In Loper Bright, the Supreme Court repudiated Chevron’s across-the-board presumption that statutory ambiguities should be treated as implied delegations of discretion to agencies. But Loper Bright did not repudiate the possibility that a court might properly find implied delegation in some cases. Although Loper Bright declared that “statutes, no matter how impenetrable, do—in fact, must—have a single, best meaning,” the Court also recognized that sometimes the “best reading of a statute is that it delegates discretionary authority to an agency.” In those cases, Loper Bright made clear, judicial deference to (not merely respect for) an agency’s reasonable statutory construction is still appropriate.

How should courts identify such cases? Loper Bright noted that a statute that instructs an agency “to regulate subject to the limits imposed by a term that leaves agencies with flexibility, such as ‘appropriate’ or ‘reasonable,’” should be construed as an implied delegation to the agency of the authority to give more definite content to those terms. What sort of statutory language falls within this category? Beyond the two specific examples the Court mentioned, Loper Bright did not offer much further guidance. In the coming years, lower courts are likely to confront hundreds of cases in which one party (typically the agency) asserts that the statutory language at issue “leaves [the] agenc[y] with flexibility,” while the adverse party insists that this statutory language has a single best meaning that the court must determine. How should courts resolve these disputes?

The best way forward may be to look to the past.In a recent article, I argue the canonical pre-Chevron cases Gray v. Powell and NLRB v. Hearst Publications, together with their antecedents and progeny, provide a useful framework—the “Gray doctrine”—for whether, post-Loper Bright, a reviewing court should construe an unclear statutory provision as an implicit delegation to the responsible agency.  The core of the Gray doctrine—and the key feature that distinguishes it from the Chevron doctrine—is a distinction between two situations in which an agency might give more definite content to unclear statutory language:

• Sometimes, in order for the agency to exercise its delegated functions, the agency must determine the boundaries of an imprecise statutory category, such as “employer,” “producer,” “compensation,” “small,” or “area.” For these sorts of terms, even though some items are clearly “in” and some are clearly “out,” there is an intermediate zone in which applying the statutory language will require making contestable line-drawing decisions. Under the Gray doctrine, courts presume that when a statute uses such imprecise terms, Congress has implicitly delegated the authority to make the necessary line-drawing decisions to the responsible agency. (That presumption, however, is subject to some important caveats, much as Chevron’s presumption was. The presumption only applies when the agency has made an authoritative decision through a relatively formal process, and even when it has, the reviewing court retains the ability to reject an agency’s line-drawing decision that rests on an unreasonable reading of the statute.)
• By contrast, many hard interpretive questions do not involve line-drawing but instead require a choice among a small number of discrete alternatives. Examples would include deciding whether a statutory term is being used in its ordinary sense or a special technical sense, which object a modifier modifies, whether a term has a consistent meaning in different statutory sections, and whether a statute requires or forbids an agency from taking a particular factor into account when making its decision. The Chevron doctrine called for deference to the agency in such cases, but the Gray doctrine does not.

Using the Gray doctrine to determine when, under Loper Bright, the best reading of a statute is that it leaves the agency with flexibility, would be both legal—consistent with § 706 of the Administrative Procedure Act (APA) as interpreted by Loper Bright—and desirable.

With respect to legality, Gray and Hearst were well-established leading cases when the APA was enacted in 1946. Almost all expert commentaries at the time (including but not limited to the Department of Justice’s APA Manual) concluded that § 706 codified rather than altered the prevailing standard of review. Indeed, Loper Bright acknowledged (though somewhat equivocally) that § 706 restated the approach to judicial review that prevailed at the time the APA was passed. Furthermore, courts adhered to a version of the Gray doctrine immediately following the APA’s enactment and for decades afterwards. This judicial practice, which was much more consistent than has sometimes been alleged, cuts against the notion that the APA repudiated Gray. Moreover, although the case law contains only a few explicit discussions of the Gray doctrine’s relationship with § 706, the discussions that do exist support the claim that post-APA courts construed § 706 as preserving rather than displacing Gray. Therefore, although Loper Bright sends mixed signals regarding the status of cases like Gray and Hearst, it is reasonable—indeed, more plausible—to read Loper Bright as accepting that the Gray doctrine is compatible with § 706, even if the Chevron doctrine—which, as Loper Bright stressed, emerged “decades later”—was not.

That reading has substantial practical advantages. Perhaps most importantly, courts, especially textualist courts, lack the tools to reliably and consistently resolve the line-drawing decisions that Gray leaves to agencies. Consider the Marine Mammal Protection Act. That Act generally prohibits projects that would harass protected marine mammals. However, the Act authorizes the Interior Department to issue permits for projects that would harass only “small numbers” of those protected mammals. Harassment that affects less than 1% of the total population of a given species—say, right whales—would clearly qualify as harassment that affects only a “small number[]” of such whales, while harassment that affects more than half of the total population clearly would not. What about activity that would harass 30% of the population? Is 30% a “small number” of whales? What about 5%? Or 15%? The statute provides no textual basis for determining the proper threshold for smallness. Any such determination would presumably have to balance conflicting policy goals while also considering the interest in efficient implementation. A court could make this sort of determination, just as courts sometimes give more definite content to amorphous terms like “reasonable.” But it is more natural to think of these sorts of policy-based line-drawing decisions as the province of the executive branch. Even if one rejects the comparative institutional competence as a sufficient justification for Chevron—as the Loper Bright Court did—that consideration is still important and supports integrating the more limited Gray doctrine into the Loper Bright framework.

