Notice & Comment

Defining Deference Down

CJW Note: Over at SCOTUSblog, there’s a great symposium on King v. Burwell. I thought I’d cross-post, with permission, one of the contributions, by Adam White, that relates to my post yesterday about the effect of King v. Burwell on administrative law. Here is Adam’s post:

As many have by now noted, Chief Justice John Roberts asked only one question at the King oral arguments, but that one question proved to be crucial. Responding to the solicitor general’s calls for “Chevron deference” to the IRS’s interpretation of the Affordable Care Act, Roberts noted that deferring to the IRS now would open to the door to a future presidential administration reversing course: “If you’re right—if you’re right about Chevron, that would indicate that a subsequent administration could change that interpretation?”

Justice Kennedy sounded a similarly skeptical note that the Court owed the IRS deference: “it seems to me a drastic step for us to say that the Department of Internal Revenue and its director can make this call one way or the other when there are, what, billions of dollars of subsidies involved here? Hundreds of millions?” It was the second time in a year that Kennedy had raised such fundamental, structural questions in a case arising from the Affordable Care Act. (The first was in Hobby Lobby.)

Quite frankly, those moments left me optimistic that both the Chief Justice and Justice Kennedy were seriously considering siding with the challengers – that they would invoke Brown & Williamson’s “major questions” doctrine to refuse to give Chevron deference to the IRS, and in turn that they would interpret the statute according to its plain meaning and rule against the administration. (And I said as much, here and here.)

Needless to say, I did not expect the eventual outcome: that Roberts and Kennedy (and the Court’s liberal Justices) would refuse to give Chevron deference to the administration yet ultimately endorse the administration’s statutory interpretation – an interpretation that, by the Court’s own candid assessment, was at odds with the statutory text’s “most natural meaning.”

Years ago, while still a judge on the D.C. Circuit, Roberts (quoting his late mentor Henry Friendly) stressed that “whatever degree of confidence about congressional purpose one derives from the legislative history, that purpose must find expression ‘within the permissible limits of the language’ before it can be given effect.” One might have expected similar skepticism as to legislative “purpose,” and judicial efforts to pursue such purposes without strong textual support, in King. Especially when Roberts, Kennedy, and the rest of the majority do not try to cast this particular legislative process in a positive light. Given their acknowledgement that the ACA “does not reflect the type of care and deliberation that one might expect of such significant legislation,” with too much of it written “behind closed doors, rather than through ‘the traditional legislative process,’” one might have expected Roberts and Kennedy to enforce the statute’s most natural meaning, and hold that “an exchange established by the State” actually was limited to exchanges established by states.

Indeed, barely a year ago, when both Roberts and Kennedy joined a very different majority of Justices rejecting the administration’s attempt to effectively re-write the Clean Air Act in service of the administration’s greenhouse gas regulations, they stressed that “[w]e expect Congress to speak clearly if it wishes to assign to an agency decisions of vast “economic and political significance.”

The key word, it seems, was “agency.” For in this case, Roberts and Kennedy recognized that Congress had not spoken clearly in support of this interpretation, but they (and their fellow majority of Justices) saw it as effectively committing to themselves, rather than the agency, this particular decision of vast economic and political significance.

It is a decision rich with irony. For example: the Chief Justice refuses to give Chevron deference to the IRS’s interpretation of the statute because “[i]t is especially unlikely that Congress would have delegated this decision to the IRS, which has no expertise in crafting health insurance policy of this sort.” Never mind that just three years ago the Chief Justice himself saved the Affordable Care Act’s individual mandate – another of the three core ACA features shaping the Chief Justice’s statutory interpretation in King – by interpreting it as a tax.

Furthermore, while purporting to be tasked with vindicating Congress’s intent, Roberts and the majority take an unsubtle swipe at then-Speaker Nancy Pelosi. The majority’s opinion exhumes a Felix Frankfurter article’s description of a fictional senator who tells his colleagues, Pelosi-ishly, that “‘I admit this new bill is too complicated to understand. We’ll just have to pass it to find out what it means.”

But the King decision’s most significant irony is that in service of preserving and protecting Obamacare, the Court has significantly reinforced and reinvigorated the “major questions” doctrine, a doctrine ordinarily associated with conservatives’ efforts to restrain the administrative state by infusing the interpretation of regulatory statutes with structural constitutional concerns – namely, that the courts must not presume that Congress delegates vast powers to regulatory agencies through obscure statutes. It is, as I indicated earlier, a doctrine most commonly associated with FDA v. Brown & Williamson Tobacco Corp., which held that the FDA exceeded its statutory limits by attempting to regulate tobacco.

