rule of necessity: “where the policy of disqualification conflicts with a litigant’s rights to obtain a judicial remedy, it has been generally conceded that the former must yield to the latter, trusting the conscience of the court to achieve a just result”: if all the judges in a particular context are unconstitutionally biased, then we must pretend that none of them are for the sake of allowing the case should go forward, lest we deprive the litigant of their day in court.
American Cyanide Co. v. FTC (6th Cir. 1966): The chief counsel of a Senate subcommittee helped conduct a broad-ranging investigation, examined witnesses, and helped with the final report on the investigation. He was then included in a hearing on the issue and refused to disqualify himself. The Circuit Court found that his participation amounted to a “denial of due process which invalidated the order,” noting “whenever there may be a reasonable suspicion of unfairness, it is best to disqualify.” In doing so, the Court distinguished between investigation and adjudication, relying on the purposes behind the Trade Commission Act to make the case distinct from Cement Institute.
Cinderella Career & Finishing Schools v. FTC (D.C. Circuit 1970): The same chairman from the American Cyanide case made statements to the press indicating his stance on finishing schools. He then participated in a hearing regarding charges against such a finishing school. They said that the test for disqualification in such adjudication was whether “a disinterested observer could conclude that the agency had in some measure adjudged the facts and the law of a particular case before hearing it.” If a conclusion in the affirmative could be reached disqualification is appropriate. Commissioners can be disqualified for financial interests or for prejudging the facts in adjudication.
Association of National Advertisers v.FTC (D.C. Circuit 1979): The new chairman of the FTC gave a speech in which he strongly suggested that advertising aimed at children was harmful and legally “deceptive.” Shortly thereafter the Commission issued a notice of proposed rulemaking that considered banning television advertisements of sugared products during children’s programming. Various advertising agencies moved for the chairman to disqualify himself. The Court of Appeals emphasized that this decision was rulemaking, not adjudication.
Majority (Tamm): When a proceeding is classified as rulemaking, due process does not require procedures more rigorous than those provided by Congress. (Vermont Yankee). Congress is under no requirement to hold an evidentiary hearing prior to its adoption of legislation and so doesn’t delegate any such requirement (Bi-metallic). Distinct from Cinderella because it deals with legislative facts that require agency members to be involved with risk assessment, prediction, etc. A Commissioner should only be disqualified if “there is a clear and convincing showing that the agency member has an unalterably closed mind on matters critical to the disposition of the proceeding.” (In rulemaking, an agent is only disqualified if there is a showing of personal bias (due to past abusive interaction with the party) and pecuniary interests)).
Dissent (MacKinnon): Even under the Majority’s test, the chairman should have been disqualified.
Vermuele thinks it is problematic to make such a distinction between legislative and adjudicative facts-“when legislative facts are at issue, we call it expertise, when adjudicative facts are at issue, we call it bias.”
Morgan v. United States (Morgan I) (1936): In adjudication, the person in the agency who makes the decision has to be the one who considered the evidence: “he who decides must hear.” In this case, the secretary had the option to delegate the entire decision to the under-secretary for consideration of the evidence and the decision or he could make the decision himself-he had no option to hear the evidence or make the decision. This holding was diluted in Morgan 2-4 where after realizing that it’s difficult to implement the standard because of time constraints, the court said that “one who decides must in some way give personal consideration to the evidence,” however litigants cannot probe the legal processes of decisionmakers to determine whether they did in fact consider the evidence.” (The agency head can always informally delegate the decision to others who will informally “brief” the head on the issues, leaving him to make the decision.) This was affirmed in National Nutritional Food Ass’n v. FDA (2nd Cir. 1974) where the Court determined that where findings accompany a decision, there must be a strong showing of bad faith or improper behavior before testimony with regard to reason can be taken.
The problem: Although the APA instructs courts to decide “all relevant questions of law,” §706, courts said that there were some questions of law that the agency should decide. On those questions, courts should “defer” to the agency’s judgment, overturning the agency only if its legal determination is “unreasonable, impermissible, or arbitrary.” Basic question: When should a court “defer” or “give weight to” an agency’s determination of a legal question? There were conflicting ideas, including a impressive body of law sanctioning free substitution of judicial for administrative judgment when the question involved the meaning of a statutory term. Two primary views: (a) Courts should defer to “reasonable” agency interpretive positions; (b) Courts must remain the final arbitrators of statutory meaning.
NLRB v. Hearst Publications (1944):
Background: Hearst refused to bargain collectively with a union representing newsboys who distribute their papers on the streets of LA, claiming that they didn’t have to because newsboys are not “employees” within the meaning of the term in the National Labor Relations Act. The NLRB after hearings concluded that they were newsboys and ordered Hearst to bargain with them. The Circuit Court set aside the Board’s orders, determining that newsboys didn’t fall within the statutory definition. NLRB appealed.
