Intelligence Law School - Course 1: Lesson 5.6.2 Judicial Review of Agency Rules


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LESSON 5: ADMINISTRATIVE LAW


5.6 Judicial Review of Administrative Rules


5.6.2 Judicial Review of Agency Rules


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5.6.2 Judicial Review of Agency Rules

5.6.2.1 Scope of Review: Chevron Deference vs. Skidmore Deference

The statutory provisions allowing federal courts to perform judicial review of agency action under the Administrative Procedure Act are codified as Chapter 7 of Title 5 of the United States Code.[1]

Judicial review under the APA is complicated,[2] so I go into it in-depth in later courses on IntelligenceLaw.com.

I’ll deal with it in the lessons on suing or defending intelligence agencies in court for violating the rights of American citizens.

 

Ø  Review of Legislative vs. Non-Legislative Rules: I will say that judicial review is one of the best examples of why the distinction between legislative and non-legislative rules is so important.

o   The categorization of a rule as either a legislative rule or a non-legislative rule is a key factor determining the level of deference courts will give to an agency’s interpretation of its statutory mandate.[3]

Ø  Chevron Deference (Strong Deference): Beginning in 1984, the Supreme Court began removing itself from the process of overseeing Executive Branch agencies through judicial review.

o   A key element of this withdrawal came in the form of the most famous Supreme Court opinion in all of administrative law—Chevron U.S.A. v. National Resources Defense Council.[4] 

o   I go into the importance of this case in depth in later courses, but for now just know that the Chevron case created a passive review standard known as “strong deference”—more popularly called “Chevron deference” which is the standard of review employed by courts reviewing cases questioning an agency’s interpretation of its own statute.

o   If this interpretation takes place in a formal legislative rule then the agency’s interpretation will be accorded strong deference, meaning that the Court will only overturn an agency’s interpretation if it is unreasonable.

o   Chevron means that courts are required to defer to the agency’s judgment unless it is essentially crazy.

Ø  Skidmore Deference (Weak Deference): But this is only for legislative rules.

o   Chevron deference almost certainly wouldn’t be applied to the non-legislative rules on Intelligence Community agencies.

o   Instead, a reviewing court would almost certainly be required to apply a less deferential standard of review known as “Skidmore deference,” which comes from a pre-Chevron case called Skidmore v. Swift & Co.[5] 

o   Using Skidmore deference, the Court considers the opinion of the agency as not controlling, but rather just a body of experience and informed judgment upon which a reviewing court can resort for guidance—but they don’t have to.

o   They may substitute their judgment for that of the agency when they disagree with what the agency has done.[6] 

§  Very different than Chevron review.

 

Ø  United States v. Mead (2001): A later Supreme Court case back in 2001 called United States v. Mead clarified when Chevron is supposed to apply.

o   The Court said that:

§  “administrative implementation of a particular statutory provision qualifies for Chevron deference when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority […]”[7]

Ø  There had been considerable confusion between the Circuit Courts of Appeal on the issue of which standard of deference to apply to interpretive rules.[8]

o   Now there is a little more certainty as a result of Mead and a group of related Supreme Court cases which have begun to flesh out the applicable standard.

o   I discuss this more thoroughly in later courses involving judicial review.

 

And that’s it for our review of administrative law generally, as it’s applied 99% of the time.

 

Footnotes

[1] 5 U.S.C. §§ 701-707.

