September 30, 2013 Articles

Chevron: Stronger Than Ever in City of Arlington, Texas

Sometimes landmark decisions grow from prosaic beginnings.

By Bradford S. Babbitt

Sometimes landmark decisions grow from prosaic beginnings. The U.S.  Supreme Court’s decision in City of Arlington, Texas v. Federal Communications Commission, 133 S. Ct. 832 (2013), is an example. For the majority, judicial usurpation of the legislative function lay at the heart of the matter. For the dissent, the danger was the ever-growing power of the administrative state and the centrality of the judiciary’s role in constraining its co-equal branches to their proper roles. The basis for this elemental struggle? How long a period is “reasonable” for a state or local government to rule on an application for a telecommunications facility.

Factual Background
The decision in City of Arlington, Texas, had its start in a decision by the Federal Communications Commission (FCC) under the Telecommunications Act of 1996 (TCA). In the TCA, Congress imposed limitations on the traditional authority of state and local governments to regulate the “location, construction and modification” of telecommunications facilities, including towers and antennas. One of those limitations requires state or local governments to act on wireless siting applications “within a reasonable period of time after the request is duly filed.” Congress did not define what would constitute a “reasonable period.”

Providers of wireless-telecommunications services petitioned the FCC for a determination of what constituted a “reasonable period,” complaining that they frequently faced long delays in obtaining rulings on their applications. The FCC granted the requested ruling, relying on Congress’s delegation of authority to “prescribe such rules and regulations as may be necessary in the public interest” to carry out the provisions of the Communications Act of 1934, into which the TCA had been incorporated. The FCC determined that a “reasonable time” under the act is presumptively, but rebuttably, 90 days to process a collocation application (an application to install a new antenna on an existing tower) and 150 days to process all other applications.

State and local governments challenged the FCC’s declaratory ruling, arguing that the FCC lacked authority to interpret the “reasonable period” language. The Fifth Circuit upheld the FCC’s deadlines, ruling that it was obliged to defer to the FCC’s determination of the scope of its jurisdiction under Chevron, U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). The circuit court then ruled that the FCC’s presumptive time periods were a permissible construction of the act and, thus, were also entitled to deference under Chevron.

The Court granted certiorari to consider whether “a court should apply Chevron to . . . an agency’s determination of its own jurisdiction.”

The Majority: “Make No Mistake—The Ultimate Target Here Is Chevron Itself”
Justice Scalia, writing on behalf of a majority that included Justices Thomas, Ginsburg, Sotomayor, and Kagan, recited Chevron’s “now-canonical formulation.” First, determine “whether Congress has directly spoken to the precise question at issue.” If congressional intent is clear, both courts and agencies must give effect to that intent. But, if the statute is “silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.”

For Justice Scalia, Chevron’s two-step process applies regardless of the nature of the question at issue. “No matter how it is framed, the question a court faces when confronted with an agency’s interpretation of a statute it administers is always, simply, whether the agency has stayed within the bounds of its statutory authority.” He rejected the suggestion that some agency decisions (the important ones, such as jurisdiction) are subject to less deference than others (the less important ones, such as applications of jurisdiction the agency plainly has). For the majority, “the distinction between ‘jurisdictional’ and ‘nonjurisdictional’ interpretations is a mirage.” Unlike congressional authority over the judicial branch, which consists only of the power (within limits) to define classes of cases courts may decide (not authority to dictate how those cases should be decided), congressional authority over agencies is unfettered: Congress controls the power of agencies to act as well as how they are to act. “[W]hether framed as an incorrect application of agency authority or an assertion of authority not conferred—[the question] is always whether the agency has gone beyond what Congress has permitted it to do. . . .”

For the majority, the false dichotomy between “jurisdictional” and “nonjurisdictional” agency interpretations posed the danger of undermining the judicial deference inherent in Chevron. “Make no mistake—the ultimate target here is Chevron itself. Savvy challengers of agency action would play the ‘jurisdictional’ card in every case.” While some judges would be deceived and others tempted, the effect would be to transfer interpretive decisions—“archetypal Chevron questions,” from agencies Justice Scalia terms “unelected federal bureaucrats” to federal courts, which he describes as “unelected (and even less politically accountable).”

The majority’s position takes seriously and applies rigorously the statutory limits on agencies’ authority, in all cases: “Where Congress has established a clear line, the agency cannot go beyond it; and where Congress has established an ambiguous line, the agency can go no further than the ambiguity will fairly allow.” If the agency’s determination is based on a permissible construction of the statute, “that is the end of the matter.” 133 S. Ct. at 1874–75

The Dissent: “Only the Courts Can Say What the Law Is”
The dissent, written by Chief Justice Roberts on behalf of Justices Kennedy and Alito, distinguishes an agency’s application of its power to resolve a statute’s ambiguity from an agency’s determination of whether it has the power to resolve that ambiguity. The former deserves Chevron deference; the latter does not. In this way, the dissent interprets Chevron more narrowly than the majority. For the dissenters, application of Chevron deference does not hinge on congressional delegation generally. Rather, Chevron only applies where Congress has “delegate[ed] authority to the agency to elucidate a specific provision of the statute by regulation.” Justice Roberts sees the majority in this case as expanding agency authority to decide when, and whether, Congress has conferred power on an agency.

For the chief justice, decisions about when and whether Congress has conferred power on an agency are reserved to the courts and, therefore, should be made without deference to the agency. He bases this conclusion on nothing less than the touchstone of Marbury v. Madison, 1 Cranch 137 (1803). In his view, the judiciary’s duty to resolve these questions of law is unchanged by the rise of the modern administrative state.

