The Volokh Conspiracy

Among the Supreme Court’s seven cert grants today were the potentially important takings case Ilya notes below and another potentially important administrative law case: City of Arlington v. FCC. In City of Arlington (consolidated with another case), the Court limited the grant to the question whether Chevron deference should extend to agency interpretations of ambiguous statutory language that defines the scope of an agency’s jurisdiction. This is an important question that has divided the lower courts and the Supreme Court has never directly addressed. It’s also one that is likely to divide the current court (though along what precise lines I am reluctant to predict).

This question is of particular interest to me because it was the subject of an article I co-authored with GMU’s Nathan Sales, “The Rest Is Silence: Chevron Deference, Agency Jurisdiction, and Statutory Silences,” with whom I clerked on the D.C. Circuit. In this article, we explained why Chevron deference should not apply in such contexts, placing us firmly on the side of Justice Brennan and opposed to Justice Scalia. Brennan and Scalia debated this question in Mississippi Power & Light Co. v. Mississippi ex rel. Moore, though the Court ducked the issue. Now it appears they will finally resolve it.

For prior posts on this issue, see here, here, and here.

A news release from the Competitive Enterprise Institute notes that the attorneys general of Michigan, Oklahoma, and South Carolina have joined their lawsuit challenging the constitutionality of portions of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The original suit challenged several Dodd-Frank provisions, including creation of the Consumer Financial Protection Board. The states’ challenge focuses on Title II’s “orderly liquidation authority,” which allows the federal government to seize allegedly troubled financial institutions with minimal notice or recourse. According to the states, these provisions lack adequate due process and could threaten state pension funds. Here’s the amended complaint.

Last term, in Sackett v. Environmental Protection Agency, a unanimous Supreme Court rejected the EPA’s effort to deny private landowners an opportunity to challenge the agency’s assertion of jurisdiction over their land. The Sacketts wanted to build a home in a subdivision, but the EPA concluded the Sacketts’ land to contain jurisdictional wetlands under the Clean Water Act and issued an order requiring the Sacketts to cease construction of their home and undertake specified restoration efforts. Failure to comply with the order was itself punishable with substantial fines, in addition to any for violating the CWA. The Sacketts sought judicial review of the order, on both statutory and constitutional grounds, to no avail in the lower courts. They prevailed in the Supreme Court, however, completely on statutory grounds, leaving the due process questions to another day.

The Court based its decision on the Administrative Procedure Act’s presumption in favor of judicial review of final agency actions and the CWA’s failure to expressly preclude such review. But what if the CWA had precluded review? Would the Sacketts have been entitled to judicial review under the Due Process Clause? And more broadly, given the uncertainty surrounding the scope of federal wetland regulation, and the lack of fully enforceable jurisdictional regulations, does current CWA enforcement more generally comport with the principles of due process? I explore some of these questions in a forthcoming article in the Cato Supreme Court Review, “Wetlands, Property Rights, and the Due Process Deficit in Environmental Law.” The abstract is below.

In Sackett v. Environmental Protection Agency a unanimous Supreme Court held that private landowners could seek judicial review of an Administrative Compliance Order issued by the Environmental Protection Agency alleging that their land contained wetlands subject to regulation under the Clean Water Act. The Court’s decision rested on statutory grounds, but the same result may have been dictated by principles of due process. Under the CWA, federal regulators have asserted authority over waters and dry lands alike and sought to expand federal jurisdiction well beyond constitutional limits. Under existing regulations, landowners have little notice or certainty as to whose lands are covered, under what authority, or with what effect. As a consequence, federal wetlands regulations, as currently practiced, violates important due process principles.

Earlier this month, several of the parties challenging the Environmental Protection Agency’s decision to regulate greenhouse gases under the Clean Air Act filed petitions for panel rehearing or rehearing en banc in Coalition for Responsible Regulation v. EPA, in which the U.S. Court of Appeals for the D.C. Circuit turned away all of the state and industry challenges to the EPA’s rules. I summarized the court’s decision here, and provide greater background on the EPA’s regulations and associated policy issues here.

The en banc petitions stress the unusual magnitude and importance of the regulations at issue, as well they should, but that’s often not enough for en banc review. Nor are protestations that that the original panel muffed the merits (case in point), particularly where (as here) most of the issues could be resolved on traditional administrative law grounds. The industry argument that the panel erred in refusing to force the EPA to consider potential adaptation to climate change, for example, is a non-starter. Even if the panel got this question wrong (and I don’t believe it did), that’s not the sort of question that is worthy of en banc review.

