Chevron Deference: A Primer
Released: 2017-09-19T00:00:00

Background

Congress has created numerous administrative agencies to implement and enforce delegated regulatory authority. Federal statutes define the scope and reach of agencies' power, granting them discretion to, for example, promulgate regulations, conduct adjudications, issue licenses, and impose sanctions for violations of the law. The Administrative Procedure Act (APA) confers upon the judiciary an important role in policing these statutory boundaries, directing federal courts to "set aside agency action" that is "not in accordance with law" or "in excess of statutory jurisdiction, authority, or limitations." Courts will thus invalidate an action that exceeds an agency's statutory authorization or otherwise violates the law. Of course, in exercising its statutory authorities, an agency necessarily must determine what the various statutes that govern its actions mean. This includes statutes the agency specifically is charged with administering as well as laws that apply broadly to all or most agencies.

As this report explains, when a court reviews an agency's interpretation of a statute it is charged with administering, the court will generally apply the two-step framework outlined by the Supreme Court in Chevron U.S.A., Inc. v. Natural Resources Defense Council . Pursuant to that rubric, at step one, courts examine "whether Congress has directly spoken to the precise question at issue." If so, "that is the end of the matter" and courts must enforce the "unambiguously expressed intent of Congress." In the case of statutory silence or ambiguity, however, step two requires courts to defer to a reasonable agency interpretation of the statutory text, even if the court would have otherwise reached a contrary conclusion.

This report discusses the Chevron decision, explains the circumstances in which the Chevron doctrine applies, explores how courts apply the two steps of Chevron , and highlights some criticisms of the doctrine, with an eye towards the potential future of Chevron deference.

What Is Chevron Deference?

The Chevron case itself arose out of a dispute over the proper interpretation of the Clean Air Act (CAA). The contested statutory provision required certain states to create permitting programs for "new or modified major stationary sources" that emitted air pollutants. In 1981, the Environmental Protection Agency (EPA) promulgated a regulation that defined "stationary source," as used in that statute, to include all pollution-emitting activities within a single "industrial grouping," and thus let states "bubble," or group together, all emitting sources in a single plant for the purposes of assessing emissions. This allowed a facility to construct new pollution-emitting structures so long as the facility as a whole—that is, the "stationary source"—did not increase its emissions. The Natural Resources Defense Council (NRDC) filed a petition for judicial review, arguing that this definition of "stationary source" violated the CAA. The NRDC claimed that the text of the CAA required the EPA "to use a dual definition—if either a component of a plant, or the plant as a whole, emits over 100 tons of pollutant, it is a major stationary source."

A unanimous Supreme Court disagreed and upheld the regulation, determining that the EPA's definition was "a permissible construction of the statute." The Court explained that when a court reviews an agency's interpretation of a statute it administers, it faces two questions:

First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute.

Applying this two-step inquiry to review the challenged EPA regulation, the Court first considered the text and structure of the CAA, along with the legislative history regarding the definition of "stationary source." The text of the statute did not "compel any given interpretation of the term 'source,'" and did not reveal Congress's "actual intent." The Justices concluded that the statutory text was broad, granting the EPA significant "power to regulate particular sources in order to effectuate the policies of the Act." The legislative history of the CAA was similarly "unilluminating." However, the ambiguous legislative history was "consistent with the view that the EPA should have broad discretion in implementing the policies of" the CAA. Ultimately, the Court decided that the EPA had "advanced a reasonable explanation" for determining that its definition of "source" advanced the policy concerns that had motivated the CAA's enactment, and upheld this "permissible construction."

The Court gave three related reasons for deferring to the EPA: congressional delegation of authority, agency expertise, and political accountability. First, the Court invoked a judicial presumption about legislative intent, which has subsequently become one of the leading justifications for deferring to agencies under Chevron :

If Congress has explicitly left a gap for the agency to fill, there is an express delegation of authority to the agency to elucidate a specific provision of the statute by regulation.... Sometimes the legislative delegation to an agency on a particular question is implicit rather than explicit. In such a case, a court may not substitute its own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency.

In the view of the Court, because the statutory term "source" was ambiguous and could be read either to prohibit or to allow "bubbling," Congress had implicitly delegated to the EPA the ability to choose any definition that was reasonably permitted by the statutory text. The statutory ambiguity constituted a limited delegation of interpretive authority from Congress, and the agency had acted within that delegation.

