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LEGISLATION & REGULATION Stephenson Fall 2008 Grade: H Question 1: This matter involves possible judicial review of both the department‟s legal interpretations of the statute as well as review of the department‟s decision-making in the informal rulemaking process. Chevron provides a starting point for analysis of agency legal interpretations. In Chevron, the Court articulated a two-step standard of for reviewing an agency‟s construction of the statute. The first step of analysis under Chevron is a determination of whether “Congress has directly addressed the precise question at issue.” Here, the department‟s proposed rulemaking involves a construction of the DSA that is broad enough so that Sec. 1 extends the department‟s licensing authority to assault weapons. If the Court determines that the statute does not speak to the issue, or is ambiguous, then it must review the department‟s determination for reasonableness. If the department‟s determination is a reasonable one, Chevron requires deference. The Court is unlikely to find, under Chevron step one, that Congress spoke directly to the issue of licensing assault weapons under the Act. We might argue that the plain language of the statute is broad enough to extend the department‟s authority to assault weapons. Under a natural and unelaborated interpretation of the statutory language, it could be said that assault weapons have a “substantial risk” of “widespread death and injury. While this argument may be persuasive to some, it will almost certainly not be persuasive enough to dispose of the case at Chevron step one. Opponents of the regulation will argue that there is ambiguity from a number of sources. First, they may argue that the plain language itself is ambiguous. Assault weapons are mentioned nowhere in the text, and it is unclear that they pose a “substantial” risk, or that Congress had in mind assault weapons causing “widespread death.” This argument is weak, but may introduce some doubt vis-à-vis the department‟s plain meaning argument. Second, they may argue that the legislative history indicates a concern with issues of a scope and nature different from that of assault weapons. For example, the Senate committee report indicates that Congress was concerned with substances that might be used in weapons of mass destruction. Wile the reports discuss nuclear weapons, they do not mention assault weapons. Though the bill was rewritten in broader language, the legislative history, indicates that this concern with weapons of mass destruction was moved from Sec. 1 to the definitional section, which includes “mass destruction” in the definition of “mass terrorism.” The House floor debate corroborates such an interpretation. Perhaps most convincing to the Court will be arguments that the department‟s interpretation of the statute raises serious constitutional issues relating to both the second amendment and to the federal structure of our government more generally. The theoretical underpinning of the Chevron decision is that, in the absence of clear Congressional language, we must assume that Congress intended to delegate to the department the authority to give the statutory language more precise meaning, or to „fill in the gaps‟ Congress left unelaborated. Our jurisprudence, however, also presumes that, in Cases where a statute is amenable to several interpretations, one of which may raise a „serious constitutional issue,‟ then the Court should interpret the statute in a way that does not challenge a constitutional principle. Similarly, where the statutory language is broad enough so that its application may raise constitutional issues, then the Court should interpret the statute narrowly. In this case, though the statute itself is arguably unambiguous in its delegation of power to the department with regard to assault weapons, the Court may find persuasive an argument that, although Chevron indicates that we presume delegation to the department, that in this case we presume that Congress could not possibly have intended, without a clear statement of intent, to delegate to the department the authority to interpret the statute in a manner that contravenes, or may contravene, valuable and important constitutional principles. With regard to the constitutional arguments themselves, the most persuasive is an argument that, especially in light of the Court‟s decision in Heller, the department‟s interpretation raises serious Second Amendment issues. The court might reason, that, in the absence of clear language to the contrary, Congress would not have intended to regulate firearms in a manner that may violate the Constitution. The department may argue, on the other hand, that, as in Rust v. Sullivan, the constitutional problems posed by this regulation are not serious enough to overcome the deferential standard articulated in Chevron. After all, the regulation doesn‟t prohibit firearms generally, but merely the sub-category of assault weapons. That Congress banned them in 1994 is a strong indication that merely regulating assault weapons does not pose serious constitutional issues. Opponents of the regulation may also argue that the department interpretation pre-empts state regulations in the area of firearm sales, and that, due to a presumption against preemption articulated in cases such as Cippollone, the Court should find that Congress couldn‟t have delegated to the department the power to pre-empt the state‟s law through this interpretation of the DSA. In the absence of an express pre-emption clause, there should be a strong presumption against pre-emption owing to the federal structure of our government and the sovereignty of the States to regulate their own affairs. This argument is likely to be a weak one. The department