Lawson and Kam on the Development of Chevron Deference

In a mammoth recent paper on Chevron deference, Gary Lawson and Stephen Kam trace the origins of the doctrine: Making Law out of Nothing at All (2013), 65 Admin Law Review 1 (draft). The paper is ably reviewed on Jotwell by Linda Jellum.

What I found most striking, in view of Canadian courts' desire to embrace Chevron deference, is the narrative Lawson and Kam set out. Before Chevron, much turned on the distinction between interpreting and applying law. Interpretation was a matter for courts; application for administrative decision-makers. But these were presumptions, rebuttable by reference to a "mélange of factors, with no clear metric for determining how much or when those factors weigh in the balance".

This is eerily similar to the framework established by  the Supreme Court of Canada in Dunsmuir v. New Brunswick. In Lawson and Kam's telling, American courts were then pushed towards the beguiling simplicity of Chevron. Yet, subsequently Chevron itself has been modified to ensure that courts take into account a range of contextual factors in calibrating the appropriate amount of deference (though this has not pleased everybody). The Americans went from law/fact to rebuttable presumptions to Chevron to context.

Is this not a cautionary tale for Canadian courts? A "two-step" approach, which relies on "clarity" and "ambiguity" seems as if it would simplify an approach based on rebuttable presumptions (as it must have seemed to American judges in the 1980s). Appearances can be deceptive, however. From the American experience we can perhaps deduce that adopting Chevron would simply lead to a further set of problems. Ironically, if Canada were eventually to follow the American lead in focusing on context, the result would be something like the pragmatic and functional analysis abandoned in Dunsmuir.

Finally, as Lawson and Kam remind us, Chevron's simplicity is only skin deep: "To this day, we still do not have consensus on what it means for the meaning of a statute to be 'clear'". Chevron may just be jurisdictional error on steroids.

Deference and the Rule of Lenity

In a recent American case, Carter v. Welles-Bowen Realty, Inc, the question arose whether the rule that ambiguous penal statutes are to be construed in favour of defendants (the "rule of lenity") could 'trump' the rule that courts are to defer to administrative interpretations of ambiguous statutes (Chevron deference).

Chevron Deference in Canada?

The comments of Evans J.A. in Qin v. Canada (Citizenship and Immigration), 2013 FCA 263 are obiter, strictly speaking, but they are comments by Evans J.A. and will carry a great deal of weight.

Reasonable Interpretations of Law: Some Thoughts

Not so long ago, I posted on "Deference and Reasonableness". I have also just posted some thoughts on rationality. It is quite timely, then, that I recently came across the reasons of Robertson J.A. in Small v. New Brunswick Liquor Corporation, 2012 NBCA 53, a case decided last summer. They deserve careful reading by anyone interested in reasonableness in administrative law.

Deference on Jurisdictional Questions: the SCOTUS Weighs In

Should courts defer to administrative decision-makers' interpretations of the limits of their own statutory authority? The Supreme Court of the United States finally answered that question in the affirmative today, in City of Arlington v. Federal Communications Commission. I think the majority is absolutely right, as I explain below. Indeed, Scalia J.'s majority opinion is must-read material for lawyers and law students interested in the concept of "jurisdictional error".

Interpreting Regulations -- Kevin Stack

Kevin Stack has posted Interpreting Regulations on SSRN. Here is the abstract:

The age of statutes has given way to an era of regulations, but our jurisprudence has fallen behind. Despite the centrality of regulations to law, courts have no intelligible approach to regulatory interpretation. The neglect of regulatory interpretation is not only a shortcoming in interpretive theory but also a practical problem for administrative law. Canonical doctrines of administrative law — Chevron, Seminole Rock/Auer, and Accardi — involve interpreting regulations, and yet courts lack a consistent approach.

This Article develops a method for interpreting regulations and, more generally, situates regulatory interpretation within debates over legal interpretation. It argues that a purposive approach, not a textualist one, best suits the distinctive legal character of regulations. Administrative law requires agencies to produce detailed explanations of the grounds for their regulations, called statements of basis and purpose. Courts routinely use these statements to assess the validity of regulations. This Article argues that these statements should guide judicial interpretation of regulations as well. By relying on these statements as privileged sources for interpretation, courts not only grant deference to agencies but also treat these statements as creating commitments with respect to a regulation’s meaning. This approach justifies a framework for interpreting regulations under Chevron, Seminole Rock/Auer, and Accardi that is consistent with the deferential grounding of these doctrines, and provides more notice to those regulated than does relying on the regulation’s text alone.

This Article also shows how regulatory purposivism constitutes a new foothold for Henry Hart and Albert Sacks’s classic legal process account of purposivism. Hart and Sacks’s theory is vulnerable to the criticism that discerning statutory purpose is elusive because statutes do not often include enacted statements of purpose. Regulatory purposivism, however, avoids this concern because statements of basis and purpose offer a consistent and reliable source for discerning a regulation’s purpose. From this perspective, the best days for Hart and Sacks’s legal process theory may be ahead.

The rest can be downloaded, which I recommend, here. In particular, Stack sheds some much-needed light on the question of how best to characterize what an administrative agency has said (in a regulation) or done (in a decision). An understanding of this, on the part of a reviewing court, is essential and will often be critical to whether relief is granted or denied to the applicant.

From the paper itself comes a helpful overview of Stack's proposed method:

So what does this regulatory purposive technique look like? The central tenet of the approach is to read the text of the regulation in light of the regulation’s statement of basis and purpose. The D.C. Circuit’s decision in Secretary of Labor, Mine Safety & Health Administration ex rel. Bushnell v. Cannelton Industries, Inc., delivered by then–Judge Ruth Bader Ginsburg, provides a nice illustration.

