Step One of Chevron v - DOC by spq13998


									                   Step One of Chevron v. Natural Resources Defense Council
                                     Third Revised Draft

     Prepared for the Scope of Judicial Review portion of the Project on the Administrative
                                         Procedure Act
                                           June 2001

                                             Elizabeth Garrett *

I.      To interpret a regulatory statute, a court first determines the extent to which the
        statutory meaning with respect to the issue before the court is clear. If the
        statutory meaning is ambiguous or if the statute is silent, the court does not impose
        its own construction on the text. Instead, the court decides whether the agency’s
        interpretation of the statute is permissible.

        In Chevron v. Natural Resources Defense Council, 467 U.S. 837 (1984), the Court set
out a two-step process for the interpretation of regulatory statutes:
        “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.” Id. at 842-43 (footnotes omitted).

        Step One of Chevron, therefore, determines the role of the judiciary in interpreting
regulatory statutes. The Court defined the judicial role to be less extensive than its traditional
one in interpreting other kinds of statutes, where judges continue to interpret and clarify
statutory language after finding the text ambiguous or discovering a gap in the statute. In the
context of regulatory statutes, however, silence or ambiguity triggers judicial deference to
reasonable agency interpretations of the statute. Thus, Chevron has significant institutional
implications, shaping the relationship among the branches of government and serving as a kind
of “counter-Marbury” for the regulatory state. See Cass Sunstein, Law and Administration
After Chevron, 90 Colum. L. Rev. 2071, 2075 (1990); see also Cynthia Farina, Statutory
Interpretation and the Balance of Power in the Administrative State, 89 Colum. L. Rev. 452
(1989) (discussing separation of powers implications of Chevron); Jonathan Molot, The Judicial
Perspective in the Administrative State: Reconciling Modern Doctrines of Deference with the
Judiciary’s Structural Role, 53 Stan. L. Rev. 1 (2000) (arguing that Chevron is inconsistent with
the Founders‟ view of the appropriate judicial role in statutory interpretation).

 Professor, University of Chicago Law School. I appreciate co mments on an earlier draft by Ron Levin, Charles
Koch, Andrei Marmo r, Ricky Revesz, Peter Strauss, Adrian Vermeu le, and members of the ABA Section on
Admin istrative Law and the Regulatory Process, as well as the research assistance of Leslie Danks and Crista
Leahy. I also appreciate the generous support of the James H. Douglas Fund for the Study of Law and Govern ment
and the Law and Govern ment Program Endowment, both at the University of Chicago Law School.

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        Some scholars have attempted to reconcile Chevron with the traditional role of the
courts in statutory interpretation. John Duffy argues that Chevron‟s test reflects the
understanding that regulatory statutes delegate to an agency the power to interpret ambiguous
statutory commands, so long as the agency‟s decision does not conflict with the statutory
provisions. Administrative Common Law in Judicial Review, 77 Tex. L. Rev. 113, 199-203
(1998). Duffy concludes: “The illusion of deference [in applying the Chevron test] is created
by the agency‟s delegated authority to fill in the details of the statute, which will affect a court‟s
interpretation of the more general language in the statute. Thus, Chevron is primarily a case
about delegation, not deference.” Id. at 202.

         Soon after the Court decided Chevron, it appeared to cut back on the scope of its new
doctrine. In INS v. Cardoza-Fonseca, 480 U.S. 421 (1987), the Immigration and Nationality
Service had interpreted the term “well- founded fear” used in a provision of the Immigration and
Nationality Act to mean the same thing as a standard in a different section of the Act that
required proof of a “clear probability of persecution.” Justice Stevens declined to defer to the
agency‟s interpretation of the term, primarily because the Court found that the interpretation
was inconsistent with clear congressional intent. Stevens also stated that Chevron deference
was inappropriate in Cardoza-Fonseca because the “narrow legal question whether the two
standards are the same is, of course, quite different from the question of interpretation that
arises in each case in which the agency is required to apply either or both standards to a
particular set of facts.” Id. at 448.

         It soon became clear that any reading of Cardoza-Fonseca‟s dicta to suggest that
Chevron should apply only to interpretive questions that are mixed questions of law and fact
and not to pure questions of law was an incorrect understanding of Cardoza-Fonseca. See
NLRB v. United Food and Commercial Workers Union, 484 U.S. 112, 123 (1987). In his
concurrence in United Food Workers, Justice Scalia emphasized the proper understanding of the
Cardoza-Fonseca dicta: “[O]ur decision demonstrates the continuing and unchanged vitality of
the test for judicial review of agency determinations of law set forth in Chevron …. Some
courts have mistakenly concluded otherwise, on the basis of dicta in INS v. Cardoza-Fonseca.”
Id. at 133. Cardoza-Fonseca is merely a case decided at Step One of Chevron. Applying
traditional tools of statutory construction, including the canon that different verbal formulations
in the same statute ought not to be given identical meanings, the Court concluded that the
agency‟s interpretation was inconsistent with the statute. See 480 U.S. at 432-33, 449. As the
Chevron Court explained, the judiciary “must reject administrative constructions which are
contrary to clear congressional intent” even if the language allows several other permissible
interpretations. 467 U.S. at 843 n.9.

II.       At Step One, a court should use the “traditional tools of statutory construction” to
          determine whether the meaning of the statute is clear with respect to the issue
          before it. These tools include the text of the statute, dictionary definitions, the
          statutory structure, agency interpretations, and legislative purpose.

       In its formulation of Step One of the Chevron test, the Court included a crucial footnote:
“The judiciary is the final authority on issues of statutory construction and must reject

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administrative constructions which are contrary to clear congressional intent. If a court,
employing traditional tools of statutory construction, ascertains that Congress had an intention
on the precise question at issue, that intention is law and must be given effect.” Chevron, 467
U.S. at 843 n.9 (emphasis added) (citations omitted). Judicial interpreters consider statutory
text, dictionary definitions, the statutory structure and framework, including agency
interpretations, and statutory purpose as traditional tools of statutory construction.

          A. Statutory Text and Dictionary Definitions

        Statutory language is the primary source of meaning for courts. Frequently, statutes will
provide definitions of key words, particularly when such words are used in a way that differs
from their ordinary meaning. In Gustafson v. Alloyd Co., Inc., 513 U.S. 561 (1995), the Court
consulted the statutory definition of “prospectus” as part of its inquiry into the meaning of that
term in a provision allowing a right of rescission against sellers who make material
misrepresentations “by means of a prospectus.” Id. at 573-576. Dictionary definitions are used
as evidence of ordinary usage of words found in regulatory statutes, the usage which should
prevail absent a finding that words should be understood in some specialized sense. Since the
Court decided Chevron, dictionaries have become increasingly popular tools of statutory
construction, and many judicial arguments revolve around which dictionary is appropriate in a
particular case. For example, the opinions in MCI Telecommunications Corp. v. AT&T, 512
U.S. 218 (1994), include arguments about the relative merits of Webster’s Third New
International Dictionary (a descriptive dictionary that Justice Scalia argues promotes colloquial
and erroneous usage as correct usage) and those of Webster’s Second (a prescriptive dictionary).
See also Ellen Aprill, The Law of the Word: Dictionary Shopping in the Supreme Court, 30
Ariz. St. L.J. 275 (1998); Note, Looking It Up: Dictionaries and Statutory Interpretation, 107
Harv. L. Rev. 1437 (1994).

