Public Institutions

Major Questions Doctrine

& �Hard Look Doctrine (Arbitrary & Capricious Review)

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Cases that have limited

Chevron Deference

• Mead: Chevron only applies to agency statutory interpretations that have the force of law.
• Skidmore & Christensen: Describe the “lesser” deference that agency guidance gets. (Christensen has some nice descriptive quotes)
• Major Questions Doctrine: “In extraordinary cases, there may be reason to hesitate before concluding that Congress has intended such an implicit delegation”
• King v. Burwell & WV v. EPA (There are others, these are the ones we read)

Chevron 2 Step

When reviewing an agency’s construction of a statute that it administers, courts consider two questions:

1. whether Congress has directly spoken to the precise question at issue; and
2. if not, whether the agency’s answer is based on a permissible construction of the statute.

United States v. Mead Corp.

Mead Test

Chevron deference only applies when an agency interpretation is created through notice and comment, an order coming out of formal adjudication, or some other procedure through which Congress intended for the agency to speak with the “force of law.” The Mead Court provided a two-part test for figuring out when an interpretation has the force of law:

1. Congress has delegated to an agency the general authority to make rules carrying the force of law; and
2. The agency interpretation for which deference is sought was promulgated in exercise of that authority.

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But, the Court says that SOME deference should still be given to interpretations that lack the “force of law”�

“The weight [accorded to an administrative] judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.”

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-Skidmore v. Swift

Review of Judicial Oversight of Agency Determinations

“Chevron Step 0” (Mead): Did Congress give the agency lawmaking authority and did the agency exercise that authority?

• If yes, then continue to Chevron Step 1
• If Congress did not intend the agency action to carry the force of law, then weaker deference standards apply (Skidmore deference)
• Chevron Step 1: Did Congress speak to this issue in particular?
• If yes, then statutory language applies
• If no, then Congress expected agency to fill in the ambiguities
• Chevron Step 2: Was agency’s statutory interpretation permissible?
• The answer to this is usually “Yes”
• Similar to Arbitrary & Capricious test

West Virginia v. EPA

Clean Air Act

• CAA delegates authority to EPA to determine Best Systems of Emission Reduction (BSERs)

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• EPA carries out this mandate in cooperation with states (Cooperative Federalism)

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• In 2015, the EPA promulgated the Clean Power Plan rule to regulate carbon dioxide emissions by implementing a “sector-wide shift in electricity production from coal to natural gas and renewables”

Can the EPA do that, according to the statute?

Non-delegation Doctrine

• Congress didn’t intend to delegate this much authority to an agency
• Separation of powers does not permit this kind of delegation
• “Both separation of powers principles and a practical understanding of legislative intent make us “reluctant to read into ambiguous statutory text” the delegation claimed to be lurking there.” (Dovetails the concepts of non-delegation and non-Chevron)

Major Questions Doctrine

• Did Congress intend to confer the power asserted by the agency? [When EPA “substantially restructure the American energy market” by “discovering in a long-extant statute an unheralded power” - Nope]
• Has agency interpreted the statute this way before? [EPA has never devised a cap by “shifting” polluting activity from “dirtier to cleaner sources.”“Unprecedented power over American industry” - Nope]
• Is this within the agency’s expertise? [EPA is not expert at electricity transmission, distribution, and storage - Nope]
• Would Congress intend to confer this decision to an agency? [Congress would likely want to exercise this authority itself, and does not confer this type of authority to EPA anywhere else in the CAA - Nope]
• Has Congress opted to adopt this scheme in any statute? “Congress has considered and rejected” the regulation of greenhouse gas emissions “multiple times” - Nope]

Sidenote (Snark Warning)

Interesting to see people who claim to be textualists focusing so hard on legislative intent.

Dissent

“Today, the Court strips the Environmental Protection Agency of the power Congress gave it to respond to “the most pressing environmental challenge of our time.”

Now, let’s move on to 5 U.S.C. § 706

Arb & Caprish

5 U.S.C. § 706

…The reviewing court shall—

(2) hold unlawful and set aside agency action, findings, and conclusions found to be—

(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; …

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In making the foregoing determinations, the court shall review the whole record or those parts of it cited by a party, and due account shall be taken of the rule of prejudicial error.

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What is the “whole record”?

• Formal Rulemaking: evidentiary record created by the hearing procedures

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• Informal Rulemaking: Overton Park defines the “record” for informal proceedings as information that the agency actually considered in making the decision
• Agency notices for proposed and final rule
• Comments, studies, data not published in notices

• Substantial evidence standard = Formal Rulemaking (and hybrid or informal rulemaking when judicially required)

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• Arbitrary & Capricious standard = Informal Rulemaking

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We’ll be focusing on the far more common Arbitrary & Capricious standard

A&C before Overton Park v. Volpe

• Agency didn’t need a record or decision to justify its actions
• Challenger had to prove a negative: that there were no facts or good reasons to support the agency action

That’s really hard to do!

