Notice & Comment

From Justice Stevens’ Papers—Justice Stevens Crafted the Chevron Two-Step Test in an Afternoon, by Isaiah McKinney

Last month, the Supreme Court heard oral arguments in Loper Bright Enterprises v. Raimando and Relentless Inc. v. Department of Commerce, both of which asked the Court to overrule Chevron. By overruling Chevron, what the parties are really asking is that the Court overrule the two-step test from the beginning of the case, not that the Court overrule the final holding that the EPA’s interpretation of the Clean Air Act was correct. Under the Chevron two-step test, courts defer to agencies’ reasonable interpretations of ambiguous statutes. First, courts ask if the statute is ambiguous. If it is, then the court will defer to the agency’s interpretation so long as it is reasonable. The Chevron two-step has become almost a law in and of itself, and Chevron is the most cited administrative law case of all time. 

Justice Stevens stated that when he penned Chevron, he did not think he was revolutionizing the law. It seems hard to argue that one of the most cited administrative law cases of all time did not change anything. But after looking at his papers, and as I explain in a forthcoming law review article, his earlier drafts of Chevron largely followed the jurisprudence of the time. And scholars, like Thomas Merrill, have noticed how most of the opinion does not seem to follow from the two-step standard of review. Professor Merrill wondered if Justice Stevens wrote the Chevron two-step test after drafting the rest of the opinion. He did indeed. In fact, Justice Stevens wrote the test in an afternoon. 

This summer I went to the Library of Congress and looked at Justice Stevens’ papers. Included in his papers on Chevronwere several drafts.[1] His first draft was dated May 25, 1984, and it was a partial draft—only eleven pages. It started with an introduction and the procedural posture, both of which map closely to the final opinion. Then Justice Stevens turned to the statutory history, skipping the standard of review section that would make this case famous. The rest of the draft focused on the text of the statute. Justice Stevens was perplexed by the statute, and he concluded his draft by explaining that there are two possible interpretations:

Thus, this much is clear from the face of the statute. If a brand new factory that will emit over 100 tons of pollutants is constructed in a nonattainment area, that plant must obtain a permit pursuant to §172(b)(6) and in order to do so, it must satisfy the §173 conditions, including the LAER requirement. If, however, an old plant containing several large emitting units is to be modernized by the replacement of one unit emitting over 100 tons of pollutant, the question whether the new unit must satisfy the LAER requirement depends on whether the individual unit, or the entire plant, is regarded as the major statutory source.[2]

Four days later, on May 29, Justice Stevens wrote another, more thorough draft, also labeled “First Draft,” probably because it was the first complete draft. This draft included an in-depth discussion of the legislative and the regulatory history, but still no standard of review.[3] The second through fourth drafts were not included in his papers. 

But in his fifth draft, dated June 7, Justice Stevens included a standard of review section:

The Court of Appeals addressed the wrong question in reviewing the regulations at issue. Once it determined, after its own examination of the legislation, that Congress did not actually have an intent regarding the applicability of the bubble concept to the permit program, the question before it was not whether in its view the concept is “inappropriate” in the general context of a program designed to improve air quality, but whether the Administrator’s view that it is appropriate in the context of this particular program is a reasonable one.[4]

This text also included a footnote:

When Congress has implicitly left a gap for the agency to fill, and the agency has been accorded general authority to prescribe such regulations as are necessary to fulfill its statutory mandate, generally a court may not substitute its own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency. . . . The court need not conclude that the agency construction was the only one it permissibly could have adopted to uphold the construction, or even the reading the court would have reached if the question initially had arisen in a judicial proceeding.[5]

From this draft, one can see why Justice Stevens said that he did not think Chevron changed administrative law jurisprudence. Here, he was really just restating the deferential rules that courts applied at the time. In that same footnote, Justice Stevens also quoted United States v. Shimer, which stated that if the “agency’s choice represents a reasonable accommodation of conflicting policies that were committed to the agency’s care by the statute,” courts “should not disturb it unless it appears from the statute or its legislative history that the accommodation [wa]s not one that Congress would have sanctioned.”[6] The test that Justice Stevens created in his fifth draft is not that different from Shimer—both tests centred on congressional delegation and the reasonableness of the agency’s interpretation. 

