Monday’s opinion in City of Arlington v. FCC is surely destined for administrative law textbooks.  One reason is that the Court at last resolved a longstanding dispute in the field: whether agencies are eligible for deference under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc. when interpreting the scope of their own so-called “jurisdiction.”  The answer is yes; as Justice Scalia’s majority opinion explains, the distinction between jurisdictional questions and non-jurisdictional interpretations is “a mirage.”  The decision is also a bonanza for other significant administrative-law debates.  It provides another chapter in the disagreement between Justices Scalia and Breyer over the virtues of rules versus standards in determining deference; it includes an interesting sidebar between the majority and the dissent regarding federal agencies’ accumulation of legislative, executive, and judicial power; and it features a vigorous dissent by the Chief Justice regarding “the danger posed by the growing power of the administrative state,” which now entails “hundreds of federal agencies poking into every nook and cranny of daily life.”

Opinion author in red. Dissenting Justices in grey.

Opinion author in red. Dissenting Justices in grey.

The practical effect of Arlington, in contrast, is not clearly so momentous – and not nearly as significant as a decision ruling the opposite way would have been.  Making the deference framework unavailable for supposedly jurisdictional questions might well have unraveled Chevron, which has become administrative law bedrock.  The Solicitor General expressed this fear at oral argument, telling the Court that to deny deference to “jurisdictional” questions would open a “Pandora’s box,” because jurisdictional questions cannot coherently be distinguished from other interpretive questions.  But allowing the Chevron framework to apply to such questions does not portend the same sea-change.  Arlington does not eliminate all judicial latitude in resolving the “Step Zero” question – that is, the question whether Chevron applies at all – and it does nothing to diminish the considerable leeway courts have when actually applying Chevron.

As I described in an earlier post, this case originated as a dispute over the FCC’s authority to define the “reasonable period of time” within which local governments must, under the Federal Communications Act, rule on siting applications for wireless service facilities.  In a declaratory ruling, the FCC concluded that it had authority to interpret the phrase and went on to define the periods that would be deemed reasonable.  When the City of Arlington, Texas challenged the FCC’s ruling in the Fifth Circuit, the court held as an initial matter that Chevron’s framework applies even to questions of an agency’s “statutory jurisdiction.”  The court then deferred to the FCC’s conclusion that it possessed the requisite authority, and further ruled that the prescribed periods were permissible constructions of the Act.  The Supreme Court granted certiorari only on the first question presented, which has divided the courts of appeals: whether “a court should apply Chevron to review an agency’s determination of its own jurisdiction.”

The city’s lead argument, echoed ultimately by the Chief Justice’s dissenting opinion, was that allowing deference on “jurisdictional” questions offends the constitutional structure.  Agencies have no power to act unless Congress grants them authority, the argument goes, and it is the judiciary’s role to determine whether Congress has granted the requisite authority.  The government’s response marshaled past precedent, governing principles, and practicality – in particular, that there is no coherent way to separate jurisdictional questions from others.  Oral argument focused significantly on the puzzle of cordoning off “jurisdictional” questions from other questions of agency interpretation.  (My recap of the oral argument is here.)

That line-drawing difficulty animates the Court’s opinion in Arlington.  Articulating for the majority a position he has long espoused, Justice Scalia began by explaining that “the distinction between ‘jurisdictional’ and ‘nonjurisdictional’ interpretations is a mirage.  No matter how it is framed, the question a court faces when confronted with an agency’s interpretation of a statute it administers is always, simply, whether the agency has stayed within the bounds of its statutory authority.”  The purported jurisdictional distinction is “an empty distraction,” Justice Scalia explained, because “every new application of a broad statutory term can be reframed as a questionable extension of the agency’s jurisdiction.”  Yet illusory as the distinction might be, the Court emphasized, it could have serious consequences: “Make no mistake—the ultimate target here is Chevron itself.”  If the city’s view prevailed, litigants would “play the ‘jurisdictional’ card in every case,” and the ultimate result would be to shift numerous interpretive decisions, even “archetypal Chevron questions,” from agencies to courts.

The majority opinion’s final section, responding to the dissent, clarifies the disagreement between them – and its limits.  All agree, the Court says, that under the Court’s decision in United States v. Mead, Chevron applies only if the agency has “received congressional authority to determine the particular matter at issue in the particular manner adopted.”  Where the majority and dissent differ, Justice Scalia explains, is that the majority accepts “the theorem that the whole includes all of its parts” – that a general conferral of rulemaking authority validates rules for all of the matters the agency is charged with administering.  Thus, to the extent there was dispute over the necessary breadth of a congressional grant of authority for purposes of clearing Step Zero, the majority indicates that a general grant suffices.  According to the Court, the dissent’s contrary insistence on a provision-by-provision search for congressional authority – even where an agency has issued a rule under a “broad grant of rulemaking authority” – proposes “a massive revision of our Chevron jurisprudence.”

For Justice Scalia and the majority, the dissent’s desired “revision” is particularly problematic because it would “render the binding effect of agency rules unpredictable and destroy the whole stabilizing purpose of Chevron.”  Justice Scalia, after all, has long viewed Chevron as rule-based, providing Congress with a “stable background rule” against which to legislate.  This is why Justice Scalia has long criticized Mead, which he described at the time as an “avulsive change” that would replace Chevron’s predictability with “th’ ol’ totality of the circumstances” test.  Echoing those words in Arlington, Justice Scalia warned that the dissent’s “open-ended hunt for congressional intent,” would leave thirteen courts of appeals to apply “a totality of the circumstances test.”  “The excessive agency power that the dissent fears,” Justice Scalia wrote, “would be replaced by chaos.”