[2] For an excellent summary of the judicial review provisions in Chapter 7 of the Administrative Procedure Act (5 U.S.C. §§ 701-707), see Congressional Research Serv., General Management Laws: A Compendium, § I(B), RL30795 (MAY 19, 2004), available at https://intelligencelaw.com/files/pdf/law_library/crs/RL30795_5-19-2004.pdf (“Sections 701-706 constitute a general restatement of the principles of judicial review embodied in many statutes and judicial decisions; however, they leave the mechanics regarding judicial review to be governed by other statutes or court rules. Section 701 establishes a presumption of reviewability of agency actions by providing that the action “of each authority of the Government of the United States” is subject to judicial review except where “statutes preclude judicial review,” or “where agency action is committed to agency discretion by law” (Section 701(a)(1),(2)). The Supreme Court has consistently supported the strong presumption of reviewability, requiring a “showing of ‘clear and convincing’ evidence of a ... legislative intent to restrict access to judicial review.”  (Citizens to Protect Overton Park v. Volpe, 401 U.S. 402, 410 (1971); Abbott Laboratories v. Gardner, 387 U.S. 136, 141 (1967); Bowen v. Michigan Academy of Family Physicians, 476 U.S. 667, 681 (1986)).  Moreover, the exception for actions “committed to agency  discretion” is narrowly construed and is applicable only in “rare instances where statutes are drawn in such broad terms that in a given case, there is no law to apply” (Volpe, supra, 401 U.S. at 410). A challenge may be brought by any person who is “adversely affected or aggrieved” by the action “within the meaning of the relevant statute” (5 U.S.C. § 702). Courts deciding the standing of a person challenging a rule also must comply with the limitations on federal court jurisdiction imposed by the “case or controversy” requirement of Article III of the Constitution, which has been interpreted to require that a party bringing an action in federal court demonstrate an “injury in fact,” caused by the violation of a legally protected interest, that is concrete and particularized, and actual or imminent, as opposed to conjectural or hypothetical (see Valley Forge Christian College v. Americans United for Separation of Church and State, 454 U.S. 473 (1982); see also Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992)). In addition, parties seeking to establish constitutional standing are required to show that their injury “fairly can be traced to the challenged action” and that the injury is likely to be redressed by a favorable judicial decision (Allen v. Wright, 468 U.S. 737 (1984); Valley Forge, supra, at 472).  A person challenging an agency rule who satisfies Section 702*s test is also likely to satisfy the injury requirement for constitutional standing.  Indeed, courts typically merge their discussions of Section 702*s “adversely affected or aggrieved” language with the constitutional injury requirement (see, e.g., Wilderness Society v. Griles, 824 F.2d 4, 11 (D.C. Cir. 1987)). In addition to constitutional requirements, the judiciary has developed prudential rules to constrain the instances in which review may be obtained. Like their constitutional counterparts, these judicially imposed limits on the exercise of federal jurisdiction are “founded in concern about the proper — and properly limited — role of the courts in a democratic society” (see Warth v. Seldin, 422 U.S. 490, 498 (1974)). However, unlike their constitutional counterparts, they may be modified or abrogated by Congress. The prudential components of the standing doctrine require that (1) a plaintiff assert his own legal rights and interests rather than those of third parties; (2) a plaintiff’s complaint be encompassed by the “zone of interests” protected or regulated by the constitutional or statutory guarantee at issue; and (3) courts decline to adjudicate “‘abstract questions of wide public significance’ which amount to ‘generalized grievances’ pervasively shared and most appropriately addressed in the representative branches” (Valley Forge, supra, at 472). Any standing inquiry is further complicated in instances when an organization seeks to challenge agency action. An organization may have standing to sue if it has been injured as an entity, and may likewise possess standing to sue on behalf of its members, so long as the members would otherwise have standing to sue in their own right; the interests the organization seeks to protect are germane to its purpose; and neither the claim asserted nor the relief requested requires the participation of individual members (see Hunt v. Washington State Apple Advertising Commission, 432 U.S. 333, 343 (1977)). The forum for judicial review of agency rules is determined by statute.  Statutes containing judicial review provisions applicable to rulemaking generally call for direct, pre-enforcement review in the courts of appeals, and usually specify requirements as to venue, timing of review, and scope of review. If there is no specifically applicable judicial review provision governing the agency’s rule, a challenge to the rule will normally be through an action for an injunction or declaratory relief in a district court. Jurisdiction must be obtained through one of the general jurisdictional statutes, the most frequently asserted being 28 U.S.C. § 1331, the so-called “federal question” provision, which gives district courts “original jurisdiction of all civil actions wherever the matter in controversy ... arises under the Constitution, laws, or treaties of the United States.”  Other jurisdictional provisions that may be used are 28 U.S.C. § 1337 (actions arising under commerce-related statutes) and 28 U.S.C. § 1361 (mandamus jurisdiction). Section 706 sets forth the scope of review of agency actions.  In general, the scope of review depends on the nature of the agency determination under challenge. Agency conclusions on questions of law are reviewed de novo.  When a court reviews an agency’s construction of a statute it administers, the court is required to uphold Congress’s intent where Congress has directly spoken to the precise statutory question at issue. If the statute is silent or ambiguous with respect to the specific issue, however, the agency’s interpretation of the statute must be upheld if the agency’s construction of the statute is permissible (see Chevron U.S.A. v. NRDC, 467 U.S. 837 (1984)). The Supreme Court has clarified the limits of this standard, ruling that Chevron deference applies only in instances when Congress has delegated authority to an agency to make rules carrying the force of law, and when the agency interpretation claiming deference was promulgated pursuant to that authority (see United States v. Mead Corp., 533 U.S. 218, 229 (2001)). Agency exercises of judgment or discretion, such as in informal rulemaking or informal adjudication, are reviewed under the “arbitrary, capricious, abuse of discretion” standard.  Under this standard, an agency determination will be upheld if it is rational, based on a consideration of the relevant factors, and within the scope of the authority delegated to the agency by Congress.  The agency must examine the relevant data and articulate a satisfactory explanation for its action, including a rational connection between the facts found and the choices made.  A court is not to substitute its judgment for that of the agency  (see Motor Vehicle Mfr’s Assoc. v. State Farm Mut. Auto Ins. Co., 463, U.S. 29, 42-43 (1983)). Agency determinations of fact, typically in challenges of agency adjudications, are reviewed under the “substantial evidence” test when the agency determination is reviewed on the record of an agency proceeding required by statute (see Consolo v. FMC, 383 U.S. 607, 618-21 (1966)), citing (Universal Camera v. NLRB, 340 U.S. 474 (1951)).”).