can argue that the DSA necessarily pre-empts state law in many areas, and that if it could not do so, that its entire purpose would be frustrated. Therefore, the Court should find, as in Rice v. Santa Fe, that, where Congress has established broad regulatory power in a field, State law is impliedly pre-empted in those areas. Alternatively, States may still regulate those areas, but where state regulations come into conflict with federal regulation, they are pre-empted. Though Chevron articulates a two-step process, in practice there are often overlapping concerns at both steps. Step two of Chevron is a review of reasonableness, but the Court‟s application of substantive canons and textual interpretation in step one imposes meaningful constraints on the scope of reasoned decision-making that is permissible. Once step one review has been done, it is unclear what additional constraints step two imposes that may overcome Chevron‟s deferential standard. The outcome of the Court‟s Chevron analysis will likely depend on whether the Court finds a serious constitutional issue, as in DeBartolo, or whether it finds that the issue is not serious, as in Rust. The department has a strong case, given the previous regulation of assault weapons. Opponents might argue that the fact the ban has not been renewed is evidence that Congress thinks this is a bad idea, and actively opposes such regulation. This is likely to be a weak argument given that the issue has not come up for a vote, and has merely not left the subcommittee, a fact for which there could be many explanations, some of them political. If the Court finds the constitutional objections insubstantial, it will almost certainly defer to the department‟s interpretation. The opponents‟ best arguments lie with the legislative history of the DSA. This is, however, unlikely to be enough to convince the Court that Congress “clearly spoke” to the issue and that assault weapons fall outside of the scope of the Act. The Court will probably find that the statute is ambiguous on the matter, and, as noted, in the absence of constitutional objections, will likely defer to the judgment on the matter. Having withstood a challenge to it‟s statutory interpretation, the Court will next review the department‟s decision-making in the rulemaking process for arbitrariness. Opponents will argue that the department has not provided sufficient evidence to reach its conclusions, as well as that the department hasn‟t provided a complete “chain of reasoning” for how assault weapons contribute to a threat of terrorism. These objections are unlikely to persuade the Court to strike down the department‟s regulation. Overton Park articulated a deferential standard of review such that the rule will not be struck down as long as a reasonable person could reach the department‟s conclusion given the evidence. The opponents of the regulation haven‟t provided evidence to cast doubt on the department‟s reasoning. Additionally, as this decision is more of a policy matter, rather than a scientific matter as in Ethyl Corp., the Court is less likely to overrule the regulation on the grounds of evidentiary support, but will instead look to the department‟s decision-making. To avoid legal challenge, the department should also include in its statement of basis and purpose responses to the issues raised by the NRA and the State of Texas. Failure to so do could, as in State Farm, result in a successful legal challenge. The department must prove that it has addressed the relevant factors and that there is a rational connection between the facts as the department has found them, and the department‟s decision. In particular, the department should articulate a rationale for why a felony conviction is an appropriate indicator for risk of terrorism, and, by extension, stricter regulation. Question 2: The ERA can be challenged on several grounds, the first of which is the appointment and removal procedures provided for in the enabling statute. The Appointments clause requires that that all “Officers of the United States” be appointed with the advice and consent of the Senate. The removal of executive officers, however, was traditionally held, as it was in Myers, to be at the complete discretion of the President. This plenary power was held to be necessary for the performance of the President‟s duties, but was later constrained by the ruling in Morrison v. Olson, which held that removal protections concerning high-level officers were allowable as long as they didn‟t interfere with the performance of Presidential duties. In light of the ruling in Morrison, such challenges face a heavy burden of proof. Because of the staggering of the appointments, each President will have the opportunity to influence the Commission by making some appointments. Additionally, the ability to select the chairman at will and without case is an important policy tool considering the great power the ERA gives to the position of chair. A challenge of restrictions on removal power is therefore unlikely to succeed. A stronger avenue for attack is presented by the appointment provisions themselves. There is, however, a question as to whether the Commissioners are inferior officers. The fact that consent by the senate is required seems to indicate that they are high-level officers. However, the Appointments Clause requires that all high-level officers be appointed by the President with the advice and consent of the Senate, and the ERA provides that three of the members be appointed by the heads of agencies. Such a delegation scheme would be allowable if the commission members were inferior officers, but such a reading would be inconsistent with the broad powers granted to the commission, as well as the fact that they operate independently and not under the direct supervision