Notice & Comment

This Word Salad Needs a Dressing, by Robert Charrow

There is considerable buzz that the demise of Chevron is at hand.  The Court expressly teed up the issue when it granted certiorari in Loper Bright Enterprises v. Raimondo, No. 22-451 (U.S. May 1, 2023).  In part, the Court agreed to consider whether it “should overrule Chevron.”   Loper, though, may warrant more than mere buzz; it could prove far more significant than a stake in the heart of an obscure doctrine of deference.  At issue in Loper is not so much whether a legislative regulation should be given deference where the organic legislation is silent, but rather whether the agency has any authority whatsoever to issue a rule against a backdrop of legislative silence.[1]  Loper places at risk the continued ability of agencies to “gap-fill,” the grist of the administrative state.  Further, if Loper is decided in favor of the petitioners, it could further blur the distinction between a legislative rule, which, for deference purposes, would be issued only to eliminate ambiguity, and an interpretive rule, which also issues to eliminate ambiguity.  

No matter which way Loper is decided, the distinction between a legislative and interpretive rule will remain obscure.  I’ve been doing administrative law federally for quite some time and remain perplexed by the difference between an interpretive[2] and legislative rule.  Tomes have been written on the subject and courts have struggled to articulate a meaningful difference, with little success.  In part, this is a consequence of the Administrative Procedure Act (“APA” or “Act”) itself. The Act is a compact linguistic morass, short by today’s standards, but rife with fuzzy words, misplaced phrases, and errant punctuation.  Many of the critical terms are not defined, and those that are appear embedded in sentences that are almost as ambiguous as that chestnut, “visiting relatives can be boring.”  So, after 50 years of doing this stuff, I’m confused and because I’m a generous guy, I’d like to share my confusion.

Let’s start with what should be simple basics.  The term is not redundant; not all basics are simple—e.g., quantum mechanical basics can be complex.  Here are the blackletter, court ordained definitions.  Legislative rules “are those that have the ‘force and effect of law,’ while ‘interpretive rules” are those that merely ‘advise the public of the agency’s construction of the statutes and rules which it administers.’” Perez v. Mortgage Bankers Assn., 575 U. S. 92, ___ (2015) (slip op., at 2–3).  “[A] court is not required to give effect to an interpretive regulation.”  Chrysler Corp. v. Brown, 441 U.S. 281, 315 (1979) (citations omitted). See also Shalala v. Guernsey Memorial Hosp., 514 U.S. 87, 100 (1995) (interpretive rules “do not have the force and effect of law and are not accorded that weight in the adjudicatory process[.]”).  

But all of this really begs the question: are interpretive rules merely fanciful musings of an agency with few, if any, real world ramifications?  If that were the case, why would an agency bother issuing an interpretive rule—it is not legally binding, courts are not required to accord it weight in an adjudicatory proceeding, and Chevron deference doesn’t apply.  And if they don’t have the force and effect of law (whatever that means) and impose no legally binding requirements or norms, but are merely advisory, who should really care about an agency’s advice untethered to a legal norm or requirement?  If the difference relates to how a court treats the two procedurally, then that doesn’t help anyone to figure out, in advance, whether something is an interpretive or legislative rule.  It only predicts what a court will do once it has decided the rule’s pedigree.  And it certainly doesn’t help the agency decide whether notice-and-comment rulemaking is warranted, a requisite for a legislative—but not interpretive—rule.

There must be more to an interpretive rule than an agency’s whimsical thoughts:  it spells out the agency’s interpretation of ambiguous provisions in a statute and, in so doing, tells us what the agency believes a particular term in the statute means.  The definition of “rule” may help us further tease out the essence of an interpretive rule.  According to the APA, a “rule” means “the whole or part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy . . . . .”  5 U.S.C. § 551(4).  The words “implement, interpret, or prescribe” all describe actions taken with respect to the “law.”  Thus, a rule can implement the law, it can interpret the law, or it can prescribe the law.  And a rule can just as easily implement or prescribe a policy; but it cannot, almost by definition, interpret a policy.[3] Thus, an interpretive rule under the APA appears to be one that interprets the law, which means, among other things, that it addresses ambiguities in the statute.  Not the most helpful definition; indeed, rather circular.  It seems doubtful linguistically that an interpretive rule can “implement” and likely, cannot prescribe the law without bumping into its kissing cousin, the “legislative rule,” whose sine qua non is that it prescribes the law, but it can, in addition, interpret and implement the law.