[3] See Yule Kim & George Costello, Congressional Research Serv., Statutory Interpretation: General Principles and Recent Trends (2008), available at https://intelligencelaw.com/files/pdf/law_library/crs/97-589_8-31-2008.pdf (“When a court reviews an agency’s formal interpretation of a statute that the agency administers, and when the statute has not removed agency discretion by compelling a particular disposition of the matter at issue, courts defer to any reasonable agency interpretation.  This is the Chevron rule announced in 1984. [Citing Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S. 837 (1984)] In two decisions, one in 2000 and one in 2001, the Court clarified and narrowed Chevron’s application, ruling that Chevron deference applies only if an agency’s interpretation is the product of a formal agency process, such as adjudication or notice-and-comment rulemaking, through which Congress has authorized the agency “to speak with the force of law.” [Citing Christensen v. Harris County, 529 U.S. 576 (2000) and United States v. Mead Corp., 533 U.S. 218, 229 (2001)] Other agency interpretations that are made without the protections of a formal and public process are reviewed under pre-Chevron principles set forth in Skidmore v. Swift & Co. [Citing 323 U.S. 134 (1944)]”).

[4] Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S. 837 (1984) (Official Case Syllabus: "The Clean Air Act Amendments of 1977 impose certain requirements on States that have not achieved the national air quality standards established by the Environmental Protection Agency (EPA) pursuant to earlier legislation, including the requirement that such "nonattainment" States establish a permit program regulating "new or modified major stationary sources" of air pollution. Generally, a permit may not be issued for such sources unless stringent conditions are met.  EPA regulations promulgated in 1981 to implement the permit requirement allow a State to adopt a plantwide definition of the term "stationary source," under which an existing plant that contains several pollution-emitting devices may install or modify one piece of equipment without meeting the permit conditions if the alteration will not increase the total emissions from the plant, thus allowing a State to treat all of the pollution-emitting devices within the same industrial grouping as though they were encased within a single "bubble." Respondents filed a petition for review in the Court of Appeals, which set aside the regulations embodying the "bubble concept" as contrary to law.  Although recognizing that the amended Clean Air Act does not explicitly define what Congress envisioned as a "stationary source" to which the permit program should apply, and that the issue was not squarely addressed in the legislative history, the court concluded that, in view of the purpose of the nonattainment program to improve rather than merely maintain air quality, a plantwide definition was "inappropriate," while stating it was mandatory in programs designed to maintain existing air quality. Held: The EPA's plantwide definition is a permissible construction of the statutory term "stationary source." Pp. 842-866. (a) With regard to judicial review of an agency's construction of the statute which it administers, if Congress has not directly spoken to the precise question at issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute.  Pp. 842-845. (b) Examination of the legislation and its history supports the Court of Appeals' conclusion that Congress did not have a specific intention as to the applicability of the "bubble concept" in these cases.  Pp. 845-851. (c) The legislative history of the portion of the 1977 Amendments dealing with nonattainment areas plainly discloses that in the permit program Congress sought to accommodate the conflict between the economic interest in permitting capital improvements to continue and the environmental interest in improving air quality. Pp. 851-853. (d) Prior to the 1977 Amendments, the EPA had used a plantwide definition of the term "source," but in 1980 the EPA ultimately adopted a regulation that, in essence, applied the basic reasoning of the Court of Appeals here, precluding use of the "bubble concept" in nonattainment States' programs designed to enhance air quality. However, when a new administration took office in 1981, the EPA, in promulgating the regulations involved here, reevaluated the various arguments that had been advanced in connection with the proper definition of the term "source" and concluded that the term should be given the plantwide definition in nonattainment areas.  Pp. 853-859. (e) Parsing the general terms in the text of the amended Clean Air Act -- particularly the provisions of §§ 302(j) and 111(a)(3) pertaining to the definition of "source" -- does not reveal any actual intent of Congress as to the issue in these cases.  To the extent any congressional "intent" can be discerned from the statutory language, it would appear that the listing of overlapping, illustrative terms was intended to enlarge, rather than to confine, the scope of the EPA's power to regulate particular sources in order to effectuate the policies of the Clean Air Act. Similarly, the legislative history is consistent with the view that the EPA should have broad discretion in implementing the policies of the 1977 Amendments.  The plantwide definition is fully consistent with the policy of allowing reasonable economic growth, and the EPA has advanced a reasonable explanation for its conclusion that the regulations serve environmental objectives as well.  The fact that the EPA has from time to time changed its interpretation of the term "source" does not lead to the conclusion that no deference should be accorded the EPA's interpretation of the statute.  An agency, to engage in informed rulemaking, must consider varying interpretations and the wisdom of its policy on a continuing basis.  Policy arguments concerning the "bubble concept" should be addressed to legislators or administrators, not to judges.  The EPA's interpretation of the statute here represents a reasonable accommodation of manifestly competing interests and is entitled to deference.  Pp. 859-866.").