The majority’s concluding explanation of why the FCC ultimately prevails also raises a more technical intrigue regarding the application of Mead.  (Readers weary of administrative law arcana may want to skip to the next paragraph.)  The Court rules that “it suffices to decide this case that the preconditions” to Chevron are satisfied because [1] “Congress has unambiguously vested the FCC with general authority to administer the Communications Act through rulemaking and adjudication,” and [2] “the agency interpretation at issue was promulgated in exercise of that authority.”  At first blush, this is just a (simpler) restatement of Mead’s emphasis on form; a leading understanding of Mead is that it created a dichotomy (or at least an anomaly) based on the type of procedure at issue, wherein “formal” procedures are all but guaranteed Chevron’s application, while the myriad types of informal agency procedures might be reviewed under Chevron, depending on an array of circumstances.  The wrinkle here is that the FCC actually didn’t use notice-and-comment rulemaking or formal adjudication.  Instead, it issued a declaratory ruling, which technically belongs in the large bin of agency action known as informal adjudication.  To be sure, as the Fifth Circuit noted, the “informal” process here bore many of the hallmarks of more formal processes; for example, the FCC published advance notice in the Federal Register and accepted and considered comments.  That said, by stating so sparely that the Commission’s use of its general rulemaking or adjudication authority was all that was necessary to satisfy Chevron’s preconditions, without any further discussion of what other factors allowed the informal procedure at issue to satisfy Mead, the Court may have subtly (and only marginally) undermined Mead’s tilt against “informal” procedures.

Justice Breyer issued a brief concurrence, joined by no other Justices.  He reiterated and updated his longstanding view that deciding whether a deferential framework is warranted must rest on a wide array of factors – that the inquiry is one of standards, not rules.  Although concurring in the judgment and concurring in the opinion in part, Justice Breyer’s opinion resonates substantially with the dissent: he agrees that the courts must decide de novo “whether Congress has delegated to an agency the authority to provide an interpretation that carries the force of law,” and he would answer that question through a wide-ranging inquiry into congressional intent.

The dissenting opinion, authored by the Chief Justice and joined by Justices Kennedy and Alito, inveighs forcefully against the modern accretion of administrative power.  The dissent links the accumulation of “a potent brew of executive, legislative, and judicial power” within agencies to the Framers’ fears of tyranny; emphasizes the vastness and continued growth of the administrative state (including more than fifty new agencies in the last fifteen years); and notes that agencies enjoy practical independence, even from the President (on this last point, the dissent cites scholarly works by both Justices Kagan and Breyer).  All of this sets the background for the dissent’s framing of the question at issue: “whether the authority of administrative agencies should be augmented even further . . . to decide when Congress has given them the power” to resolve statutory questions.  The dissent, of course, would answer no; under both Marbury v. Madison and the Administrative Procedure Act, in the dissent’s view, it is the courts that must decide whether Congress has delegated authority to agencies.  And the “appropriate question,” the dissent says, is more searching than the majority’s general inquiry; courts must ask “whether the delegation covers the ‘specific provision’ and ‘particular question’ before the court.”  Where the majority sees the dissent as advocating a judicial power grab, the dissent laments the abdication of the duty to “ensure” that each branch of government remains “confine[d] . . . to its proper role.”

In the end, as I’ve suggested, Arlington may end up being remembered most for its high-level commentary on the role of agencies in the constitutional structure.  As for practical effect, the decision is more significant for what it did not hold than for what it did.  Had the Court ruled that “jurisdictional” questions cannot receive deferential review, the Solicitor General might have been right in fearing Chevron’s unraveling.  In contrast, the Court’s ruling that agencies are eligible for deference on questions that implicate their statutory authority will leave unchanged judicial practice in most circuits.  Moreover, even with Arlington in place, courts will continue to possess leeway – at all of Chevron’s Steps—in determining whether deference is warranted.

The decision in Plain English

Nearly thirty years ago, in a case called Chevron U.S.A. Inc. v. Natural Resources Defense Council, the Court outlined a test for reviewing an agency’s interpretation of a statute.  In the first step of the test, a court determines whether Congress’s intent is clear from the text of the statute.  If so, it does not need to go any further; all that matters is what Congress intended.  But if the statute is not clear or does not address the question at issue, the court defers to the agency’s interpretation of the statute – even if it does not necessarily agree with the agency – as long as it is a reasonable one.  Before Monday’s decision in City of Arlington v. FCC, there was a long-running dispute over whether courts should, using the Chevron framework, also defer to an agency’s interpretation of the scope of its own “jurisdiction” – that is, its authority under the statute.  The Court in Arlington rejects the notion that questions regarding an agency’s “jurisdiction” are somehow special, reasoning that all agency interpretations implicate, and cannot exceed, an agency’s statutory authority.  Accordingly, the Court ruled that an agency’s interpretation regarding the scope of its statutory authority, like other agency interpretations, is examined under the Chevron framework.

Disclosure: Goldstein & Russell, P.C., whose attorneys work for or contribute to this blog in various capacities, served as co-counsel to the petitioners in these cases.

Posted in City of Arlington v. FCC, Cable, Telecom., and Tech. v. FCC, Featured, Merits Cases

Recommended Citation: Miriam Seifter, Opinion analysis – “Pandora’s box” stays closed, SCOTUSblog (May. 23, 2013, 11:25 AM), http://www.scotusblog.com/2013/05/opinion-analysis-pandoras-box-stays-closed/