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[Senate Hearing 114-284]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 114-284

                   EXAMINING AGENCY USE OF DEFERENCE
                                PART II

=======================================================================

                                HEARING

                               before the

                            SUBCOMMITTEE ON
               REGULATORY AFFAIRS AND FEDERAL MANAGEMENT

                                 of the

                              COMMITTEE ON
                         HOMELAND SECURITY AND
                          GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 17, 2016

                               __________

                   Available via http://www.fdsys.gov

       Printed for the use of the Committee on Homeland Security
                        and Governmental Affairs

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20-358 PDF                     WASHINGTON : 2016 
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                          Washington, DC 20402-0001

        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

                    RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona                 THOMAS R. CARPER, Delaware
ROB PORTMAN, Ohio                    CLAIRE McCASKILL, Missouri
RAND PAUL, Kentucky                  JON TESTER, Montana
JAMES LANKFORD, Oklahoma             TAMMY BALDWIN, Wisconsin
MICHAEL B. ENZI, Wyoming             HEIDI HEITKAMP, North Dakota
KELLY AYOTTE, New Hampshire          CORY A. BOOKER, New Jersey
JONI ERNST, Iowa                     GARY C. PETERS, Michigan
BEN SASSE, Nebraska

                  Christopher R. Hixon, Staff Director
              Gabrielle A. Batkin, Minority Staff Director
           John P. Kilvington, Minority Deputy Staff Director
                     Laura W. Kilbride, Chief Clerk
                   Benjamin C. Grazda, Hearing Clerk

       SUBCOMMITTEE ON REGULATORY AFFAIRS AND FEDERAL MANAGEMENT

                   JAMES LANKFORD, Oklahoma, Chairman
JOHN MCCAIN, Arizona                 HEIDI HEITKAMP, North Dakota
ROB PORTMAN, Ohio                    JON TESTER, Montana
MICHAEL B. ENZI, Wyoming             CORY A. BOOKER, New Jersey
JONI ERNST, Iowa                     GARY C. PETERS, Michigan
BEN SASSE, Nebraska
                     John Cuaderess, Staff Director
                  Eric Bursch, Minority Staff Director
                      Rachel Nitsche, Chief Clerk

                            C O N T E N T S

                                 ------                                
Opening statement:
                                                                   Page
    Senator Lankford.............................................     1
    Senator Heitkamp.............................................     2
    Senator Ernst................................................    16
Prepared statement:
    Senator Lankford.............................................    27

                               WITNESSES
                        Thursday, March 17, 2016

Neomi Rao, Associate Professor of Law, George Mason University 
  School of Law..................................................     5
Charles J. Cooper, Partner, Cooper & Kirk, PLLC..................     7
Michael Herz, Arthur Kaplan Professor of Law, Cardozo School of 
  Law............................................................     9

                     Alphabetical List of Witnesses

Cooper, Charles J.:
    Testimony....................................................     7
    Prepared statement...........................................    44
Herz, Michael:
    Testimony....................................................     9
    Prepared statement...........................................    70
Rao, Neomi:
    Testimony....................................................     5
    Prepared statement...........................................    29

                                APPENDIX

Responses to post-hearing questions for the Record:
    Ms. Rao......................................................    80
    Mr. Cooper...................................................    84
    Mr. Herz.....................................................    91
 
               EXAMINING AGENCY USE OF DEFERENCE, PART II

                              ----------                              

                        THURSDAY, MARCH 17, 2016

                                 U.S. Senate,      
                        Subcommittee on Regulatory,        
                      Affairs and Federal Management,      
                    of the Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 9:02 a.m., in 
room 342, Dirksen Senate Office Building, Hon. James Lankford, 
Chairman of the Subcommittee, presiding.
    Present: Senators Portman, Ernst and Heitkamp

             OPENING STATEMENT OF CHAIRMAN LANKFORD

    Senator Lankford. Good morning, everyone, and welcome. I 
cannot imagine what anyone would rather do on a St. Patrick's 
Day than to be in a hearing with two redheads talking about 
judicial deference. Doesn't that just sound festive?
    Let me welcome everyone here. This is Examining Agency Use 
of Deference, Part II, for us. This is an incredibly important 
issue. Today's hearing will focus on the practice of Federal 
courts deferring to agencies when it comes to their 
interpretation of statutes, more commonly referred to as 
Chevron deference.
    The Constitution provides for three separate and distinct 
branches of government, each with a check on the others. As 
Chief Justice John Marshall stated in 1825, the Legislature 
makes, the Executive executes, and the Judiciary construes the 
law. Chevron blurs the traditional understanding of separation 
of powers by giving agencies the power to interpret the meaning 
of statutory ambiguities. Chevron deference has fundamentally 
altered how agencies regulate. Instead of simply carrying out 
the directives of Congress, agencies can seek out ambiguities 
in the law so they can address problems as they see fit. They 
do so knowing that the courts will likely take their 
interpretations, defer to them as permissible construction 
regardless of congressional intent.
    Take for example, the Waters of the United States (WOTUS) 
Rule. Emboldened by the Chevron deference, the Environmental 
Protection Agency (EPA) expanded the Clean Water Act beyond 
anything contemplated by the enacting Congress to the detriment 
of landowners and farmers. With studies showing that 
traditionally Supreme Court justices defer to the agency's 
interpretation more than 70 percent of the time, the EPA knows 
that it would be very unlikely that a Supreme Court would 
overturn the Waters of the United States Rule.
    Its abdication of judicial power runs counter to the 
standard of review laid out in the Administrative Procedures 
Act (APA). The APA gives courts clear direction to decide all 
relevant questions of law and interpret Constitutional and 
statutory provisions. Chevron deference ignores this directive. 
Instead of courts using their judgment to independently decide 
all relevant questions of law, Chevron directs the courts to 
see their judicial obligation to decide questions of laws in 
favor of any reasonable agency interpretation.
    In a 2006 empirical study, Cass Sunstein found that whether 
Supreme Court justices validated an agency's interpretation of 
a statute based on Chevron deference hinged largely on 
ideological factors. He found that both the Supreme Court and 
the Courts of Appeals apply the Chevron framework based on the 
judge's political convictions. For example, the most liberal 
justices are 27 percentage points more likely to uphold liberal 
agency interpretations of law than conservative agency 
interpretations. Similarly, conservative justices are 30 
percent more likely to validate conservative agency 
interpretations of law than liberal agency interpretations.
    Simply put, Chevron deference is a blank check for the 
Executive Branch to exercise its own brand of legislative 
authority with little or no accountability. This is not a 
government of the people, by the people, for the people--it's a 
government by bureaucracy. Congress should correct this 
constitutional imbalance by making it clear that agencies 
should not interpret legislative text beyond its plain reading 
and courts should rigorously scrutinize agency interpretations 
of statutory language to ensure congressional intent is 
followed. Doing so vindicates separation of powers principles 
and leaves Congress' legislative role intact.
    It is in this light that I am pleased to join Senators 
Hatch, Grassley and Lee, in introducing the Separation of 
Powers Restoration Act of 2016. This bill, introduced today, 
amends the APA to clarify that courts may not defer to an 
agency interpretation of a statutory provision or rule. 
Ambiguities and statute are unavoidable, but when they do 
occur, courts, not the agencies, must determine their meaning.
    I look forward to hearing from our witnesses, their ideas 
to address this issue in a way that respects congressional 
intent and upholds judicial independence. I have one other 
special guest that's here today, and I would ask the Ranking 
Member to be on her best behavior today because my wife is in 
the audience. She is normally pretty tough on me in hearings 
like this. So my wife, Cindy--we will be married almost 24 
years--is also in the audience.
    So with that, I would recognize the Ranking Member Heitkamp 
for her remarks.