Additionally, although the Gray presumption, like the Chevron presumption, may be a legal fiction, the presumption that Congress intended an imprecise statutory term as delegation of authority to the agency is more empirically plausible in the Gray context than in the Chevron context. When Congress delegates to an agency the power to apply imprecise statutory language to particular situations, it is natural to assume that Congress intended and understood the statute as giving the agency the authority to make the inevitable line-drawing decisions regarding the scope of those imprecise terms.

Integrating the Gray doctrine into Loper Bright’s implicit delegation inquiry would mean that a reviewing court confronted with a challenge to an agency’s interpretation of a statute would proceed in the following steps:

• At step one, the court would ask whether the statute expressly delegates to the agency the authority to define or interpret the contested provision of the statute. Loper Bright explicitly holds that such express delegation is lawful, and that a reviewing court should uphold an agency’s reasonable exercise of such definitional authority. If there is no express delegation, then the court proceeds to step two.
• At step two, the court exercises its independent judgment to resolve all statutory ambiguities that take the form of pure or abstract questions of law. Such questions typically involve a choice among a limited number of discrete alternatives. Although the court should respectfully consider the agency’s views on these questions (à la Skidmore), resolution of these questions of law is the responsibility of the court. This is the key distinction between the Loper Bright/Gray doctrine and the Chevron doctrine. Resolving these pure legal questions may be sufficient to decide the case. But it is possible that after the court resolves all pure questions of law, some residual ambiguity remains. In particular, a contested statutory term may be inherently imprecise, with a continuum of related meanings, such that applying the statute requires deciding where to draw the line between those items that fall into the relevant statutory category and those that do not. If such residual imprecision remains, the court proceeds to step three.
• At step three (the rough analog to the old Chevron “step zero”), the court must decide if the statute’s use of an imprecise term constitutes an implied delegation of line-drawing authority to the agency. Although the default presumption is that it does, the court should typically decline to find such an implied delegation if the agency has announced its view in a non-binding statement that was not issued pursuant to relatively formal procedures (such as a notice-and-comment rulemaking or a formal hearing), or if the line-drawing before the court is of such extraordinary significance that it is inconceivable that Congress lacked a specific intent. In these circumstances, then the court must decide for itself whether the agency’s line-drawing decision is correct. But if none of those limits applies, the court should treat the statutory imprecision as an implicit delegation to the agency and proceed to step four.
• At step four, the court should uphold the agency’s line-drawing decision as long as that decision is reasonable. At this step, the reviewing court gives the agency’s decision genuine deference, not merely Skidmore respect, because the court has concluded that the statute’s use of an imprecise term has implicitly delegated the necessary line-drawing decisions to the agency—a possibility that Loper Bright explicitly recognizes. The court must still police the boundaries of the statutory delegation by ensuring that the agency’s decision is reasonable. But if the court is satisfied that the agency has stayed within those boundaries, the court should approve the agency’s exercise of its discretion to decide how an imprecise statutory term ought to apply.

That approach to judicial review of agency statutory interpretations would be consistent with the APA, with Loper Bright, and with several decades’ worth of pre-Chevron case law. Incorporating Gray would also have significant practical advantages, promoting efficient and effective government and sparing judges from the need to find the “correct” answer to questions that traditional tools of legal interpretation are simply not capable of answering. Invoking the Gray doctrine to resolve such cases would also be clearer and more analytically sound than justifying deference by (mis)characterizing questions of law application as questions of fact. The latter approach—which is already appearing in some of the post-Loper Bright case law, most notably the Court’s decision in Seven County Infrastructure Coalition—risks sowing confusion.

Debate and disagreement over the meaning of Loper Bright, especially its suggestion that a finding of implicit delegation to the agency might still be appropriate in some cases, is already bubbling up in the lower courts. Over the next few years, as the post-Loper Bright standard of review doctrine starts to take shape, litigants (especially agencies) and judges have an opportunity to steer the doctrine in a productive direction. One way they can do so is by recognizing the implicit wisdom in much of the pre-Chevron case law, and advancing, in appropriate cases, the position that Loper Bright’s implicit delegation prong incorporates the Gray doctrine.

Matthew Stephenson is the Henry L. Shattuck Professor of Law at Harvard Law School, where he teaches administrative law, legislation and regulation, anti-corruption law, and political economy of law. His research focuses on the application of positive political theory to public law, particularly in the areas of administrative procedure, anti-corruption, judicial institutions, and separation of powers.