Between Seminole Rock and a Hard Place: A New Approach to Agency Deference, by Kevin Leske

by Guest Blogger — Tuesday, Sept. 20, 2016

There is no question that there are both weighty constitutional concerns and practical problems with the Seminole Rock doctrine that impede the achievement of consistency, fairness and transparency in our modern administrative state. These concerns coupled with the confusion and inconsistencies in the lower courts when they attempt to apply Seminole Rock’s “plainly erroneous or inconsistent with the regulation” standard demonstrate why the Court should re-evaluate the doctrine. But unlike some commentators, I do not believe that the Seminole Rock standard should be completely abandoned and replaced with, for example, the Skidmore standard. Nor do I agree, however, that the Seminole Rock inquiry should remain in its current form. Instead, I have offered a new approach in order to address the persuasive practical and constitutional concerns expressed by Justice Scalia, other members of the Court, and by scholars.

 

In my 2013 article in the Connecticut Law Review, titled Between Seminole Rock and Hard Place: A New Approach to Agency Deference, I explored the genesis of the Seminole Rock deference regime and analyzed the Supreme Court’s articulation, application, and interpretation of the doctrine from its inception in 1945 to 2013. I then argued that a comprehensive analysis of the Court’s opinions that apply the Seminole Rock doctrine, as well as the Court’s various deference regimes, revealed three things. First, substantial doctrinal inconsistency, even confusion, exists with respect to Seminole Rock deference inquiry. Second, when the Court has invoked the Seminole Rock doctrine, it has engaged in a far more searching inquiry than the plain text of the standard would suggest. And third, many of the factors actually considered by the Court in those opinions promote fair notice, consistency, and accountability in the administrative state, while muting concerns regarding unconstitutional agency “self-interpretation” and a lack of an independent judicial check on the agency interpretation.

 

I then proposed a new approach to determine whether to defer to an agency’s interpretation of its regulation that incorporates many of the objective factors previously applied by the Court when applying the doctrine over the past 70 years, as well as traditional factors courts have looked to when approaching interpretative questions. My intent was to fashion a formal, clearly articulated, and relatively simple standard. And by relying upon objective factors, thereby limiting the subjective inquiry, and erring, in a sense, on the side of the original Seminole Rock deference standard, this new approach falls comfortably between Chevron’s controlling deference and Skidmore’s less deferential treatment that the courts apply when reviewing an agency’s interpretation of an ambiguous statutory provision.

 

The formulation of the Seminole Rock standard that I advance essentially incorporates the following three key elements: (1) the core holding of the decision itself—namely, that deference to an administrative agency’s interpretation of its own regulation is warranted unless the interpretation “is plainly erroneous or inconsistent with the regulation”; (2) features relied upon by the Court in other deference regimes, such as Chevron; and (3) factors from the Court’s previous decisions applying the Seminole Rock doctrine.

 

This new deference approach for Seminole Rock is divided into a two-step test. As in Chevron, a court would first determine whether the regulation is ambiguous. If the regulation is not ambiguous then the court would simply apply the plain language of the regulation. If ambiguous, the second step would be to apply four objective factors. These factors are: (1) the administrative agency’s stated intent at the time of the regulation’s promulgation; (2) whether the interpretation currently advanced has been consistently held; (3) in what format the interpretation appears; and (4) whether the regulation merely restates or “parrots” the statutory language. The analysis of these factors would determine whether or not the agency would be entitled to controlling deference under Seminole Rock.

 

Exploring each of the factors is well beyond the scope of this blog post, but as I explain in the article, the new approach offers a practical solution that aims to address legitimate criticism on both sides of the issue. The application of this two-part test does not wholly reject or accept Seminole Rock deference and instead represents an intermediate level of deference that essentially combines features of the current controlling deference standards, including Seminole Rock and Chevron, with the less deferential standard of Skidmore. Applying the factors in step-two (when the regulation is ambiguous) continues to value the expertise and experience that an agency brings to the table when determining the meaning of a regulation. And while it allows the agency’s proffered interpretation to remain the focal point, it also ensures that the judiciary will play a more prominent and independent role when reviewing the underlying regulation than under the current Seminole Rock standard. It is able to accomplish this important goal by incorporating objective criteria into the analysis to determine whether to defer.