             OPENING STATEMENT OF SENATOR HEITKAMP

    Senator Heitkamp. Thank you, Mr. Chairman, and welcome. I 
just do not know how you have done it for 24 years, but we 
really congratulate you. And we will give special privilege to 
people who wore green. I do not know about the rest of you, but 
Mr. Cooper, you are in good shape.
    Mr. Chairman, thank you so much for holding this hearing. 
This is really a quite heated topic here in Washington, D.C., 
and I think it is always good to get diverse opinions, always 
good to reexamine the law, always good to try and figure out 
where we are right now. And so I just want to make a few 
opening comments, but I look forward to the dialogue.
    When an agency gets a law from Congress to execute, 
sometimes, in fact, many times, there is only one clear way to 
interpret or approach a statute, but that typically is not the 
case. In those situations where there is not one, clearway, the 
agencies have to do their best job in determining what was in 
fact legislative intent.
    As I have said before, the legislative branch needs to do a 
better job when we write laws. For various reasons, we are not 
always clear in our intent or our expectation. Maybe it is 
because we do not want to make the decision and we want to kick 
the ball and the can down the road instead of actually doing 
the job that we were elected to do, which is resolve difficult 
issues of public policy.
    I think that when we fail to consider a detail in the bill 
at all it becomes very difficult for agencies, very difficult 
for courts, and so my first plea would be that we do a better 
job, and in fact, when we find ambiguities, that we legislate. 
And one of the reasons why you do not see that happening the 
way it should is because we have a system that is in near 
gridlock in terms of just taking care of the peas and carrots, 
as you will, of legislation.
    And so we are now engaging in a greater way, I think, 
judicial evaluation of the work that agencies do and the work 
that Congress does. And this is not a role I think that the 
Supreme Court, or any court at any level, particularly 
relishes, that of trying to arbitrate between some people's 
opinion of what happens in a statute and the agency's attempt 
to pass a statute.
    But Chevron has been law for a long time, and I think that 
we need to appreciate that this was the law that basically 
evolved over a long period of time. And I think in many ways it 
was a statement by Congress that if you want clear direction, 
you ought to legislate clear direction and not count on the 
courts to be the arbitrator.
    So Chevron, in my opinion, is not a free pass for agencies 
to do as they please. I want to--always popular to quote in 
these kinds of hearings Justice Anton Scalia, who said, ``Any 
resolution of ambiguity by the administrating agency that is 
authoritative, that represents the official position of the 
agency, must be accepted by the courts if it is reasonable.'' 
Reasonableness has been the key, and in ``Michigan v. EPA,'' 
just as an example, the court determined that the 
interpretation by an agency not to consider costs was anything 
but reasonable.
    If Congress directs agencies to create policies that are 
legally enforceable, we should expect them to stay within the 
parameters that Congress has outlined. If they do not, I think 
the courts are ready to step in, and have proven their ability 
to do so. Replacing Chevron with something, I approach with 
great trepidation. We do not know what that is. We have had 
steady and sure law for the last 30 laws, and the legislative 
process, I think, becomes less certain as we move forward.
    And I think, just to digress a little bit. If you look at 
what has happened with the infamous Waters of the United 
States, in every case they overturned an EPA rule. So no 
deference. You did it wrong. But what happens when they 
overturn it with a 4-4-1? One person now is deciding what is 
Waters of the United States and everybody is trying to evaluate 
what he meant in that minority-concurring opinion, if I can put 
it that way.
    And so it has created great disruption. We are now back in 
the same vein. Instead of Congress legislating, we continue to 
rail at the evils of judicial review, the evils of agencies, 
the whole while--when we should be pointing back at ourselves 
and say, what is the evil of not legislating in a clear manner 
what we intend the law to mean, especially when it is as 
important as a jurisdictional standard of Waters of the United 
States.
    It is mind boggling, and I think in most States you do not 
have these problems because legislators tend to take their 
responsibilities seriously. And so I am very interested in this 
topic, very interested in how change would look for the courts. 
This is a court-adopted doctrine over a long period of time. 
They have refused to overturn Chevron. There is probably reason 
for that, even conservative courts.
    And so this is going to be, hopefully, a great discussion, 
but I am going to be asking questions about how would the 
change be effectuated and how would a change be realized, and 
if you are going to have courts that have complete de novo 
jurisdiction, do we have enough courts to evaluate all the 
facts?
    And so with that, I turn it back to the chairman, and look 
forward to the dialogue.
    Senator Lankford. At this time, we will proceed to 
testimony from our witnesses. Neomi Rao is an Associate 
Professor of law and Director for the Center for the Study of 
the Administrative State at George Mason University School of 
Law. Ms. Rao served as Associate Counsel and Special Assistant 
to President George W. Bush. She also worked as Counsel for the 
U.S. Senate Committee on the Judiciary. She clerked for Justice 
Clarence Thomas in the U.S. Supreme Court, and practiced 
international law at Clifford Chance, LLP.
    Charles Cooper is the founding partner and Chairman of 
Cooper & Kirk, recognized as one of the Nation's top 
litigators. Mr. Cooper has appeared before the U.S. Supreme 
Court multiple times. Prior to entering private practice, Mr. 
Cooper served in the Civil Rights Division of the Justice 
Department and as the Assistant Attorney General for the Office 
of Legal Counsel. Mr. Cooper clerked for Justice William 
Rehnquist, later Chief Justice, on the U.S. Supreme Court.
    Michael Herz is the Arthur Kaplan Professor of Law at 
Cardozio; is that right?
    Mr. Herz. Cardozo.
    Senator Lankford. Cardozo. I apologize for that--School of 
Law. At Cardozo he has served as Senior Associate Dean and Vice 
Dean. He has clerked for Associate Justice Byron White of the 
U.S. Supreme Court and is former chair of the American Bar 
Association's (ABA) section of Administrative Law and 
Regulatory Practice.
    I would like to thank all of our witnesses for appearing 
before us today. It is the custom of the Subcommittee that we 
swear in all witnesses before they testify, so if you do not 
mind, please stand and raise your right hand.
    Do you swear this testimony that you will give before the 
Subcommittee will be the truth, the whole truth and nothing but 
the truth so help you, God?
    Ms. Rao. I do.
    Mr. Cooper. I do.
    Mr. Herz. I do.
    Senator Lankford. Thank you. You may be seated. Let the 
record reflect all witnesses answered in the affirmative.
    We are using a timing system today. You will find that this 
Committee is into more conversation and fact-finding than we 
are exactly sticking by the letter of the clock law. So we will 
start with Ms. Rao, and we will have a 5-minute clock there 
that will wind down a little bit as we go, and be as close as 
you would like to, but we are not going to stick by it strictly 
today. How about that? Ms. Rao, you are up.

 TESTIMONY OF NEOMI RAO,\1\ ASSOCIATE PROFESSOR OF LAW, GEORGE 
                 MASON UNIVERSITY SCHOOL OF LAW

    Ms. Rao. Great. Thank you. Chairman Lankford, Ranking 
Member Heitkamp, and Members of the Committee, thank you for 
the opportunity to testify on this important issue. My focus 
today will be on the relationship between judicial deference to 
agency decisionmaking and the extensive delegation of lawmaking 
authority from Congress to the agencies.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Rao appears in the Appendix on 
page 29.
---------------------------------------------------------------------------
    The tremendous growth of the administrative State and the 
expansion of the powers of the Executive Branch have raised 
alarms at the Supreme Court and elsewhere. Administrative 
agencies now exercise a powerful combination of lawmaking, 
execution and adjudication functions. Operating under open-
ended delegations, agencies have significant discretion as a 
practical matter to make the law. While the executive power 
undoubtedly includes discretion to implement and to interpret 
the law, the Executive Branch must always act pursuant to 
statutory or constitutional authority and has no independent 
authority whatsoever to make law.
    The Constitution indeed vests all legislative powers with 
Congress. The administrative state has required loosening and 
sometimes the abandonment of these constitutional restraints. 
Notably, the Supreme Court will allow almost any delegation of 
authority, from Congress to the Executive, under its 
intelligible principle test. In addition, the Supreme Court has 
developed various and somewhat chaotic doctrines of deference 
to agency interpretations of ambiguous statutes. I think it is 
difficult to reconsider deference without also revisiting 
delegation. Deference in part was an understandable reaction to 
the fact that agencies often operate with a significant degree 
of statutory discretion and so courts hesitated to step in to 
question agency policymaking.
    Yet, delegation to agencies, combined with deference to 
agency interpretations, has allowed for much of the 
administration to operate outside of the checks and balances of 
the Constitution. In recent opinions, Chief Justice Roberts and 
Justices Thomas and Alito have each drawn a connection between 
delegation and deference, and indeed, the need for courts to 
provide an independent check on agencies.
    It is interesting to note that both the non-delegation 
doctrines in Chevron are forms of judicial restraint. Although 
many rationales and defenses are provided for these doctrines, 
I want to focus on one formalist assumption for judicial 
restraint in this area. The Court has argued repeatedly that 
the structural rivalry between Congress and the president will 
keep the branches within their constitutional limits. 
Therefore, because Congress and the president compete for 
control over lawmaking, Congress will not delegate too much.
    In this understanding, courts can leave enforcement of the 
non-delegation principle to the institutional competition 
between the branches. Similarly, the Court, and in particular, 
Justice Scalia, have defended Chevron deference on these same 
grounds. In a case from a few years ago, he argued that 
deferring to agency interpretations would not allow Congress to 
enlarge its own power.
    And so both the flaccid non-delegation doctrine and Chevron 
deference are judicial approaches that assume the political 
rivalry between Congress and the Executive will adequately 
protect constitutional limits without vigorous judicial review. 
Yet it turns out that in a modern administrative state, this 
assumption is mistaken or at last significantly incomplete. In 
addition to transferring significant authority to the 
Executive, delegation has fractured the interest of Congress as 
an institution because in part, it provides an opportunity for 
Members of Congress to influence the administration. This 
dynamic stands at odds with what I have termed the collective 
Congress, which in some ways is an analogy to the unitary 
executive.
    Quite simply, Article 1 vests all legislative powers here 
in a Congress, not in one House committee or member. Collective 
lawmaking is really the cornerstone of representative 
government. It provides the mechanism by which representatives 
serving different interests come together and enact laws for 
the general good.
    This collective mechanism also aligns the interest of 
lawmakers with the institution of Congress. Delegation, 
however, unravels the collective Congress and it undermines 
Congress as an institution. And when that happens, Congress may 
fail to check the overreach of the Executive, and then judicial 
deference compounds this and simply reinforces the problem.
    So if Members of Congress and agencies are more likely to 
collude rather than compete over administrative discretion, the 
structural rivalry between the branches will not work to limit 
power. And when the structural checks fail to constrain, 
judicial review becomes all the more imperative. Judicial power 
indeed includes the power and the duty to exercise independent 
judgment when reviewing agency actions and interpretations.
    The deference framework, such as it is, requires serious 
consideration by the courts and perhaps by Congress through 
reforms of the Administrative Procedure Act (APA). Yet, I would 
point out that the courts cannot remedy the problems of 
administrative overreach on their own. Judicial review plays an 
essential part in keeping the branches within their 
constitutional limits. Judicial review is not the exclusive 
mechanism for this. The political branches have far more 
effective means to check each other, and real reform will 
require action from Congress, the Executive and the courts.
    Thank you.
    Senator Lankford. Mr. Cooper.