This draft also echoes the 1944 NLRB v. Hearst Publications, Inc. decision, where the Court deferred to the agency’s application of a statutory term. The court explained that it would not “substitute its own” factual inferences for those of the agency, but a court could decide statutory questions de novo if those questions “ar[ose] in the first instance in judicial proceedings.” Justice Stevens used very similar language to both those quoted phrases in his fifth draft. One difference though, is that Hearst stated that court could not substitute its own factual inferences for those of the agency, but Justice Stevens wrote that a court would generally not “substitute its own statutory construction for that of the agency.”[7] By pivoting to statutory interpretations, rather than factual ones, Justice Stevens may have been squaring Hearst and Shimeron the issue of legal versus factual deference. But even taking this difference into account, Justice Stevens’ test in this draft reads as an application of the jurisprudence of the time, not a brand-new test.

Later that same day, Justice Stevens wrote his sixth draft, which included the two-step test:

Whenever a court is required to review an agency’s construction of the statute which it administers, it may be confronted with two quite different questions. First, always, is the question whether Congress has directly spoken [to] the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the Court, as well as the agency, must obey the unambiguously expressed intent of Congress. If, however, the statute is silent or ambiguous with respect to the specific issue, the question for the Court is whether the agency’s answer is a permissible interpretation of the statute. That, of course, is a different inquiry than the question that might confront a court that was authorized to place its own interpretation on an ambiguous statute.[8]

Much of language of the test in this draft is identical to the language in the final opinion. While Justice Stevens’ draft written earlier in the day appears to be applying the jurisprudence of the time, this sixth draft created a bright line test which was not found in any prior cases. 

In one afternoon, Justice Stevens went from applying the precedents of the past forty years, to creating the test that would both revolutionize and settle administrative law for the next forty. Prior to Chevron, the Court had been wrestling with what standard of review to apply to administrative interpretations. Till about 1940, the Court had usually applied the contemporaneous and customary canons of construction. From 1940 until Chevron, the Court had adopted a much more deferential standard of review in cases like Gray v. Powell, Hearst PublicationsSkidmore v. Swift & Co., and Shimer. But the Court did not apply a deferential standard of review in all administrative interpretation cases, as Judge Friendly explained in Pittson Stevedoring Corp. v. Dellaventura when deciding whether to defer to the agency’s interpretation: “We think it is time to recognize . . . that there are two lines of Supreme Court decisions on this subject which are analytically in conflict, with the result that a court of appeals must choose the one it deems more appropriate for the case at hand.” 

But after Justice Stevens penned the Chevron opinion, the Chevron two-step became the controlling standard of review until the present day. In the remaining six months of 1984 alone, Chevron was applied three times in the D.C. Circuit. In 1987, in INS v. Cardoza-Fonseca, three years after Chevron, Justice Scalia stated that “Chevron . . . has been an extremely important and frequently cited opinion, not only in this Court, but also in the Courts of Appeals.” After Chevron, there was no longer any question about what standard of review to apply. That little test that Justice Stevens drafted in an afternoon became the face of administrative law for forty years. But in the Relentless and Loper Bright cases, that little test might be overruled. What was done in an afternoon, may also be undone in a morning, only forty years and nearly eight thousand citations later.

Isaiah McKinney is an attorney and graduated cum laude from Wake Forest University School of Law.

[1] On a side note, for all of you handwriting experts out there, I would love it if you would go and read his handwritten notes. I am really curious as to what he said, but his handwriting was less than clear. 

[2] Chevron v. Nat. Res. Def. Council, JPS Draft #1 [2$1005i, 2$1005if], at 1–2 (May 25, 1984).

[3] Chevron v. Nat. Res. Def. Council, JPS Draft #1 [2$1005i, 2$1005if] (May 29, 1984).

[4] Chevron v. Nat. Res. Def. Council, JPS Draft #5 [chevron,chevroni], at 5–6 (June 7, 1984).

[5] Id. at 5–6 n.9 (internal quotations and citations omitted).

[6] 367 U.S. 374, 383 (1961).

[7] NLRB v. Hears Publications, Inc., 322 U.S. 111, 130 (1943).

[8] Chevron v. Nat. Res. Def. Council, JPS Draft #6 [chevron,chevroni], at 5–6 (June 7, 1984).

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