Issue: Does a reviewing court have to accept an agency’s application of a broad statutory term?
Analysis: The Court determined that while Congress did not explicitly define the term, but looking at the terms and purposes of the statute, as well as the legislative history is helpful.
Holding: When the question is one of specific application of a broad statutory term in a proceeding in which the agency administering the statute must determine [its meaning] initially, the reviewing court’s function is limited. The Board’s determination of the definition of “employees” under the Act must be accepted if it has “warrant in the record” and reasonable basis in law. The Court emphasized that Congress set boundaries of the category without defining what went in them, and that it was the province of the agency to make decisions within those boundaries. (Idea that questions of pure law are for courts versus questions of pure facts, which are for agencies.)
Skidmorev. Swift & Co. (1944):
Background: Employees of the Swift packing plant brought action under the Fair Labor Standards Act to recover overtime. (The Administrator published documents in the form of interpretative bulletins and informal rulings as a practical guide to employers and employees on how the office would seek to apply the Act. His test to determine whether overtime was warranted was to consider “the degree to which the employee is free to engage in personal activities during periods of idleness…”). They spent time on the premises at night to answer fire alarms and were paid for each alarm they answered. There was no statutory provision to say how much deference courts should pay to the Administrator’s conclusions. The trial court said that, as a matter of law, this did not constitute hours eligible for overtime pay under the Act and gave significant deference to the Administrator’s findings. The Circuit Court affirmed.
Issue: Can courts, in determining controversies take account of reports, recommendations, and opinions of administrators?
Analysis: While non-binding, the Administrator’s policies were made in pursuance of his official duty and are entitled to respect.
Holding: Yes. Courts and litigants can properly resort to the rulings, interpretations, and opinions of Administrators under the Act because, while not binding, their authority constitutes a body of experience and informed judgment. How much weight is given each judgment will depend on the thoroughness evident in its consideration, the validity of the reasoning, its consistency with earlier and later pronouncements, etc. (p. 280). Expertise-based deference-idea of seeking to find the best answer (“Skidmore factors”-see (e)). Other considerations:
Whether the agency’s interpretation was made near the time the statute was enacted, whether its interpretation is longstanding, and whether Congress reenacted the same statutory language against the background of the interpretation.
Additionally, courts consider the nature of the agency’s specialized experience in relation to the legal question and the practical implications of deferring.
In sum, the Court determines how much deference to give an agency depending on the following Skidmore factors:
Thoroughness evident in the agency’s considerations
Whether Congress reenacted the same language in the presence of a particular interpretation
The nature of the agency’s specialized experience in relation to the legal question (expertise)
Practical implications
Chevron USA, Inc. v. Natural Resources Defense Council (1984)
Background: The case concerned the interpretation of the words “stationary source” in the 1977 Amendments to the Clean Air Act. The statute requires states to develop air pollution plans that “require permits for the construction and operation of new or modified major statutory sources…” The EPA promulgated rules that allowed states to define an entire plant as one stationary source, allowing a “bubble effect.” The Court of Appeals held that the statute did not permit the EPA to allow such a definition because it would undermine Congress’s goal of speedy compliance with national air quality standards.
Issue: In the absence of clear Congressional intent regarding the interpretation of a statute given by an agency, should courts defer to the agency’s interpretation?
Holding (Stevens): Yes (EPA’s interpretation should stand). Courts should follow a two-step process:
Look to see if Congress has expressed a clear intent. If the intent of Congress is clear, that is the end of the matter. If Congress has not directly or unambiguously addressed the precise question at issue, rather than imposing the court’s construction of the statute,
The Court considers whether the agency’s interpretation is based on a permissible construction of the statute. The agency’s interpretation does not have to be the same as the Court’s, it just has to be permissible.
For the first step, looking at the text, legislative history, and canons can be helpful (ordinary statutory interpretation). (Scalia says this includes policy considerations to determine whether the law is ambiguous.). Together, the steps create authority-based deference
Rationale: Appropriateness of delegation when the question involves matter of law-idea of attributing to Congress a default rule despite §706’s language to the contrary. Expertise is not as important here as it is in Skidmore. These rules promote political accountability: for Congress to be clear in its intent when making legislation. Perhaps the true purpose of Chevron was to help judges who were realizing that often there was not a single best answer of interpretation. It gave judges a way to constrain the range of acceptable agency decisions without requiring one particular decision.