TESTIMONY OF CHARLES J. COOPER,\1\ PARTNER, COOPER & KIRK, PLLC

    Mr. Cooper. Thank you, Chairman Lankford, and thank you, 
Ranking Member Heitkamp. It is a real pleasure to be here, and 
I want to thank both of you for inviting me to discuss this 
very important subject matter this morning.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Cooper appears in the Appendix on 
page 44.
---------------------------------------------------------------------------
    As Chief Justice Roberts has recently lamented, the Framers 
could hardly have envisioned today's vast and varied Federal 
bureaucracy and the authority administrative agencies now hold 
over our economic, social and political activities. The Chief 
Justice added a warning about the danger posed by the growing 
power of the administrative State, and the danger he had in 
mind was the danger to our liberties, our individual liberties 
that the separation of powers was designed by the Framers to 
protect.
    The modern administrative state has become a sovereign unto 
itself, I would submit to the Subcommittee, a one-branch 
government whose regulatory grasp reaches into virtually every 
human activity. The focus of my remarks this morning will be on 
Chevron and Seminole Rock, two judge-made doctrines of judicial 
deference to agencies that have placed the administrative 
state's regulatory power, I would submit to you, on steroids.
    Now, Chairman Lankford has previously described those 
doctrines and I will not repeat that here in the interest of 
time. But I will say that both of the doctrines have been 
extended to the full reach of their logic in the decade since 
they were announced. Time is too short to walk through the 
various precedents following Chevron and Seminole Rock, but the 
bottom line, I submit to you, is that these two cases, and 
their progeny, have transformed the administrative state into a 
kind of super court, vested with the last word--binding even on 
the Supreme Court--as to the meaning of ambiguous statutory and 
regulatory provisions in those areas where those doctrines are 
applied.
    Since the early part of the 20th Century, the 
administrative state has been permitted to accumulate and 
exercise legislative, executive and judicial power, despite the 
Constitution's careful and exclusive allocation of these powers 
to the Congress, the president and the courts. And, although 
the powers wielded by the administrative state are vast, it is 
essentially politically accountable neither to Congress, nor 
for the most part, to the president.
    Chevron and Seminole Rock exacerbate these serious 
separation of powers concerns by ensuring that the 
administrative State also largely escapes meaningful legal 
accountability to the courts. I believe that these doctrines of 
deference are at war with the Constitution's separation of 
powers, and for that matter, also with the original design of 
the APA itself, as Chairman Lankford alluded to in his opening 
remarks.
    Turning first to our Constitutional system. As Alexander 
Hamilton wrote in the Federalist No. 78, the interpretation of 
the laws is the proper and peculiar providence of the courts. 
Accordingly, it's been clear, at least since ``Marbury against 
Madison,'' that the authority to conclusively say what the law 
is is a judicial power, one that Article 3 vests exclusively in 
the judicial department, not the executive. And since the 
Constitution does not give the legislative branch any share of 
the judicial power, Congress cannot delegate that power or any 
part of it to an agency.
    It follows, I would submit to you, that the courts must 
retain the sole authority to issue binding interpretations of 
law. Chevron and Seminole Rock, by licensing the wholesale 
transfer of this authority to agencies, are at war with Article 
3. To be sure, this analysis assumes that when an agency 
purports to resolve a statutory or regulatory ambiguity, it is 
exercising interpretative--and by that I mean judicial, 
essentially judicial power.
    And there are some scholars and jurists--and I think we 
will hear from one momentarily--who dispute this assertion, 
arguing instead that in such cases the agency is exercising 
legislative authority implicitly delegated by Congress, and I 
too agree that that is a much more reasonable way to understand 
the rationale of Chevron.
    But I think that any attempt to justify Chevron and 
Seminole Rock on that ground runs headlong not into Article 3, 
but into Article 1 of the Constitution, which vests all 
legislative powers exclusively in Congress, powers that under 
the original design of the Constitution cannot be delegated.
    And I have just another minute or so, Mr. Chairman, if you 
will.
    Senator Lankford. Yes, sir.
    Mr. Cooper. And although the non-delegation doctrine has 
lain largely dormant since the 1930s, we just heard that the 
Supreme Court's continuing reluctance to police the line drawn 
by the Constitution between legislative and executive power 
cannot deprive Congress of its authority--indeed, I would 
submit to you its responsibility--to recognize and maintain 
that critical constitutional boundary. That is equally the 
responsibility of this Congress to do so.
    The constitutional problems created by Chevron and Seminole 
Rock, as I mentioned earlier, are of the judiciary's own 
making. Congress never intended that the courts defer to agency 
legal interpretations. Indeed, I think that much is plain from 
the text of Section 706 of the APA previously quoted by the 
Chairman. It instructs the reviewing court to decide all 
relevant questions of law, to interpret any statutory 
provisions and determine the meaning of the terms of an agency 
action, such as a regulation.
    That language is imperative, commanding the that courts 
shall decide all questions of law. Yet under Chevron and 
Seminole Rock, the agency under review, not the reviewing 
court, authoritatively decides the relevant questions of law. 
Chevron and Seminole Rock, I believe, it cannot be reconciled 
with the original design and the test of Section 706.
    I want to close by urging Congress, and I think welcoming 
Congress' consideration of this important question and 
congressional reforms designed to abrogate Chevron and Seminole 
Rock for those reasons. I do not think there can be any 
question that Congress has the power to do so. Both Chevron and 
Seminole Rock purport to be rooted in the background 
presumption of congressional intent to delegate these 
authorities to the agencies.
    So Congress clearly has the power to rebut that presumption 
by language, language that this Committee and this Congress 
will have to frame in a way even more explicit than Section 706 
already is so that it is inescapably clear to the courts that 
deference is not what Congress contemplates.
    And thank you, Mr. Chairman. Thank you again, Ranking 
Member.
    Senator Lankford. Thank you. Mr. Herz.