Citizens to Preserve Overton Park v. Volpe

Neither the announcement approving the route nor the design for the highway included a statement of the Secretary’s factual findings. There was no indication of why

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• There was no feasible or prudent alternative or
• If all possible planning to minimize harm was undertaken

Strauss was an attorney

at the Solicitor General’s office

(supervise and conduct SCOTUS litigation)

• The background that is left out of the agency record is also invisible in the judicial record.

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• Public interest is largely represented in administrative record (don’t have the strength and $ of lobbyists or government, itself)

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• What gets lost when agencies don’t create a full record reflecting their deliberation processes?

This case =�The “Hard Look” Doctrine

Under “arbitrary and capricious” standard of review, courts look to see whether agencies have taken a “hard look” at the underlying questions of policy and fact upon which their decisions are based. According to the hard look doctrine, agencies have to justify their decisions with adequate reasoning to pass muster under the arbitrary and capricious standard. In practice, the arbitrary and capricious standard and review is very similar, if not identical, to step two of the Chevron test.

Overton Park Inquiry

Court applied A&C standard (706(2)(A)) instead of de novo review (706(2)(F)), saying de novo review is only for reviewing adjudication proceedings. Court introduced 3 part inquiry:

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1. Did agency act within its scope of authority?
2. Was the choice the agency made arbitrary & capricious?
3. Did the agency follow the right procedure?

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Because there is no record, the court remands so that agency can provide adequate explanation for its decision

Citizens to Preserve Overton Park v. Volpe A&C consideration

Court must engage in a substantial inquiry

• Is the agency’s decision based on a consideration of relevant factors?
• Was there a clear error of judgment?

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Although this inquiry is supposed to be “searching” and “careful”, the ultimate standard of review is NARROW

Remember, 5 U.S.C. § 706 says:

…The reviewing court shall—

(2) hold unlawful and set aside agency action, findings, and conclusions found to be—

(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; …

(E) unsupported by substantial evidence in a case subject to sections 556 and 557 of this title or otherwise reviewed on the record of an agency hearing provided by statute …

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In making the foregoing determinations, the court shall review the whole record or those parts of it cited by a party, and due account shall be taken of the rule of prejudicial error.

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What if there’s not a “whole record”?

• In this case, SCOTUS remanded to District Court to hear again with fuller record
• If agency didn’t keep records, the Court may have to examine decisionmakers to build a post hoc record, but that’s not preferred…

The Overton Park effect on agency processes

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Introduced the concept of records for informal agency proceedings. Now, agencies include explanations in their final rules - even though they don’t have to produce written findings in 5 U.S.C. § 553 rulemaking as a procedural matter.

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What happens when an agency proceeding is A&C?

The court usually remands the decision to the agency so that the agency has another opportunity to defend its rule with an adequate explanation

Why remand?

SEC v. Chenery Corp.

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“Congress has entrusted the agency, not the courts, with the exercise of discretion in implementing the statute, so a court can only review the justification made by the agency, not supply its own”

Motor Vehicle Manufacturers v. �State Farm

• What happened to the rulemaking in this case?
• What was happening politically, at the time?

National Traffic and Motor Vehicle Safety Act of 1966

Timeline of Events

• Jan. 20, 1977 - Jimmy Carter becomes President.
• 1977 - Department of Transportation orders all new full-size cars to have air bags or automatic restraint devices by the 1982 model year and all new cars, regardless of size, by the 1984 model year.
• Jan, 20, 1981 - Ronald Reagan becomes President.
• October 1981 - The National Highway Traffic Safety Administration rescinds Carter Administration requirement on air bags, saying automatic passive restraint devices could be cut out by consumers.

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NHTSA Says

“We’re no longer able to find that the automatic restraint requirement would produce significant safety benefits”

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(but did anything change with cars or safety, etc.?)

SCOTUS Majority:

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“By failing to analyze the continuous seatbelts in its own right, the agency has failed to offer the rational connection between facts and judgment required to pass muster under the arbitrary and capricious standard.”

“Rational Connection”

A&C standard is not met when agency decision/action:

• relies on factors that Congress didn’t intend for agency to consider
• Entirely fails to consider an important aspect of problem
• Offered an explanation for its decision that runs counter to the evidence before the agency
• Is so implausible that it could not be ascribed to a difference in view or the product of agency expertise

The Court won’t replace an agency’s reasoning with its own reasoning.

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BUT

Vermont Yankee is not a “talisman under which any agency decision is by definition unimpeachable.”

Court Says:

“While the agency is entitled to change its view on the acceptability of continuous passive belts, it is obligated to explain its reasons for doing so.”

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-Not disagreeing with agency’s reasoning, but disagreeing with lack of decisionmaking record/explanation of rationale

SCOTUS Minority

“The agency’s changed view of the standard seems to be related to the election of a new President of a different political party… A change in administration brought about by the people casting their votes is a perfectly reasonable basis for an executive agency’s reappraisal of the costs and benefits of its programs and regulations.”