The Secretary of Labor had issued regulations to protect miners with pneumoconiosis, a lung disease, providing that miners with evidence of pneumoconiosis could obtain a transfer to a position with lower dust concentrations. In addition, the regulations protected the miners’ compensation, providing that “[w]henever” such a miner is transferred “the operator shall compensate the miner at not less than the regular rate of pay received by that miner immediately before the transfer.” In the case at issue, the eligible miner had initially been transferred to work as a dispatcher at his mining wage, and then to an inside laborer position at a reduced wage as part of a general realignment due to economic conditions. The question was whether the regulations protected the miner from compensation decreases solely for transfers to meet the respiratory dust standards, as the employer maintained, or for all subsequent transfers, as the Secretary maintained.

The court agreed with the Secretary, finding the Secretary’s position “consistent” with the regulations’ text (“whenever”) and also “fully consonant” with the “administrative history and purposes.” The court relied on both the general and more specific purposes set forth in the Secretary’s statement of basis and purpose for the regulations. At a general level, the court noted that the Secretary had observed that existing law discouraged eligible miners from claiming protections, and had sought in the regulations to “provide eligible miners with significant additional protections against fears of job security, adverse economic consequences,” and other undesirable working and wage conditions. More specifically, as the court noted, the Secretary’s statement of basis and purpose had stated that an eligible miner, “ ‘should not suffer any loss in pay whenever an operator transfers the miner’ because ‘[i]f any eligible miner perceived that their rate of pay could be decreased upon any transfer, the incentive to exercise the Part 90 option would be reduced.’ ” The court found that these grounds “strongly support[ed]” the Secretary’s reading of the regulations to protect against wage decreases given that existing law already protected the miner’s rate of pay upon initial transfer to less dusty work. The court thus located a reading of the regulations that was both permitted by the text and that carried out the regulations’ purposes, which the court discerned from the regulations’ statement of basis and purpose.

This purposive technique, grounded in the distinctive character of regulations, builds on Hart and Sacks’s model. By treating the agency’s text and the statement of basis and purpose as the focus of interpretation, it respects the principle of institutional settlement. And because statements of basis and purpose are both more consistently produced and more detailed than enacted statutory statements of purpose, purposive regulatory interpretation more frequently dwells on inferences from those statements, and less frequently requires a broader-ranging, independent reconstruction of rational purpose.

Precedent and Administrative Law -- Again

I have previously blogged about the place of precedent in modern Canadian administrative law. The basic idea is not difficult to grasp. In Canada there is no presumption that there is a "right" answer to any question of law or discretion that arises before administrative bodies. Accordingly, administrative bodies are not bound by their previous decisions. As long as the decision in any given case is reasonable, then it should not be struck down just because the administrative body previously reached a different decision.

Deference to Administrators' Interpretations of their Own Regulations

The Supreme Court of the United States recently cast a critical eye over the concept of Auer deference (so called even though the seminal case is actually Bowles v. Seminole Rock & Sand Co.). When administrative bodies promulgate rules, regulations and policies to fill in the gaps in statutory provisions, their promulgations may themselves have gaps and require further interpretation. Auer deference commands that any such further interpretation "becomes of controlling weight unless it is plainly erroneous or inconsistent with the regulation" (see here). 

80% of life is just showing up

Fascinating decision here from the District Court for the District of Columbia. America's National Labor Relations Board has been at the centre of controversy recently because of President Obama's inability to appoint new members. Before he made recess appointments to restore the full complement of members, the Board took an important decision which would have had the effect of making it easier for unions to become certified for collective bargaining purposes.

But the decision was challenged by a couple of employers' interest groups and ultimately ran aground on the Board's statutory quorum requirement. Three members must "participate" in any decision:

But whether the standard is “mere presence” or “participation,” the difficulty is in applying that standard to an online vote. When the very concept of a quorum seems designed for a meeting in which people are physically present in the same place, what does it mean to be present or to participate in a decision that takes place across wires? In other words, how does one draw the line between a present but abstaining voter (who may be counted toward a quorum) and an absent voter (who may not be) when the voting is done electronically? 

Here, a draft of the proposed rule was circulated by email to all three remaining members. Two indicated an affirmative response. The third never responded, not realizing that his failure to do so would lead to a failure to participate. To no avail, the Board argued that the third member's participation in previous discussions  and procedural decisions (in which he had made his opposition clear) and his subsequent release of a statement explaining his opposition satisfied the quorum requirement.

As District Judge Boasberg explained:

[H]e simply did not show up – in any literal or even metaphorical sense. Had he affirmatively expressed his intent to abstain or even acknowledged receipt of the notification, he may well have been legally “present” for the vote and counted in the quorum. Had someone reached out to him to ask for a response, as is the agency’s usual practice where a member has not voted, or had a substantial amount of time passed following the rule’s circulation, moreover, it would have been a closer case. But none of that happened here. In our prior world of in-person meetings, Hayes’s actions are the equivalent of failing to attend, whether because he was unaware of the meeting or for any intentional reason. In any event, his failure to be present or participate means that only two members voted, and the rule was then sent for publication that very day.

One other interesting point is the footnoted discussion of the applicability of Chevron deference to the Board's interpretation of its statutory provisions. There is, as the judge noted, an argument that a reviewing court should defer to the Board's determination of whether the quorum requirement has been satisfied: that is, if the Board considers it unnecessary for a formal vote to be recorded, a reviewing court should not interfere. But in the New Process Steel case, the Supreme Court of the United States did not apply Chevron deference to the quorum provision; and, stranger still, the Board did not raise the point in its argument.

As the judge noted, Woody Allen was quite correct to observe that 80% of life is just showing up.

H/T Jonathan Adler at the Volokh Conspiracy.