January 18, 2017

Why Reject Chevron?

Posted on January 18, 2017 by Edward F. McTiernan

The outcome of the recent presidential election appears to have been based, at least in part, on the fact that some portion of the electorate felt that out-of-touch and unelected government regulators cannot be trusted to solve problems because they either are making things up (coal-fired power plants contribute to climate change) or caused the problem in the first place (over reaching while delineating “waters of the US”).  Environmental regulations and their human analog – health and safety standards – are viewed in some quarters as the height of paternalism by our government and are often cited as the sort of regulatory morass that only a self-serving, arrogant bureaucracy could concoct.  One response to the perceived negative effect of regulations in general, and environmental regulations in particular, has been a call to ‘increase regulatory accountability’ and to ‘restore the proper role of elected officials.’

The Regulatory Accountability Act is one notable legislative response to these concerns.  In 2016, it was a one-house bill that was not acted upon by the Senate.  That could change and the Regulatory Accountability Act of 2017 (H.R. 5) has already been introduced (on January 3, 2017).  Title II of this omnibus legislation includes the “Separation of Powers Restoration Act” which would overturn Chevron U.S.A. v. NRDC,467 U.S. 837, (1984) as well as Auer v. Robbins, 519 U.S. 452 (1997) by amending the Administrative Procedures Act, 5 USC 706, and requiring that federal courts “shall decide de novo all relevant questions of law, including the interpretation of constitutional and statutory provisions, and rules made by agencies.”.  (Chevron and Auer are often seen as two sides of the same coin; the Chevron test calls for deference to an agency’s reasonable interpretation of a statute while Auer requires strong deference to an agency’s interpretation of its own regulations.  Of course, these tests only come into play after a searching review of the language and history of the enabling legislation fails to reveal Congress’ intent.)

Although the logic behind Chevron has been questioned by many, including Justice Scalia, overturning Chevron as a means of restoring the separation of powers seems like an odd way of attempting to increase the power of the people’s elected representatives and restoring accountability.  After all, deference favors stakeholders who support an administrative determination (including decisions to issue a permit or adopt a less stringent emission standard).  In the environmental area, where well-funded non-governmental membership organizations routinely challenge rules and permits, the benefits of Chevron to the regulated community are easy to overlook.

In any event, one of the key arguments in favor of Chevron deference is that when Congress decides to leave implementation of legislation to an executive agency, and Congress also leaves gaps or ambiguity in a statute, filling the gap or resolving the ambiguity necessarily involves policy judgments.  Putting aside questions of whether Congress can ever avoid the problem by eliminating legislative gaps or ambiguity; as a general matter Chevron deference reflects a decision that such judgments are best left to the executive agency that is most steeped in the subject matter at issue.  There are at least two primary reasons that courts use to explain why Chevron and its progeny leave these judgments to executive agencies – presumed expertise and greater accountability.  Indeed, even taking into account the newly popular idea that the presumed expertise of experts to solve real-world problems should be continuously challenged (or at least deeply discounted), many judges may still favor deference on the theory that policy judgments are generally not for the courts precisely because they are better left to the executive branch which (unlike our independent judiciary) is, to a degree, answerable to the popular will at election time.

Replacing Chevron with de novo judicial review would very likely result in greater uncertainty as generalist judges with life-time tenure are called upon to exercise their judgments concerning policy decisions made by specialized executive agencies directed by an elected representative of the people.  Moreover, environmental cases typically present mixed questions of fact and law.  Courts would need time to sort out when and how to integrate de novo review of legal determinations with the substantial evidence test for formal rules and adjudications and the arbitrary and capricious standard as applied to agency guidance and informal rules. Replacing Chevron will also probably lead to more litigation (and forum shopping) as stakeholders perceive greater prospects for success.

Of course, uncertainty and litigation are not necessarily bad – if they result in improved decision-making and they help restore common-sense outcomes.  However, given the inevitability that the Environmental Protection Agency will be called upon to make policy judgments when Congress intentionally leaves gaps or unintentionally creates ambiguity, predictability has benefits.  This is where the new ‘accountability’ at the core of Title II of the Regulatory Accountability Act of 2017 seems to fall short.  It is not clear how shifting the review of administrative actions from the elected executive branch to the insulated judiciary will increase predictability or accountability.  Even taking into account the other parts of this legislative package (including the direction that agencies must select the lowest cost alternative and increased reliance of the administrative record), it is far from certain that this proposed legislative fix will increase the power of the people’s elected representatives or provide a net benefit to the regulated community on environmental issues.

There is much to be done to improve participation and increase transparency in environmental decision-making at both the state and federal level.  However, until someone comes up with something better than de novo judicial review, doing away with the familiar two-step Chevron analysis for determining legislative intent could prove to be a difficult place to start.

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