        Often a court discovers that there are alternative dictionary definitions for crucial words.
In some cases, the existence of alternative dictionary definitions, “each making some sense
under the statute,” leads the court to conclude that the statute is ambiguous or incomplete and
thus to defer to the agency‟s reasonable choice. See National Railroad Passenger Corp. v.
Boston & Maine Corp., 503 U.S. 407, 418 (1992). In other cases, the court will conclude that
only one definition is sensible and thus resolve the interpretive question at Step One. In MCI
Telecommunications Corp. v. AT&T, the Court was faced with the question of the meaning of
the word “modify.” With one exception, the definitions in several dictionaries included a
“connotation of increment or limitation”; only one definition among many contained in
Webster’s Third defined “modify” to also mean “to make a basic or important change in.” 512
U.S. at 225-226. Justice Scalia concluded that this outlier definition was based either on
intentional distortions of the word (perhaps for sarcastic effect) or on careless or ignorant
misuse (which he claimed occurs frequently in Webster’s Third). Id. at 228. He refused to find
an ambiguity requiring deference because of “a meaning set forth in a single dictionary (and, as
we say, its progeny) which not only supplements the meaning contained in all other dictionaries,
but contradicts one of the meanings in virtually all other dictionaries. Indeed, it contradicts one
of the alternative meanings contained in the out-of-step dictionary itself.” Id. at 227. Thus, the
case was decided at Step One.

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          B. Statutory Structure and Framework, including Agency Interpretations

        At Step One, judicial interpreters consider aspects of the larger statutory framework to
provide meaning to particular statutory provisions. First, judges will consult the entire statute in
which the provision appears, including sections of the statute passed at different times. They
will try to adopt a meaning that makes the most sense of the statute as a whole and promotes
coherence. See, e.g., Gustafson, 513 U.S. at 568-573 (interpreting the Securities Act of 1933,
15 U.S.C. § 77a-aa); Visiting Nurses Ass’n of Southwestern Indiana v. Shalala, 213 F.3d 352
(7th Cir. 2000) (interpreting the Social Security Act, § 1359gg).

        Second, judges consider related statutes in order to formulate a meaning of the relevant
terms “with a view to their place in the overall statutory scheme.” FDA v. Brown & Williamson
Tobacco Corp., 120 S.Ct. 1291, 1301 (2000) (quoting Davis v. Michigan Department of
Treasury, 489 U.S. 803, 809 (1989)). In Brown & Williamson, the Court discussed the effect on
the regulatory scheme of considering nicotine as a “drug” and cigarettes as “drug delivery
devices” given the other provisions of the Food, Drug, and Cosmetic Act (the “FDCA”). But
the Court did not stop with a consideration of the FDCA; instead, it also observed that “the
meaning of one statute may be affected by other Acts, particularly where Congress has spoken
subsequently and more specifically to the topic at hand.” Id. The Court analyzed various
tobacco-related laws passed after the FDCA over the last 35 years. See also Independent
Insurance Agents of America, Inc. v. Hawke, 211 F.3d 638, 643 (D.C. Cir. 2000) (considering
subsequent statutes in interpreting the term “incidental powers” in the National Bank Act).

         The Brown & Williamson case also reflects a third kind of statutory context available at
Step One: subsequent legislative activity that reaffirms congressional understanding of the text
at issue or demonstrates congressional acquiescence to the meanings provided by other
institutions. Thus, the Court discussed legislative proposals that would have granted the FDA
clear authority to regulate tobacco products and that had been rejected by Congress. 120 S.Ct.
at 1306-1313. The Court concluded, in part on the basis of its analysis of this history of
legislation inaction, that Congress had clearly excluded the regulation of tobacco products from
the jurisdiction of the FDA. The judicial use of subsequent legislative inaction as a tool in
interpretation has been erratic, both in the Chevron context and more generally. Legislative
proposals fail for many reasons; therefore, it is difficult to conclude with certainty that
legislative inaction demonstrates congressional acquiescence. See, e.g., Solid Waste Agency of
Northern Cook County v. Army Corps of Engineers, 121 S.Ct. 675, 681-682 (2001) (refusing to
allow evidence of failed legislative proposals to inform interpretation of plain text of statute
because proposals fail for many reasons and the connection between the subsequent history and
the original congressional intent is “considerably attenuated”). However, Brown & Williamson
was “not the run-of-the- mill legislative acquiescence case … [T]he long-standing interpretation
[of the FDCA] had been woven into the fabric of the law; Congress had not simply left it alone,
it had relied on it, legislated around it, and developed an overall regulatory scheme that
depended on it. If this description is accurate (the dissenters were unconvinced), it makes the
strongest case for relying on later congressional action to inform one‟s understanding of an
earlier statute – not just acquiescence, nor even just reenactment, but, in the Court‟s words,
„effective ratification.‟” Michael Herz, Reading the Clean Air Act After Brown & Williamson,
31 ELR 10151, 10157 (2001).

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        As part of the larger interpretive context of the FDCA, the Brown & Williamson
majority considered the FDA‟s longstanding position that it lacked the power to regulate
cigarettes. Justice Breyer attacked this position as inconsistent with clear precedent, including
Chevron itself, that allows agencies to change their understanding of ambiguous terms in
regulatory statutes and to alter their policies as administrations change and as scientific and
other information develops. 120 S.Ct. at 1329-1331. The majority claimed not to be relying on
past agency interpretations as an independent source of meaning, but rather as a way to discover
the context in which Congress legislated over the course of three decades and to suggest the
likely congressional understanding of the regulatory framework. See, e.g., id. at 1308. See also
Solid Waste Agency, 121 S.Ct. at 680 (noting that the original interpretation by the Army Corps
was inconsistent with the interpretation at issue in the case and giving priority to the original
position which was closer to the time of enactment and thus apt to more accurately reflect
congressional intent).

         Agency interpretations can provide insight into statutory meaning in another, more
traditional way as well. Just as the Supreme Court in Solid Waste Agency looked to the
agency‟s relatively contemporaneous interpretation of a statute to discern legislative intent,
courts have long considered agency interpretations of statutory language to be persuasive
evidence of statutory meaning. See, e.g., Norwegian Nitrogen Products Co. v. United States,
288 U.S. 294, 315 (1933) (pre-Chevron decision giving weight to “contemporaneous
construction of a statute by the [people] charged with the responsibility of setting its machinery
in motion; of making the parts work efficiently and smoothly while they are yet untried and
new”); United States v. American Trucking Associations, 310 U.S. 534, 549 (1940) (citing
Norwegian Nitrogen and also noting that more weight should be accorded to the agency‟s view
of legislative intent when the agency helped to draft the statutory language). Courts find agency
views on statutory meaning persuasive because agency staff often play a major role in drafting
legislation; agencies are responsible for the initial application of the statute; and agencies‟ day-
to-day interactions with particular statutes make it likely that they will have a relatively
sophisticated view of how a statute fits into a coherent regulatory scheme. See Peter Strauss,
When the Judge is Not the Primary Official with Responsibility to Read: Agency Interpretation
and the Problem of Legislative History, 66 Chi.-Kent L. Rev. 321, 329, 334 (1990).
Consideration of agency interpretations at Step One is distinct from the deference given to
reasonable agency interpretations at Step Two. Here, courts look to agencies for assistance in
understanding the statutory meaning, acknowledging their role in the lawmaking process but
cognizant of the danger that agencies may have incentives to mischaracterize legislative intent,
just as other actors in the legislative process.