of the President of another appointed official. If the commissioners are high-level officers, then the appointment provisions allowing agency heads to appoint commissioners is unconstitutional, since the President is entitled to make all such appointments. The government may argue that because the agency heads are themselves appointed by the President, the appointments made by the agency heads are in a sense also being made by the President himself. This is, however, a strained reading of the statute, and is further hindered by language throughout the statute that explicitly differentiates between appointments made “by the President” and those others that are not. Additionally, the advice and consent of the Senate language is not present in the statutory language as it refers to the appointments of commissioners by agency heads. An additional avenue of attack is through the partisan balance requirements and qualifications required in Sec. 1(a)-(g). CAKE could argue that these requirements are overly burdensome and unreasonably interfere with the President‟s constitutional power to appoint whom he deems most suited for the job. The government may argue, however, that the requirements are merely a codification of the “advice and consent” of the Senate that is specified in the Appointments Clause. Because the Senate could effectively impose these requirements on the Presidential selection through voting down appointments that do not comply with the requirements, then Congress should be allowed to impose them prospectively and by statute. However, CAKE could argue that the restrictions are needlessly rigid and unilateral in a manner not contemplated by the “advice and consent” language of the Appointments Clause. CAKE can also challenge the ERA on the basis of nondelegation doctrine, arguing that the scope of delegation is too broad, and that there is no intelligible principle to guide the agency, since it is not clear what factors the Commission must take into account when making decisions. This is likely a weak argument in light of the standard developed in J.W. Hampton & Co., requiring reasonably articulated factors for the agency to consider. In this case, Congress has specified that the goals are prevention of recessions, and “sustained” growth and job creation. The Court may find that this is a sufficient narrowing of the commission‟s discretion such that striking the ERA down on nondelegation grounds is not warranted. Though, in American Petroleum, the Court voiced nondelegation concerns, successful nondelegation arguments are rare. Additionally, the Court may, as in American Trucking, remand to the Commission so that it may itself provide more articulate guidelines. An additional avenue for challenge is arguing that the ERA does not provide sufficient procedural requirements. Though the ERA provides for notice, there is no opportunity for comment, and the Commission is specifically exempted from the APA. CAKE may argue that the lack of procedure creates due process concerns and is an insufficient check on possible agency abuse. It is not clear whether such an argument would be successful. Cases requiring APA procedures, such as McGrath, have involved adjudication, and the Court voiced concern that without procedural safeguards, individual determinations may be made in an arbitrary or abusive manner. In this case, the Commission does not have the power to change the legal status of or between individuals, and merely makes determinations as to the distribution of stimulus money. Unlike welfare, it is unlikely the Court will find that anyone has a legal right to this money. The Commission does not make any regulations that could have the power of law. The Court is therefore likely to find that APA procedures are required, especially in the presence of explicitly contrary Congressional intent. CAKE may also challenge the nature of Congressional control that has been reserved in Sec. 4(d) as being a from of legislative veto and therefore a violation of the Presentment Clause. CAKE could argue that the provision allowing a unicameral delay of the proposal‟s effectuation constitutes an exercise of legislative authority that is not in accord with constitutional requirements. In Chadha, the court struck down a legislative veto provision on these grounds. The government, however, could distinguish this case from Chadha by arguing that the delay is not legislative because it doesn‟t affect the legal status of the proposal, but merely gives Congress time to pass legislation that complies with the presentment requirements. CAKE must argue that, even though this is true, there may be cases where such a delay could determine a particular outcome, such as forcing a particular business into bankruptcy, and is therefore an exercise of legislative power. Question 3: I believe the majority approach is preferable to Scalia‟s, and would counsel joining the majority opinion. A premise underlying Skidmore was that, because the agency did not have any authority to make decisions with the force of law, its determinations could not bind the court and was therefore not entitled to deference, but merely “respect.” The question in this case is whether the determinations of an agency that does have the power to make decisions with the force of law are entitled to Chevron deference when they come in the form of determinations that do not have the force of law. In other words, the agency has chosen to forego the more extensive procedural requirements required for a ruling to which it, as well as others, would be bound, and has instead issued a particularized determination that does not reach beyond the involved parties to bind others. The presumption of the majority opinion, that Congress would not have intended the agency to receive deference of the kind