There is one issue, however, that could well be en banc-worthy: the panel’s conclusion that industry petitioners lacked standing to challenge the EPA’s so-called “tailoring rule.” While the strict application of Article III standing requirements is nothing new on the D.C. Circuit, here the panel applied the standing rules to prevent the object of a government action from challenging the lawfulness of that action, on the grounds that the harm would not be redressable by a favorable ruling on the merits. Though a plausible reading of the relevant standing precedents, this is a holding that could insulate all manner of regulatory action from judicial review, and expand the already troubling, de facto agency authority to issue “waivers” or otherwise disregard applicable legal requirements.

A bit of background: The Clean Air Act requires the EPA to impose various regulatory requirements on stationary sources that have the potential to emit more than 100 or 250 tons per year of regulated pollutants. (The specific threshold depends on the type of facility.) As applied to traditional pollutants, these thresholds catch thousands of facilities. But applied to greenhouse gases — carbon dioxide in particular — they catch millions. This, the EPA claims, would be an “absurd” result because it would impose an insuperable burden on the EPA and cooperating state agencies. To remedy this, the EPA sought to “tailor” the Act’s requirements by substituting numerical thresholds of its own devising for those contained in the statute itself. So with a wave of its administrative hand, the EPA substituted 75,000 and 100,000 for 100 and 250, and reserved the right to lower the threshold at its discretion in the future.

Industry and state petitioners challenged the Tailoring Rule on the grounds that the EPA has no authority to rewrite the statute by administrative fiat. Applying the plain text of the statute, however, would result in more stringent regulation, not less. Larger facilities subject to the Tailoring Rule would not be guaranteed any direct relief from the rule’s requirements — save whatever relief would come from delay caused by the litigation — and therein lied the problem. If being subject to an illegal regulation were not itself sufficient for standing, all the companies could claim was that subjecting some portions of industry to stringent greenhouse gas permitting rules while exempting others would produce a competitive harm in the form of an unlevel playing field. Exempting some companies from the requirements could give exempted parties a competitive advantage against those who emit enough to still be regulated under the “tailored” rule. Yet unless Congress were to amend the Act (or the EPA were forced to adopt an alternative statutory construction), the larger facilities would be regulated no matter what.

Because the industry petitioners could not claim their suit would necessarily relieve them of any regulatory burdens, the panel concluded, industry petitioners lacked standing to sue. (Indeed, the panel went further and said there was no injury because the regulation of stationary sources was an inevitable consequence of the endangerment finding.) There is a logic to the D.C. Circuit’s reasoning — after all, if winning won’t relieve someone of any regulatory burdens, how could their claim be redressable? One possible response is that rejecting the “Tailoring Rule” could force the EPA to consider alternative ways to avoid the “absurd results” it fears from applying the Act as written to greenhouse gases — alternatives that might well exempt some of the industry petitioners from regulation — but the court closed that door by accepting the EPA’s interpretation of the Act in other portions of the opinion (and then conveniently ducking whether the EPA’s Tailoring Rule is itself permissible under the Act).

A consequence of this decision is that no party subject to the Tailoring Rule has standing to challenge its legality. Thousands of companies are forced to comply with the regulation, and none can have their day in court. Applied more broadly, this decision could have substantial implications, effectively giving agencies like the EPA carte blanche to issue rules selectively exempting politically favored constituencies from statutorily mandated rules. (Indeed, that’s exactly what happened here, as the EPA was well aware that trying to impose the Clean Air Act to stationary source emissions of greenhouse gases would produce a substantial political backlash.) That doesn’t mean the decision is wrong — the rule against taxpayer standing insulates many allegedly illegal government actions from judicial review — but it should raise some questions.

The decision also rests uneasily with the Supreme Court’s treatment of procedural rights in standing cases, which hold that requiring the government to observe such procedural rights is sufficient to satisfy the redressability requirement, even if the ultimate government action will be unchanged. So, for instance, if a plaintiff alleges a federal agency failed to conduct an Environmental Impact Statement under the National Environmental Policy Act, she does not need to allege that the agency would have made a different decision had the EIS been completed. The mere fact that she is injured as a consequence of the agency’s procedurally deficient action is enough. Yet under the D.C. Circuit’s reasoning, there is sufficient redressability for standing when an agency causes injury by failing to follow statutorily prescribed procedures, but not sufficient redressability for standing when an agency causes injury by adopting a regulation that violates the statute’s plain text. [Note: For purposes of standing, such allegations must be accepted as true, so the standing claim does not turn on whether the industry petitioners are correct on the merits on this point -- though, as it happens, they are.]