 TESTIMONY OF MICHAEL HERZ,\1\ ARTHUR KAPLAN PROFESSOR OF LAW, 
                     CARDOZO SCHOOL OF LAW

    Mr. Herz. Chairman Lankford, Ranking Member Heitkamp, 
Members of this Subcommittee, it is an honor to appear before 
you today. I have been teaching and writing about 
administrative law for almost three decades, and like all 
professors of administrative law, I have spent an inordinate 
amount of that time grappling with Chevron. Whatever other 
effects Chevron may have, it has been great for law professors.
---------------------------------------------------------------------------
    \1\ The prepared statement of Mr. Herz appears in the Appendix on 
page 70.
---------------------------------------------------------------------------
    And I am suspicious of, but reconciled to, Chevron. I am 
suspicious because, exactly as the chairman said in his opening 
remarks, judicial review of administrative action, in 
particular judicial review to ensure compliance with statutory 
limits and commands, is an essential pillar of our 
constitutional democracy. One would not want to send agencies 
out into the world to do what they want. They are creatures of 
statute. They have only the authority Congress has given them. 
They must comply with congressional limits, and judicial review 
is essential to ensure that they do so.
    I completely agree with all that. That is a long-standing 
understanding of how our system works. And the question is 
whether Chevron throws that overboard or not, and I would 
suggest it does not, that properly read and applied, Chevron 
retains and respects the courts' essential role in this regime. 
The doctrine is messy. It is inconsistently applied, like all 
doctrines, but at the end of the day, Chevron is not the threat 
that has been described.
    I want to just say a couple of things drawing on my 
submitted testimony, and then a couple other things, and then I 
will stop. If Senate testimony had titles, mine would be ``What 
Chevron is Not.'' Let's think about the real Chevron, not a 
caricature. And so a few things that Chevron is not.
    First, Chevron is not judicial abdication. First of all, 
there are a whole bunch of situations where Chevron just does 
not apply. There is an agency interpretation out there and the 
court more or less ignores it. At the Supreme Court level, that 
is the vast majority of cases. In lower court level, that's 
less true, but still true.
    Second, when Chevron applies, courts do a lot of work in 
what we call step one, the step where they are trying to figure 
out, did Congress address this issue? They do more work--they 
spend more time in step one than you would think from reading 
Chevron itself, where Justice Stevens, in, I think, a 
completely infelicitous phrase, says that the court should 
determine if Congress had an intent on ``the precise question 
at issue,'' and if there is nothing, we are off to step two, 
and defer.
    Congress almost never had an intent on the precise question 
at issue, at least in a case that is actually litigated to 
judgment. That is why there is a lawsuit. And Congress cannot 
be expected to anticipate, to have a clear specific intent 
about, every application of the statute. But Congress still may 
have answered the question, and courts realize that and spend a 
fair amount of time in step one. That is what courts should be 
doing.
    And finally, step two, when deference kicks in, it does not 
involve handing the judicial role over to agencies, as Mr. 
Cooper said. My view is that what is happening in step two is 
not fairly called interpretation. A court gets to step two 
because it concludes the statute does not answer the question. 
``We could come up with an answer,'' says Justice Stevens--
paraphrasing--in Chevron, ``but we would be making it up.'' 
There is just not an answer in the statute, and at that point, 
when law has given out, it is not really a legal question. 
There is a policy judgment to be made, and if it is a policy 
question, better it should be made by the agency, which has 
some expertise and electoral accountability and is exercising 
delegated authority from Congress, than by courts.
    For that reason, I do not think there is anything 
unconstitutional about Chevron. But the key thing that I think 
is emerging from the testimony of all three of us today is 
actually a certain common ground about where the problem lies. 
The issue is about delegation more than it is about 
interpretation, and this resonates a little with the Ranking 
Member's opening comments. The constitutional argument based on 
Article 3, I think, is completely meritless, and I am not sure 
how strong either of my fellow panelists think it is. They seem 
more focused on the Article 1, non-delegation argument. That 
seems to me a completely plausible argument. Absolutely, what 
Chevron rests on is a frank acknowledgement that Congress hands 
a lot of power to agencies and does not answer a lot of 
questions.
    Now, is that constitutional? The other two witnesses think 
it is not, and of course, the court's doctrine here is famously 
toothless. I disagree, but that is not our question today, the 
non-delegation doctrine. The key point from a Chevron point of 
view, if I could just take one more minute--the key point is to 
see that if you get rid of Chevron, if all review is de novo 
and nothing else changes, statutes are still just as unclear. 
Law still gives out.
    It just means that courts will be inventing answers and 
calling it interpretation instead of agencies. That does not 
give Congress any more power. It arguably gives Congress less 
power. And the underlying problems are exacerbated rather than 
ameliorated. I will stop there. Thank you so much.
    Senator Lankford. Thank you, all three of you. It will just 
be an open dialogue today, back and forth, and so feel free to 
jump in at any point. We will be able to talk through this.
    Mr. Herz, let me pick up right where you left off there. 
Your statement there about courts will invent answers without a 
Chevron type structure, what would prohibit courts, when they 
get to a decision where they have stated in the past for 
Chevron that the policy questions, the agencies have the 
greatest expertise in that area, the courts are more 
generalists, what would deter a court from instead of inventing 
an answer to saying this is an answer that Congress did not 
address, and so Congress needs to write a statute on it, so 
until Congress writes a statute on it, there is not a law on 
this?
    Mr. Herz. Well, obviously, the question is going to arise 
in different circumstances. In many settings, it is clear that 
Congress has given regulatory authority to the agency. Take the 
Waters of the United States, or take Chevron itself, and the 
question is, what is the flexibility the agency has and what is 
the scope of that authority? Someone has to say what are Waters 
of the United States? The statute just is not much help. What 
the statute actually says is you need a permit for a discharge 
into navigable waters, and then weirdly, it defines navigable 
waters as waters of the United States.
    The legislative history suggests that what Congress wanted 
to do was reach to the greatest extent of its constitutional 
authority, but that is the legislative history. There is just 
not a lot to work with there, whether you are an agency or a 
court, and the court cannot just say, oh well, the agency has 
no authority under the Clean Water Act. It is inescapable that 
it has to regulate.
    Senator Lankford. There is not the ability for the court to 
be able to step back and say this is unclear at this point, the 
Congress needs to give clarity on this, so we cannot move 
beyond this point of what has been done until we get greater 
clarity? Going back to the Ranking Member's statement before--
--
    Mr. Herz. Right.
    Senator Lankford [continuing]. That Congress has the 
responsibility to be able to define this, if Congress failed on 
its responsibility, shouldn't Article 3 push back and say 
Article 1 needs to do their job?
    Mr. Herz. Yes. I think there are two approaches the court 
might take if it shared that concern. One is in the setting 
where the statute applies directly to private conduct as 
opposed to a statute that tells the agency to do something, and 
then the agency----
    Senator Lankford. Correct.
    Mr. Herz [continuing]. Statute that applies to the agency, 
there is a due process issue. A really vague statute, like a 
really vague regulation, if we just do not know what it means, 
is unconstitutional under the due process clause, indeed that 
could be a regulation or a statute.
    But the more common Chevron setting is we are talking about 
what this term means as it applies to the agency, and then it 
is just a non-delegation issue. What you are suggesting is a 
non-delegation doctrine with teeth. The court is saying to the 
Congress, you just did not decide the question, go back and do 
it right, because this----
    Senator Heitkamp. I think in the Courts' experience, many 
times when they do do that, they do not get an answer. I am 
going to point you to a case that I was involved in called 
``Quill,'' the famous multi-state tax case. The court deferred 
to Congress and said, yes, we can make a determination whether 
this is in violation of the Interstate Commerce Clause. We are 
going to do that, but the Congress has control over the 
Interstate Commerce Clause. That case was decided in 1992.
    We now have had a whole growth of remote sellers accessing 
markets in competition with other sellers and no answer. And 
recently, Justice Kennedy, in a concurring opinion on a tax 
anti-injunction case, basically said, we are tired of waiting 
for Congress. And so you take a look at all these contentious 
issues, whether it is Dodd-Frank, whether it is the Affordable 
Care Act, they are full of ambiguities that, quite frankly, if 
I were on the Court, I would be tired of cleaning it up. I 
would be tired of hearing it. I would be saying Congress is not 
doing its job under delegation.
    Now, Mr. Cooper, you said something that I thought was 
really interesting. You said this is binding on the Supreme 
Court. I had to laugh when we were talking about Cardozo, 
because every first-year law student loved reading a Cardozo 
opinion because they were all so well written and fun. So he is 
fairly famous for first-year law students.
    But also first-year law students, says none of this is 
binding. Chevron is not binding on the Supreme Court. The 
Supreme Court could reverse Chevron tomorrow. They could change 
the doctrine tomorrow, right? I mean, can we all agree as 
lawyers that is true.
    Mr. Cooper. True.
    Senator Heitkamp. So why don't they? If it is in violation 
of Article 3, which should be the province and the concern of 
the Supreme Court in terms of their range of responsibilities, 
why don't they reverse Chevron? They have been asked many times 
to do that. And it has been conservative and liberal courts 
that have dodged that question.
    Mr. Cooper. Ranking Member Heitkamp, I find that many of 
your comments resonate very well with me. I completely agree 
that much of the problem in this area has been Congress'----
    Senator Heitkamp. It is right here.
    Mr. Cooper. It is Congress' inability really to focus and 
answer difficult political public policy questions. And that 
has led to, in the absence of a non-delegation doctrine, Mr. 
Chairman, essentially, to wholesale legislative lawmaking at 
the agency level in a way that I do not believe is consistent 
with our separation of powers.
    You are right, the Chevron case is judge made. It can be 
judge unmade. I cannot really tell you why it is that the 
courts have, in my opinion, through Chevron, through Seminole 
Rock, abdicated their judicial responsibility, but I do believe 
