Congress draft statutes and how officials at federal agencies draft regulations that interpret statutes. Such a narrowing also likely has the support five or maybe even six justices on the Court today.

In sum, yesterday's decisions in Wisconsin Central and Pereira articulate two different, though not mutually exclusive, avenues for narrowing Chevron deference. Justice Gorsuch's "clear enough" approach would encourage courts to engage in a more-searching inquiry at step one. Justice Kennedy's anti-"reflective deference" approach would likely lead to narrowing Chevron's domain at step zero. Neither would entail eliminating Chevron deference entirely.

Whether such narrowing of Chevron deference is a good thing is a discussion I'll save for another day.

Posted by Chris Walker on June 22, 2018 at 03:12 PM in 2018 End of Term | Permalink


I should add that occasionally in the context-specific deference future, courts will also deny deference when they like what the agency's done so much that they don't want to let subsequent administrations upset it; see King v. Burwell.

Posted by: Asher Steinberg | Jun 23, 2018 11:53:15 AM

As a teacher of contract drafting, I come at ambiguity from a different perspective. If the text has two plausible conflicting interpretations, it's ambiguous. The English language lends itself to ambiguity,and it's very hard to draft language, whether in a contract or statute, that is unambiguous. Ambiguity is thus common. Interpreting ambiguity is just another type of interpretation of the meaning of the text. Whether judges should defer to bureaucrats in interpreting the text of administrative statutes is the question and I don't think it matters very much whether the text is ambiguous or requires some other type of interpretation.

Posted by: Douglas Levene | Jun 23, 2018 7:32:16 AM

I see a context-specific Step Zero as a return to pre-Chevron doctrine and an overruling of Chevron, whose main innovation, it seems to me, was ushering in a mandatory and more or less categorical deference doctrine in place of a permissive one. It's true that there will always be interpretive deference to some degree and that Kennedy, Roberts, Breyer, and apparently Alito aren't categorically opposed to it, but I think a context-specific approach would basically mean deference when courts agree with the agency or don't want to do the work of grappling with something especially technical, and no deference when courts don't like what the agency's done (for interpretive or policy reasons, and often the latter) but can't say the agency is clearly wrong. It may well be that *some* context-specific approach would more accurately get at what Congress wants, but I doubt that the context-specific approach the Court would adopt would be particularly driven by congressional expectations, which aren't easily excavable from, at least, traditional legal sources (I'm not too sure what surveys of drafters show, but in any event I doubt that doctrine will be built on surveys of drafters). Instead, I, perhaps cynically, envisage a context-specific approach taking shape on an ad hoc basis as courts look for ways to get around obstacles to their preferred results. Epic's mini-exception to Chevron for cases where the SG disagrees with an agency, which makes no sense on its own terms (political accountability seems at its apex when the SG very visibly signals that the administration is opposed to some independent agency's policy and would undo it just as soon as the President can get his people there, while the prior administration's holdovers just as visibly signal that a consequence of defeating the President's bid for reelection would be a reaffirmation of that policy), is probably an example of the outcome-motivated context-specific approach of the future.

Posted by: Asher Steinberg | Jun 22, 2018 6:53:46 PM

Interesting post , but there is no such thing unclear or clear enough statute or whatever . What we do have , is the starting point , which is always the text , the wording . If the wording , doesn't yield the intent of the legislator , then we have : not ambiguity , but a lacuna or vacuum which should be filled with the judge interpretation. But, intent is always clear , whether should be constructed , or whether clearly emerges from the text itself .But even If , the subjective intent of the legislator , is not clear , the judge steps in , and fill the void , with objective intent ( created by him , and matching the case handled , and the objective principles and values of the system or jurisprudence , and legislation).

For , there is no such thing , text or law or provision , without intent. Doesn't exist . The intent is there , whether objective , or subjective , whether implicit or explicit , just should be redeemed , that is all !!

Speaking of judge Alito , classic work in filling the gap by using extra textual sources , very recommended ( a ruling dealing with servicing in accordance with the " Hague convention " ) here :



Posted by: El roam | Jun 22, 2018 5:04:10 PM

Minor nit: "which held that administrative law judges at the SEC are inferior officers under the Appointments Clause." The Court said nothing about "inferior officer" status. The SCOTUS agreed the ALJs were officers but the parties didn't contest what type of officer. FN3.

Posted by: Anon | Jun 22, 2018 4:35:51 PM

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