          C. Legislative Purpose

        Courts routinely consider statutory purpose in their search for unambiguous statutory
meaning. Although policy arguments relevant in choosing among competing meanings for
ambiguous statutory language are more properly within the province of the agency in its Step
Two role, see, e.g., Chevron, 467 U.S. at 864-66, the general purpose of Congress in enacting a
certain regulatory framework may provide compelling evidence of legislative intent with respect
to particular provisions and provide evidence of the range of meanings permissible under the

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statute. For example, in interpreting provisions of the Telecommunications Act of 1996, Justice
Breyer considered both the legislative history and the statutory purpose to “illuminate [ the
Act‟s] language.” AT&T Corp. v. Iowa Utilities Board, 525 U.S. 366, 412 (1999) (Breyer,
concurring in part and dissenting in part). See also Presley v. Etowah County Comm’n, 502
U.S. 491, 508-509 (1992) (rejecting agency‟s interpretation on the basis of structure and
purpose arguments); CSX Transportation v. U.S., 867 F.2d 1439, 1443 (D.C. Cir. 1989)
(considering structure and purpose of the Staggers Rail Act at Step One). Interpreting statutory
language with the larger legislative purpose in mind ma y provide some guidance at Step One,
although purpose is often framed at such a level of generality that it cannot satisfactorily clarify
ambiguous language.

III.      Most courts use legislative history as one of the traditional tools of statutory
          construction. Some judges, particularly those who use textualist methods of
          interpretation, decline to rely on legislative history at Step One.

         Most judges will consider legislative history at Step One, although this tool of statutory
construction is more controversial than those discussed in Section II. The controversy over the
appropriate use of legislative history is part of a larger dispute about the appropriate method of
judicial interpretation of all legislation, not just of regulatory laws. Intentionalism has lo ng
been the dominant interpretive approach of the courts. For example, the Chevron test explicitly
views the objective of interpretation at Step One as determining the intent of Congress.
Intentionalists have traditionally considered legislative history to illuminate statutory meaning
and congressional intent. See Stephen Breyer, On the Uses of Legislative History in
Interpreting Statutes, 65 S. Cal. L. Rev. 845 (1992); Peter Strauss, The Courts and the
Congress: Should Judges Disdain Political History?, 98 Colum. L. Rev. 242 (1998) (both
discussing the appropriate use of legislative history by courts to provide context and suggest
meanings considered by Congress). Justice Stevens, a pragmatic intentionalist, has frequently
used legislative history as a guide to congressional intent, and his opinion in Chevron is
consistent with this methodology. Although Stevens began with the statutory language of the
Clean Air Act Amendments of 1977, he also considered committee reports and statements by
key legislators on the floor of Congress as he searched for the congressional intent about the
bubble concept. Only after canvassing the legislative history and still finding no clear
congressional intent on the issue before the Court, did Stevens defer to the agency‟s
interpretation of the statute. See also Babbitt v. Sweet Home Chapter of Communities for a
Great Oregon, 515 U.S. 687, 708 (1995) (majority opinion by Stevens). Similarly, most other
judges, who generally consider legislative materials relevant to legislative intent and therefore
to statutory meaning, will rely on committee reports, floor debate, and other legislative
materials at Step One.

        Since Chevron, a different method of interpretation has become prominent, in large part
through the advocacy of Justice Scalia. Scalia, along with Justice Thomas and a few other
lower court judges, interprets statutes using a method called textualism. See Antonin Scalia, A
Matter of Interpretation: Federal Courts and the Law 23-47 (1997). Textualists are not
particularly concerned with discovering congressional intent, at least inasmuch as it differs from
the directives found in the statutory language itself. Although textualism is influential in the
courts and the academy, the majority of judges, including a majority of the Supreme Court,

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remain intentionalists. However, the influence of textualism has had two related effects on the
Chevron doctrine.

        First, the debate about interpretive methodology has led to a renewed emphasis on the
primacy of the text and its plain meaning in all statutory interpretation, including the
interpretation of regulatory statutes. Because of the importance of the votes of textualist
justices in close cases, the Supreme Court has restated Step One of Chevron in a handful of
recent opinions to eliminate references to legislative intent as the lodestar of interpretation. For
example, in National Railroad Passenger Corp. v. Boston & Maine Corp., 503 U.S. 407 (1992),
the Court described its role as follows:
        “If the agency interpretation is not in conflict with the plain language of the statute,
        deference is due. In ascertaining whether the agency‟s interpretation is a permissible
        construction of the language, a court must look to the structure and language of the
        statute as a whole. If the text is ambiguous and so open to interpretation in some
        respects, a degree of deference is granted to the agency, though a reviewing court need
        not accept an interpretation which is unreasonable.” Id. at 417-18 (citations omitted).
See also Thomas Merrill, Textualism and the Future of the Chevron Doctrine, 72 Wash. U. L.Q.
351 (1994) (discussing changes in Chevron as a result of the rise of textualism).

        Two opinions in another case also reflect this subtle change in the emphasis of the
Chevron test. In K Mart Corp. v. Cartier, Inc., 486 U.S. 281 (1988), both Justice Kennedy
(writing for the Court) and Justice Brennan (concurring in relevant part) applied the Chevron
test, but the majority articulated the test in a way much more compatible with a textualist
approach and with few references to legislative intent or legislative history. Although he
mentioned “the clearly expressed intent of Congress” in a direct quotation from Chevron,
Justice Kennedy conceived of the Step One process as “ascertaining the plain meaning of the
statute.” Id. at 291. Deference is due if the agency interpretation of ambiguous language is “not
in conflict with the plain language of the statute.” Id. at 292. In contrast, Justice Brennan‟s
concurrence is replete with references to the intent of Congress, and unlike the majority, he does
not limit his search for intent to the language and structure of the statute but also relies on
extensive discussion of the legislative materials and drafting history.