Second, the Court cited the greater institutional competence of agencies, as compared to courts, to resolve the "policy battle" being waged by the litigants. The Court reasoned that, with its superior subject matter expertise, the EPA was better able to make policy choices that accommodated "manifestly competing interests" within a "technical and complex" regulatory scheme. Finally, the opinion of the Court also rested implicitly on concerns about the constitutional separation of powers. While judges should not be in the business of "reconcil[ing] competing political interests," the Court stated, it was "entirely appropriate for this political branch of the Government to make such policy choices—resolving the competing interests which Congress itself either inadvertently did not resolve, or intentionally left to be resolved by the agency charged with the administration of the statute in light of everyday realities."

Does Chevron Deference Apply?

An important threshold question for a court reviewing an agency's interpretation of a statute is whether Chevron deference should apply at all. As an initial matter, the Chevron framework of review is limited to agencies' interpretations of statutes they administer. Even when an agency is interpreting a statute that it administers, however, the Supreme Court has prescribed important limits on the types of agency statutory interpretations that qualify for Chevron deference. One crucial inquiry, sometimes referred to as Chevron "step zero," is whether Congress has delegated authority to the agency to speak with the force of law. This analysis often turns on the formality of the administrative procedures used in rendering a statutory interpretation. The Court has indicated that an agency's determination of the scope of its jurisdictional authority is entitled to Chevron deference in appropriate circumstances. Another situation where the Court has occasionally declined to follow Chevron occurs when an agency's interpretation implicates a question of major "economic and political significance." However, this "major questions" doctrine has been invoked in a somewhat ad hoc manner, leaving unclear exactly how this consideration fits into the Chevron framework.

Importantly, even if the Chevron framework of review does not apply, a court might still give some weight to an agency's interpretation of a statute. In the 2000 case of United States v. Mead Corp. , the Court explained that even when Chevron deference was inapplicable to an agency's interpretation, it might still merit some weight under the Court's pre- Chevron decision in Skidmore v. Swift & Co . Under Skidmore , when an agency leverages its expertise to interpret a "highly detailed" "regulatory scheme," a court may accord the agency's interpretation "a respect proportional to its 'power to persuade.'" In other words, a court applying Skidmore deference accords an agency's interpretation of a statute an amount of respect or weight that correlates with the strength of the agency's reasoning.

Finally, when an agency interprets legal requirements that apply broadly across agencies, it is not operating pursuant to delegated interpretive authority to resolve ambiguities or relying on its particular expertise in implementing a statute, and the agency's interpretation is not afforded deference by a reviewing court. For instance, courts will review de novo, or without any deference at all, procedural provisions of the APA, the Freedom of Information Act, and the Constitution.

How Did the Agency Arrive at Its Interpretation?

Determining whether Chevron deference applies to an agency's interpretation typically requires a court to examine whether Congress delegated authority to the agency to speak with the force of law in resolving statutory ambiguities or to fill statutory gaps. One important indicator of such a delegation is an agency's use of formal procedures in formulating the interpretation. As background, the APA requires agencies to follow various procedures when taking certain actions. For instance, agencies issuing legislative rules that carry the force of law generally must follow notice and comment procedures; and adjudications conducted "on the record" must apply formal court-like procedures. In contrast, non-binding agency actions, such as agency guidance documents, are exempt from such requirements. In Christensen v. Harris County , the Court ruled that nonbinding interpretations issued informally in agency opinion letters, "like [those] contained in policy statements, agency manuals, and enforcement guidelines, all of which lack the force of law," do not receive deference under Chevron . In contrast, the Court indicated, Chevron deference is appropriate for legally binding interpretations reached through more formal procedures, such as formal adjudications and notice-and-comment rulemaking.

Likewise, in United States v. Mead Corp. , the Court ruled that tariff classification rulings by the U.S. Customs Service were not entitled to Chevron deference because there was no indication that Congress intended those rulings "to carry the force of law." The Court held that "administrative implementation of a particular statutory provision qualifies for Chevron deference when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority." Such a delegation could be shown by an agency's authority to conduct formal adjudications or notice-and-comment rulemaking, "or by some other indication of a comparable congressional intent." The Court found no such indication here—the tariff classifications were not issued pursuant to formal procedures and the rulings did not bind third parties. Further, their diffuse nature and high volume—over 10,000 classifications issued every year at 46 different agency field offices—indicated that such classifications did not carry the force of law.

Mead and Christensen thus indicate that a key indicator of a congressional delegation of power to interpret ambiguity or fill in the gaps of a statute is authority to utilize formal procedures such as notice-and-comment rulemaking or formal adjudications to implement a statute. An agency's interpretation of a statute reached through these means is thus more likely to qualify for Chevron deference than is an informal interpretation, such as one issued in an opinion letter or internal agency manual.