Policy: The Court emphasizes that it is permissible for an agency, within the limits of the policymaking responsibilities Congress delegated to it, to rely upon the incumbent administration’s view of wise policy to inform its judgments. Therefore, when a challenge is based on the wisdom of an agency’s policy, rather than whether it is a reasonable choice within the permissible bounds delegated by Congress, the challenge must fail.
Chevron Step Zero: Since Chevron neither explicitly overruled nor replaced Skidmore, to which agency decisions does it apply? Step Zero: “a predicate for Chevron is a delegation of interpretive power to agencies.”
It does not apply in the following situations:
When interpreting statutes that apply to all agencies, i.e. the Freedom of Information Act, the APA, etc. since no agency administers them. (p. 283 Chevron deference requires the agency to be construing an organic or enabling statute “when a court reviews an agency’s construction of the statute which it administers…”)
Litigating Positions: Chevron only applies when we’re dealing with an agency’s contemporaneous construction of a statute it administers. Chevron, like Chenery, excludes post hoc rationalizations.
Statutes administered by courts (where courts are the administering agencies), e.g. the Fair Labor Standards Act (no rulemaking or adjudication by the agency)
Criminal Statutes, since they are all administered by courts
Although it is less clear, when statutes create authority that is shared across agencies, meaning that they can be enforced by more than one agency, sometimes neither agency gets deference, sometimes they both get deference, etc.
United States v. Mead Corporation (2001):
Facts: The Customs Service provides tariff rulings before the entry of goods by regulations authorizing “rule letters,” setting tariffs for particular imports. No notice and comment procedure in establishing these rule letters, and most of the letters contained very little rationales. Mead’s planners were previously classified as “other” and exempt from tax, but Customs switched them to the “diary” category and levied a 4% tax, citing the dictionary definition of diary as their rationale.
Issue: Does a tariff classification ruling by the U.S. Customs Service deserve judicial deference?
Majority (Souter): No. There was not an official delegation to the Customs Service to have this power. When Congress provides for a relatively formal administrative procedure, there is a presumption that they intended administrative action to have the effect of law. Otherwise, there is a presumption that agency discretion doesn’t exist unless the statute expressly or implicitly says so. When it is clear that Congress has delegated such law-making power, then we consider Chevron. Otherwise, a consideration of the Skidmore factors is appropriate. Reversed and remanded.
Dissent (Scalia): Scalia says that the majority seems to be adopting a presumption that unless there is an affirmative showing of Congressional intent to delegate, the courts interpret ambiguity in legislative instructions. He thinks the presumption should be the opposite-when there is silence/ambiguity, the agency’s decision should be reviewed solely for reasonableness, and the court should defer so long as their conclusion is reasonable. “Step Zero” is entirely inappropriate/impracticable.
Conclusion: We presume that the appropriate degree of deference is determined by the Skidmore factors unless the agency shows that there is an affirmative congressional intention to delegate power to the agency to make rules with the force and effect of law through the use of formal processes (notice and comment or formal rulemaking/adjudication) or some other comparable showing of intent, in which case Chevron is triggered. Note: while the inclusion of formal procedure in delegation seems to be sufficient for Chevron to be triggered, it is not necessary (so its absence does not automatically require a turn to Skidmore). Interpretive rules and informal adjudication are considered “beyond the Chevron pale.” In addition to Skidmore factors, we consider the number of decisions the agency put out to best understand whether Congress wanted to delegate that much power to the agency. Force and effect of law, at what level the agency decision was made, and whether the agency applied proper procedure/thought.
Rationale: We don’t want an automatic use of Chevron for two reasons:
Functional Reason: There are all sorts of different agencies with different structures, and it seems intuitive that we don’t want to be overly deferential to all those different parts.
Legal/congressional intent: Congress could not have intended for the agencies rather than the courts to have that much law interpreting power.
Effect: Skidmore generally applies when an agency has expressed views about the meaning of the statute it administers and Chevron is inapplicable.
Problems: The Skidmore factors tend to bleed into the Mead analysis, which is problematic since the court is supposed to be choosing between Skidmore and Chevron deference. Outside of formal adjudication/rulemaking/notice-and-comment, it is unclear what gets Chevron deference (typically interpretive rules do not.)
Barnhart v. Walton (2002) (Breyer): Breyer says Chevron applies because of the interstitial nature of the legal question, the related expertise of the agency, the importance of the question to the administration of the statute, the complexity of that administration, and the careful consideration that the Agency has given the question over a long period of time (i.e. the Skidmore Factors).
Gonzales v. Oregon (2006): “Congress does not hide elephants in mouse holes”: Congress would not implicitly delegate to the Attorney General because it would encroach on the state’s traditional authority to regulate medical practice. Essentially, delegations have to be clear/express and courts are reluctant to find an implied delegation where federalism is in play.