The modern administrative state drives the dissent’s refusal to treat questions about an agency’s power to decide the same as questions about an agency’s application of well-established power. The chief justice describes the vast growth of the administrative state and its accretion of power in the modern era. He acknowledges that one can reasonably question the ability of any president to oversee the hundreds of “federal agencies poking into every nook and cranny of daily life.” Roberts describes that oversight as a “critical part of the constitutional plan,” but suggests that the scale of the administrative state undermines its effectiveness as a “safeguard against agency overreaching.”

The Majority and the Dissent: So Close and Yet So Far Apart
The majority and the dissent reach opposite destinations after traveling far, on parallel tracks. At the outset, both opinions describe the Chevron requirements similarly. For both, the first step is to determine whether congressional intent on a specific question is clear. If so, then agencies and courts alike should effectuate that intent. If not, both majority and dissent describe the court’s next step in reviewing agency action as determining whether the action is based on a permissible construction of the statute.

Chief Justice Roberts and Justice Scalia spar over whether the majority has answered the right question. Justice Scalia writes of a false dichotomy between jurisdictional and nonjurisdictional determinations, applying Chevron deference to both. The chief justice, in his turn, eschews the word “jurisdiction,” describing the term as “ambiguous.” But the chief justice poses the question as whether a court should “defer to an agency on whether Congress has granted the agency interpretive authority over the statutory ambiguity at issue,” and then admits that one could call that “jurisdiction.” In substance, both opinions address whether Chevron applies to the question of whether “Congress has granted the agency interpretive authority over the statutory ambiguity at issue.”

As noted above, the dissent interprets the majority’s decision as expanding the scope of Chevron. But, as with the definition of the question before them, only a slim gap exists between the majority and the dissent. Justice Scalia does not appear to advocate for the application of Chevron in the face of general congressional delegation. Indeed, the majority quotes Chevron to the effect that deference is accorded an agency decision only where the statute “is silent or ambiguous with respect to the specific issue. . . .” The main difference between the opinions lies in Justice Scalia’s belief that the “specific issue” includes whether an agency has power to resolve a merits ambiguity, as contrasted with Justice Roberts’s belief that the “specific issue” is restricted to ambiguity over a merits question.

Chief Justice Roberts argues that an agency cannot bootstrap itself into an area in which it has no jurisdiction. The majority would almost certainly agree with his proposition. Justice Scalia would be likely to respond that judicial review, even under Chevron, would prevent that harm. Deferential review does not equate to no review. Under the majority’s view, “[n]o matter how it is framed, the question a court faces when confronted with an agency’s interpretation of a statute it administers is always, simply, whether the agency has stayed within the bounds of its statutory authority.” If an agency invokes its jurisdiction outside the bounds of the statute in question, even Chevron deference would not preserve the agency’s determination.

Both the majority and dissent concur that Chevron deference is based on, and finds legitimacy as, a congressional delegation of interpretive authority. They disagree over the scope of that delegation. Justice Scalia finds congressional delegation in every statutory ambiguity because Congress knows how to constrain agency discretion—by speaking “in plain terms”—and how to expand such discretion—by speaking “in capacious terms.” Because Congress recognizes that ambiguities will be resolved by agencies, in the first instance, he reads congressional intent to delegate resolution of any and all ambiguity, including jurisdictional ambiguity, to the agencies.

Chief Justice Roberts, however, finds congressional delegation only “if Congress has delegated authority to definitively interpret a particular ambiguity in a particular manner” and reserves that determination of congressional delegation to the courts. For the dissent, the question of an agency’s power to resolve a statutory ambiguity is special and, therefore, not subject to Chevron deference. The dissent’s reservation of that issue, in the first instance, to the courts undermines his expressed reliance on congressional delegation as the font of Chevron deference. To the contrary, the chief justice suggests that the courts’ constitutional authority to “say what the law is” would overrule even explicit congressional delegation of authority to an agency to decide the scope of its power to resolve statutory ambiguity. If so, by reserving questions of the scope of an agency’s authority to the courts and, thereby, exempting those questions from Chevron deference regardless of what Congress has delegated to the agency, the dissent runs afoul of the first prong of the Chevron formula: enforce the intent of Congress when that intent is clear.

A further flaw in the dissent is the fact that Congress creates ambiguities “by design or default” with respect to an agency’s power to address a merits statutory ambiguity just as easily as it creates a merits statutory ambiguity. Under the chief justice’s view, the standard of review on appeal would be different. As a result, challengers to agency action would be incentivized to frame their appeals as relating to the existence of the agency’s authority to decide, rather than to the decision itself. Such an incentive would threaten to shift authority from agencies to the courts, a risk of which Justice Scalia warns.

Additionally, Chief Justice Roberts’s reliance on Marbury v. Madison may be misplaced. In his view, questions of law, such as whether an agency has authority to resolve statutory ambiguity, are reserved to the courts. Therefore, no deference should be accorded under Chevron. One can just as easily characterize an agency’s resolution of statutory ambiguity on the merits of an issue as a question of law. Indeed, the dissent concedes that “Congress has delegated to the agency the authority to interpret those ambiguities ‘with the force of law.’” While the dissent draws a line between whether an agency may decide a question and how an agency decides that question, the basis for that line is unclear.

What is clear from the Court’s decision is that deferential review of agency action under Chevron is alive and well in City of Arlington, Texas.

Keywords: litigation, appellate practice, FCC, TCA, jurisdictional, nonjurisdictional, agency

Bradford S. Babbitt is a trial and appellate lawyer with Robinson & Cole LLP in Hartford, Connecticut.

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