This aspect of the D.C. Circuit’s standing holding are also at odds with Massachuetts v. EPA. While not all would read the Clean Air Act to provide procedural rights, the Mass v. EPA majority did. Specifically, they held that Section 307(b)(1) of the Clean Air Act provides a “procedural right to challenge” an unlawful EPA action “as arbitrary and capricious,” so there was no need to show that allowing the EPA to regulate greenhouse gases would halt global warming. As the Mass v. EPA majority explained, “When a litigant is vested with a procedural right, that litigant has standing if there is some possibility that the requested relief will prompt the injury-causing party to reconsider the decision that allegedly harmed the litigant.” This case, too, is a challenge to an unlawful EPA action under Section 307(b)(1), and the industry petitioners are unquestionably injured by being forced to comply with the relevant permitting rules — and yet the D.C. Circuit held they did not have standing.

In Lujan v. Defenders of Wildlife, Justice Scalia explained “there is ordinarily little question” that one who is the object of government action has standing to challenge that action. Yet under the D.C. Circuit’s decision, no entity subject to the Tailoring Rule has standing to challenge it — and that might be enough to make the issue en banc-worthy.

UPDATE: Nathan Richardson comments at Common Resources here.

The U.S. Court of Appeals for the D.C. Circuit issued two significant decisions today.

In the first, Sherley v. Sebelius, a unanimous panel affirmed the district court’s grant of summary judgment to the federal government rejecting a challenge to federal funding of emryonic stem cell research. Chief Judge Sentelle wrote for the court. Judges Henderson and Brown wrote separate concurrences. Co-blogger Russell Korobkin has several posts on this litigation. (See here, and scroll down.)

In the second, R.J. Reynolds Co. v. FDA, a divided panel affirmed the district court’s grant of summary judgment to tobacco companies in their First Amendment challenge to the FDA’s new cigarette labeling rules. Judge Brown wrote for the court, joined by Senior Judge Randolph. Judge Rogers dissented.

As if I wasn’t already sufficiently behind on my blogging, I’ve also yet to post about the D.C. Circuit’s decision Tuesday striking down the EPA’s cross-state air pollution rule, or the petition for en banc reconsideration filed in the greenhouse gas litigation. Time permitting, there will be more to come on all these cases.

Today the House Committee on Oversight and Government Reform is holding a hearing on the Internal Revenue Service’s role in “Enforcing ObamaCare’s New Rules and Taxes.” Among the subjects of the hearing is a recent IRS rule authorizing tax credits and subsidies for the purchase of qualifying health insurance plans in federally-run exchanges. Although the plain text of the PPACA only authorizes tax credits in state-run exchanges, the IRS promulgated this rule to ensure the credits (and associated subsidies) are available nationwide. This rule will affect quite a few states because somewhere between 15 and 30 states (if not more) will fail to create exchanges by 2014. The rule is also illegal.

I have co-authored testimony for the hearing with Michael Cannon of the Cato Institute arguing that the IRS rule is not authorized by the PPACA. The testimony is largely based on our forthcoming article in Health Matrix. As we explain in the article, the rule is not authorized by the plain text of the PPACA, nor can it be justified by resort to the statute’s legislative history or congressional intent.

The most prominent critic of our position is Professor Tim Jost of Washington & Lee, who will also be testifying at the hearing. He criticized our position on the Health Affairs blog. Wednesday, Health Affairs posted our response. As we note, Jost has moderated and modified his position since he first critiqued our claim. More importantly, Jost fails to identify any statutory language or evidence from the legislative history that contradicts the plain text of the statute. Nor, for that matter, has the IRS. We’ll see if they have any more evidence in support of their position at the hearing.

The heart of Jost’s claim is that the PPACA’s supporters would have wanted tax credits to be available in every state. Perhaps so, but that’s not the bill that was enacted. They also believed every state would create their own exchanges (which explains why the CBO, among others, scored the bill as if every state would have an exchange). Had states acted as the PPACA’s supporters hoped and anticipated, there would be no issue. But the failure of states to fall in line hardly justifies the IRS’ effort to rewrite the statute after the fact.

For more on this issue, see my prior blog posts on the subject here, here, and here. See also some of the coverage our forthcoming paper has received, such as here and here.

UPDATE: A few comments in response to some of the queries and comments below.

First, I came upon this wrinkle in the law quite by accident, and well before the IRS proposed its rule, when preparing this article. I was not aware of the implications until much later.

Second, my interest in this sort of question — the scope of authority delegated to agencies — extends well beyond the PPACA. See, for instance, this article, which is quite relevant to the Chevron issues here.