         The shift in the formulation of Chevron‟s two-step analysis should not be overstated; in
most cases, the Supreme Court and lower courts use the intentionalist language of Chevron even
when their method of interpretation more closely resembles textualism in its emphasis on
statutory language, dictionary definitions and statutory structure. But see Strickland v.
Commissioner of the Maine Department of Human Services, 48 F.3d 12, 16 (1st Cir. 1995)
(quoting K Mart Corp. formulation and discussing what the rephrasing means for the use of
legislative history by a court); Bankers Life and Casualty Co. v. U.S., 142 F.3d 973, 982-83 (7th
Cir. 1998) (characterizing Boston & Maine Corp. as a stage in the Supreme Court‟s “ongoing
development” of Chevron “especially regarding the scope of the initial inquiry into statutory

        The second effect of textualism on Chevron has been to call into question the
acceptability of legislative history as a tool of statutory construction at Step One. Textualists
spurn the use of legislative history, with the limited exception that legislative history can be

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used to refute a finding of absurdity or scrivener‟s error. Compare, for example, Justice
Stevens‟ majority opinion in Sweet Home, supra, with Justice Scalia‟s dissent in the case, or the
opinions by Justice Scalia for the Court and by Justice Stevens in dissent in City of Chicago v.
Environmental Defense Fund, 511 U.S. 328 (1994). Textualists argue that legislative history is
unreliable and often strategically used by legislators to influe nce courts, and they contend that
using legislative materials violates the bicameralism and presentment requirements in the
Constitution by elevating non-statutory materials to the level of law. See Adrian Vermeule,
Interpretive Choice, 75 N.Y.U. L. Rev. 74 (2000) (arguing that legislative history should not be
used by courts because judges are not competent to separate strategic or inaccurate materials
from materials that reflect genuine intent); John Manning, Textualism as a Nondelegation
Doctrine, 97 Colum. L. Rev. 673 (1997) (making the constitutional argument). Thus, textualists
do not use history at Step One, not because they think it is more appropriately used by agencies
at Step Two, but because they think it is virtually never acceptable to rely o n history in

         The textualist approach to legislative history is in tension with the primary interpretive
techniques used by agency officials in implementing statutes. Agencies are involved in drafting
and writing legislative history, and they work closely with Congress over time, so they are
sophisticated and regular users of legislative history. Agencies also must be concerned that
their implementation strategies and interpretive choices do not irritate members of Congress
who control their budgets and can repeal or alter regulatory statutes. Therefore, agencies
necessarily consider legislative history (although perhaps to discern the intent of the current
Congress rather than that of the enacting one). See Peter Strauss, When the Judge is Not the
Primary Official with Responsibility to Read, supra, at 329-335. If judges refuse to consider
legislative history but agencies practically have no choice but to consider it, it is possible that
courts may find an unambiguous statutory meaning at Step One that agencies have discarded as
inconsistent with legislative history. Alternatively, courts may rule out interpretations as
inconsistent with statutory meaning that agencies view as permissible given their understanding
of legislative intent revealed through legislative history. Pragmatic textualists, like Vermeule,
who argue that courts should not use legislative history for institutional competence reasons
may be more comfortable with agency reliance on such materials than are textualists like Scalia
who contend that the use of legislative history in interpretation violates the Constitution.
Nonetheless, both groups of textualists would deny courts access to legislative history at Step

         The Seventh Circuit Court of Appeals adopted an unusual approach to the use of
legislative history in Bankers Life & Casualty Co. v. U.S., 142 F.3d 973 (7th Cir. 1998). The
court noted:
         “While this circuit has examined legislative history during the first step of Chevron, we
         now seem to lean toward reserving consideration of legislative history and other
         appropriate factors until the second Chevron step. In the second step, the court
         determines whether the regulation harmonizes with the language, origins, and purpose of
         the statute. While not dispositive, a court may find various considerations informative –
         these considerations might include the consistency of the agency‟s interpretation, the
         contemporaneousness of the interpretation, and the robustness of the regulation
         following congressional reenactment of the underlying statute.” Id. at 983.

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See Jason Bell, Bankers Life & Casualty Co. v. United States: Using a Balanced Approach to
Review a Treasury Regulation Issued Pursuant to the Commissioner's General Authority, 34
New Eng. L. Rev. 449, 471-481 (2000) (approving of court‟s unusual interpretive approach in
the limited circumstance of Treasury regulations); see also Ellen Aprill, Muffled Chevron:
Judicial Review of Tax Regulations, 3 Fla. Tax Rev. 51 (1996) (advocating change in
application of Chevron so that legislative history is used only at Step Two if language is not
plain in order to test reasonableness of the agency‟s interpretation). Although the court claimed
to use legislative materials at Step Two, the inquiry there was whether the agency‟s
interpretation was inconsistent with congressional intent. Although courts often engage in this
analysis at Step Two, it is closely related to Step One because it is part of the judicial inquiry
into clear statutory meaning. See Ronald Levin, The Anatomy of Chevron: Step Two
Reconsidered, 72 Chi.-Kent L. Rev. 1253, 1283-84 (1997) (referring to this category of Step
Two cases as “instances of „belatedly discovered clear meaning‟”). Thus, the approach in
Bankers Life may not be inconsistent with the general judicial approach of using legislative
history at Step One in the search for clear statutory meaning. If the Seventh Circuit is departing
from the general practice, however, the case is an outlier.

IV.       Textual canons of construction are tools of statutory construction available for
          judicial use at Step One.

        Courts have long used a set of rules of interpretation as a guide to statutory meaning;
these rules are referred to as the canons of statutory construction. The canons have been
attacked as insufficiently determinate and susceptible to strategic manipulation by willful judges
who choose among competing canons to reach policy outcomes they favor. See, e.g., Karl
Llewellyn, Remarks on the Theory of Appellate Decision and the Rules of Canons about How
Statutes Are To Be Construed, 3 Vand. L. Rev. 395 (1950). This attack exaggerates the
malleability of the canons. While canons cannot give definite answers in all cases, there is a
group of canons that are generally employed in a principled manner and that can shed real light
on statutory meaning. This group of widely accepted canons of construction operates as default
rules to guide not only judicial interpretation but also legislative drafting.

        The question for the Chevron analysis is which canons are considered as traditional tools
of statutory construction suitable for judicial use at Step One. One difficulty is that canons are
employed to clarify and narrow meaning, so their use necessarily implies some amount of
ambiguity, vagueness, generality, or unclarity in the statutory text. To put it differently, canons
usually do not come into play if the language is self-evidently clear, incapable of more than one
meaning. Of course, recourse to dictionaries and statutory structure and purpose,
uncontroversial aspects of the Step One inquiry, occurs because the statutory text, standing
alone, is not entirely pellucid. Thus, even though use of the canons signals some ambiguity in
the statutory text, the current judicial practice of using most of the ca nons to discern statutory
meaning is consistent with other interpretive practices.

        Textual (or syntactic) canons aim to discover what statutory text typically means to an
ordinary speaker of the language and to discern the plain or ordinary meaning of statutory
provisions. They reflect our linguistic conventions and understandings, and thus they are
helpfully, and uncontroversially, used by courts at Step One. The Chevron court worked to

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determine the “common English usage” of the text at issue in that case, 467 U.S. at 860, so rules
that are designed to reveal ordinary usage are particularly appropriate at Step One. Likewise, in
National Credit Union Administration v. First National Bank & Trust Co., 522 U.S. 479 (1998),
Justice Thomas employed several grammar canons to understand the meaning of a provision in
the Federal Credit Union Act. At Step One, he discussed the relevance of the use of certain
articles, plural rather than singular nouns, and participles rather than prepositions. Id. at 500,
502. In addition to rules of grammar, the use of dictionaries to illuminate ordinary meaning is
often considered part of the canon urging interpreters to adopt the ordinary meaning of terms
unless the statutory context indicates some specialized usage (perhaps through the use of
statutory definitions).