Nonetheless, the Supreme Court has indicated that an agency's use of formal procedures in interpreting a statute is not a necessary condition for the application of Chevron deference. Mead indicated that a delegation of interpretive authority could be shown by an agency's power to conduct notice-and-comment rulemaking or formal adjudications, "or by some other indication of a comparable congressional intent. " In Barnhart v. Walton , the Court deferred under Chevron to the Social Security Administration's interpretation of the Social Security Act's provisions regarding disability benefits. The majority opinion, written by Justice Breyer, examined a variety of factors in finding that Chevron deference was applicable to the agency's interpretation. The Court noted that, under Mead , the application of Chevron deference depended on "the interpretive method used and the nature of the question at issue." In this case, while the agency interpretation was reached informally, it was nonetheless "one of long standing," having apparently been in place for over 40 years. Rejecting a bright-line rule that would require formal procedures to merit Chevron deference, the Court noted that a number of factors could be relevant in determining whether the Chevron framework is appropriate, such as "the interstitial nature of the legal question, the related expertise of the Agency, the importance of the question to administration of the statute, the complexity of that administration, and the careful consideration the agency has given the question over a long period of time."

Following Barnhart 's case-by-case approach to when the Chevron framework governs judicial review of agency statutory interpretations, some lower courts have applied Chevron deference to certain agency statutory interpretations reached through informal means (e.g., a letter ruling issued to parties), particularly when an agency has expertise in implementing a complex statutory scheme.

Agency Interpretations of the Scope of Its Authority ("Jurisdiction")

The Supreme Court has also ruled that an agency's statutory interpretation concerning the scope of its jurisdiction is eligible for deference. In City of Arlington v. FCC , the Court rejected the contention that Chevron deference should not apply to an agency's "interpretation of a statutory ambiguity that concerns the scope of the agency's statutory authority," reasoning that "there is no difference, insofar as the validity of agency action is concerned, between an agency's exceeding the scope of its authority (its 'jurisdiction') and its exceeding authorized application of authority that it unquestionably has." In that case, the Court examined the Telecommunications Act, which requires state and local governments to act on an application for siting a wireless telecommunications facility within a "reasonable period of time." The Federal Communications Commission (FCC) issued a declaratory ruling specifying the number of days that it considered reasonable to reach a decision on those applications, but this decision was challenged on the ground that the agency did not have delegated authority to adopt a binding interpretation of that portion of the statute.

The Supreme Court granted certiorari on the question of whether a court should apply Chevron to an agency's determination of its own jurisdiction. In other words, the Court asked: did Chevron apply to the FCC's decision that it possessed authority to adopt a binding interpretation of this part of the statute? Or should courts refuse to defer to the FCC's "jurisdictional" decision that it enjoyed such authority? The Court ruled that the Chevron doctrine did apply, questioning whether an agency's jurisdictional authority could sensibly be distinguished from its nonjurisdictional power. According to the majority opinion, every new application of an agency's statutory authority could potentially be reframed as a questionable extension of the agency's "jurisdiction"; but ultimately, the question for a court in any case is simply "whether the agency has stayed within the bounds of its statutory authority."

The Court majority rejected the dissent's view that even when an agency has general rulemaking authority, courts should first conduct a de novo review to determine if Congress has delegated interpretive authority to speak with the force of law on a particular issue. Instead, the majority held, the Chevron doctrine applied because Congress had vested the FCC with the authority to administer generally the Telecommunications Act through adjudication and rulemaking, and the agency had promulgated the disputed interpretation through the exercise of that authority.

One way to understand City of Arlington is that the Court majority rejected the inclusion of a "jurisdictional" test at Chevron "step zero." The dissent urged that, before applying the Chevron framework, courts should conduct a threshold examination of whether an agency has received a delegation of interpretive authority over particular issues, essentially a "step zero" inquiry. The majority opinion, however, rejected examining that issue as a threshold matter. Instead, once the "preconditions to deference under Chevron are [otherwise] satisfied," the Court should proceed to the Chevron two-step framework and determine if the agency has reasonably interpreted the parameters of its statutory authority. In this case, Congress delegated to the agency the power to speak with the force of law in administering a statute, and the agency reached an interpretation through the exercise of that authority. Accordingly, the court held that Chevron 's two-step framework was applicable to the agency's determination that it had authority to decide what constituted a "reasonable period of time."