Third, I oppose the IRS rule, first and foremost, because it is illegal. I was also critical of the Bush Administration for pursuing policies that conflicted with the relevant authorizing statutes (e.g. some of the Bush EPA’s illegal air pollution rules) even where I was sympathetic with some of the underlying policy preferences.

Fourth, it is misleading to say this is an effort, first and foremost, to eliminate tax credits. As out testimony and article note, for every $2 in tax credits allowed by the IRS rule, there are $8 in unauthorized appropriations (in the form of payments to insurance companies) and $1 in penalties imposed on employers. I have no opposition to the provision of tax credits for the purchase of health insurance — indeed, I like the idea of using such tax credits to eliminate the tax preference for employer-provided insurance — but I believe tax credits and outlays must be authorized by Congress, and neither was here. Some federal agency could unilaterally enact tax credits to the most deserving group imaginable on day one of a Romney administration, and if they weren’t authorized by Congress (and particularly if they triggered unappropriated outlays too), I’d be first in line to attack that policy as well.

This morning, in Intercollegiate Broadcast System v. Copyright Royalty Board, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit consisting of Judges Garland, Griffith, and Senior Judge Williams declared the Copyright Royalty Board to be unconstitutional under the Appointments Clause, and adopts a narrow fix. This was not a surprising development, as this issue has been brewing for some time (as I noted in these posts). Senior Judge Williams’ opinion for the court in begins:

Intercollegiate Broadcasting, Inc. appeals a final determination of the Copyright Royalty Judges (“CRJs” or “Judges”) setting the default royalty rates and terms applicable to internet-based “webcasting” of digitally recorded music. We find we need not address Intercollegiate’s argument that Congress’s grant of power to the CRJs is void because the provision for judicial review gives us legislative or administrative powers that may not be vested in an Article III court. But we agree with Intercollegiate that the position of the CRJs, as currently constituted, violates the Appointments Clause, U.S. Const., art. II, § 2, cl. 2. To remedy the violation, we follow the Supreme Court’s approach in Free Enterprise Fund v. Public Company Accounting Oversight Bd., 130 S. Ct. 3138 (2010), by invalidating and severing the restrictions on the Librarian of Congress’s ability to remove the CRJs. With such removal power in the Librarian’s hands, we are confident that the Judges are “inferior” rather than “principal” officers, and that no constitutional problem remains. Because of the Appointments Clause violation at the time of decision, we vacate and remand the determination challenged here; accordingly we need not reach Intercollegiate’s arguments regarding the merits of the rates and terms set in that determination.

This week RegBlog is publishing an online symposium on Mitt Romney’s regulatory proposals. Participants include Ronald Cass, William Funk, Jack Beermann, Richard Murphy, and yours truly. One piece will be posted each day. Ron Cass’ essay is here. Mine will appear tomorrow.

UPDATE: My contribution is now online here.

The State National Bank of Big Spring, Texas, the 60-Plus Association, and the Competitive Enterprise Institute filed suit against the Consumer Financial Protection Board alleging that the CFPB, as currently structured, is unconstitutional. Specifically the suit alleges that the CFPB lacks political accountability because, among other things, the President cannot remove the Bureau’s director save for cause and Congress cannot exercise control over the Bureau’s budget. Further, the suit notes, the Dodd-Frank statute limits judicial review of CFPB actions. “As a whole, Dodd-Frank aggregates the power of all three branches of government in one unelected, unsupervised and unaccountable bureaucrat,” commented former White House counsel C. Boyden Gray, who is representing the plaintiffs. Of note, CEI served as plaintiffs co-counsel in Free Enterprise Fund v. Public Company Accounting Oversight Board, which invalidated limitations on the removal of PCAOB members. CEI has more info on the suit here.

[Note: Corrected]

UPDATE: Boyden Gray and State National Bank of Big Spring CEO Jim Purcell have an op-ed in Friday’s WSJ on the unconstitutional aspects of the CFPB and the Financial Stability Oversight Council. Here’s an excerpt:

Dodd-Frank created both the Financial Stability Oversight Council and the Consumer Financial Protection Bureau, giving each agency effectively unlimited power. The FSOC can declare a financial firm “systemically important”—that is, too big to fail—based on “any” “risk-related factors” that it “deems appropriate.” And the CFPB can punish even responsible lenders who in good faith offer loans that the bureau later deems to be “unfair,” “deceptive” or “abusive.” . . .

Ordinarily, when regulators wield broad power, their discretion is still limited by checks and balances. The Constitution empowers the president and Congress, as well as our courts, to prevent regulators from running amok with excessive, arbitrary or even partisan regulations.