it has led to a problem of constitutional dimension that is 
well within this body's authority.
    When I say that agency interpretations or agency lawmaking 
are binding on even the Supreme Court, well that is the 
necessary result of Chevron if it is honestly applied. If you 
are deferring to an agency's decision----
    Senator Heitkamp. But if the court did find that in 
violation of Article 3, wouldn't the court make a correction? 
Wouldn't the court reverse Chevron?
    Mr. Cooper. Yes.
    Senator Heitkamp. I am with Mr. Herz. I think that the 
issue here really is delegation. It is really who all 
ultimately gets to decide. And I think that the biggest problem 
that we have is the lack of political courage and political 
will to make the tough decisions. We move them to the agency. 
The agency looks at this, and depending upon how you view the 
agency, either says we have to decide this or goodie, we get to 
decide this.
    And so the agency now has built up a whole lot of we are 
not going to ask Congress for clarification. We are just going 
to do it because we are not going to get it from Congress. So 
we do, I have a real concern about delegation of legislative 
authority.
    Mr. Cooper. Yes.
    Senator Heitkamp. I do not discount that at all. My problem 
is that when we look to who should be fixing that, it should be 
the entity, the branch of government that is being infringed 
upon, which is the U.S. Congress. And it should not be about 
telling the Judiciary what judicial doctrines they should be 
applying, but telling ourselves it is time to do our job.
    Mr. Cooper. Well, not----
    Senator Heitkamp. And so why is that not the answer, I 
guess, rather than telling the court, you cannot apply Chevron?
    Mr. Cooper. I think Chevron tells the agencies that 
Congress' job is yours and we are not going to interfere. I 
think that is what Chevron says. And I very much welcome 
Chairman Lankford's observation that when, as Professor Herz 
puts it, when a statute does not answer the question, when law 
has given out--in other words, Congress has not legislated on 
the subject at issue--it would be, in my opinion, the proper 
judicial response to say, there is no law, there is no law 
before me as a judge to apply.
    And that is a delegation issue, to be sure, that would 
require a robust non-delegation doctrine. But the Congress 
would simply say--excuse me--the court would simply say the 
agency's answer is the agency's answer, it is not Congress, and 
Congress is the one that has Article 1 obligation and 
authority, an obligation to decide this question.
    It is Congress who is politically accountable to the 
people, and if they do not like what Chairman Lankford or 
Ranking Member Heitkamp have done, they can call them home and 
do something about it. That is not the case with agency 
legislation. So yes, that would be, to my mind, Mr. Chairman, a 
perfectly legitimate, and the appropriate judicial response. 
When law has given out, there is no law.
    Senator Lankford. So the challenge that we have is Congress 
only acts when it has to. If there is a deadline, if there is 
some imposing reason to act, then Congress acts because the 
pressure of the American people come on for action. And 
Congress has found over the previous several decades the 
ability to be able to hand off to agencies, to someone else, to 
take that action.
    And the challenge is now, I think the courts are also doing 
the same thing. Courts are now saying, well, this is also 
something handed to us, but we are going to hand it to someone 
else as well. And everyone is passing around the hot potato 
here, when ultimately, we have to push this back to do your 
job, do your job, do your job. If you do not do your job, no 
one else can do your job.
    And Congress is not doing its job because it has found a 
way to be able to hand off to the courts, or to the Executive 
Branch, a way for their job to be done by someone else.
    Mr. Cooper. And if the courts stopped playing that game, 
and if Congress required them to do so, to essentially use the 
common canons of statutory construction to decide ambiguous 
questions, and sometimes to decide there is no law here, law 
has given out, if they did that, then there would be no choice 
but for it to come back to Congress and this body to----
    Senator Lankford. And put the pressure back on everyone to 
actually get the task done. And that becomes a key issue. The 
challenge that I have with this as well is when the Court 
treats statute as they do the Constitution--and that is open to 
interpretation in the sense of, the Constitution, of course, 
was a broad written document, 200-plus years old. Of course, 
they could not speak to cars. Of course, they could not speak 
to airplanes.
    And so you look at an EPA Clean Air Act, or a Clean Water 
Act, and say, well, Congress, of course, did not know about 
this 40 years ago, so what would they have done if they would 
have known about that? When this begins to open up and to say 
there has not been a policy statement made on this because at 
the time that Congress did not know about this or chose not to 
act on this statement, it seems to be an interpretation of the 
process for the court to say, what did the Congress mean if 
this would have been true at the time rather than what does the 
policy say?
    Does that make sense?
    Mr. Cooper. It does to me.
    Senator Lankford. Mr. Herz, go ahead.
    Mr. Herz. So I will just make three very quick points in 
response to this. First, to my ear, Mr. Cooper is asking for a 
level of legislative specificity which simply is impossible to 
achieve. That is to say, law will always run out at some point. 
Congress cannot possibly--no drafter, no instructor--can 
possibly anticipate everything.
    If my wife tells me, go out and get some milk, and now I am 
at the store and suddenly, wait, a quart, a half-gallon, skim, 
2 percent, whole? She did not tell me. Is that 
unconstitutional? No. I figure it out, that is always going to 
be the case. And if she said a quart, then I still have the 
skim question, et cetera. There will always be something. And 
so it cannot be----
    Senator Lankford. Correct.
    Mr. Herz [continuing]. Just that, any uncertainty means, oh 
it is an unconstitutional statute. We do not want to make your 
job harder than it already is.
    The second thing is that the key thing, I think, to bear in 
mind is Chevron is about the allocation of authority as between 
courts and agencies. And if the problem is over delegation, it 
does not matter which one of those is exercising the delegated 
authority. If the problem is Congress has not decided 
something, agencies can make it up or courts can make it up. 
That is still a problem constitutionally.
    And then just the third thing, just as you said, Senator 
Lankford, courts can do some crazy things, right? I mean, you 
are worried about agencies, but you can also be worried about 
courts. The Sunstein article you mentioned in your opening 
remarks, absolutely shows an ideological influence in Chevron, 
but the question is always, compared to what? There is 
obviously an ideological influence without Chevron as well, and 
many studies show that. Getting rid of Chevron is not going to 
abandon, and may actually exacerbate, the ideological influence 
that is in the courts.
    Senator Lankford. Right.
    Senator Heitkamp. Can I just make a point that, Mr. Cooper, 
there is a whole range of decisions agencies make. I would put 
Waters of the United States over here, because it is a 
jurisdictional question. It is a threshold, baseline question 
in terms of legally. I think legally you have complicated facts 
given hydrology, given everything that they do. But that is a 
tough question.
    On the other side is tank car rules, right, tank car rules 
that say we need to make the railroad safe, we are moving a lot 
of oil on tank cars, we need to reinforce these, we did not 
engage early enough, now these are the new standards for 
breaking in tank car rules.
    Does the court really want to evaluate the gauge of the 
steel of the tank car, or do they want to defer to the agency? 
And I understand the difference between, interpretations of law 
and the implementations of law. But it goes back to what Mr. 
Herz is saying, those would be two examples. At some point in 
the middle, the vast majority of the issues are going to be in 
the middle. And if we litigate and kick back to Congress 
everything in the middle and the court says, now Congress wants 
to rehear this because we just passed a law that says if you do 
not like what the agency has done, kick it back to us, I fear 
for the union given what I have seen since I have been here.
    And so, I mean, I think Mr. Herz, your milk example is 
right on. I mean, you forgot organic or----
    Senator Lankford. Except maybe you should just call your 
wife and she would tell you what it is.
    Senator Heitkamp. She might tell you and then you knew you 
were supposed to get organic. But I think because the 
regulatory world has become so complex, it just becomes so 
extraordinarily difficult. And that is just my point.
    Senator Lankford. Let me make one comment, too. And Senator 
Ernst just joined us as well. I want to bring in Ms. Rao on 
this, because there are different ways--we talk about Chevron. 
There are different ways to do this. The permissible 
construction that is Chevron, compare that to the Skidmore most 
persuasive and as far as the different thresholds of giving 
deference. Because there will be deference.
    I get the milk illustration, except there is a pushback to 
say at some point, I did not get clarity, let me go check in 
with who originally gave the orders here at this point. When we 
deal with a most persuasive versus permissible construction, 
what do you think the boundaries are of that when you deal with 
statutes?
    Ms. Rao. I do think Skidmore and Chevron present different 
standards. Because in Skidmore, the Court is really still 
retaining the authority to say what the law is, and they take 
into account the practice of the Executive Branch, or their 
interpretations. And so I think that does leave more power with 
the courts.
    I think also, in relation to the discussion that we have 
been having, I think one thing is important to note, which is 
that this idea that when law gives out, either the agency has 
to make it up or the Court has to make it up. I think that in 
many instances that that is not quite right, because there is 
another answer. I think, as Mr. Cooper said, which is, the 
Court can simply say there is no law here, which doesn't 
necessarily mean it goes back to Congress. It can also just go 
back to the agency, right, to do something that is within the 
law, and they do not necessarily have to redefine steel 
standards to say that the steel standards are not within the 
statute.
    So I think it is not the case that you are always replacing 
judicial policymaking with agency policymaking.
    Senator Lankford. Right.
    Ms. Rao. It just may be that there is----
    Senator Lankford. That could be a statement of the State 
needs to rule on this or there needs to be another statute, or 
you need to be within the bounds of the statute.
    Ms. Rao. Right.
    Senator Lankford. But this is not spoken to in a specific 
year.
    Ms. Rao. That's right.
    Senator Lankford. This is not the authority of----
    Ms. Rao. I think the idea that one or the other has to make 
it up has a very strong assumption that is pro-regulatory, 
which is someone has to do something. And I think in our system 
of government that is not the case, right, if there is no law 
under which a government actor can act, then nothing happens. 
And if Congress actually wants regulatory action, then they may 
have to make some changes.
    Senator Lankford. Senator Ernst.