Major Questions Doctrine

The Court has sometimes declined to defer to an agency interpretation under Chevron when a particular case presents an interpretive question of such significance that "there may be reason to hesitate before concluding that Congress ... intended" to delegate resolution of that question to the agency. Although the Court has not fully articulated when the so-called "major questions doctrine" applies, and indeed, has never used this phrase itself, previous applications of this principle seem to rest on a determination by the Court that one of the core assumptions underlying Chevron deference—that Congress intended the agency to resolve the statutory ambiguity—is no longer tenable. The fact that an agency interpretation implicates a major question is sometimes deemed to render the Chevron framework of review inapplicable. However, the Court has also invoked this concern while applying Chevron , to justify concluding that under the two-part test, the Court should not defer to the agency's construction of the statute.

The Court first held that a question of great "economic and political significance" might displace Chevron deference in FDA v. Brown & Williamson Tobacco Corp . The impetus for that dispute was the decision of the Food and Drug Administration (FDA) to regulate tobacco products. The Supreme Court decided that Congress had not given the FDA the authority to regulate tobacco products and invalidated the regulations. The Court acknowledged that its analysis was governed by Chevron , because the FDA regulation was based upon the agency's interpretation of the Food, Drug, and Cosmetic Act (FDCA), a statute that it administered. However, the Court resolved the matter at Chevron step one, concluding that Congress had "directly spoken to the issue" and "precluded the FDA's jurisdiction to regulate tobacco products."

A significant factor in the Court's decision in Brown & Williamson was the fact that Congress had for decades enacted "tobacco-specific legislation" outside the FDCA, acting "against the backdrop of the FDA's consistent and repeated statements that it lacked authority under the FDCA to regulate tobacco." The Court concluded that the apparent clarity of this legislative and regulatory history, considered against "the breadth of the authority that the FDA ha[d] asserted" when it promulgated the new regulations, undercut the justifications for Chevron deference. The Court then articulated what was later characterized by some observers as the major questions doctrine, holding that "[i]n extraordinary cases, ... there may be reason to hesitate before concluding that Congress has intended ... an implicit delegation" of authority "to fill in the statutory gaps." In the Court's view, this was such an extraordinary case, and the Justices were "obliged to defer not to the agency's expansive construction of the statute, but to Congress' consistent judgment to deny the FDA this power." The Court believed "that Congress could not have intended to delegate a decision of such economic and political significance to an agency in so cryptic a fashion." Thus, in Brown & Williamson , the Court invoked this major questions consideration under Chevron 's first step, as a factor supporting its conclusion that the FDCA unambiguously precluded the FDA's interpretation.

The Supreme Court has cited the importance of a disputed question to avoid deferring to an agency under Chevron in a number of cases since Brown & Williamson , although the Court has applied the "major questions doctrine" in a somewhat ad hoc manner. In these subsequent cases, the Court has not clearly explained when an agency interpretation will raise a question so significant that a court should not defer, nor has it explained why this consideration is relevant in some cases but not others. In Whitman v. American Trucking Ass'ns , decided one year after Brown & Williamson , the Court invoked the major questions consideration as part of its Chevron step one analysis. The Court held that there was not a sufficient "textual commitment of authority" in the Clean Air Act to support the EPA's assertion that Congress had given the EPA the authority to consider costs when regulating air pollutants. In reaching this conclusion, the Court read the statutory text as being primarily concerned with promoting the "public health," rather than cost concerns. Because these provisions were highly important to this statutory scheme, the Court required a "clear" "textual commitment of authority to the EPA to consider costs." The Court observed that Congress "does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions—it does not, one might say, hide elephants in mouseholes."

In 2006, the Court invoked the major questions principle as one factor in its analysis at step zero in Gonzales v. Oregon . The Court held that Congress had not given the U.S. Attorney General the authority to issue an interpretive rule regarding the use of controlled substances in assisted suicides "as a statement with the force of law." Citing Brown & Williamson , the Justices refused to conclude that "Congress gave the Attorney General such broad and unusual authority through an implicit delegation in the [Controlled Substances Act's] registration provision."

By contrast, the Court declined to apply the major question exception in Massachusetts v. EPA , decided in 2007. The Court was reviewing the EPA's decision to deny a rulemaking petition that had asked the EPA "to regulate greenhouse gas emissions from new motor vehicles under § 202 of the Clean Air Act." The EPA claimed that the CAA did not give it the authority to regulate "substances that contribute to climate change." As summarized by the Court, the EPA argued that "climate change was so important that unless Congress spoke with exacting specificity, it could not have meant the Agency to address it." The Court rejected this claim, distinguishing Brown & Williamson by deciding that in this case, the statutory scheme and congressional and regulatory "backdrop" supported a conclusion that the EPA had authority to regulate greenhouse gases.