But Dodd-Frank does not honor checks and balances. It eliminates them. The CFPB is not subject to Congress’s “power of the purse,” which James Madison knew to be Congress’s “most complete and effectual weapon.” Instead, Dodd-Frank lets the CFPB claim more than $400 million from the Federal Reserve each year and prohibits Congress from even reviewing that budget. The president’s control over the CFPB is limited because by law he can remove the agency’s director only under strictly limited circumstances. Finally, Dodd-Frank limits the courts’ review of CFPB’s legal interpretations. . . .

The FSOC is similarly free from checks and balances. For example, when the Council—a working group of the Treasury secretary, Federal Reserve chairman, comptroller of the currency, and other unelected regulators—anoints a financial institution as too big to fail, the courts are prohibited from even reviewing whether the regulators properly interpreted the applicable laws.

Court-watchers are wondering if Thursday, June 21, will see the release of Supreme Court rulings on Obamacare or Arizona’s laws against illegal aliens. There’s another important decision that the Court almost certainly make on Thursday: whether to grant certiorari in Georgia-Pacific West v. Northwest Environment Defense Center.  (All the relevant documents are here, on Scotusblog.) Jonathan Adler blogged about it earlier today.

The Georgia-Pacific case involves a complex question of environmental law and regulatory deference, but its economic impact is enormous. In short: the federal Clean Water Act requires that most types of “point source” discharges of pollutants into waters can be allowed if the point source has discharge permit. A classic point source is a sewage discharge pipe from a factory or a municipality, that discharges into a river.

Federal law has separate controls for “non-point source” discharges of pollutants into waters. For example, if pesticides that are sprayed on a golf course run off into a river, that would be a non-point source of water pollution. In practice, most non-point sources involve farming, ranching, forestry and so on. The EPA has particular regulations for run off from such sites.

Now suppose that someone builds a logging road. There road itself is not a “pollution.” in any normal sense of the word. It’s just made of natural dirt and travel. Rainwater falls on the road, and runs off the road. For many roads, some of the rainwater run-off might eventually end up in a ditch or culvert, and the ditch or culvert might lead to a stream or lake. (The ditch or culvert helps reduce erosion.) Is the the ditch or culvert therefore a “point source” that requires a Clean Water Act discharge permit?

The EPA’s answer has always been “no.”  EPA regulations in 1976 said so explicitly. In 1987, the Clean Water Act was amended to require point source permits for stormwater runoff “associated with industrial activity”. CWA section 402(p). In writing regulations to implement the 1987 amendments, the CWA correctly decided the runoff of natural, unpolluted water from logging roads is not covered by section 402(p). One of the reasons that this is correct is that CWA definition of “point source” expressly excludes “agricultural stormwater discharges.”

However, the 9th Circuit’s decision in Georgia-Pacific held the EPA regulations invalid. 640 F.3d 1063. This creates a direct circuit split with the 8th Circuit’s Newton County Wildlife Association v. Rogers, 141 F.3d 803. If the 9th Circuit decision stands, it will essentially shut down logging within the enormous territory of the Circuit. If the 9th Circuit is right, then discharge permits are necessary not only for new roads, but for existing roads–and on private land as well as public land. Obtaining a permit can take years, and the permitting process offers many opportunities for anti-logging activists to monkey wrench and delay. If you wanted to destroy the American timber business, the 9th Circuit’s Georgia-Pacific decision is the perfect tool.

Last December, the Supreme Court asked the Solicitor General for a brief regarding Georgia-Pacific’s cert. petition. The brief agrees with petitioners (and their amici, including the majority of states Attorneys General) that the Ninth Circuit was wrong. However, the SG urged the Court not to take the case, because the EPA says it is writing new regulations which will supposedly fix the problem.

In my view, the Court should grant the petition. First, the Court should determine whether or not the Clean Water Act itself can even plausibly be read to give EPA power over rainwater runoff from logging roads.  This a very important issue for which the nation needs a definite answer.

Second, in order to give the Court time to act, Congress enacted an appropriations rider forbidding enforcement of the new permitting requirement under the Georgia-Pacific theory. (And since EPA can’t issue permits, private plaintiffs cannot sue to compel road owners to either obtain permits or shut down the road.) But the ban expires on September 30. (That the Solicitor General took have a year to file a cert. amicus brief prevented the case from possibly being heard on the merits this spring.) Because of the time necessary for Notice and Comment for EPA rulemaking, the new EPA regulation cannot possibly be operative before the litigation freeze expires.