Back to Long Island (p. 34), Breyer says to determine whether Congress has delegated law-interpreting power to the agency, look at the following factors (Skidmore factors again, like in Barnhart):
Complexity of the question/level of agency expertise
Consistency of the agency’s announcement
Thoroughness of the pronouncement
Whether the question is interstitial or important
Summary of the different views regarding deference:
Scalia: Chevron is the proper standard
Mead camp (Souter): the question is always whether there is an implied/explicit delegation of power to the agency (i.e. did the agency use notice and comment, formal adjudication or rulemaking?) If so, Chevron, if not, then there may or may not be a delegation, depending on whether or not the decision was centralized, how many decisions were made, and how binding they are
Breyer: Merge Chevron and Skidmore by having Chevron depend on Skidmore like factors.
How to approach a question of deference on the exam:
Ignore Scalia
Think of Mead as a “toggle switch”: ask is there implied/express delegation of authority? Know that there could still be a delegation even in the absence of formal adjudication, rulemaking, or notice and comment (for guidance documents or other forms from informal adjudication or rulemaking, go through the factors of centralization, the number of decisions, and their binding effect). If there is Chevron.
Even if there is (b), say according to Breyer, an analysis of the Skidmore factors (as he defines them in Barnhart and Long Island) would be relevant, go through those factors, and then say that it is not clear whether the Skidmore factors are appropriately part of the Mead analysis.
Chevron Step One: Is there a gap or ambiguity in the language of the statute such that Congressional intent on the particular issue is unclear? (Did the agency act within the statute’s range of ambiguity?)
First, use the traditional tools of interpretation to try and discover Congressional intent: text, legislative history, etc.
Also look at the canons (textualism, intentionalism, purposivism). For “major questions,” you can assume that Congress did not intend to delegate decisionmaking power on major questions to the agency under the non-delegation doctrine.
Facts: The Endangered Species Act defines “take” and “harm.” It contains protection for endangered species, making it unlawful for any person to take any endangered or threatened species. The Secretary promulgated a rule that defines the statute’s prohibition on takings to include “significant habitat modification or degradation where it actually kills or injures wildlife.”
Issue: Did the Secretary exceed his authority under the Act in promulgating that regulation? (Can the regulation be used to keep loggers fro any activity that would “harm” certain birds?)
Analysis: The court uses the canons, rejecting the lower court’s use of noscitur a sociis, to understand the meaning of the word “harm,” as well as the dictionary definition. They also look at the purpose of the ESA and determine that it was designed to extend protection against activities that cause harm. Congress delegated broad administrative and interpretive power to the Secretary when it enacted the ESA.
Majority (Stevens): Congress did not unambiguously manifest its intent on the issue. The Secretary’s interpretation was reasonable and should stand. (Although the Court only did typical statutory interpretation, it then draws a Chevron conclusion).
Dissent (Scalia): The legislation was unambiguous in that it forbade the hunting and killing of animals and provided that the federal government could protect animals by buying land with endangered animals. Scalia relies on expressio unius and the absurd result doctrine (Congress couldn’t have intended to protect endangered species at any cost) to reach his conclusion.
MCI v. AT&T (1994):
Background: The 1934 Communications Act requires long-distance telephone carrier to file tariffs for services and rates with the FCC and charge customers only in accordance with filed tariffs. The act authorized the commission to “modify” these requirements. By rule, the FCC provided that only AT&T-historically the dominant long-distance carrier-was required to file tariffs. AT&T challenges, alleging that the FCC went beyond its authority in making such a rule.
Analysis: MCI said that “modify” includes the authority to make even basic and fundamental changes in the scheme created by that section and that the court should defer the agency’s interpretation of the word. Using several dictionary definitions of the word, Scalia rejects that interpretation, saying that Congress’ intent was unambiguous.
Holding: Alterations to the Communications Act that would result in a fundamental revision of the statute are not considered “modifications” under the act. Scalia also seems to be saying that this was an invalid delegation (based on non-delegation and the idea that Congress would not delegate on major questions to prevent the agency from having too much power.
Significance: The agency does not have discretion unless Congress made it clear that it does-back to the idea of elephants in mouse holes-no authority unless it is explicit.
FDA v. Brown & Williamson (2000):
Background: The FDA, after disavowing the authority to do so since its inception, asserted jurisdiction to regulate tobacco products and promulgated regulations intending to reduce tobacco consumption among children and adolescents.
Analysis: If tobacco was included, the FDA would have to remove it from the market. Congress has passed other tobacco statutes over 35 years, acting on reliance that tobacco cannot be regulated by the FDA to enact other regulatory schemes. They also explicitly rejected a bill that would give the FDA jurisdiction.