               OPENING STATEMENT OF SENATOR ERNST

    Senator Ernst. Thank you, Mr. Chairman. I appreciate this. 
This is such an important topic. We are spending a second 
Subcommittee hearing on this, and I want to thank the witnesses 
for being with us today.
    Mr. Cooper, I would like to start with you, because I want 
to expand a little bit on this discussion that is going on 
right now. And notwithstanding the legislation that is in front 
of us today, and Senator Lankford has been really championing 
that, what, in your opinion, would be considered the ideal 
deference balance? A lot of different opinions out here, but 
what would you think is the ideal balance?
    Mr. Cooper. Well, earlier, the chairman mentioned, and 
Professor Rao spoke to, the Skidmore standard. I think the 
Skidmore standard would be an acceptable one to me, because I 
believe that basically it is a court saying, taking all of the 
available information bearing on the meaning of this law in 
front of me, including the persuasiveness of the agency's 
analysis, what is the correct answer to the question at hand? 
What is the correct answer?
    The most recent, I think, Chevron decision from the Supreme 
Court was ``King against Burwell.'' And the Court rejected 
application of Chevron, and once it rejected application of 
Chevron on the theory that well, this is a question of such 
surpassing economic and political consequence within the 
statute, we are not going to apply Chevron. Well, what was the 
question then? What is the correct legal answer? What is the 
correct interpretation of that provision, 36B of the ACA? I 
think that is the question.
    So what are the typical sources of evidence that the Court 
calls upon to determine the meaning of a statute? I could cite 
to you the traditional canons of construction, because that is 
what they use, for example, at Chevron step one, and that is 
what they used purportedly--I think, erroneously, profoundly 
erroneously--in ``King against Burwell''. But the Court 
purported to apply there the traditional canons of statutory 
construction to find out what is the correct meaning, not what 
is a plausible meaning, and therefore, we accepted and deferred 
to it.
    Senator Ernst. And then what, in your opinion, too, would 
be the guidelines as far as a timeframe? If you take a look at 
an act that was passed 10, 20 years ago, and regulatory 
agencies are continuing to develop regulation for something 
that was passed so long ago, do you see that as an issue? And I 
would use the Clean Water Act and what we see going on with 
WOTUS right now.
    When does that timeframe start to interfere with OK, well, 
we understand the original construct, the intent of those 
legislators to make sure that waters that were covered were 
navigable waters, well now it has gotten to a point we are 
including Iowa. 97 percent of dry land is now considered waters 
of the United States.
    Is there a timeframe that should be considered in that, or, 
how would you respond to that?
    Mr. Cooper. I do not really look at it so much in terms of 
timeframes, as if there is some kind of temporal limit or range 
within which Congress has provided the law that is to be 
applied. I do believe that the advance of technology and the 
advance of, information in our understanding sometimes presents 
new questions that old statutes do not answer and that that is 
why this body is a continuing one.
    And then, obviously, because there are new and pressing 
questions, regulatory agencies with general jurisdiction over 
those subject matters will naturally feel they need to provide 
an answer even in the absence of congressional guidance or 
seizing upon congressional statutes that really do not provide 
the adequate standards to guide and channel their decisions.
    So I think I grasp the concern that you have here. I do not 
have specific comments, Senator Ernst, on the Waters of the 
United States problem that has come up. Frankly, I have not 
studied that specifically and carefully. I think my colleagues 
may have. But my general answer to you is that in law, new 
problems arise every day in areas in which there is legislation 
but that that legislation does not answer. Then it becomes your 
job.
    Senator Ernst. I would agree. I think there is a point in 
time and that we can have all kinds of discussions about that, 
but we need to revisit the topics. And I guess my opinion would 
be that it is Congress' job to take a look at the way things 
have progressed through the years. Are we still following the 
original intent of the law? If not, Congress needs to revisit 
that, not an agency making, 10 years of changes to rules and 
regulations to keep up with the times.
    I think at some point it needs to come back to this body 
for a second look. And then we set now the new intent of 
whatever act we might decide to pass.
    Mr. Cooper. And may I----
    Senator Ernst. Yes, go ahead, please.
    Mr. Cooper. I just wonder if on this question of navigable 
waters there was a time when that word was perfectly 
serviceable in a regulatory context and in a judicial context. 
What led to the events that now allow that word to cover 97 
percent of your State's dry land?
    Senator Ernst. Exactly.
    Mr. Cooper. Something is not right there. And I think that 
was an aggressive interpretation and application beyond the 
place where Congress could reasonably have intended for that 
word to extend. So if that is the case, then it seems to me 
that it may well be Congress' obligation now to define it with 
greater specificity.
    Senator Ernst. Absolutely. I agree. And do you mind if I--
--
    Senator Lankford. Go ahead.
    Senator Ernst. One more. I am sorry. We will keep going, 
because I want to jump in a little bit further there. But in 
talking about the change and taking legislation--and it 
eventually changes over the years or is implemented--but just 3 
days before the Supreme Court overturned the utility Mercury 
and Air Toxic Standards (MATS) rule, EPA Administrator McCarthy 
bragged to HBO's Bill Maher that the Supreme Court's decision 
would not matter because it took 3 years to get the Supreme 
Court to act, and by then, her quote, ``The investments have 
been made''.
    Unfortunately, most of our Nation's facilities were forced 
to already comply with this rule before it was overturned by 
the Supreme Court. And I point out this quote because this is 
the main concern that I have with deference, is that we have 
agencies that are able to really push their own agenda knowing 
that the investments will be made before there is time for the 
court system to react to that. So they really are getting their 
agenda through without going through the court system. They can 
get those investments made.
    And that is exactly what I think will happen with WOTUS, is 
that people will go ahead and make the investments and they 
will start putting the regulations in place before it actually 
makes it through the judicial system.
    Any thoughts on that? And I would open it to any of you.
    Senator Lankford. Can I make just a quick comment on that 
to add to what you are saying on it? Christopher Walker is 
assistant professor of law at Ohio State University. Did a 
study, and he just basically inventoried seven different 
Federal agencies and their regulators there, asking questions. 
He found that of the regulators that are in those seven 
agencies, 94 percent of them knew the term ``Chevron 
deference'' by name.
    So what Senator Ernst is talking about, to say that there 
is this sense within the agencies that they are familiar with 
this doctrine, know it, and know that they are promulgating 
rules, are aware that, hey there is a chance I am going to get 
Chevron deference on this, that is a big issue when you've got 
94 percent of the folks making regulations that know what 
Chevron deference is----
    Senator Ernst. I understand that.
    Senator Lankford [continuing]. Specifically. So I apologize 
for interrupting.
    Senator Ernst. Yes. No, thank you very much.
    Senator Lankford. I wanted to add to that.
    Ms. Rao. Yes, Senators, I do have some thoughts about that, 
which is, I think you are absolutely right that it is the case 
agencies often rely on the fact that there is a long lag for 
litigation, and even at the end of the litigation process, 
there is a good chance that the courts will defer to what the 
agency has done. And even if they do not, as you say, the 
investments have been made.
    I would also want to flag another problem, which is that 
agencies often can take actions that affect private industries 
without going through rulemaking. So they have all sorts of 
ways of kind of forcing investments that are not even 
challengeable in court, right? So you have the problem of 
regulating by speeches or by, FAQs that they post on their 
website.
    And if you talk to people in industry, they say, well, we 
need to do what the head of the agency said in their speech, 
even though it has not gone through any process and there is no 
way to challenge it. And so, there is a problem of deference. 
And there is also a problem that these agencies just act like 
general lawmaking bodies where they can say something and 
expect people to comply, which is, I think, an even further 
problem.
    Senator Ernst. Right. Certainly. Thank you. Mr. Herz.
    Mr. Herz. So I am not going to dispute that agencies 
sometimes get out of control. The agencies do, right? All 
institutions abuse their authority from time to time. But I 
think that some of the most recent comments have moved us away 
from, and are not good examples of, whatever the abuses 
produced by Chevron may be.
    So to the extent agencies are regulating by speeches or 
regulating by press release, that may be a problem. It is not a 
Chevron problem because those do not get Chevron deference. The 
black letter law is no court would give Chevron deference to 
those. So if they have an impact, it is not because of Chevron.
    Likewise, Michigan against EPA may well illustrate 
something that went profoundly wrong, but the court set aside 
the regulation in Michigan against EPA. It did not defer, and 
therefore, it cannot be a very good example of a Chevron 
problem. It may be an example of another problem, but Michigan 
against EPA reminds us, as I said in my initial comments, that 
actually courts do set aside agency action under Chevron. It is 
not a complete rubber stamp.
    And then with regard to WOTUS, obviously, the 97 percent 
figure is pretty astonishing. I am surprised by it, but I 
defer, so to speak. Assuming it is true, I think a court will 
and should strike down that regulation under Chevron. If it 
really is affecting 97 percent, it is inconsistent with 
Congress' intent and with the statute. And so that is the work 
Chevron does. Some teeth remain in judicial review, 
notwithstanding Chevron.
    Senator Ernst. Thank you. Thank you very much.
    Mr. Cooper. May I just make the point that I really do 
disagree with the notion that, for example, the regulation at 
issue in ``Michigan against EPA'' was not a Chevron problem? I 
do believe that Chevron is well known by every regulatory 
agency, that Chevron essentially licenses those regulatory 
agencies to not try to find the correct answer, and I 