The doctrine was arguably revived in recent years, first in Utility Air Regulatory Group v. EPA , and then in King v. Burwell . In Utility Air , the Court reviewed EPA rules regulating greenhouse gas (GHG) emissions from stationary sources. The EPA had concluded that regulation of GHG emissions from motor vehicles triggered GHG permitting requirements for stationary sources. The Court held at step two of the Chevron analysis that the EPA's interpretation was "not permissible." The regulations represented an unreasonable reading of the statute in part because they would have constituted "an enormous and transformative expansion in EPA's regulatory authority without clear congressional authorization." In the Court's view, the "extravagant" and "expansive" power claimed by the EPA fell "comfortably within the class of authorizations that we have been reluctant to read into ambiguous statutory text."

In King v. Burwell , the Court considered whether states participating in a federal health care exchange were eligible for tax credits under the Patient Protection and Affordable Care Act. The Court declined to apply the Chevron framework to analyze the statutory interpretation of the Internal Revenue Service (IRS), holding that this was an "'extraordinary case'" in which the Court had "'reason to hesitate before concluding that Congress'" implicitly delegated to the IRS the authority to "'fill in the statutory gaps.'" The Court concluded:

Whether [the tax] credits are available on Federal Exchanges is thus a question of deep "economic and political significance" that is central to this statutory scheme; had Congress wished to assign that question to an agency, it surely would have done so expressly. It is especially unlikely that Congress would have delegated this decision to the IRS, which has no expertise in crafting health insurance policy of this sort.

The King v. Burwell decision arguably represented a break from prior major question cases: in past cases, the Court had considered the economic or political significance of the regulation as one factor during its application of the Chevron framework of review. In King , the Court concluded that the significance of the issue rendered Chevron entirely inapplicable .

Therefore, when reviewing an agency's interpretation of a statute, depending on the nature and significance of the question purportedly delegated to the agency, a court could decline to afford deference to the agency's interpretation either by utilizing the major questions doctrine as a factor in the course of its Chevron analysis or by concluding that the Chevron framework is altogether inapplicable. Consequently, some commentators have argued that the major questions doctrine has the potential to alter the doctrine of Chevron deference, shifting the power to interpret ambiguous statutes from agencies to courts. However, given the uncertainty about what constitutes a "major question," or how the major questions inquiry should be factored into the Chevron analysis, it seems equally plausible that courts will continue to be reluctant to invoke the doctrine.

Chevron Step One

After a court has determined that Chevron applies to a particular agency's interpretation of a statute, the first inquiry in the two-step Chevron framework presents a question of statutory construction for the court. Step one requires a court to determine whether Congress "directly addressed the precise question at issue." A court proceeds to step two only if a statute is "silent or ambiguous with respect to the specific issue." If the statute is unambiguous, a court must "give effect" to that congressional intent without deferring to the agency. The Supreme Court stated in Chevron that a court should conduct the step one analysis by "employing traditional tools of statutory construction."

This "traditional tools" instruction, however, left open for debate the tools that should be employed during Chevron 's first step. There are different theories of statutory interpretation, and each interpretive school has a different view of which tools courts should appropriately deploy when they seek to discern statutory meaning. Generally, however, most courts begin by considering the text of the statute. To give meaning to this text, judges typically seek to determine the "natural reading" or "ordinary understanding" of disputed words. They often refer to dictionaries to find this ordinary meaning. A contested statutory term can be further clarified by reference to the statutory context, looking to that specific provision as a whole, or by examining how the term is employed in related statutes. Courts may also turn to a set of presumptions, or interpretive canons, about how people usually read meaning into text.

Other tools of statutory construction, focused on determining legislative intent, are somewhat more controversial but are still frequently deployed in step one analyses. Accordingly, courts often refer to statutory purpose. They also regularly cite legislative history at Chevron step one. Similarly, to help determine congressional intent, courts have looked to past agency practice as well as agency interpretations that were advanced prior to the dispute before the court. Finally, judges may sometimes invoke normative or substantive canons of statutory interpretation, distinct from the textual canons mentioned above.

Courts and scholars debate not only which methods of statutory construction constitute the "traditional tools" embraced in Chevron 's step one, but also when application of those tools may render a statute sufficiently clear to conclude that Congress has "directly addressed the precise question at issue." It is an open question whether Chevron 's first step presents a normal question of statutory interpretation, in which the court should look for ambiguity or clarity as it would any other time it interprets a statute, or whether instead a determination that a statute is unambiguous for the purposes of Chevron step one requires some higher level of clarity. Different judges may undertake a more or less searching inquiry, deploying different tools of statutory interpretation and, perhaps as a result, reaching different conclusions regarding whether to proceed to Chevron step two. Some decisions have implied that if a court needs to resort to a greater number of tools in the search for a clear meaning, this in itself suggests that a statute is ambiguous.

