C. PRECLUSION OF REVIEW UNDER § 701

2. “Committed to Agency Discretion by Law” -- § 701(a)(2)

At the end of note 4 at p.604 (Deferential review of refusals to institute rulemaking), add:

The Supreme Court recently stated its approval of the D.C. Circuit’s approach to review of agency refusals to initiate rulemaking in the landmark case, Massachusetts v. EPA, 127 S. Ct. 1438 (2007), in which petitioners challenged EPA’s refusal to begin rulemaking proceedings to regulate greenhouse-gas emissions from motor vehicles. The Court explained:

… As we have repeated time and again, an agency has broad discretion to choose how best to marshal its limited resources and personnel to carry out its delegated responsibilities. See Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-845 (1984). That discretion is at its height when the agency decides not to bring an enforcement action. Therefore, in Heckler v. Chaney, 470 U.S. 821 (1985), we held that an agency's refusal to initiate enforcement proceedings is not ordinarily subject to judicial review. Some debate remains, however, as to the rigor with which we review an agency's denial of a petition for rulemaking.

There are key differences between a denial of a petition for rulemaking and an agency's decision not to initiate an enforcement action. See American Horse Protection Assn., Inc. v. Lyng, 812 F.2d 1, 3-4 (C.A.D.C.1987). In contrast to nonenforcement decisions, agency refusals to initiate rulemaking “are less frequent, more apt to involve legal as opposed to factual analysis, and subject to special formalities, including a public explanation.” Id., at 4; see also 5 U.S.C. § 555(e). They moreover arise out of denials of petitions for rulemaking which (at least in the circumstances here) the affected party had an undoubted procedural right to file in the first instance. Refusals to promulgate rules are thus susceptible to judicial review, though such review is “extremely limited” and “highly deferential.” National Customs Brokers & Forwarders Assn. of America, Inc. v. United States, 883 F.2d 93, 96 (C.A.D.C.1989).

EPA concluded in its denial of the petition for rulemaking that it lacked authority under 42 U.S.C. § 7521(a)(1) to regulate new vehicle emissions because carbon dioxide is not an “air pollutant” as that term is defined in § 7602. In the alternative, it concluded that even if it possessed authority, it would decline to do so because regulation would conflict with other administration priorities. As discussed earlier, the Clean Air Act expressly permits review of such an action. § 7607(b)(1). We therefore “may reverse any such action found to be ... arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” § 7607(d)(9).

E. REVIEW OF LAW

Overview of new materials: The Supreme Court issued several opinions during the 2006 Term with significant Chevron or Mead dimensions. Lightly edited versions of two of the most interesting are included here:

• Zuni Public Schools Dist. No. 89 v. Department of Educ.,127 S.Ct. 1534 (2007);
• Long Island Care at Home, Ltd. v. Coke, 127 S. Ct. 2339 (2007).

Zuni is basically a Chevron step-one case. It is of particular interest for its nice clash among the justices concerning the roles of legislative text, intent, and history in statutory interpretation.

Coke overrules a Second Circuit opinion that was the focus of note 10 following the Mead materials at p.723 of the casebook. A replacement note 10 is therefore set forth below. Instructors may wish to assign Coke itself, however, as it covers a good bit of conceptual ground in a relatively short space. Its chief doctrinal importance lies in its Mead gloss, in which the Court explained why a regulation that the DOL had itself called an “Interpretation” was nonetheless entitled to Chevron deference. But Coke also contains applications of Chevron and Seminole Rock, which may make this case a nice tool for “summing” up review of law.

2. The Chevron (R)Evolution

Remarks on Zuni

In its Chevron section, the casebook makes do with just two full-blown examples of step-one analysis – Chevron itself and Brown & Williamson (which students read in chapter 3 and which note 9 at page 697 instructs students to reread). Zuni Public Schools Dist. No. 89 v. Department of Educ., 127 S.Ct. 1534 (2007) provides an opportunity to wrestle with more step-one issues.

3. Chevron’s Reach

Remarks on Coke – A Revised Note

Note 10 at p.723 discusses the Second Circuit’s Mead analysis in Coke v. Long Island Care At Home Ltd., 376 F.3d 118 (2nd Cir. 2004) (Coke I). The Supreme Court, without argument, vacated the Second Circuit’s judgment in Coke I and remanded for the lower court to reconsider its decision in light of a DOL “Advisory Memorandum” defending the regulation at issue. 546 U.S. 1147 (2006) (mem.). The Second Circuit affirmed its original judgment in a brief opinion. 462 F.3d 48 (2d Cir. 2006) (per curiam) (Coke II). The Supreme Court overruled Coke II in Long Island Care At Home, Ltd. v. Coke, 127 S. Ct. 2339 (2007). Here is a revised version of Note 10:

10. The Supreme Court’s most recent refinement of (or retreat from) Mead. In Long Island Care at Home, Ltd. v. Coke, 127 S. Ct. 2339 (2007), the Court revisited the Mead doctrine in a case that addressed whether the courts should extend Chevron deference to a regulation that the Department of Labor had promulgated via notice-and-comment but which it had denominated an “interpretive” rule.