         A related group of syntactic canons is aimed more at describing the linguistic
conventions of legislative drafters rather than those of ordinary people. Most courts do not
distinguish between these two sets of textual rules, apparently believing that both sets follow
common language usage. It may be more accurate, however, to consider some textual canons
either as prescriptive (and thus not necessarily reflecting common usage) or as descriptive of the
more formal use of language when lawmakers draft important documents like statutes. Again,
these canons are commonly and uncontroversially used by courts at Step One. They are well-
suited to the Step One inquiry because they attempt to discover how congressional drafters
intended the statutory language to be understood by their colleagues, agencies, and citizens. See
Independent Insurance Agents of America, Inc. v. Hawke, 211 F.3d 638, 644-645 (D.C. Cir.
2000) (explaining when textual canons are appropriately used at Step One to trump Chevron
deference and concluding that they should be used when they are suited to the statutory context
and when relevant canons point to the same understanding). Examples of these canons are the
rule against surplusage (used, for example, by Justice Thomas in NCUA, 522 U.S. at 501); the
related canons of noscitur a sociis and ejusdem generis (see, e.g., Justice Scalia‟s dissent in
Sweet Home, 515 U.S. at 720-21, and Justice Thomas‟ majority opinion in Christensen v.
Harris County, 120 S.Ct. 1655, 1660-1661 (2000)); the reenactment doctrine (see, e.g., Sweet
Home, 515 U.S. at 729 (Stevens, dissenting)); the canon that different statutory sections are to
be interpreted so as to be consistent with one another (see, e.g., United Transportation Union-
Illinois Legislative Board v. Surface Transportation Board, 169 F.3d 474, 480 (7th Cir. 1999));
and the related canons that Congress is not presumed to do a futile thing and that each statutory
provision should be given effect (see, e.g., Halverson v. Slater, 206 F.3d 1205, 1207 (D.C. Cir.

         It is not always clear which canons belong in this category. For example, some have
classified the canon that riders to appropriations bills should be narrowly construed as a rule
that reflects legislative understandings. See, e.g., Sunstein, Law and Administration after
Chevron, supra, at 2107. Perhaps that is right; after all, both Houses have adopted internal rules
designed to limit the scope of appropriations riders. But would those enacting a rider in a
particular case agree that they intended a narrow construction? At least some of the rules that
arguably fall within this subset of textual canons should more properly be considered in the
category of substantive canons related to failures in the legislative process, discussed below.

V.        Substantive canons, including clear statement rules, are typically considered
          traditional tools of statutory construction available for use at Step One. Some

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          courts do not use certain substantive canons protecting important social values and
          regulatory policies at Step One, deferring instead to the agency’s decision whether
          to take account of s uch policies.

        Substantive canons are rules of interpretation that do more than mirror widespread
linguistic conventions; instead, these canons work to vindicate certain policy values. With
some exceptions discussed below, courts use these canons to help them determine the extent to
which statutory meaning is clear. In some cases, the canons appear to be used as part of the
Step Two inquiry, although these cases usually involve the “belatedly discovered clear
meaning” analysis that Levin argues closely resembles a court‟s task at Step One. See Ronald
Levin, supra, at 1283. In other words, although the court finds that the statutory language is
ambiguous, it holds that a particular canon of construction rules out the agency‟s interpretation
because it is inconsistent with the statute as interpreted with the guidance of the canon. See,
e.g., Qualcomm Inc. v. FCC, 181 F.3d 1370 (D.C. Cir. 1999) (holding that under the canon of
constitutional doubt, agency interpretation of ambiguous statute that raised a serious
constitutional question with regard to retroactive application was not entitled to deference when
a reasonable and clearly constitutional alternative was available). See also Edward J.
DeBartolo Corp. v. Florida Gulf Coast Building and Construction Trades Council, 485 U.S.
568 (1988) (declining to defer to an interpretation by the National Labor Relations Board when
the construction posed a serious question of validity under the First Amendment and other
reasonable interpretations of the language were possible, but apparently deciding the case at
Step One). The difference between a traditional Step One case and a “bela tedly discovered
clear meaning” case is that, in the latter instance, the agency may still have some discretion with
respect to its interpretation of ambiguous text as long as the interpretation does not run afoul of
the substantive canon. See Section IV, infra, for further discussion of these cases.

        Three sets of substantive canons merit attention. First, a set of substantive canons
related to values of the democratic process are designed to account for problems in the
environment in which legislation is drafted. Either they provide incentives for drafters to
improve, or they restrict the damage that might be caused by sloppy drafting and poor
deliberation. Arguably included in this group of canons, for example, is the rule that riders to
appropriations bills should be construed narrowly, a canon that reflects concerns about the
poorer quality of committee and floor deliberation that tends to accompany enactment of such

        These substantive canons should be used by courts to clarify statutory meaning. If
courts declined to apply such canons at Step One and allowed agencies to use discretion in
deciding whether to rely on them, their incentive effects would be reduced. Moreover, if these
substantive canons are designed to minimize possible bad consequences of a flawed legislative
process, courts should regularly apply them to favor certain meanings over other possible
interpretations. See also Bernard Bell, Using Statutory Interpretation to Improve the Legislative
Process: Can It Be Done in the Post-Chevron Era?, 13 J.L. & Pol. 105 (1997) (arguing that
leaving to agencies the discretion to apply or ignore some interpretative methodologies designed
to improve the legislative process may undermine their effectiveness).

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        A second set of substantive canons protect underenforced constitutional norms, that is,
constitutional principles that courts do not protect more aggressively through invalidation of
statutes and that Congress is apt to slight when legislating. See Lawrence Sager, Fair Measure:
The Legal Status of Underenforced Constitutional Norms, 91 Harv. L. Rev. 1212 (1978)
(describing the notion of underenforced constitutional norms). Take, for example, the
nondelegation doctrine. The Supreme Court has invalidated federal statutes as violations of the
nondelegation doctrine only twice in our history; yet, the concept is still a vibrant one because it
supports canons of statutory construction that require narrow interpretations of broad statutory
language and thereby limit Congress‟ ability to make open-ended delegations to agencies. See
Cass Sunstein, Nondelegation Canons, 67 U. Chi. L. Rev. 315 (2000). Similarly, the canon that
statutory language will be interpreted so that it does not raise serious constitutional doubts
requires Congress to legislate clearly when it wants to affect behavior in the fuzzy zone between
constitutional and unconstitutional regulation. See, e.g., Edward J. DeBartolo Corp., 485 U.S.
at 575. The canon that legislation is presumed to have only prospective effect and not to have
retroactive application absent a specific indication to the contrary protects an aspect of due
process that courts tend not to protect more aggressively outside the criminal context. See, e.g.,
Bowen v. Georgetown University Hospital, 488 U.S. 204, 208 (1988).