Confusion about the level of statutory ambiguity required to trigger Chevron 's step two is compounded by Supreme Court decisions that seemingly blur the line between the two steps. The Court has sometimes held only that an agency's interpretation is "reasonable" or "permitted" without expressing an opinion on whether the statute is sufficiently clear to indicate that Congress in fact unambiguously addressed the specific question before the court.

Chevron Step Two

If a court determines at step one that the statute is ambiguous or silent on the particular issue in question, the Chevron framework next requires consideration of whether the agency's construction of the statute is "permissible." Under Chevron 's step-two analysis, if Congress has delegated authority to an agency to fill in the gaps of a statute, courts will give "controlling weight" to reasonable agency interpretations of a statutory ambiguity. Accordingly, at Chevron 's second step, courts may not substitute their own interpretation of a statutory provision for an agency construction that is reasonable. Chevron deference thus sometimes requires a court to sanction an interpretation that departs from what the court considers the best reading of a statute, so long as the agency's interpretation is "rationally related to the goals of the statute." Commentators have noted that, at least in the federal courts of appeals, agency interpretations are more likely to prevail when a case is resolved at Chevron 's second step than when a court decides an issue at step one, or declines to apply the Chevron framework at all.

Agency Discretion to Change Course

What qualifies as a permissible statutory construction is largely dependent on the particular context, although courts applying Chevron 's second step may inquire into the sufficiency of an agency's reasoning and may consider the traditional tools of statutory construction. The theory of delegation animating Chevron deference implicitly acknowledges that an ambiguous statute permits a range of plausible interpretations. Within the parameters of its statutory delegation, an agency might have discretion to pursue a variety of different policy objectives. One important consequence of this principle is that agencies are permitted to change their interpretations of ambiguous statutes over time. Assuming agencies acknowledge the change and stay within the bounds of a reasonable interpretation, they may reconsider the wisdom of their policy choices and shift their construction of statutory ambiguities accordingly to reflect altered circumstances or a change in policy preferences.

In addition to an agency's discretion to alter its interpretations at step two, another implication of Chevron 's delegation theory is that an agency's construction of a statutory ambiguity can supersede a court's contrary prior decision on the meaning of a statute. Because the Chevron framework rests on the assumption that "it is for agencies, not courts, to fill statutory gaps" at Chevron 's second step, agencies possess delegated interpretive authority to determine the legal meaning of ambiguities in statutes they administer. Accordingly, in National Cable & Telecommunications Association v. Brand X Internet Services ( Brand X ) the Supreme Court held that "[o]nly a judicial precedent holding that [a] statute unambiguously forecloses the agency's interpretation, and therefore contains no gap for the agency to fill, displaces a conflicting agency construction." Put another way, when a court concludes that its determination of a statute's meaning "follows from the unambiguous terms of [a] statute and thus leaves no room for agency discretion," an agency is foreclosed from adopting a contrary interpretation. But absent such a judicial finding, Brand X teaches that an agency is free to adopt a countervailing reasonable construction of a statutory ambiguity in the future.

Differing Judicial Approaches to Step Two Analysis

Given the variety of statutory schemes implemented by federal agencies, as well as the potential for multiple reasonable interpretations of the same statute, precisely what constitutes a reasonable agency construction of a statute is difficult to define in the abstract. As an initial matter, some courts affirm the agency's interpretation under Chevron 's step two without any sustained analysis beyond consideration of the statute at step one. In these situations, courts often appear to anchor their decision on their prior consideration at step one of the statute's meaning—meaning, for example, that if an agency's position is one of multiple interpretations that the court found could be reasonable at Chevron 's first step, then the court will defer to the agency's interpretation at Chevron 's second step.

In other cases, however, courts at step two engage in a more thorough examination of the reasonableness of an agency's interpretation. In some instances, a court's analysis at step two focuses on the sufficiency of an agency's reasoning, an examination which can overlap with "hard look" review under the "arbitrary and capricious" standard of the APA. Some courts may also employ the traditional tools of statutory construction at Chevron 's second step. One common inquiry courts consider is whether the agency's position comports with the overall purpose of the statute in question. For example, in Chevron itself, the Supreme Court held that the agency's interpretation "of the term 'source' [was] a permissible construction of the statute" in light of the statute's goals "to accommodate progress in reducing air pollution with economic growth." Lower courts have followed suit, examining at Chevron 's second step whether an agency's interpretation of a statutory ambiguity accords with a statute's policy objectives. A variety of other indicia can also potentially be relevant in assessing the reasonableness of an agency interpretation, including whether the agency's construction serves the public interest, and whether the agency has consistently interpreted the statute in the same manner over time.