As mentioned earlier, we saw this doctrine arise last year in Utility Air Regulatory Group v. EPA, in which the Court’s five-Justice majority refused to extend Chevron deference to the EPA’s interpretation of the Clean Air Act, and held that the administration’s greenhouse gas emissions regulations could not be squared with the best interpretation of the Clean Air Act’s plain terms.

And recently we’ve seen it, repeatedly, in the D.C. Circuit. Indeed, Judge Janice Rogers Brown invoked it in her dissent from the court’s denial from rehearing en banc in the very litigation that shortly thereafter became Utility Air Regulatory Group. More significantly, it has been featured prominently in that court’s majority opinions, too. Last year, in Loving v. IRS, the court invoked Brown & Williamson in holding that the IRS was unreasonable in interpreting its statutory jurisdiction over “the practice of representatives of persons before the Department of the Treasury” to cover independent tax-preparation assistants. Two years earlier, the D.C. Circuit invoked Brown & Williamson’s “major questions” doctrine to strike down the EPA’s cross-state air pollution rule (a decision eventually reversed by the Supreme Court).

These cases reflect the “major questions” doctrine’s usual association with conservative skepticism of expansive regulatory power. (Utility Air Regulatory Group’s majority was a familiar five-Justice conservative lineup; the aforementioned D.C. Circuit opinions were written by Judge Brett Kavanaugh.) Of course, the doctrine is not exclusively of conservative valence: in Gonzales v. Oregon(2006), the liberal Justices and Kennedy invoked the doctrine to deny Chevron deference to the Bush Justice Department’s interpretation of the Controlled Substances Act. But it is of primarilyconservative vintage, reflecting the nondelegation doctrine’s continued viability not as a means to strike down statutes, but as a rule of interpreting statutes narrowly rather than presuming too often the delegation of immense regulatory power into agency hands.

A decade ago, Cass Sunstein attempted to square the major questions doctrine with the Chevron deference framework by limiting its use in displacing agency discretion. He urged judges to employ the major questions doctrine at Chevron’s Step One – that is, in initially trying to ascertain whether the statute’s meaning is clear. But he urged judges not to employ the doctrine at Chevron’s Step Zero – i.e., in trying to decide whether Congress delegated interpretive authority to the agency in the first place, or whether instead the court should simply interpret the statute on its own without any concern for the agency’s interpretation. Sunstein could not have been more emphatic:

I believe that despite some of their language, MCI and Brown & Williamson are best regarded as Step One cases, not as Step Zero cases. The reason is that there is no justification for the conclusion that major questions should be resolved by courts rather than agencies. In fact, there are two problems with that conclusion. The first is that, as with the distinction between jurisdictional and non-jurisdictional questions, the difference between interstitial and major questions is extremely difficult to administer. Even if sensibly administered, it raises doubts about an array of judicial decisions, including Chevron itself. The second problem is that expertise and accountability, the linchpins of Chevron’s legal fiction, are highly relevant to the resolution of major questions; it follows that so long as the governing statute is ambiguous, such questions should be resolved.

In King the Court rejects Sunstein’s advice, refusing to extend Chevron deference to the administration’s interpretation of an ambiguous statute because the Court held first that Congress could not have delegated the interpretive matter to the agency. After King v. Burwell, the “major questions” doctrine is emphatically a Chevron Step Zero question – a welcome development in and of itself. Before even beginning to apply Chevron’s two-step approach, the courts will need to ask whether the policy matter at hand is of such economic or political significance that it cannot be presumed to have been committed to the agency’s discretion by Congress. Much like the Court said, inWhitman v. American Trucking, that an agency cannot “cure” a nondelegation doctrine problem by adopting a narrowing construction of the statute by its own volition, it will fall to the courts rather than the agencies to resolve a statute’s implications under the “major questions” doctrine before proceeding to apply Chevron’s two-step deference framework.

Of course, Chevron deference does not always facilitate the expansion of the administrative state, and the abolishment of Chevron deference (as some, especially on the right, increasingly would like to see happen) would not itself restrain the administrative state’s growth.

The fundamental problems inherent in King’s interpretation of the Affordable Care Act, like the fundamental problems inherent in the Act itself, are legion. But its promotion of the major questions doctrine, as a matter of administrative law, may prove to be of great benefit in other cases.

Adam J. White is counsel with Boyden Gray & Associates, and an adjunct fellow at the Manhattan Institute. His firm filed an amicus brief in King on behalf of the Galen Institute, arguing that the major questions doctrine and federalism considerations favored the challengers instead of the administration.

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