understand that that cannot be found with respect to a lot of 
the enactments, Madam Ranking Member, that Congress puts 
forward.
    But with respect to even those where there is a correct 
answer, that is not something the agencies have to find or even 
have to look for. They only have to look for a plausible 
answer, and I do believe that that ensures that they will 
regulate to the limits and beyond the limits of what is 
plausible in obedience to whatever their regulatory agenda is.
    Mr. Herz. I half agree with that.
    Mr. Cooper. And yes, there will be occasions when they so 
far exceed it that they go beyond even what is a plausible 
interpretation of Congress' meaning, in the case of ambiguity, 
that the courts will say, well, no, we have to step in here. 
But that is a Chevron problem, in my opinion.
    Mr. Herz. If I could just very briefly half agree with what 
you said, even though I would be expected to completely 
disagree.
    Senator Lankford. Is that a 49 percent agree or a 51 
percent?
    Mr. Herz. I think it is 51. In the interest of 
bipartisanship, it is 51. As everybody knows, there has been a 
lot of empirical work done to try and find a Chevron effect in 
the courts. Are courts, in fact, upholding agencies more often 
or less often than before Chevron or than in a hypothetical 
world without Chevron? And by and large, those findings have 
indicated that if you look at outcomes, you do not see a 
significant effect. In the Supreme Court, absolutely not, but 
the Supreme Court is the Supreme Court. They do what they want.
    But even in the lower courts, which is a more complicated 
picture, but basically, if you just count outcomes, it seems 
like Chevron does not have much impact. I will say, there is a 
lot of work that suggests it does not matter what the standard 
of review is. Agencies get upheld 70 percent of the time 
regardless of standard of review, and if that is right, we 
should just end the hearing now and all go home. I mean, we are 
wasting our time.
    The obvious conclusion to this is to say, ``ah, see, 
Chevron does not matter. Courts are not giving away the 
store''. The response is exactly what Chuck was saying, and the 
Chris Walker article you cite as an example of this. There is 
an older article by Don Elliott that makes the same point--I 
forget the cite; Don Elliott was general counsel of EPA in the 
first Bush Administration--that says agencies are taking more 
and more aggressive interpretations because they know they are 
protected by Chevron.
    And to the extent that is happening, then if the affirmance 
rate remains the same, that does not mean Chevron is not having 
an effect. Chevron is having an effect. And that is where one 
would really need to look. I think the Walker article is a good 
one. I think more work needs to be done there to get an 
empirical answer, but that is the critical point.
    Senator Ernst. Thank you very much. Thank you, Mr. 
Chairman.
    Senator Portman. First, I want to thank Chairman Lankford 
and Ranking Member Heitkamp, one for holding this hearing, and 
for continuing to probe on this issue, as we have in a number 
of other hearings, but second for their deference to other 
Members of the Committee to be able to ask questions, because, 
we all have 20 things going on at once.
    But this is a fascinating topic for us to grapple with. I 
just left the Farm Bureau where we talked about Waters of the 
United States, and you know, we talked about the EPA 
regulations, and there has been discussion today, I am sure, 
about immigration and the Affordable Care Act and the fact that 
the agencies in promulgating their rules are playing a bigger 
and bigger role in our lives.
    I thought your Ohio State professor analysis of the number 
of people in the agencies who know what is going on with regard 
to the specific issue of Chevron deference was interesting, but 
the fact is, it is almost like we have this fourth branch that 
is playing a bigger and bigger role in all of our lives.
    So we have talked a lot about Chevron today. I think that 
is important. I think the Office of Information and Regulatory 
Affairs (OIRA) doctrine is just as important, and I think that 
is something--if you do not mind, I would like to probe just 
for a second. There is a bill that I have introduced in every 
Congress that I have been here in the Senate, and it is called 
the Regulatory Accountability Act. Some of you have been 
involved with that, and I appreciate your work on it. It was 
something that this year Senator Angus King and I introduced. 
It is bipartisan. It has been in the past. And it is really the 
first time I think in almost a half century that we have had 
some significant reform, if we can get it passed in the EPA, 
which is really where a lot of this should rest in my view. I 
was looking at the Administrative Procedure Act and, what did 
it mean and how does it apply to our current situation?
    The judicially created deference in Chevron, Seminole Rock, 
OIRA and so on, I think has taken us away from some of the 
checks and balances that our Founders intended, but also what 
is in the APA. So under the Regulatory Accountability Act, 
judicial deference to the agency's interpretation of its own 
regulations changes. It is not automatic.
    And I think this again is really an important part of what 
we are talking about that does not get as much attention as the 
agency in being able to interpret its own regulations. It would 
be based on the persuasiveness and the thoroughness of 
agencies' reasoning behind it. It would also repeal this OIRA 
deference in that regard. And this bill, by the way, has the 
support now of over 80 groups, including some you would expect, 
like the National Association of Manufacturers, the Chamber, 
the Business Roundtable, but also a lot of scholars, a lot of 
former public officials, some officials who have been involved 
with OIRA over the years on both sides of the aisle.
    So my question to you, I guess, would be--and if you do not 
mind, Mr. Cooper, since I know you have been spending a lot of 
time on this issue, Section 706 of the APA again, it is the law 
of the land--says, quote, ``The reviewing court shall decide 
all relevant questions of law, interpret constitutional and 
statutory provisions, and determine the meaning or 
applicability of the terms of an agency action.''
    That is in law. And Scalia wrote in ``Perez v. Mortgage 
Bankers Association,'' that the Supreme Court has been quote, 
``Heedless of the original design of the APA'' in, quote, ``its 
elaborate law of deference to agency interpretations of 
statutes and regulations.''
    We have talked a lot about Antonin Scalia in the last few 
weeks. This is one where I think he got it right, that you need 
to go back to the APA and look at what it says, and it does not 
seem to fit with some of this. So I guess I would just ask you, 
Mr. Cooper, do you think that the APA itself is, as it was 
originally intended and written, is at odds with Chevron, 
Seminole Rock and for that matter, the deference that is 
established in OIRA?
    Mr. Cooper. Senator Portman, thank you for that question. 
And yes, I do. And I have tried to outline my thoughts in some 
detail in the written submission that I have provided to the 
Subcommittee. But I do think the language of 706 is quite 
imperative. It makes clear that it is the courts' 
responsibility; the courts shall interpret all statutes. And it 
is equally clear with respect to agency actions, including, 
obviously, regulations.
    I find it extraordinary, really, extraordinary that the 
Chevron doctrine and the Seminole Rock, now Auer, doctrines 
have proceeded with no one really particularly noticing that 
this is very difficult to square with the plain language of the 
APA, the congressional statute that governs the administrative 
process and judicial review of the work of the administrative 
agencies.
    So yes, I do agree. I have suggested earlier in my 
testimony that I believe that amending Section 706 now is in 
order to use language that cannot be ignored and cannot be 
escaped by the courts to abrogate both Chevron and Seminole 
Rock.
    Senator Portman. Well, I appreciate that, and that is what 
we intend to do in the Regulatory Accountability Act, is to 
make more clear what I think is already clear, as Justice 
Scalia has said, in the very language of the APA. But, frankly, 
it is a new world, and there have been new, as I said, fourth 
estate intrusions on what I think is rightfully both in the 
legislative and in the judicial branch, and that is 
understandable.
    It is a more sophisticated economy and society and there 
are lots of issues that have come up. But the question is, how 
can you be sure that we do have that appropriate balance that, 
again, I think goes back to the Founders, but certainly you can 
take it right back to the Administrative Procedure Act and 
Section 706.
    On this issue of notice and comment rulemaking, someone 
said that the agencies rely on Seminole Rock deference to 
expand their authority without going through the process of 
notice and comment. You may have talked about this earlier 
today, and I apologize, I did not hear it, but do you think 
that the Seminole Rock deference influences the behavior of 
agencies or agency staff, and do you think it creates an 
incentive for agencies to take advantage of ambiguous terms and 
statutes that they are asked to administer?
    Mr. Cooper. Senator Portman, I certainly do. I do not see 
how it could not, I mean, human nature being what it is. The 
notice and comment procedure required under the APA is one that 
is designed to ensure that the agency solicits and considers 
all of the information that it can from the public in order to 
ensure that its decisions made pursuant to congressional 
statute are reasonable, never arbitrary and capricious, and are 
as close to congressional design as possible. That is its 
purpose.
    If to whatever extent under Seminole Rock it can regulate 
in a vague and general way, it then has freed itself from 
essentially the binds of notice and comment rulemaking because 
once it has a general regulation and it is free under Seminole 
Rock to interpret that regulation in a way that the courts must 
defer, it has given itself an entirely new flexibility to 
effectively make law.
    And I cannot cite to you--perhaps my colleagues on either 
side who study this day in and day out--I am always intimidated 
frankly when I am with the professors of administrative law.
    Senator Heitkamp. You do not seem very intimidated.
    Mr. Cooper. I do not study the agencies day in and day out. 
I sue them day in and day out, and so Chevron, honestly, is 
typically my enemy in that litigation. And I confess my bias 
upfront, but I cannot cite to you particular episodes when 
Seminole Rock has been abused in the fashion that I am 
suggesting it has, but I do agree with Justice Scalia that it 
is happening.
    Senator Portman. I am over my time here, but I will say, 
the other issue that we--at least I have not addressed, that I 
saw in Ms. Rao's testimony, you addressed, which is, right back 
to us. I mean, Congress has, I think you said ``passed the 
buck.'' Because we do live in a more complicated, difficult 