Courts may also apply other traditional tools of statutory interpretation at step two, although this practice can sometimes mirror a court's step one analysis. For example, courts will examine whether an agency's interpretation makes sense within the statutory scheme, looking for consistency with other relevant provisions in the statute at issue, the interaction between various statutory provisions, or prior judicial precedents interpreting similar provisions. In addition, courts may inquire into the commonly used meaning of a statutory term. Importantly, some courts apply a broader range of tools of construction at Chevron 's second step than at step one. For instance, some courts will examine a statute's legislative history at step two to determine if the agency has reasonably complied with Congress's goals, even if those courts believe that doing so at step one would be inappropriate.

As noted above, some observers have concluded that agencies are more likely to prevail at Chevron 's second step than when a court completes its analysis at step one or conducts review de novo of the agency's position. Potentially, judicial deference to an agency's interpretation may lead to relatively greater national uniformity in the implementation of regulatory statutes, a feature arguably endorsed by the Supreme Court. Because Chevron instructs courts of appeals to defer to reasonable agency interpretations of statutory ambiguities, circuit splits on the meaning of ambiguous statutory provisions may be less likely than would arise without Chevron deference. In turn, it is arguably more likely that agencies entrusted with administering statutes will do so uniformly regardless of forum, compared to courts across different circuits, which might reach conflicting interpretations of a statute's meaning.

The potential for Chevron deference to harmonize the administration of a statute might shed light on the observation that the Supreme Court is arguably less deferential than federal courts of appeals when it applies Chevron 's second step. That is, while the Court applies the same basic framework as do lower courts, certain recent decisions at least appear to apply Chevron 's second step more stringently. In the 2015 case of Michigan v. EPA , for example, the Court rejected as unreasonable the EPA's interpretation of a CAA provision that authorized the agency to regulate certain emissions only where "appropriate and necessary." In making the initial determination whether to regulate at all, the EPA did not consider the cost to industry in doing so. The majority opinion applied the Chevron framework, but held at Chevron 's second step that it was unreasonable for the EPA not to consider costs when initially deciding that it was appropriate and necessary to regulate. In contrast, the dissent would have upheld the EPA's interpretation. While the agency did not consider costs in deciding whether to regulate, it did consider costs in setting the specific emissions limits. Importantly, however, both the majority and the dissenting Justices agreed that not considering costs at all would be unreasonable. Consequently, all the Justices applied Chevron in a manner cabining the agency's discretion in interpreting the statute – an approach that contrasts with the deference traditionally typically given agency interpretations at step two.

Issues to Consider

Criticisms and Future Application of Chevron

The Court's decision in Chevron is a foundational case for understanding the modern administrative state. It is one of the most cited cases by federal courts in administrative law disputes, and supplies a background principle of deference to statutory ambiguity against which Congress may legislate. Indeed, some scholars have noted that a certain amount of ambiguity in a statute is likely inevitable. Consequently, Chevron is sometimes characterized as placing resolution of statutory ambiguities in politically accountable agencies, rather than unelected Article III courts. A number of commentators have nonetheless criticized the doctrine of Chevron deference in the years since the Court's opinion, although recent skepticism from various Justices has arguably brought increased attention to their concerns. Justice Thomas, for instance, has questioned the doctrine on separation of powers grounds. At bottom, Justice Thomas objects to " Chevron 's fiction that ambiguity in a statutory term is best construed as an implicit delegation of power to an administrative agency to determine the bounds of the law." He argues that judicial deference to ambiguous agency statutory interpretations contradicts the Constitution's vestment of judicial power in Article III courts, which requires the judiciary, rather than the Executive, to "say what the law is." In addition, for Justice Thomas, to the extent that agencies are not truly interpreting statutory ambiguities, but rather formulating policy under the Chevron deference framework, "[s]tatutory ambiguity thus becomes an implicit delegation of rule-making authority, [allowing the agency] to formulate legally binding rules to fill in gaps based on policy judgments made by the agency rather than Congress." But, for Justice Thomas, granting agencies power to speak with the force of law with respect to matters on which "Congress did not actually have an intent" violates Article I by permitting the executive branch to exercise legislative power.