Besides that, if the 9th Circuit is correct, then EPA “cannot” make the regulatory choice not to require discharge permits for logging roads. Thus, EPA’s new rule will itself the subject of further litigation. As long as the 9th Circuit’s panel decision in Georgia-Pacific remains valid, EPA will have to write a regulation complying with it, and so it seems inevitable that a huge number of logging roads will be requires to get point source discharge permits.

If cert. were granted, then the 9th Circuit (or failing that, the Supreme Court) should issue a stay for enforcement of Georgia-Pacific.

Even without a stay, if the Court granted cert., the grant itself would deter many private lawsuits brought under the Georgia-Pacific theory. If suits were brought, most lower courts would probably decide not to issue preliminary injunctions, and not to let the suits move forward, until the Supreme Court decided the case.

As the amicus briefs for the cert. petition explicate, the damage caused by Georgia-Pacific would be enormous. Although Georgia-Pacific involves issue of Chevron/Auer deference (including the question of whether EPA’s regulation is ambiguous), the more fundamental question is whether Congress, when enacting the Clean Water Act in 1972 (and then amending it in 1987), and setting up an intensive and strict system of permitting for waste pipes from factories, sewage pipes, and other point sources, meant for that very same system to apply to hundreds of thousands of miles of logging roads.  It is implausible to believe that Congress intended to wipe out the timber business, and to destroy the network of hundreds of thousands of logging roads which are used every day by hunters, other outdoor recreationists, farmers, and ranchers. Certainly any proposal in Congress to impose such far-reaching, harmful legislation would have engendered extensive debate.

Congress did not enact such a foolish law, nor did it give EPA the discretion to do so (in whole or in part) by regulation. It is time for the Supreme Court to say so, with finality.

Today the Supreme Court decidedChristopher v. SmithKline Beecham Corp., which concerned whether pharmaceutical sales representatives are subject to the “outside sales” exemption from the Fair Labor Standards Act’s overtime requirements.  The Department of Labor had claimed pharma reps are not exempt, but how its regulations applied to pharma reps was unclear and the Department’s position and jusitifcation had changed over time.  As a consequence, one issue for the Court was whether the government’s interpretation of its own regulation qualified for Auer deference, which grants agencies Chevron-like deference for their regulatory interpretations.

The Court in Christopher sided with the petitioners, 5-4, rejecting the government’s interpretation.  in reaching the holding the majority explained that the agency’s interpretation of its own regulation would not qualify for Auer deference, assuming arguendo that Auer should remain good law.  This is significant because the opinion could be read as narrowing the application of Auer (much as Mead arguably narrowed the application of Chevron), and may further signal a reconsideration of Auer is in the offing.  Here’s an excerpt:

Although Auer ordinarily calls for deference to an agency’s interpretation of its own ambiguous regulation, evenwhen that interpretation is advanced in a legal brief, . . . this general rule does not apply in all cases. Deference is undoubtedly inappropriate, for example, when the agency’s interpretation is “‘plainly erroneous or inconsistent with the regulation.’” . . . And deference is likewise unwarranted when there is reason to suspect that the agency’s interpretation “does not reflectthe agency’s fair and considered judgment on the matter in question.” . . .  This might occur when the agency’s interpretation conflicts with a prior interpretation, . . . or when it appears that theinterpretation is nothing more than a “convenient litigating position,” . . . or a “ ‘post hoc rationalizatio[n]’advanced by an agency seeking to defend past agency action against attack.”

In this case, there are strong reasons for withholding the deference that Auer generally requires. Petitioners invoke the DOL’s interpretation of ambiguous regulations to impose potentially massive liability on respondent for conduct that occurred well before that interpretation wasannounced. To defer to the agency’s interpretation in thiscircumstance would seriously undermine the principlethat agencies should provide regulated parties “fair warning of the conduct [a regulation] prohibits or requires.” . . .  Indeed, it would result in precisely the kind of “unfair surprise” against which our cases have long warned. . . .

Our practice of deferring to an agency’s interpretation of its own ambiguous regulations undoubtedly has important advantages, but this practice also creates a risk that agencies will promulgate vague and open-ended regulations that they can later interpret as they see fit, thereby “frustrat[ing] the notice and predictability purposes of rulemaking.” Talk America, Inc. v. Michigan Bell Telephone Co., 564 U. S. ___, ___ (2011) (SCALIA, J., concurring) (slip op., at 3); . . . It is one thing to expect regulated parties to conform their conduct to an agency’s interpretations once the agency announces them; it is quite another to require regulated parties to divine the agency’s interpretations in advance or else be held liable when the agency announces its interpretations for the first time in an enforcement proceeding and demands deference. Accordingly, whatever the general merits of Auer deference, it is unwarranted here. We instead accord the Department’s interpretation a measure of deference proportional to the “‘thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlierand later pronouncements, and all those factors which give it power to persuade.’”