world, and it is easier to say, we are not going to figure out 
how to deal with this in the statute. We are just going to give 
it to some expert in an agency. And I think Congress has a role 
here too in writing statutes that provide more guidance and 
clarity.
    And thank you all very much. Thanks for the deference, Mr. 
Chairman.
    Senator Heitkamp. I mean, we see this over and over again. 
As Senator Portman said, and as I said in my opening comments, 
this abrogation of responsibility that we see in Congress, 
whether it is getting Government Accountability Office (GAO) 
reports or Inspector General (IG) reports and not following up, 
not holding people accountable, not coming together to try and 
clarify. Think about the cost of the litigation of Waters of 
the United States, and we are operating in uncertainty.
    A lot of people are happy for the stay. I am happy for the 
stay. I have a bill that changes this. It has become so 
difficult to actually legislate in a toxic environment. But the 
one point that I want to make is that so many people look at 
this as a partisan issue. This is a structural issue. This is a 
constitutional issue, and you have to balance it. And you can 
say, well, this is all designed to get even with somebody's 
agency, but I go back to the Massachusetts case that directed 
EPA to begin to look at regulating carbon. They made a 
decision. That decision was not given deference, and now we are 
in the clean power plan regime.
    This is not about partisan politics. This is about the 
balance of authority and power, and as we live in a more 
complicated world with less ability to make simple decisions 
here in a complicated environment and hand over those simple 
decisions, say good luck, I think a fair amount of agencies who 
would be watching this would say, look, you didn't give me 
enough direction. You want me to do my job and regulate and you 
have not told me what to do, and so what am I supposed to do? I 
just throw up my hands and say, not going to meet the statutory 
requirement to get these regulations out in time, so I am going 
to get dinged on that, but I do not know what you intended, and 
this is a lot more complicated, and we cannot take it back.
    And so I want to just say this has been very stimulating. 
And I think we will continue this discussion. But I want to put 
it in the context of this is not a liberal/conservative 
decision. This is a constitutional issue about balance of power 
and delegation, and we approach it that way. We may not agree. 
I mean, I quite frankly, think if the Court does not like 
Chevron, reverse it, give us a different standard. I do not 
feel obligated to reverse Chevron for the courts. The courts 
can reverse Chevron. But I do feel obligated to start 
identifying those areas that we in Congress have an obligation 
to clarify these ambiguities and take that responsibility 
seriously.
    And so thank you. You have been a very engaging and 
enlightening panel.
    Senator Lankford. Thank you. Let me do a quick wrap up, and 
I have one last question as well. It is interesting to me, as 
recently as yesterday, I met with some leadership from the 
Corps of Engineers about a piece of statute that Congress 
passed last year, or actually, 2 years ago in this particular 
piece. And we walked through the details of it, and their 
comment, because my question to them was this has not been 
implemented, and they said, well, we are going to try to get 
with you and your staff, because we do not have good parameters 
of what to do with this. We know the intent. We do not know how 
to do it.
    And so they were literally coming back as an agency, back 
to Congress to say, we need additional help and additional 
legislation to provide us greater clarity. They were not 
willing to make a guess to try to determine what is permissible 
construction. In some ways, it was gosh, this seems very plain 
to me, and the other way, I thought, OK, let's have the 
conversation, what is missing?
    But it forced that conversation, exactly what we have 
talked about. They were not going to move on permissible 
construction because they were not confident 100 percent of 
what we needed. And so they were coming back to us on it.
    Let me ask this last question on this, and I know I am 
going to open up Pandora's Box with it, but I want to try to 
limit our time on this, because you have all been terrific to 
be able to walk through these issues. If we were to pass 
something or to try to lay something before the courts and say 
the reviewing courts should review the meaning of statutory 
provisions de novo, what happens? Mr. Herz.
    Mr. Herz. So I am speaking off the top of my head.
    Senator Lankford. I understand. That is what professors do.
    Mr. Herz. Right.
    Senator Lankford. You draw from your experience.
    Mr. Herz. Yes, but also I am very nervous because I am 
sitting next to a real lawyer. First of all, I do not think 
there is any doubt about the constitutionality of such a bill. 
Congress has the authority to pass such a law under the 
Constitution. In essence, as Senator Portman was pointing out, 
it did so already in 706. This would be a modification of 706.
    Second, I think that it would be only partially effective, 
because to say de novo review, as I would read it, seems to say 
not only not Chevron, but not Skidmore. Skidmore came up 
earlier. Just de novo, on your own, ignore the agencies. Apart 
from the fact that I do not think courts should do that, I do 
not think courts would do it. The idea that courts should take 
agency view seriously is a very old idea. It did not start with 
Chevron.
    And it is imbued in the judiciary, and it is a kind of 
natural instinct, and I think an appropriate instinct. So my 
guess is that courts would continue to pay some attention to 
what agencies had to say. I do think it would shift the law and 
shift the practice. But I do not think it would actually 
produce pure de novo review in reality. Compliance with 
Skidmore, is impossible to police. A Court can say oh, we are 
applying Skidmore, but we are not persuaded, and who knows if 
they were or not, right?
    But likewise, compliance with de novo would be impossible 
to police. They could say it is de novo, but in fact, they 
might take the agencies quite seriously. I think they probably 
would.
    Senator Lankford. Thank you. Other comments?
    Mr. Cooper. I would just add, I really do not think de 
novo--first of all, I would welcome that amendment to 706 and I 
would be delighted, as this Subcommittee continues to explore 
how best to address this problem if you conclude ultimately, 
Ranking Member, that it is a problem.
    But I do not think that de novo review would require that 
the courts blind themselves to what the agency has said. I 
think they could and would review that in the same way they 
would review the amicus briefs and briefs that are before them 
in terms of what does this mean? Using again the usual canons 
of statutory construction, what is the correct answer, as the 
court put it in ``King against Burwell''? And looking to see 
how the agency itself has analyzed that question would be 
illuminating.
    It would be illuminating in the same way that a brief 
before them is illuminating. If to the extent it persuades, it 
persuades. To the extent it does not, it does not.
    Senator Lankford. Ms. Rao.
    Ms. Rao. Sure. I think one of the difficult things about 
legislating the standard of judicial review, in my 
understanding, is that the proposal is to try to restore the 
Court's independent judicial review of agency action. And I am 
not sure if the term ``de novo'' captures that, and I am not 
sure what language would necessarily capture we want you to 
exercise your traditional independent role of judicial review.
    Because frankly, the independent judgments and judicial 
review are kind of a complex matter, right, very hard to sort 
of spell out. And so like the others, I think that it is a 
great thing for Congress to think about and consider, how do we 
sort of get the APA to say we meant what we said in the APA 
originally? But what precise language is used I think is maybe 
harder to pin down.
    Senator Lankford. Yes, welcome to Congress.
    Ms. Rao. Yes.
    Senator Lankford. Why we end up with laws that are 
ambiguous as well, because of interpretation on the other side. 
I appreciate all of your input, your preparation for this and 
being a part of this conversation today and bringing this to 
the national conversation. This is a long-term conversation. It 
is not new to today, as you know very well. As you talked 
about, often this comes up in the classroom setting as well.
    This one we have to find some sort of resolution for, 
because I think the trend line is, this continues to get 
fuzzier as time goes on rather than clearer. And so if we can 
provide some sort of clarity to this in the direction that it 
goes, I think we continue to drift.
    So I appreciate very much the overarching conversation. Any 
other comments, Ranking Member.
    Senator Heitkamp. Just that it is all about staying in your 
lane. What is the lane? And we have not defined the lane. I 
agree with Professor Herz. We have the ability to do that, but 
so does the Court have the ability to decide, and probably with 
more certainty and quicker. And I think at some point here they 
are going to have to revisit Chevron and either make the 
modification or the clarifications that give the message that 
this is not unfettered discretion. You do not have unfettered 
discretion.
    And I think a lot of people look at Chevron, say that is 
what Chevron means; you just check the box. Well, there are 
hundreds of cases out there where Chevron applied, resulting in 
the overturning of a rule or a regulation. And so we cannot say 
that it is unfettered discretion.
    And so the question becomes, how do you fix the problem of 
overreach? How do you fix the problem of lack of clarity? And 
Congress has to do its job, which is to legislate and protect 
its prerogatives, which is in fact legislating and not over-
delegating the responsibility.
    And rather than telling the courts what to do, I would like 
to have a discussion broadly with my colleagues about what we 
are supposed to be doing, because I think that is really where 
the rubber meets the road.
    Senator Lankford. And I would agree with the Ranking Member 
on that one. And hopefully we can work through some legislative 
solutions and have some things that would be resolved. That----
    Senator Heitkamp. Because that is not painful.
    Senator Lankford [continuing]. Clearly the Congress' 
responsibility. Before we adjourn, I would like to announce 
that on April 12, the Subcommittee will examine efforts to 
improve USAJobs' website and hold a hearing later in April 
reviewing the rulemaking records of independent regulatory 
agencies.
    That concludes today's hearing. I would like to thank the 
witnesses again for their testimony. The hearing record will 
remain open for 15 days, to the close of business on April 1--
no kidding on that one--for the submission of statements and 
questions for the record.
    With that, this hearing is adjourned.
    [Whereupon, at 10:29 a.m., the Subcommittee was adjourned.]

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