         Some of the canons protecting underenforced constitutional norms are applied as clear
statement rules. A clear statement rule is merely a canon of construction that can be overcome
only with very precise and clear textual language; other canons of construction, such as the rule
that laws are presumed to have only prospective effect, can be overcome by specific evidence in
the text or legislative history. Some canons of construction, like the rule of lenity, are usually
applied as tie-breakers, leading a court to prefer a narrower construction when all the other
sources of legislative meaning provide no clear choice between competing interpretations. In
other words, a clear statement rule is a canon with teeth, providing relatively significant
protection for constitutional or other norms. Supporters of clear statement rules argue that they
force Congress to focus its attention on the particular issue in order to legislate precisely enough
to overcome the clear statement requirement. This additional deliberation may ensure that
constitutional principles are not undermined without substantial justification and a purposeful
decision by the democratically accountable branch. Moreover, if it is difficult to pass
legislation with sufficiently precise language to provide a clear statement, then the amount of
legislation intruding on areas of constitutional concern should decline. See generally William
Eskridge, Jr. & Philip Frickey, Quasi-Constitutional Law: Clear Statement Rules as
Constitutional Lawmaking, 45 Vand. L. Rev. 593 (1992) (explaining and critiquing clear
statement rules).

        Many of the clear statement principles protect structural or institutional constitutional
norms. For example, there are several clear statement rules relating to federalism, such as the
rule that ambiguous federal statutes will not be interpreted to preempt state law, see National
Ass’n of Regulatory Utility Commissioners v. FCC, 880 F.2d 422 (D.C. Cir. 1989), or the rule
that ambiguous language will not be interpreted to intrude on areas of traditional state authority
or important state governmental functions, see Gregory v. Ashcroft, 501 U.S. 452 (1991). See
also Solid Waste Agency, 121 S.Ct. at 683 (requiring a clear statement at Step One in order to
find congressional intent to “permit[] federal encroachment upon a traditional state power and
refusing to consider Chevron deference in this context). Another clear statement rule requires

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that Congress state clearly in the statutory text when it intends a sta tute to have extraterritorial
effect. See EEOC v. Arabian American Oil Co., 499 U.S. 244 (1991). Another set of clear
statement rules ensure that certain sensitive decisions are made explicitly and transparently by
the most democratically accountable branch, the legislature. See Kent v. Dulles, 357 U.S. 116
(1958) (holding that the executive branch could not withhold passports from “subversives”
without express congressional authorization and thus using a clear statement rule to protect the
constitution right to travel).

        The most controversial aspects of clear statement rules are not peculiar to Chevron but
relate generally to the use of these rules. Is it fair to require clear textual statements to
overcome the presumptions of clear statement rules, or does this set too high a hurdle for
Congress, allowing courts effectively to strike down legislation without appearing to be
activist? Are the values protected by clear statement rules legitimate? Given the level of
protection provided by clear statement rules to certain values like federalism and a smaller
national government, they must be justified by convincing reasons rooted in the Constitution or
a theory of democratic governance. Substantive canons, unlike textual canons, are not neutral –
they privilege one vision of the world over others.

         Generally, courts use these substantive canons, including the clear statement rules, at
Step One to determine the extent to which statutory meaning is clear. The justification for their
use by courts is that if they are designed to protect constitutional objectives, they ought to
operate so as to narrow the range of permissible interpretations to those that serve the
objectives. Furthermore, if they have become part of the interpretive regime that serves as a
background for legislative drafting, they may reflect legislative intention, providing additional
justification for their use at Step One. If lawmakers know that precise textual language is
required, for example, to apply federal mandates to state and local governments, the absence of
such language sends a strong signal about the correct meaning of the text.

         Judges, lawyers, and scholars may want to think more rigorously about whether all these
substantive canons relating to constitutional norms should be applied at Step One. Although
some of the canons are clearly intended to force the legislature to make a particular decision
with specific language, e.g., Kent v. Dulles, other canons may be designed only to prohibit
courts from making certain important policy decisions. Therefore, they do not necessarily
reflect a preference that the legislature rather than an administrative agency make the policy
choice. The Chevron context introduces a third institution into the interpretive picture; with
respect to regulatory statutes, the choice is among the three branches rather than between the
legislature and the judiciary. So, for example, Curtis Bradley has argued that Aramco‟s clear
statement rule operates to allocate the decision about extraterritoriality to branches other than
the judiciary but does not reflect a preference for congressional as opposed to executive
determination. Curtis Bradley, Chevron Deference and Foreign Affairs, 86 Va. L. Rev. 649,
692-94 (2000). When courts are faced with an ambiguous regulatory statute with uncertain
extraterritorial effect, rather than using the clear statement rule to interpret the law so that it has
not extraterritorial effect, courts should defer to the executive branch‟s interpretation even if it
extends the statute‟s reach in the absence of a clear statement. The canon works only to require
a decision on this issue by a political actor, and since the Congress has been unwilling or unable

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to decide the matter clearly, it is left for the agency to decide the territorial scope of the statute.
Justice Breyer made a similar institutional point in his dissent in Brown & Williamson:
        “[O]ne might claim that courts, when interpreting statutes, should assume in close cases
        that a decision with „enormous social consequences‟ … should be made by
        democratically elected Members of Congress rather than by unelected agency
        administrators. Cf. Kent v. Dulles, 357 U.S. 116, 129 (1958) (assuming Congress did
        not want to delegate the power to make rules interfering with exercise o f basic human
        liberties). If there is such a background canon of interpretation, however, I do not
        believe it control the outcome here.
                 “Insofar as the decision to regulate tobacco reflects the policy of an
        administration, it is a decision for which that administration, and those politically elected
        officials who support it, must (and will) take responsibility. And the very importance of
        the decision taken here, as well as its attendant publicity, means that the public is likely
        to be aware of it and to hold those officials politically accountable. Presidents, just like
        Members of Congress, are elected by the public. Indeed, the President and Vice
        President are the only public officials whom the entire Nation elects. I do not believe
        that an administrative agency decision of this magnitude – one that is important,
        conspicuous, and controversial – can escape the kind of public scrutiny that is essential
        in any democracy. And such a review will take place whether it is the Congress or the
        Executive Branch that makes the relevant decision.” 120 S. Ct. at 1330-1331 (Breyer,
        dissenting) (citation omitted).

This sort of institutional choice approach, focusing on differences in institutional competence of
the branches of government and the rationales underlying each substantive canon, does not
reflect current practice, however, in which courts tend to apply all such canons at Step One to
discern statutory meaning.

        A third set of substantive canons protect important social policies and values, including
regulatory norms. These canons include rules like exemptions to tax laws should be construed
narrowly; remedial statutes should be construed broadly; laws should be interpreted to favor
Native Americans; and other similar canons of construction that are designed to protect certain
principles or groups. The proper use of these canons is often intertwined with the sort of policy
decisions for which agencies are better suited than courts; therefore, some courts do not apply
them at Step One or use them to evaluate the agency‟s interpretation, thereby allowing agencies
to decide how best to protect these policies and values within the framework of the regulatory
statute. There is, however, significant variation in judicial practice with respect to this group of
canons. If courts view these canons as relatively settled default rules that provide an
interpretive scheme against which Congress legislates, they may feel comfortable using them at
Step One to ascertain congressional intent. See, e.g., King v. St. Vincent’s Hospital, 502 U.S.
215, 220-221 n.9 (1991) (in a non-Chevron case, presuming that Congress legislates with an
understanding of interpretive principles like the canon that statues conferring veterans‟ benefits
should be construed in favor of the beneficiaries).

