Court Opinion

ID: 9495654
Source: CourtListenerOpinion
Date Created: 2023-08-05 16:07:52.10393+00
Date Added: 2024-06-11T17:57:08.368973
License: Public Domain

EASTERBROOK, Circuit Judge,
concurring in part and concurring in the judgment.
I join my colleagues’ opinion except for those portions that discuss Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). The Real Estate Settlement Practices Act is enforced entirely through private litigation, and Adams Fruit Co. v. Barrett, 494 U.S. 638, 649-50, 110 S.Ct. 1384, 108 L.Ed.2d 585 (1990), holds that, when this is true, the view of a federal agency achieves binding force only when incorporated into legislative regulations issued under delegated power. The Department of Housing and Urban Development has the power to prescribe regulations, see 12 U.S.C. § 2617(a), but elected instead to announce its interpretation of the statute. It issued a broadside and hoped that courts would kowtow. Yet in private litigation Chevron does not give any force to a declaration unaccompanied by the formalities of rulemaking or administrative adjudication. See also United States v. Mead Corp., 533 U.S. 218, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001). Otherwise the Administrative Procedure Act, which specifies how delegated power is to be exercised, would be a dead letter. When an agency doles out public funds and is a party to the suit, less formal steps may have legal effects, see Barnhart v. Walton, 535 U.S. 212, 122 S.Ct. 1265, 152 L.Ed.2d 330 (2002), but ours is not such a situation. If the agency abjures the apa’s procedures for making decisions, courts owe the administrative interpretation careful attention, see Skidmore v. Swift & Co., 323 U.S. 134, 65 S.Ct. 161, 89 L.Ed. 124 (1944), but nothing more. “Interpretations contained in policy statements ... which lack the force of law do not warrant Chevron-style deference.” Christensen v. Harris County, 529 U.S. 576, 587, 120 S.Ct. 1655, 146 L.Ed.2d 621 (2000); see also EEOC v. Arabian American Oil Co., 499 U.S. 244, 256-58, 111 S.Ct. 1227, 113 L.Ed.2d 274 (1991). I do not perceive in Walton any “merger” (p. 879) between Chevron and Skidmore, which Mead took such pains to distinguish, hud’s interpretation is on the Skidmore side of the line.
Surprisingly, two circuits have treated hud’s Real Estate Settlement Procedures Act Statement of Policy 2001-1, 66 Fed. Reg. 53052 (Oct. 18, 2001), as equivalent to a regulation. See Heimmermann v. First Union Mortgage Corp., 305 F.3d 1257, 1261 (11th Cir.2002); Schuetz v. Banc One Mortgage Corp., 292 F.3d 1004, 1012 (9th Cir.2002). Yet neither opinion discusses the significance of Adams Fruit or Christensen in relation to the agency’s disregard of those procedures that the apa establishes for the exercise of regulatory authority. Heimmermann, Schuetz, and a related decision, Glover v. Standard Federal Bank, 283 F.3d 953, 963-65 (8th Cir.2002), concern the treatment of yield-spread premiums under the Respa, and I have nothing to say about the legal status of that practice. As Glover observes, hud has issued regulations about yield-spread premiums, and the policy statement may be understood as an interpretation of those regulations, which do have binding status. But I am confident that Heimmermann and Schuetz erred in thinking that the Real Estate Settlement Procedures Act Statement of Policy 2001-1 is itself conclu*883sive under Chevron, as opposed to informative (and potentially persuasive).
Boulware v. Crossland Mortgage Corp., 291 F.3d 261 (4th Cir.2002), holds, and all members of this panel agree, that hud’s interpretation of § 8(b), 12 U.S.C. § 2607(b), finds no purchase in the statutory text, is essentially unreasoned, and is neither informative nor persuasive. Section 8 is an mti-kickback rule, not an anti-markup rule. It does not forbid profit and could not do so, given the closing agent’s unfettered ability to set a price for the package of services it offers. See Mercado v. Calumet Federal Savings & Loan Ass’n, 763 F.2d 269 (7th Cir.1985). It would make neither linguistic nor economic sense to describe the difference between wholesale and retail price in the auto business as a “portion, split, or percentage of any charge” because the dealer must pay the manufacturer for inventory. Just so in real estate closings: The Recorder of Deeds’ fee is Republic Title’s wholesale price for a service; Republic’s retail price is higher. Republic bears the costs of transferring the deed to the Recorder; it must pay the salary of employees who process the papers, and maybe it pays a messenger service too. The markup covers these and other costs, such as the bank’s fees on the checks written to the Recorder, the cost of capital used to run the business, and the risk that some deeds may be so lengthy that the Recorder’s fees will top the charge. Whether or not the $50 exceeds all costs associated with getting the deed filed, nothing has been “split” or kicked back. Services were furnished as described: the deed was filed, and the closing agent performed (and bore the cost of) all the ministerial acts essential to accomplish filing. By announcing that the respa forbids markups over wholesale price, hud has gone off on a tangent. It might as well have said that the salary paid to the closing agent’s staff, or the rent paid to the landlord for space used in the closing, is an illegal “split” of funds received from the customer.
All of this makes Chevron by the by, so it is surprising that my colleagues go out of their way to suggest that its approach is undemocratic and that statutory interpretation is just policymaking by another name. In what sense could it be “undemocratic” to have statutory ambiguities resolved, and gaps filled, by elected officials (and those who serve at their pleasure) rather than by judges whose tenure insulates them from the popular will? What is more, textualists are among Chevron’s supporters, an odd position if the decision adopts the view that legal texts are empty vessels to be filled by judges (or administrators). All Chevron does is acknowledge that decisionmaking authority is shared among branches of government; it does not imply that the only sensible interpretive stance is pragmatic rather than textualist. Nor does Chevron surreptitiously transfer authority from the legislative to the executive branch of government. Agencies’ interpretive role stems from delegation of authority, not raw ambiguity. That’s one reason why Chevron does not require courts to implement “interpretations” that agencies announce without following the apa’s requirements for rulemaking: following forms is a condition attached to the delegation.
Interpretation differs fundamentally from regulation. Judges do not apply Chevron to the Attorney General’s interpretation of the Sherman Antitrust Act, whether in public or in private litigation, although the antitrust statutes are notoriously open-ended. Nor do courts accept under Chevron the prosecutor’s interpretation of ambiguous criminal statutes such as rico. Chevron itself says that delegation is the key; Adams Fruit and Mead drive the point home. When the holder of a delegated power wields that authority, the leg*884islative plan has been fulfilled, not frustrated. Congress can choose to delegate, or not, statute-by-statute or through framework laws such as the apa; it could undo Chevron across the board if the doctrine functioned as kryptonite to its enactments. All that matters today, however, is that when the executive branch does not employ regulatory power delegated by the legislative branch, resolution of ambiguities in private litigation belongs to the judicial branch.