The Nickel Report

According to the dictionary, a phrase is “ambiguous” if it has more than one meaning.
Chevron[1] is frequently cited for the proposition that the presence of “ambiguity” gives an agency the authority to interpret the statute to eliminate the ambiguity. A better view of Chevron is that only the Courts may resolve statutory ambiguity through interpretation. When faced with statutory terms that may be given more than one meaning, courts must determine, applying canons of statutory construction, what Congress has resolved, what Congress has given the Agency discretion to resolve, and what ascertainable standards have been established by Congress to govern the exercise of discretion by the Agency. In other words, Chevron contemplates that the Court declare what the law requires, including the scope of discretion afforded an agency to make policy choices that give content to broad statutory terms.

This view of Chevron avoids, as Justice Thomas cautioned, “giv[ing] the ‘force of law’ to agency pronouncements on matters of private conduct as to which Congress did not actually have an intent.” Michigan v. EPA, 135 S.Ct. 2699, 2713 (2015) (Thomas, J. concurring). Chevron, properly construed, gives the judiciary the last word on interpretation of the law and recognizes the responsibilities and limitations on Agency policy choices made in implementation of the law. As so understood, the Chevron doctrine avoids constitutional infirmity.

While Chevron may be construed to avoid constitutional separation of powers problems, the Auer[2] and Seminole Rock[3] decisions requiring judicial deference to agency interpretations of ambiguous regulations cannot be construed in a way that avoids serious constitutional issues.

 Auer deference has been applied to allow an agency to propose and promulgate a broad “legislative” rule that allows a variety of compliance approaches, and then to bring enforcement actions based on its narrow interpretation of the rule. But where a “regulation gives no indication how to decide [an]…issue, the [agency’s]…effort to decide it…cannot be considered an interpretation of the regulation.” Gonzales v. Oregon, 546 U.S. 243, 257 (2006). Allowing agencies to pick just one outcome through interpretation of a broad legislative rule creates a host of problems, including issues of fair notice and agency circumvention of notice-and-comment rulemaking requirements. See, e.g., Perez v. Mortgage Bankers Ass’n, 135 S.Ct. 1199, 1211-12 (Scalia, J. concurring). The mere fact that agencies have felt sufficiently emboldened by Auer and Seminole Rock to seek deference in such cases supports the Court’s overruling these decisions.

In Kisor v. O’Rourke (cert. granted December 10, 2018), the Supreme Court now has the opportunity to revisit the underpinnings of these deference doctrines. In the context of legislative rules that regulate conduct, the Court should make clear that the ordinary meaning of a rule’s language expresses its purpose and that the rule must be enforced according to its terms. The judiciary’s interpretive function in this situation is (i) to determine whether the rule requires a specific outcome or is ambiguous as to the outcome, and then (ii) to apply canons of construction to resolve or to narrow the scope of any ambiguity in the rule. But where a rule or provision in a rule remains ambiguous—i.e., susceptible to alternative meanings—after that analysis, the Court should conclude that the rule authorizes a range of outcomes. This result preserves the courts’ ultimate authority to “say what the law is,” respects the role of the legislature under the constitution, and avoids the myriad other issues—such as due process/fair notice and compliance with the Administrative Procedures Act—raised by current agency deference doctrines.

[1] Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).

[2] Auer v. Robbins, 519 U.S. 452 (1997)

[3] Bowles v. Seminole Rock & Sand Co., 325 U.S. 410 (1945)