         Some policy canons have particular relevance for regulatory statutes, such as the canon
that statutes should not be interpreted to require very large expenditures of money to achieve
trivial or de minimis gains. An interpretation requiring absolute protection of safety or health

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no matter the cost would be nonsensical given the reality of limited resources. In Public Citizen
v. Young, 831 F.2d 1108, 1113-1118 (D.C. Cir. 1987), the D.C. Circuit was faced with the
question whether the FDA could include a de minimis exception in the law regulating color
additives (the “Delaney clause”), thereby allowing the FDA to decline to regulate dyes when it
found that the cancer risks they posed were trivial. The canon of construction de minimis non
curat lex seemed particularly appropriate in this case because it is designed to promote
rationality in the law and to avoid costly regulation when the risks are minimal. Id. at 1112.
Indeed, under an absolutist understanding of the Delaney Clause, which targets only
carcinogenic effects, regulation was occasionally counterproductive as industry shifted to more
dangerous but non-carcinogenic additives. Nonetheless, the Court struck down the agency‟s
interpretation and disallowed any de minimis exception to the Delaney Clause because the
textual language was phrased in absolute terms and the legislative history reflected
congressional intent to enact a rule without any exceptions. This case is unusual because of the
clear and absolute statutory language; often, the text is ambiguous enough to allow flexibility in
interpretation. The Young panel hinted that in such a case, the agency should determine
whether the statute should be interpreted to include a de minimis exception or not and the court
should defer to its decision. Id.

         In Michigan Citizens for an Independent Press v. Thornburgh, 868 F.2d 1285 (D.C.
Cir.), aff’d by an equally divided Court, 493 U.S. 38 (1989), the court was faced with an
antitrust challenge to a Joint Operating Agreement (“JOA”) between two competing newspapers
under the Newspaper Preservation Act. Those challenging the Attorney General‟s interpretation
of the Act argued that the construction allowing the JOA was impermissible because it violated
“the interpretive canon that exemptions to the antitrust laws – like all exemptions – should be
narrowly construed.” Id. at 1292. The majority rejected this argument and discussed the role of
such substantive canons in a Chevron case:
         “But Chevron implicitly precluded courts from picking and choosing among various
         canons of statutory construction to reject reasonable agency interpretations of
         ambiguous statutes. If a statute is ambiguous, a reviewing court cannot reverse an
         agency decision merely because it failed to rely on any one of a number of canons of
         construction that might have shaded the interpretation a few degrees in one direction or
                 “We do not mean to say that canons of construction are completely irrelevant in
         the post-Chevron era. If employment of an accepted canon of construction illustrates
         that Congress had a specific intent on the issue in question, then the case can be disposed
         of under the first prong of Chevron. [The court then referred approvingly to a number of
         textual canons uncontroversially used at Step One.]
                 “In this type of case by contrast, the Attorney General is called upon to balance
         two legislative policies in tension: The proconsumer direction of the antitrust laws and a
         congressional desire embodied in the Newspaper Protection Act that diverse editor ial
         voices be preserved despite the unique economics of the newspaper industry. This is
         precisely the paradigm situation Chevron addressed.” Id. at 1292-1293 (citations
This passage is susceptible to a number of interpretations. Perhaps the co urt found only that use
of the canon to construe antitrust exemptions narrowly, which does not have the strength of a
clear statement rule, insufficiently clarified the Newspaper Protection Act‟s ambiguous

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language. But see id. at 1300 n.6 (Ginsburg, dissenting) (“Under Chevron, is it the Attorney
General‟s prerogative to construe an ambiguously-phrased antitrust law exemption expansively?
The answer to [this] question[] … must be „No.‟”). Most of the substantive canons in this
category are not clear statement rules but rather operate as presumptions or tiebreakers, so their
use by courts may not eliminate the need for deference in some cases. Perhaps the court held
that this case presented an example of dueling substantive policies and thus the canon of
construction relating to antitrust exemptions was not helpful at Step One. Or perhaps the court
believed that this substantive canon implicated the kind of policy concerns more appropriately
left to the agency to address when statutory language is unclear or leaves a gap.

         The judicial practice with respect to other policy canons is inconsistent, and courts do
not tend to provide explanations of decisions to use a canon to find clear meaning at Step One
or to defer to an agency interpretation notwithstand ing an arguably relevant canon that points to
a particular resolution. Take, for example, the canon favoring Native Americans in interpreting
statutes. In some cases, the canon restricts Chevron deference. See, e.g., Ramah Navajo
Chapter v. Lujan, 112 F.3d 1455, 1462 (10th Cir. 1997) (also finding the canon consistent with
the statute‟s purpose). In some cases, the court defers to an agency interpretation that competes
with the canon. See, e.g., Haynes v. U.S., 891 F.2d 235, 239 (9th Cir. 1989). In other cases, the
canon is used to confirm the reasonableness of the agency‟s interpretation of an ambiguous
statute. See, e.g., Arizona Public Service Co. v. EPA, 211 F.3d 1280, 1294 (D.C. Cir. 2000) (“In
light of the … canon of statutory interpretation calling for statutes to be interpreted favorably
towards Native American nations, we cannot condemn as unreasonable” the EPA‟s
interpretation of “reservation”). See also Philip Frickey, A Common Law for Our Age of
Colonialism: The Judicial Divestiture of Indian Tribal Authority over Nonmembers, 109 Yale
L.J. 1, 18-27 (1999) (discussing the uneven application of the canon generally and rationales
justifying it).

         The judicial inconsistency with respect to canons protecting important social policies
and values may reflect the debate about their justifications. Some scholars contend that canons
that protect important and well-established social policies are comparable to canons that protect
underenforced constitutional norms, like the nondelegation canons. See, e.g., Sunstein,
Nondelegation Canons, supra, at 334-35 (classifying many substantive canons as
constitutionally based nondelegation canons). Just as the canons relating to constitutional
norms are applied at Step One, so should the canons protecting important social policies, even if
they do not obviously rise to the level of constitutional values. Indeed, Sunstein argues that
many of the policy canons do implicate constitutional values and are variations of
nondelegation canons; thus, they belong in the second category of canons which are generally
used by courts at Step One. This analysis, which may leave very few canons in the third
category of those implicating important but not constitutional policies, again demonstrates the
difficulty of classifying canons. In addition, this argument has less force with respect to canons
designed to improve regulatory policies or correct regulatory failures. These canons, like the de
minimis exception in Public Citizen v. Young, seem to fall squarely within agency competence,
at least relative to judicial competence, and they do not seem fairly classified as nondelegation
or quasi-constitutional canons. Thus their application should be left to the agency in
formulating a reasonable interpretation of ambiguous language. See Ober United Travel
Agency v. Department of Labor, 135 F.3d 822, 825 (D.C. Cir. 1998) (“[W]e have recognized

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that in a post-Chevron era such policy-oriented canons of statutory construction may not be
used to evaluate agency interpretations of ambiguous statutes.”); Amax Land Co. v.
Quarterman, 181 F.3d 1356, 1362 (D.C. Cir. 1999) (citing Michigan Citizens for an
Independent Press for proposition that canons that “embody a policy choice” should not be used
by courts at Step One). See also see Sunstein, Law and Administration After Chevron, supra, at
2116-17 (arguing, in earlier scholarship, that courts should defer to agency decisions whether to
apply canons designed to counteract regulatory irrationality).

