An administrative agency may generally only exercise that authority which is provided to it by Congress. Often, however, congressional delegations of authority are imprecise, and, as a result, agencies must construe ambiguous terms and make interpretive decisions in order to implement Congress's delegation. The Supreme Court, in Chevron U.S.A., Inc. v. Natural Resources Defense Council , outlined a limited role for courts in reviewing these types of agency interpretations. The Chevron test, which has been cited and followed thousands of times by federal courts since 1984, requires courts to enforce the clearly expressed intent of Congress. In the absence of such clarity, Chevron instructs reviewing courts to defer to an agency's construction of an ambiguous statute if the agency's interpretation is reasonable. Under Chevron then, it is generally left to federal agencies, and not the courts, to resolve ambiguities necessary to interpret and implement authority provided to the agency by Congress. This report will discuss the Chevron decision; explain when Chevron deference applies; highlight common agency statutory interpretations that generally do not receive deference under Chevron ; and review the recent Supreme Court opinion in City of Arlington v. FCC which clarified the applicability of Chevron deference to circumstances in which an agency is interpreting the scope of its own jurisdiction. In 1970, amendments to the Clean Air Act (CAA) established a federal-state program to abate air pollution. The statute called for the Environmental Protection Agency (EPA) to promulgate national ambient air quality standards (NAAQS) for certain air pollutants, and required the states to establish state implementation plans (SIPs) that would allow them to attain the air quality requirements established by the NAAQS. In 1977, Congress amended the CAA in order to impose certain requirements on states that had failed to achieve the national air quality standards promulgated by the EPA. The amendments required states that had not attained the established air standards to implement a permit program that would regulate "new or modified major stationary sources" of air pollution. A permit could not be granted for any new or modified major stationary source unless certain strict conditions were satisfied. A permit would not be necessary, however, if a modification would not result in an increase in air pollutant emissions. Under regulations promulgated by the EPA, a "stationary source" was not defined as an individual piece of equipment (e.g., a smokestack), but rather as the entire plant where many pollutant-producing structures may be located. The EPA, therefore, treated numerous pollution-creating structures collectively as a single "stationary source," if those structures were part of the same larger facility or complex. This concept was commonly referred to as "bubbling." With this regulation in force, a facility could modify or construct new pollution-emitting structures as long as the stationary source—the facility as a whole—did not increase its pollution emissions. The Natural Resources Defense Council (NRDC), an environmental advocacy group, opposed the EPA's definition of "stationary source" and filed a legal challenge to the agency's regulations. The NRDC sued the Administrator of the EPA in the United States Court of Appeals for the District of Columbia Circuit (D.C. Circuit), seeking review of the EPA's interpretation of the Clean Air Act Amendments of 1977. The NRDC argued that the EPA's interpretation of "stationary source" was impermissible—that is, that the EPA had to treat all individual pieces of equipment (e.g., each smokestack) as a "stationary source." Chevron U.S.A., Inc., and other industry groups were granted leave to intervene and argue in support of the EPA's position. In an opinion written by then Circuit Judge Ruth Bader Ginsburg, the D.C. Circuit agreed with the NRDC and set aside the EPA regulations. The D.C. Circuit noted that the CAA "does not explicitly define what Congress envisioned as a 'stationary source,' to which the permit program ... should apply" and found that the issue was not clearly addressed in the legislative history. Without clear text or intent from Congress, the D.C. Circuit determined that "the purposes of the non-attainment program should guide" the court's decision. The court ruled that the purpose of the nonattainment program was to expeditiously improve air quality, and that the "bubbling" concept applied by the EPA merely promoted the maintenance of current air quality standards by allowing the industry to avoid the permit process with offsets when it creates new or modifies existing pollution-emitting equipment. Chevron U.S.A., Inc., an intervenor, petitioned the Supreme Court for certiorari. The Supreme Court, in an opinion by Justice John Paul Stevens, unanimously reversed the D.C. Circuit decision by a vote of 6-0. The Court noted that "[t]he basic legal error of the Court of Appeals was to adopt a static judicial definition of the term 'stationary source' when it had decided that Congress itself had not commanded that decision." In so ruling, the Court established that it is not the judiciary's place to establish a controlling interpretation of a statute delegating authority to an agency, but, rather, it is the agency's job to "fill any gap left, implicitly or explicitly, by Congress." The Court noted that because Congress has expressly delegated to the administrative agency the authority to interpret the statute through regulation, a judge must not substitute his own interpretation of the statute in question when the agency has provided a permissible construction of the statute. In reaching its decision, the Supreme Court established a two-part test, commonly referred to as the Chevron two-step, to be applied when a court is reviewing an agency's statutory interpretation. The Court announced: When a court reviews an agency's construction of the statute which it administers, it is confronted with 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. The Court then proceeded to apply the test to the facts of the immediate case. First, the Court had to determine whether Congress had spoken clearly on the question at issue or if the statutory provisions were ambiguous. During the rulemaking process, the EPA explained that the definition of "source" was not fully addressed in the statute or the legislative history. The Court agreed, stating that "the language of [the statute] simply does not compel any given interpretation of the term 'source.'" Furthermore, the legislative history associated with the CAA amendments was "silent on the precise issue." The Court noted that the statutory language and the legislative history, instead of being clear, evinced the notion that the EPA should balance the objective of allowing continued economic growth in nonattainment areas with the objective of decreasing pollution emissions. Having concluded that the provision in question was sufficiently ambiguous, the Court moved on to step two, evaluating whether the statutory construction provided by the agency was "permissible." In its proposed and final rulemaking, the EPA noted that adopting an individualized equipment definition of "source" could disincentivize the modernization of plants, if industry had to go through the permitting process to create changes. Therefore, the EPA believed that adopting the plantwide definition of "source" could result in reduced pollution emissions. Considering the statute's competing objectives of permitting economic growth and reducing pollution emissions, the Court stated that "the plantwide definition is fully consistent with one of those concerns—the allowance of reasonable economic growth—and, whether or not we believe it most effectively implements the other, we must recognize that the EPA has advanced a reasonable explanation for its conclusion that the regulations serve the environmental objectives as well." The Court upheld the EPA's definition of the term "stationary source" and reversed the D.C. Circuit's judgment. It noted that "the Administrator's interpretation represents a reasonable accommodation of manifestly competing interests and is entitled to deference: the regulatory scheme is technical and complex, the agency considered the matter in a detailed and reasoned fashion, and the decision involves reconciling conflicting policies." The Supreme Court elucidated several reasons for favoring a restrained judicial role while granting deference to an agency interpretation of an ambiguous statute. First, the Court noted that when Congress enacts an ambiguous statutory delegation, it has, in effect, delegated to the agency it has empowered the authority to clarify the ambiguity. Congress made a conscious choice in selecting a specific agency to implement the statutory delegation, and the courts, the Supreme Court reasoned, should respect Congress's decision by granting the agency the ability to interpret the statute Congress has charged it with administering. Moreover, the Court noted that interpreting a statutory ambiguity is akin to making a policy decision on how to implement a statutory program. Agencies and legislators are best suited to balance applicable considerations and to resolve debates regarding competing, acceptable interpretations of an ambiguous delegation. Second, agencies have technical expertise in the field in which they are acting, and are therefore in a better position to make appropriate policy decisions as part of a large and complex regulatory scheme. Courts, on the other hand, lack such expertise. In Chevron , the Court specifically acknowledged that "judges are not experts in the field," and thus "may not substitute [their] own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency." Finally, administrative agencies are politically accountable—though not directly—through the democratic process.