Congress created an exemption to Fair Labor Standards Act coverage for the provision of “companionship services” and expressly granted to the Department of Labor the authority to promulgate legislative regulations defining this phrase. 29 U.S.C. § 213(a)(15). The agency used notice-and-comment to create a rule defining this statutory phrase. 29 C.F.R. § 552.109(a). The Second Circuit nonetheless refused to extend Chevron deference to this regulation on the ground that the agency had not invoked its delegated legislative power. The court reached this conclusion because, among other reasons: (a) the agency had included this particular regulation in a section of the C.F.R. it had entitled, “Subpart B—Interpretations”; and (b) this regulation was not among those listed in a different regulation that identified which definitions the agency had promulgated pursuant to its expressly delegated definitional authority. Coke v. Long Island Care At Home Ltd., 376 F.3d 118 (2nd Cir. 2004).

The Supreme Court disagreed, unanimously ruling that the regulation was entitled to Chevron treatment. To begin its analysis, the Court gave a very concise description of the Mead/Chevron framework:

We have previously pointed out that the “ ‘power of an administrative agency to administer a congressionally created ... program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by Congress.’ ” Chevron, 467 U.S., at 843 (quoting Morton v. Ruiz, 415 U.S. 199, 231(1974); omission in original). When an agency fills such a “gap” reasonably, and in accordance with other applicable (e.g., procedural) requirements, the courts accept the result as legally binding. 467 U.S., at 843-844; United States v. Mead Corp., 533 U.S. 218, 227 (2001).

It bears noting that Justice Scalia signed on to this description notwithstanding his heated Mead dissent in which he contended that Chevron deference should apply to all authoritative constructions by an agency of a statute it administers. Why did he agree to join an opinion applying Mead? Consider: The preceding passage from Coke indicates that Chevron’s form of rationality review applies to an agency’s “gap-filling” so long as it fulfills “other applicable (e.g., procedural) requirements.” This passage is (purposefully?) ambiguous about just what these “requirements” are. If one reads this term as referring only to congressionally imposed requirements, then this Coke passage merely stands for the unexceptional proposition that an agency cannot net Chevron deference for an interpretation adopted via illegal procedures – a proposition with which Justice Scalia would surely agree.

Turning to the regulation at hand, the Court concluded, contra the Second Cirrcuit, that DOL had intended for its regulation to enjoy binding power:

[The Second Circuit’s] reasons do not convince us that the Department intended its third-party regulation to carry no special legal weight. For one thing, other considerations strongly suggest the contrary, namely that the Department intended the third-party regulation as a binding application of its rulemaking authority. The regulation directly governs the conduct of members of the public, “‘affecting individual rights and obligations.’” Chrysler Corp. v. Brown, 441 U.S. 281, 302 (1979) (quoting Morton, 415 U.S., at 232). When promulgating the rule, the agency used full public notice-and-comment procedures, which under the Administrative Procedure Act an agency need not use when producing an “interpretive” rule. 5 U.S.C. § 553(b)(3)(A). Each time the Department has considered amending the rule, it has similarly used full notice-and-comment rulemaking procedures. 58 Fed.Reg. 69310 (1993); 60 Fed.Reg. 46797 (1995); 66 Fed.Reg. 5485 (2001). And for the past 30 years, according to the Department’s Advisory Memorandum (and not disputed by respondent), the Department has treated the third-party regulation like the others, i.e., as a legally binding exercise of its rulemaking authority.

The Court then capped its analysis by stressing that the Mead-style inquiry is always, at bottom, a question of congressional, not agency, intent:

Finally, the ultimate question is whether Congress would have intended, and expected, courts to treat an agency’s rule, regulation, application of a statute, or other agency action as within, or outside, its delegation to the agency of “gap-filling” authority. Where an agency rule sets forth important individual rights and duties, where the agency focuses fully and directly upon the issue, where the agency uses full notice-and-comment procedures to promulgate a rule, where the resulting rule falls within the statutory grant of authority, and where the rule itself is reasonable, then a court ordinarily assumes that Congress intended it to defer to the agency's determination. See Mead, supra, at 229-233.

Congress, however, does not generally speak to the problem of when courts should apply Chevron deference. Do Mead, Barnhart, and Coke therefore boil down to: Courts should apply Chevron deference where the courts think it is a good idea to do so?