        If the courts treat some substantive canons differently from others for purposes of
Chevron, applying most at Step One but deferring in a few cases to the agency‟s decision
whether to rely on the policies they embody, then the inherent difficulty in categorizing
substantive canons may become a more acute problem. Often it is tricky to distinguish canons
protecting important social policies from those that protect structural or institutional
constitutional values. For example, how should courts categorize the canon favoring
interpretations of ambiguous language in statutes and treaties that they benefit Native
Americans? How should courts treat the clear statement rule that requires an explicit textual
waiver of the sovereign immunity of the United States, see United States Department of Energy
v. Ohio, 503 U.S. 607, 615 (1992)? Is the canon requiring a clear statement in order to give a
statute extraterritorial effect a constitutionally-based canon or one merely protecting certain
political choices? All of these canons can be viewed as related to institutional arrangements set
forth in the constitutional design. Fuzziness in the line between the two sets of canons may
empower judges to apply more canons at Step One. Arguably, the more canons available for
use at Step One, the fewer cases that will proceed to Step Two, and the less the flexibility
accorded to agencies in their interpretation of regulatory statutes.

VI.       The court must find at Step One clear statutory meaning on the precise issue before
          it. Otherwise, it must defer to a reasonable agency inte rpretation of the statutory
          language that resolves the precise issue presented by the case.

        The key passage and footnote from Chevron that articulate the method of statutory
interpretation refer four times to congressional intent on the “prec ise” or “specific” issue
confronting the court. See Chevron, 467 U.S. at 842-43 & n.9. This emphasis cannot be
accidental, although this aspect of the Chevron test is seldom discussed in opinions interpreting
regulatory statutes. But see Gonzalez v. Reno, 212 F.3d 1338, 1348 (11th Cir. 2000) (finding
that Congress had spoken to the question of what aliens could apply for asylum but finding
silence on the precise question of what procedures must be followed to apply or what
information should be included in an application). Perhaps the best way to understand
Chevron‟s phrasing is that it emphasizes to courts the change in their interpretive role and
encourages them to apply Chevron so that Step One does not dominate the inquiry. If a court
discerns a general meaning, for example, to promote health or safety, it cannot infer from that
general purpose a clear meaning on a narrower question if the statutory language relevant to the
precise and specific question is ambiguous. Instead, it defers to an agency interpretation that is
consistent with the statutory language and the general purpose animating the legislation.

        For example, in Chevron, the Court concluded that the 1977 Clean Air Act Amendments
reflected the general congressional intent to pursue certain environmental objectives while

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allowing reasonable economic growth. But the Court could not find in the text or legislative
history any “actual intent” of Congress on the precise issue of whether the bubble concept was
compatible with the term “stationary source.” Indeed, the Court noted with respect to the
legislative history that “[t]he general remarks [of relevant lawmakers] „were obviously not made
with this narrow issue in mind and they cannot be said to demonstrate a Congressional desire.‟”
467 U.S. at 862 (quoting Jewell Ridge Coal Corp. v. Mine Workers, 325 U.S. 161, 168-69
(1945)). Thus, it is not acceptable at Step One for a court to ascertain a general meaning of
statutory terms that could support several more precise understandings and the n to select among
those specific alternatives. In such a case, courts must defer to the agency‟s selection, as long
as the interpretation it chooses is not contrary to the general purpose and policy of the Act.

        Chevron‟s reliance on the notion of the “precise” issue also underscores the importance
of how the interpretive question before the agency and the court is framed. A rigorous focus on
articulating the legal issue can help to clarify the appropriate judicial treatment for the set of
Chevron cases that Levin characterizes as presenting questions of “belatedly clear congressional
meaning.” Ronald Levin, supra, at 1282-1283. In such cases, courts as part of the Step Two
analysis supervise the agency‟s interpretive process and rule out a particular understanding of
admittedly ambiguous statutory language as inconsistent with clear congressional intent. Take,
for example, Qualcomm Inc. v. FCC, 181 F.3d 1370 (D.C. Cir. 1999). The Court applied the
canon of constitutional doubt and rejected an agency interpretation of an ambiguous statute that
raised a serious constitutional question of retroactivity when a reasonable and clearly
constitutional alternative was available. This kind of analysis is little different from the Step
One analysis in, for example, Cardoza-Fonseca. There the Court refused to defer to the INS‟
interpretation of “well- founded fear” because it conflicted with clear congressional intent,
although Justice Stevens acknowledged that the term was ambiguous enough to provide the
agency some flexibility in applying the standard in the future. See 480 U.S. at 448. See also
City of Chicago v. Environmental Defense Fund, Inc., 511 U.S. 328, 339 (1994) (holding that
the EPA‟s interpretation “goes beyond the scope of whatever ambiguity § 3001( i) contains”).

        Often courts undertake this analysis at Step Two, even though the techniques used to
resolve the issue should be identical to those used at Step One. It clarifies the Chevron test and
the scope of the court‟s role if judges explicitly cast these cases as Step One inquiries, and they
can do so by reframing the precise question. Levin suggests that the precise question in these
cases is “whether Congress has clearly ruled out an option the agency has chosen, or a premise
on which the agency has sought to act.” Ronald Levin, supra, at 1283. See also Ronald Levin,
Scope-of-Review Doctrine Restated: An Administrative Law Section Report, 38 Admin. L. Rev.
239, 250-51 (1986) (providing similar analysis in a non-Chevron framework). The court might
find clear statutory meaning at Step One with respect to this precise question, even though the
statutory provision remains somewhat ambiguous and triggers some deference at Step Two.
Another way to understand these cases is to view the judiciary‟s ro le under Chevron as a
supervisory one that does not end if clear statutory meaning cannot be determined. Instead,
using the traditional tools of statutory interpretation, courts continue to evaluate the agency
interpretation and determine the acceptable parameters of possible statutory meaning within
which the agency can choose an interpretation to guide its implementation of the congressional
directive. Understood in this way, such cases easily become Step One decisions, rather than
Step Two cases as they are often characterized by courts.

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         The emphasis on the “precise question” may also clarify the holding in Brown &
Williamson. Before it began to discuss its view that Congress would never have delegated to an
agency the question whether to regulate tobacco because it is such a politically significant
decision, the majority observed that “our inquiry into whether Congress has directly spoken to
the precise question at issue is shaped, at least in some measure, by the nature of the question
presented.” 120 S.Ct. at 1314. By focusing on the precise question of tobacco regulation rather
than on the more general question of whether the FDA had “broad jurisdictional authority,” see
id. at 1318 (Breyer, dissenting), the Court more easily reached its conclusio n that Congress
could never have intended the FDA‟s interpretation of the statute.


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