The Court’s citation to Justice Scalia’s Talk America concurrence questioning Auer is interesting.  Also notable is that the dissent would have affirmed the government’s interpretation without relying on Auer deference at all.  Indeed, the dissent never mentions Auer at all (nor its antecedent, Seminole Rock).  So while Christopher leaves Auer standing, it does not offer the embattled doctrine any support.

Should a federal agency receive Chevron deference for its interpretation of a statute of limitations governing violations of the statute it enforces? In AKM LLC v. Secretary of Labor the U.S. Court of Appeals for the D.C. Circuit denied an attempt by the Occupational Safety and Health Commission to fine an employer for failing to properly record workplace injuries. Specifically, the D.C. Circuit rejected OSHA’s effort to interpret the company’s failure as a continuing violation so as to avoid the applicable statute of limitations. Insofar as the statute of limitations as ambiguous, OSHA argued, its interpretation should receive Chevron deference. Finding the statute clear, the Court ruled against OSHA without resolving the Chevron question.

While the court did not decide the Chevron question presented by AKM, one membe of the panel, Judge Janice Rogers Brown, made her position clear. In a separate concurrence, she explained why the application of Chevron deference would have been inappropriate. According to Judge Brown, courts have been too quick to defer to agency interpretations without considering whether the precise question at issue is the sort to which Chevron should apply.

Too often, we reflexively defer whenever an administrative agency claims statutory ambiguity, but this is not our charge. See Ala. Educ. Ass’n v. Chao, 455 F.3d 386, 392–93 (D.C. Cir. 2006). Resolving disputes over statutory meaning is ordinarily the province of the courts, and the exception to this rule—deference—is not something to which an agency is entitled simply by virtue of its being an agency that has expressed an interpretation in the proper form. What makes an agency’s interpretation of a provision special is that Congress has manifested its intent that the agency’s interpretation of that provision be special. It is by Congress’s “delegation of authority to the agency to elucidate a specific provision of the statute” that an agency’s interpretation is deserving of the court’s deference.

In the course of her concurrence, Judge Brown noted that Chevron deference should not apply to jurisdictional questions.

I see no reason a court should have to defer to an agency’s interpretation of ambiguities in a provision setting out the court’s own jurisdiction to review that agency’s action. As the Ninth Circuit explained, “[w]hile we ordinarily give great weight to the interpretation of the agency charged with enforcement of the statute we are construing, that deference does not extend to the question of judicial review, a matter within the peculiar expertise of the courts.” Love v. Thomas, 858 F.2d 1347, 1352 n.9 (9th Cir. 1988). This much seems clear.

But deferring to an agency’s interpretation of its own jurisdiction without some clear indication from Congress that it has delegated jurisdiction-defining authority to the agency can raise the same separation-of-powers, expertise, and agency trust concerns. We have come to infer delegation by mere statutory ambiguity, . . . but when it comes to jurisdiction, more should be required.

This is the position Nathan Sales and I laid out in our article, “The Rest Is Silence: Chevron Deference, Agency Jurisdiction, and Statutory Silences,” 2009 U. Ill. L. Rev. 101 (2009). It is one thing to presume Congress delegated a degree of policy-making discretion to agencies, but quite another to conclude Congress granted an agency the authority to determine the scope of its own authority. Similarly, insofar as statutes of limitations are just that, limitations on agency power, it should not be presumed that Congress would want agencies to determine how such limitations should apply.

Back in the 1980s, some death penalty abolitionists came up with the clever idea to sue the Food and Drug Administration to force the regulation of drugs used for lethal injection. Because drugs used for lethal injection could not be considered “safe and effective” for this use — at least not as far as the recipient is concerned — the advocates hoped this would force the FDA to ban the use of these drugs for lethal injection. It was a clever strategy but, as they say, it was too clever by half. The case worked its way up to the Supreme Court where, in Heckler v. Chaney, the Supreme Court held the FDA Commissioner’s decision not to initiate enforcement proceedings against the use of these drugs for lethal injection.

The current cocktail used for lethal injection includes two drugs, one of which (sodium thiopental) is not produced in the U.S. and must be imported. This gave some death penalty opponents the idea to try again, this time alleging that the FDA violated federal law by allowing the importation of sodium thiopental without first ensuring it is effective. They sued in federal district court, and won. In Beaty v. Food and Drug Administration, Judge Richard Leon concluded that because the FDA had not approved sodium thiopental for lethal injection the agency was required to prevent its importation.