 

But the test does not go so far as to include a key feature of the Skidmore standard: its reliance on the “persuasiveness” as the “ultimate touchstone for deference.” By eschewing such a factor, a court’s ability to substitute its own policy judgment for that of the agency will be more limited. While this may not entirely satisfy some critics, such as Professor Manning, who believe that a court must have “an independent judicial check,” it nonetheless should satisfy their view that “it is crucial to have some meaningful external check upon the power of the agency to determine the meaning of the laws that it writes.”

 

And while I recognize that these scholars may believe that it would be prudent to replace the Seminole Rock standard with Skidmore’s test, I find it to be unrealistic for both pragmatic and doctrinal reasons. As a pragmatic matter, the Court has reaffirmed the Seminole Rock doctrine as recently as last year and it seems extremely unlikely to sweep away so many years of adherence to the doctrine now. In addition, as other scholars, such as Professor Neilson have pointed out, overruling Seminole Rock could have unintended consequences. Also, as a doctrinal matter, the modification that I propose will remain faithful to Seminole Rock’s core holding, thereby avoiding the need for the Court to overrule the case directly.

 

In the end, I believe adoption of this new approach will be effective at taking the courts, the public, and administrative agencies out from their respective “rock and a hard place.” Courts, for instance, have been understandably hesitant to give controlling deference to agencies (e.g., Seminole Rock and Chevron) in interpretive cases because it may constitute an abdication of the judicial role. On the other hand, courts have also been concerned about withholding the proper amount of deference agencies deserve (e.g., Skidmore) because doing so may improperly shift the regulatory burden and policy-making choices to the courts. Given the uncertainty in this area of the law generally, and the doctrinal confusion with respect to Seminole Rock specifically, agencies, for their part, are often caught between deciding whether to interpret a regulation informally, or engage in a more costly and time consuming procedure involving the notice and comment procedure of the Administrative Procedure Act. It thus seems clear that both agencies and courts would benefit from a clearly articulated and more balanced standard to look to when undertaking their respective roles in the judicial and administrative processes.

 

And the same can be said with respect to the public, and, by extension, regulated industries. With this new approach, an administrative agency would have a diminished incentive to promulgate vague regulations (thereby limiting its broad leeway to interpret them in the future), and a diminished opportunity to re-interpret a regulation routinely without adequate notice. The new approach would therefor promote much-needed certainty for the public. At the same time, it would protect some of the much-needed deference and flexibility that the public expects to be given to the expert administrative agency responsible for administering the statute. The approach consequently has the effect of freeing the public and industry from facing two unsatisfactory scenarios—too much deference to the agency, creating regulatory uncertainty, and too little deference, creating administrative inflexibility.

 

Kevin Leske is an Associate Professor of Law at the Barry University School of Law, where he teaches and writes in the areas of administrative, environmental, and climate change law. Prior to entering academia, Professor Leske served as an Assistant Attorney General of Vermont, where he focused primarily on national air pollution and climate change cases.

 

This blog post draws from his article, Between a Rock and Hard Place: A New Approach to Agency Deference, 46 Conn. L. Rev. 227 (2013). He has also written three additional articles on the Seminole Rock doctrine: Splits in the Rock: The Conflicting Interpretations of the Seminole Rock Deference Doctrine by the U.S. Courts of Appeals, 66 Admin. L. Rev. 787 (2014); Chipping Away at the Rock: Perez v. Mortgage Bankers Association and the Seminole Rock Deference Doctrine, 49 Loy. L.A. L. Rev. __ (2016), and A Rock Unturned: Justice Scalia’s (Unfinished) Crusade against the Seminole Rock Deference Doctrine (forthcoming, 2017).

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This post is part of an online symposium entitled Reflections on Seminole Rock: The Past, Present, and Future of Deference to Agency Regulatory Interpretations. You can read the entire series here.

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