There has been much excitement on the playground of administrative law about the recent decision in Encino Motorcars LLC v. Navarro, in which the Court refused to defer to a Labor Department regulation under the Fair Labor Standards Act. Perhaps because of swirling background debates over Chevron, arbitrariness review, “libertarian administrative law,” and the robustness of judicial review generally, early discussion has suggested that Encino has large significance, somehow retrenching on Chevron deference or supporting more robust arbitrariness review.
Whatever the merits of the larger background debates, Encino adds nothing and changes nothing. The Court’s central point was that the agency had failed to adequately justify a change in its regulation, in light of reliance interests — a point established long ago and confirmed in FCC v. Fox and Perez v. Mortgage Bankers. Encino summarizes its own holding by announcing that regulations that are arbitrary and capricious are unlawful and — the Court adds — do not receive deference (slip op., at 10). Given that arbitrary regulations are invalid, to say that they receive no deference is a sort of lesser-included observation, not an innovation that is worth a flurry of attention.
What is somewhat misleading and confusing about Encino is that Justice Kennedy’s opinion arrives at its banal conclusion via an oddly circuitous, sideways route. Seeing that Chevron has been partly tied to procedure, and that an inadequately justified regulation can in some sense be called procedurally defective, Kennedy says that Chevron deference is not owed to procedurally defective regulations (one imagines a Eureka! moment in chambers). But this is like the grade schooler who solves a math problem by multiplying both sides of the equation by 10, dividing both by 10, and then solving the original problem. Arbitrary regulations are directly invalid; and although that does also entail they should receive no deference, one hardly needs to say so, and there is no need at all to comment on it. Let’s move on.\