Why Should We Care About an Agency’s Special Insight?

INTRODUCTION In the modern federal administrative state, agencies enjoy judicial deference to their reasonable interpretations of ambiguous statutes and regulations. (1) In Chevron U.S.A. Inc. v. Natural Resource Defense Council, Inc., (2) the Supreme Court held that an agency's "permissible construction" of an ambiguous statute is to be "given controlling weight" so long as the construction is reasonable. (3) Similarly, the Supreme Court's holding in Bowles v. Seminole Rock & Sand Co. (4) gave "controlling weight" to an agency's reasonable interpretation of its own ambiguous regulation. (5) Even though the doctrine of Chevron deference is "functionally similar" (6) to Seminole Rock deference, there is an important structural difference between the two. In both the Chevron and Seminole Rock contexts, the agency serves as an interpreter of the ambiguous source of substantive law, be it a statute or regulation. (7) The difference between Chevron deference and Seminole Rock deference is the process through which the ambiguous source of law comes into effect. Chevron concerns an agency's reasonable interpretation of an ambiguous statute. (8) Any ambiguity that exists is the product of the legislative process: both houses of Congress passed a (potentially ambiguous) bill and presented it to the President to be signed into law. (9) Even though the agency is responsible for clarifying any explicit or implicit gap in the statute, Congress still drafted the statute. (10) Conversely, agencies are responsible for drafting regulations. In most instances, when an agency is engaged in rulemaking under section 553 of the Administrative Procedure Act (APA), (11) the agency is acting pursuant to some enabling organic statute that gives the agency power to promulgate rules. (12) The agency must publish "[g]eneral notice of proposed rule making" in the Federal Register. (13) The notice must provide "a statement of the time, place, and nature of public rule making proceedings," reference to the organic statute under which the agency is engaging in rulemaking, and "either the terms or substance" of the agency's proposed rule or a description of the subject of the proposed rulemaking. (14) In addition to this notice requirement, an agency must also provide the public with "an opportunity to participate," and "[a]fter consideration of the relevant matter presented," must provide a "concise general statement of their basis and purpose" with the promulgated rule. (15) Congress's only involvement in this rulemaking process is passing the statute which gives the agency authority to promulgate rules; any ambiguity in the regulation is the result of agency draftsmanship. (16) This is the important distinction between Chevron deference and Seminole Rock deference: an agency serves as both the drafter and interpreter of ambiguous regulations in Seminole Rock. (17) The unity of drafter and interpreter raises a number of concerns about separation of powers, (18) the procedural safeguards of the APA, (19) and the incentives of ambiguous rulemaking. (20) At the same time, this dual role gives the agency special insight into the intent of the regulation. (21) In a recent article, Matthew Stephenson and Miri Pogoriler proposed a number of possible limitations to Seminole Rock deference, such as withholding deference from "placeholder" interpretations, (22) interpretations that create retroactivity problems, (23) and interpretations following more informal procedures. (24) Stephenson and Pogoriler argue that these limitations are effective means of overcoming the problems that uniquely arise from Seminole Rock deference. (25) These doctrinal limits follow from Seminole Rock's similarity to Chevron. (26) Much less attention is paid to potential limitations based upon the fact that the agency enjoys special insight into the meaning of its own regulations. (27) This Note offers some additional thoughts on the outer limits of Seminole Rock deference. …