Likewise, recently appointed Justice Neil Gorsuch criticized the doctrine while he was a judge on the Court of Appeals for the Tenth Circuit. For example, then-Judge Gorsuch argued in a concurring opinion that deferring to agency interpretations under Chevron was an "abdication of the judicial duty" to say what the law is. This shift of responsibility, for Judge Gorsuch, raises due process and equal protection concerns. In particular, he argued that under the Chevron framework, regulated parties do not receive fair notice of what the law requires. Additionally, rather than effectuating "the fairest reading of the law that a detached magistrate can muster," politicized agency decisionmakers enjoy discretion to determine legal requirements "based merely on the shift of political winds." Further, Judge Gorsuch questioned whether silence or ambiguity in a statute truly reflects congressional intent to delegate interpretive authority to federal agencies, and argued that this theory contradicts the APA's mandate to courts to interpret the law. Finally, Judge Gorsuch noted that, at least in some instances, the application of Chevron deference might constitute an unconstitutional delegation of legislative authority to the executive branch.

Other judges sitting on the federal courts of appeals have raised similar objections to Chevron deference. At least one has echoed the separation of powers concerns voiced by Justices Gorsuch and Thomas; another has lamented that Chevron 's broad scope encourages agencies to aggressively pursue policy goals "unless ... clearly forbidden ," rather than fairly determining the best interpretation of a statute's meaning. And numerous scholars have also questioned the doctrine, critiquing, among other things, its purported historical foundations, theoretical basis, and inconsistent application by the Court. Further, scholars have criticized the apparent tools provided in Chevron to determine the meaning of a statute, the Court's test for when Chevron applies, as well as confusion regarding the mechanics and purpose of the doctrine's framework stemming from Chevron 's "unsystematic origin." Finally, scholars have debated the merits of each of Chevron 's initial justifications, including the presence of an implied delegation of interpretive authority from Congress to an agency, the role of agency expertise, and the importance of political accountability.

These concerns aside, the doctrine as a whole nevertheless is firmly established at the Supreme Court. Most importantly, the majority of Supreme Court Justices appear comfortable applying the doctrine. Nonetheless, appellate judges and commentators have noted that the Supreme Court has recently limited the doctrine's reach and applied Chevron 's second step fairly stringently. Given the doubts about the constitutionality of Chevron deference of at least two Justices, the competing tests for determining when Chevron applies to judicial review of agency action, and the uncertainty about whether an agency interpretation concerns a "major question" that does not merit agency deference, future disagreements about the scope of the doctrine are quite possible. Achieving consensus on the doctrine's applicability may prove difficult in certain cases, at least with respect to those areas where the appropriateness of Chevron has not been conclusively decided by the Supreme Court. Further, just as the Court has limited the reach of the doctrine in the past, such as by requiring certain procedures to apply the Chevron framework or declining to apply Chevron to certain issues, the scope of these "doctrinal safety valves" may be expanded in future cases.

Could Congress Eliminate Chevron?

Chevron is a judicially created doctrine that rests, in part, upon an assumption made by courts about congressional intent: that where a statute is silent or ambiguous, Congress would have wanted an agency, rather than a court, to fill in the gap. Accordingly, Congress can determine whether a court will apply Chevron review to an agency interpretation. When it drafts a statute delegating authority to an agency, it may "speak in plain terms when it wishes to circumscribe, and in capacious terms when it wishes to enlarge, agency discretion." Thus, Congress can legislate with Chevron as a background presumption, using ambiguity to delegate interpretive authority to agencies or writing clearly to withhold that authority.

Alternatively, if it deemed such action appropriate, Congress could also act more directly to control how courts will review agency action. Congress has the authority to shape the standards used by courts to review agency actions. Perhaps most notably, Congress has outlined the standards that should generally govern judicial review of agency decisions in the APA. Although Chevron 's place within the APA framework is a matter of dispute, it is within Congress's power to modify or displace entirely the Chevron framework by amending the APA to impose a different standard of review.

As a more limited approach to working outside of Chevron , Congress also has the power to prescribe different judicial review standards in the specific statutes that grant agencies the authority to act. Congress took such a step when it enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. A provision of the act instructs courts that, when they review "any determinations made by the Comptroller [of the Currency] regarding preemption of a State law," they should "assess the validity of such determinations" by reference to a series of factors outlined in the Supreme Court's opinion in Skidmore v. Swift & Co . This Skidmore standard is considered less deferential to agencies than the Chevron framework of review, and courts so far have recognized this legislative choice as significant.

However, given the extent to which the Chevron doctrine is unsettled, it is unclear exactly how much of the Chevron framework of review rests on presumptions about congressional intent. Therefore, it remains difficult to determine exactly how or to what extent Congress, if it deemed such action warranted, could intervene to displace that presumption.