given in Chevron is, I believe, the correct theoretical basis for a ruling in this case. As a theoretical matter, Scalia objects that according Skidmore-type deference in this case would undermine the foundation of the Chevron doctrine. One line of reasoning that differentiates Chevron from Hearst, however, was that, when there was a statutory ambiguity, there were no longer questions of law, but mixed questions of both law and policy, and that courts should be differential on matters of policy. In cases such as Mead, however, because the ruling does not have the force of law, we may characterize the determinations the agency makes as decisions of a judicial nature, since they influence a small number of people and require individualized determinations, rather than general determinations that characterize matters of policy (Londoner v. Denver). Because Congress has not—and cannot—delegate judicial power, courts should not defer to nonbinding decisions made outside the APA framework. From a practical standpoint, an procedural requirements are a good proxy for how much deliberation underlies the ruling, and presumably provides a good indication as to whether Congress intended the determination to have the force of law. An agency, as in this case, may have may low-level officers who must continuously make individual determinations. When these decisions do not have procedural requirements that accord with the APA‟s scheme, and when they do not bind third parties or future agency determinations, then there is good reason to believe that the Chevron standard of deference should not apply. The same level of agency expertise and internal oversight was arguably not exercised as when a more formal determination is made, and Congress would not have intended such determinations to carry the force of law. On the other hand, the question then becomes why not to adopt the level of authority within the agency as the standard for deciding whether to accord deference. Such a standard would, however, be unclear, as any agency matter brought to court will by then have the backing of the administrative levels of the agency. As a matter of policy, it is preferable to review these non-binding determinations de novo, respectfully considering the agency‟s decision in light of its persuasiveness and the agency‟s experience, rather than considering such a decision‟s assumptions binding on the court if the Chevron test is satisfied. When such agency determinations are made, they are not subject to a clearly articulated standard as are decisions made in the wake of relevant rulemaking. Neither are those decisions subject to procedural requirements that might give interested parties a chance to contest the agency‟s reasoning, and which form the basis of effective judicial review after Nova Scotia and Overton Park. Because the agency is bound by its essentially ad hoc decisions, and because the procedural requirements are lower than those for decisions that have the force of law, the agency should not be accorded Chevron deference upon judicial review of those decisions, and the court should be more aggressive in reviewing them, giving a lower burden of proof to the party seeking review. The scheme of the APA seems to suggest that procedural requirements are a way of preventing arbitrary agency action and abuse of delegated powers. Chevron deference contemplates, as a background principle, that the APA‟s requirements legitimize the exercise of the delegated power and, in accordance with Congressional intent to delegate, represent a judicial restraint on review of agency action. Perhaps the biggest drawback of the majority‟s approach is the formalist nature of determining which decisions have the force of law, and which do not. While insisting on Chevron deference in all cases provides a clearer rule, placing emphasis on the procedural requirements the agency used provides a good proxy for determining the sorts of rulings that have the force of law. Admittedly, there are situations where the result may be unclear, as when the agency has a longstanding pattern of informal adjunction that may have the characteristics of a rule of law. A more compelling approach may be to create a clear rule based on the procedures the agency used. This would have the effect of clarifying when Chevron does and does not apply, and would arguably alleviate some burden on agencies, who might otherwise overcompensate in order to ensure Chevron is applied. However, it is reasonably clear that notice and comment procedures will guarantee Chevron‟s applicability, and there are cases that would not be reached by rule focused entirely on procedure. Yet another approach may be to establish a standard for judicial review that is less deferential than Chevron for these cases, but it is not clear how such a standard could be consistently applied. In practice, increasing judicial discretion beyond Chevron will probably result in a highly discretionary standard similar to Skidmore. Empirically, the majority approach will certainly have the effect of encouraging agencies to adopt, on the whole, greater procedural requirements than are strictly required, and of encouraging rulemaking over adjudication. Arguably, this will deprive the agencies of some flexibility in their determination of whether to proceed on a case-by-case basis. While this flexibility is valuable, encouraging rulemaking, and to an extent greater proceduralization, is perhaps a desirable effect of this ruling. Rules have prospective effect, and put parties of notice of what their rights and obligations are. Adjudication allows the facts and context of each case to be considered, but may lead to inconsistent outcomes, and confusion about where the boundaries of the law lie.
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