Interpreting the Congressional Review Act: Why the Courts Should Assert Judicial Review, Narrowly Construe 'Substantially the Same,' and Decline to Defer to Agencies Under Chevron

Contrary to popular belief, Congress and the President, in vetoing a rule that they object to under the Congressional Review Act ("CRA"), may not forever bar the issuing agency from regulating in the area of law addressed by the rule. This is because the courts should foreclose such an outcome by interpreting the CRA in a non-restrictive manner for agencies. At the same time, however, the courts should refrain from granting deference to agency interpretations of the CRA. They should however, give some deference to agencies under the arbitrary and capricious standard of review. This approach reflects a proper understanding of the relative scope of legislative, judicial, and executive power and responsibility. Specifically, the courts may assert judicial review over rules that are alleged to be out of compliance with the CRA because asserting judicial review is consistent with the language of the statute, its legislative history and the presumption in favor of judicial review of agency action. This is true despite the fact that the majority of courts have held that the language of the CRA precludes judicial review. In addition to being able to assert judicial review, the courts have the authority under Article III, Section 2, Clause 1 of the Constitution to decide how to interpret "substantially the same," regardless of concerns that doing so would be an unconstitutional exercise of excessively delegated authority by Congress. This makes ripe the issue of how to interpret "substantially the same." The literature has formulated a hierarchy of plausible interpretations that a court could adopt, starting from the least stringent to the most restrictive of interpretations (from the perspective of federal agencies). One of the interpretations advocated for in the literature, which states that a re-issued rule need only be "altered so as to have significantly greater benefits and/or significantly lower costs than the original rule" to not be "substantially the same," is a generally valid approach. Upon testing the validity of the "cost-benefit" approach in other contexts, it is clear that this approach is reasonable in most (but not all) scenarios. In addition, the courts, in adopting a "cost-benefit" interpretation of "substantially the same," should do so de novo and decline to grant Chevron deference to agencies on the issue. This is because the CRA is not an agency-specific statute, so deferring here would create a lack of uniformity on this issue of great economic and political importance without any meaningful judicial input. Finally, for pragmatic reasons, the courts should apply the deferential arbitrary and capricious standard of review to an agency's conclusions regarding the relative costs and benefits between its re-issued and original rules, despite concerns that deferring may undermine the CRA's purpose of holding agencies accountable. This overall approach reflects a proper understanding of the scope of legislative, executive and judicial authority under our system of separated powers.