The fight’s not over, however, as the FDA plans to appeal. Some states, such as California, also appear ready to resist the ruling and are refusing to return their supplies to the FDA, likely due to hope or anticipation that Judge Leon’s opinion will be overturned on appeal.

Yesterday the White House released a new Executive Order on “Promoting International Regulatory Cooperation.” The stated purpose of the E.O. is to encourage the harmonization of regulatory requirements to simplify regulatory compliance, reduce costs for transational companies and facilitate international trade. As OIRA Administrator Cass Sunstein explains in a White House release:

The new Executive Order will promote American exports, economic growth, and job creation by helping to eliminate unnecessary regulatory differences between the United States and other countries and by making sure that we do not create new ones.

As I discuss in an op-ed in today’s Wall Street Journal, the order makes clear that in eliminating such differences, we will respect domestic law and will not compromise U.S. priorities and prerogatives. Even while insisting on those priorities and prerogatives, we can eliminate pointless red tape. Today’s global economy relies on supply chains that cross national borders (sometimes more than once), and different regulatory requirements in different countries can significantly increase costs for companies doing business abroad. As the President’s Jobs Council recently noted, international regulatory cooperation canreduce these costs and help American businesses access foreign markets. Such cooperation can also help U.S. regulators more effectively protect the environment and the health and safety of the American people.

Sunstein also made the case for the E.O. in the WSJ, providing an example of the sort of harmonization the Administration has in mind:

Today’s action builds on many other administration efforts to eliminate unjustified regulatory costs and to reduce burdens by promoting international regulatory cooperation.

One example: The U.S. has long required employers to use warning symbols to inform employees of potential safety hazards. Other nations require warnings, too, but in many cases they mandate the use of different symbols. The result of the disparate requirements is to impose pointless costs on those who do business in more than one nation. Why should chemical manufacturers have to create multiple labels for the same product in different countries?

To address this problem, the Department of Labor recently harmonized its labeling requirements with those of many nations around the world, a reform that is projected to save American businesses more than $475 million each year.

This E.O. seems to be a fairly standard good-government reform that could reduce regulatory burdens and facilitate compliance without altering substantive protections. SO it should be non-controversial, right? Apparently not. As RegBlog reports, Public Citizen argues the E.O. is a “smokescreen for deregulation.” It’s almost as if any measure to reduce regulatory costs is necessarily suspect, in and of itself.

The Center for Progressive Reform, a pro-regulatory group, is likewise suspicious. It attacked the Administrative Conference of the United States for co-sponsoring an event yesterday with the U.S. Chamber of Commerce on “Next Steps & Implementation of ACUS Recommendations on: Incorporation by Reference & International Regulatory Cooperation.” Even though the ACUS has urged greater attention to international coordination, teaming with the Chamber to support a discussion of the issue is apparently “over the line” because of the Chamber’s “enormously destructive crusade against regulation.” And yet this “crusade” was nowhere in evidence on the conference program. Most of the speakers at the event were federal government officials, including Sunstein who spoke about the new E.O. (The agenda is here.) Indeed, other than C. Boyden Gray, former U.S. ambassador to the E.U., and one Chamber official who moderated one panel, there was no one on the program who could be plausibly characterized as “anti-regulation,” and neither the Chamber nor Ambassador Gray is much of an anti-regulatory zealot. So the ACUS’ offense seemed to be no more than encouraging discussion of its own recommendations with those who are affected by regulatory harmonization. Sometimes it seems groups that self-identify as “pro-consumer” or “pro-environment” could be more accurately described as “pro-regulation.”

In Tucker v. Commissioner of Internal Revenue, the U.S. Court of Appeals for the D.C. Circuit made relatively quick work of a constitutional challenge to the authority of the Internal Revenue Service’s Office of Appeals.  Senior Judge Stephen Williams’ opinion for the court begins:

Taxpayer Larry Tucker appeals a judgment of the Tax Court rejecting two contentions: first, a constitutional claim that certain employees of the Internal Revenue Service’s Office of Appeals are “Officers of the United States,” so that their appointments must conform to the Constitution’s Appointments Clause, art. II, § 2, cl. 2, and second, an argument that the employees in question abused their discretion in rejecting his proposed compromise of the collection of his tax liability. . . . Because the authority exercised by the Appeals Office employees whose status is challenged here appears insufficient to rank them even as “inferior Officers,” we reject the constitutional claim. And we find no abuse of discretion in those employees’ decision in this case.