On top of  this linguistic gibberish sits Chevron deference, which only applies where there is an ambiguity or silence in the organic legislation.  Chevron deference forces courts to engage in the near-hopeless exercise of meta-interpretation—namely, is something ambiguous.  Page through the dictionary.  How many words carry only one definition—a scant few.  More than 95 percent of the words in the English language have more than one meaning, meaning they are potentially ambiguous.  That does not even count syntactic or pragmatic ambiguity or errant punctuation that can also create ambiguity.  While the Chevron test sounds nice—the two-step jig—it really doesn’t advance the ball. Most legislative rules though do not address traditional ambiguities.  Rather, they fill in statutory gaps—they implement or prescribe when the statute is silent.  They’re big rules, rather than little ones.  Arguably, Chevron should not apply to these rules where the agency is exercising its significant authority.  However, where Chevron should apply (i.e., those rules resolving, through interpretation, manifest linguistic ambiguity in a statute), it does not apply, because they are generally interpretive rules issued without notice-and-comment formalities. 

This brings us to the nub of the Chevron conundrum.  Chevron is at its deferential apex when a statute is silent and the agency is gap-filling.  Filling in statutory gaps is legislating by proxy and this delegation, which is nowhere to be found in the Constitution, warrants more rather than less judicial scrutiny, i.e., less deference.  Chevron, though, mandates the precise opposite:  it provides greatest deference to those rules that arguably should not even exist because they have no statutory basis; the statute is silent.  

Which brings us back to the real difference between interpretive rules and legislative ones.  The rule’s character really isn’t a factor—legislative rules can interpret and interpretive rules can legislate.  The real, practical difference is the rule’s impact on those outside of government.  An interpretive rule has a modest economic impact while a legislative one has a much grander impact.  This paradox also reflects the agency’s calculus of guessing wrong—if the rule is going to have a small impact, then the likelihood that anyone will sue over it is small and the need to ensure procedural regularity through notice-and-comment is not as great.  When a small rule is involved, the consequences of bobbling the ball are no more than an “error” in the box score; there are no runners in scoring position.  But when a big rule is involved, one goes through notice-and-comment as a precaution because the likelihood of suit is great and in many cases, certain.

The big-versus-small dichotomy finds no basis in the APA.  But then again, the words “interpret” and “prescribe,” as used in APA § 4, are not defined in § 1.  Instead of having any lexical anchor, the big-versus-small distinction reflects reality more than phrases that sound good, but really, carry no meaning—such as the “force and effect of law” and “reflects the agency’s current views.”  Differentiating a legislative and interpretive rules based on their impact reflects conceptually the Court’s evolving “major questions doctrine.”  West Virginia v. EPA, No. 20-1530, at *18 (June 30, 2022).

Robert Charrow is a Principal Shareholder of Greenberg Traurig, LLP (Washington, D.C.) and former General Counsel of the United States Department of Health and Human Services.

[1] Loper is a fishing case.  The Magnuson-Stevens Fishery Conservation and Management Act, which governs commercial fishing in federal waters, authorizes the National Marine Fisheries Service (NMFS) to require vessels to carry federal observers on board to enforce agency fishing rules, but, aside from a few instances not relevant, the law is silent as to whether the agency may require vessel owners to pay the salaries of the federally mandated observers.  The agency issued a rule requiring fishing vessels in certain waters to pay the salaries of federally mandated observers.  Various commercial fishers challenged the rule.  The Court of Appeals held that because the statute did not speak to the extent to which an agency could compel the fishing vessels to pay the full salaries of the observers, the agency’s rule was entitled to deference under Chevron.  Because it was not an unreasonable exercise of discretion, the court declined to vacate the rule.    

At issue before the Court is whether “silence” is properly viewed as a form of ambiguity sufficient to trigger Chevron deference or, alternatively, whether silence reflects the absence of delegated authority to issue the rule altogether. 

[2] The APA uses the term “interpretative.”

[3] The APA creates fives classes of rules for which notice-and-comment is not necessary:  “interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice.” 5 U.S.C. § 553(b)(3)(A).  An interpretive rule, therefore, appears to be distinct from a statement of policy, which makes sense.  Also, interpreting a policy, while not impossible, certainly seems odd.      

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