Obituary: Chevron’s “Major Questions Exception”

By David Baake — Aug. 27, 2013 at 5:43pm

LAND_Park_DC_MHoldenIf you prefer blog posts that begin by paraphrasing a Mark Twain quote, prepare to be disappointed. This blog post is about Chevron’s “major questions exception,” and reports of its death appear to have been entirely accurate. As most readers will be aware, Chevron U.S.A., Inc. v. NRDC (1984) established the framework for judicial review of administrative agencies’ interpretation of their organic statutes. Under Chevron Step One, a court must determine whether the relevant statute is unambiguous; if it is, “that is the end of the matter,” for Congress’ intent is clear. If the statute is silent or ambiguous, however, the court proceeds to Chevron Step Two. At Step Two, the Court considers whether the agency’s interpretation is “reasonable;” if it is, the Court must defer to the agency.

The “major question exception” to the Chevron framework was first identified in an influential article by Professor Cass R. Sunstein called Chevron Step Zero (2006). In this article, Professor Sunstein identified a nascent trend in the Supreme Court’s Chevron jurisprudence towards denying deference to agency decisions implicating questions of major economic and political importance. In FDA v. Brown & Williamson Tobacco Corp. (2000), for example, the Court considered whether the FDA had authority to regulate tobacco products under the Food, Drug, and Cosmetic Act (FDCA). The Court concluded that it did not. Although the Court purported to apply Chevron Step One, it made clear that its conclusion rested in large part on its determination that “Congress could not have intended to delegate a decision of such economic and political significance” to the FDA with a general grant of authority to regulate “drugs.”

Professor Sunstein argued that Brown & Williamson and similar cases were best understood, not as (surprisingly nondeferential) applications of Chevron deference, but as instantiations of a new “major questions” doctrine. This doctrine might simply require federal courts to provide de novo review of agency interpretations with major political or economic implications. Alternatively, this doctrine might embrace a more fundamental “nondelegation” principle, which would prohibit either courts or agencies from interpreting an ambiguous provision in such a way as to significantly expand the scope of an agency’s authority.

Thankfully for those of us who do not wish to return to the Lochner era, the Court “unceremoniously killed” the nondelegation version of the major questions doctrine in Massachusetts v. EPA (2007). The Massachusetts Court did not actually discuss the nondelegation version of the major question doctrine, but by interpreting an ambiguous provision of the Clean Air Act to require EPA to address greenhouse gas emissions – a question of enormous economic and political significance – the Court left little doubt about the vitality of this doctrine. But Massachusetts left untouched, or even provided support for, the de novo version of the major question doctrine.

But the de novo review version of the major questions doctrine was not long for the world, and the Court finally put it to rest in City of Arlington, Texas, v. FCC (2013). In City of Arlington, the Court considered whether “an agency’s interpretation of a statutory ambiguity that concerns the scope of its regulatory authority” is entitled to Chevron deference. In a brilliant and forceful opinion by Justice Scalia, the Court held that Chevron must apply in these circumstances. The Court’s holding rested on a broad reaffirmation of Chevron’s key insights: that lawmaking is necessary to resolve statutory ambiguity, and that it is preferable that this lawmaking be performed by expert, accountable agencies, as opposed to inexpert, unaccountable judges. These insights remain valid, the Court recognized, even where “an agency’s expansive construction of the extent of its own power would [work] a fundamental change in the regulatory scheme.” The Court acknowledged that this approach might risk “leaving the fox in charge of the henhouse,” but it maintained that this risk was best avoided “not by establishing an arbitrary and unworkable category of agency decisionmaking that is accorded no deference, but by taking seriously, and applying rigorously, in all cases, statutory limits on agencies’ authority.”

The import of City of Arlington is clear: the Court does not recognize a “major questions exception” to Chevron. Even when “an agency’s expansive construction of the extent of its own power would [work] a fundamental change in the regulatory scheme,” courts must defer to the agency if its construction is reasonable. This is good news for those who believe that the administrative agencies should be allowed to exercise initiative in tackling major threats to human health and welfare. But of course, the devil will remain in the details (or, in Justice Scalia’s case, in the dictionary).