[5] Skidmore v. Swift & Co., 323 U.S. 134 (1944) (Official Case Syllabus: "1. No principle of law precluded a determination that waiting time was working time under the Fair Labor Standards Act. Armour & Co. v. Wantock, ante, p. 126.  P. 136. 2. Whether time spent on the employer's premises (or in hailing distance) by fireguards subject to call was working time under the Fair Labor Standards Act is a question of fact to be resolved by appropriate findings of the trial court.  P. 136. 3. Although the rulings, interpretations and opinions of the Administrator under the Fair Labor Standards Act do not control judicial decision, they do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance.  P. 140.").

[6] In Skidmore v. Swift & Co., the Court ignored the opinion of the Administrator of the Wage and Hour Division, U.S. Department of Labor, with respect to the classification, under the Fair Labor Standards Act, of work hours for employees required to perform nighttime fire duty at their packing plant 3.5 to 4 nights a week. The Court mentioned the Administrator’s opinion as authoritative, but not binding on the Court. The Court substituted its own judgment for that of the Administrator. The Skidmore Court explained the issue as follows: "We consider that the rulings, interpretations and opinions of the Administrator under this Act, while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance.  The weight of such a 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. The courts in the Armour case weighed the evidence in the particular case in the light of the Administrator's rulings and reached a result consistent therewith.  The evidence in this case in some respects, such as the understanding as to separate compensation for answering alarms, is different.  Each case must stand on its own facts.  But in this case, although the District Court referred to the Administrator's Bulletin, its evaluation and inquiry were apparently restricted by its notion that waiting time may not be work, an understanding of the law which we hold to be erroneous.  Accordingly, the judgment is reversed and the cause remanded for further proceedings consistent herewith." Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944).

[7] United States v. Mead, 533 U.S. 218, 226-227 (2001) ("administrative implementation of a particular statutory provision qualifies for Chevron deference when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority”).

[8] In 1992, there was a circuit split on the issue of the standard of review for determining whether a rule is legislative or interpretive. The D.C. Circuit applied Chevron deference to an agency’s interpretive rule, while the First Circuit applied the completely opposite de novo standard that same year. See Syncor International Corp. v. Shalala, 127 F.3d 90 (D.C. Cir. 1997) (“To be sure, since an agency's interpretation of an ambiguous statute is entitled to judicial deference under Chevron, it might be thought that the interpretative rule--particularly if it changes a prior statutory interpretation as an agency may do without notice and comment--is, in reality, a change in the legal norm.”). Compare La Casa Del Convaleciente v. Sullivan, 965 F.2d 1175, 1177 (1st Cir. 1992) (“The issue of whether an administrative rule is legislative or interpretive is a question of law; therefore the standard of appellate review is de novo.”)

 


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