Killing Chevron

by Andy Grewal — Friday, Mar. 13, 2015

In a characteristically provocative opinion, Justice Scalia, concurring in Perez v. Mortgage Bankers, expressed skepticism over Chevron deference. He suggests that Chevron does not comport with the APA’s directive that “the reviewing court” decide questions of law and that Chevron goes beyond the historic level of deference accorded agency interpretations.

Putting aside issues of stare decisis, could the Court kill Chevron? The answer to that seems obviously “yes” — the Court can simply announce that Chevron is no longer good law and that the Court will interpret regulatory statutes de novo, much like appellate courts review district court interpretations of law.

But this new regime would run into a major problem whenever Congress grants a specific delegation of authority. Section 1502 of the tax code, for example, uses two sentences to give the IRS wide authority to issue regulations regarding consolidated returns. Given the brevity of the statute, one might think that the relevant regulations would be short and sweet. But allowing corporations to file a consolidated return is actually quite complex and the IRS regulations go on for hundreds of pages of necessary detail.

If Chevron is killed, what would a court do when asked to examine these regulations? Would we really expect a court to decide afresh every technical issue covered in them? That would be impossible for courts, the IRS, and taxpayers. We need some level of deference for agency regulations.

There might be another way out, however. Justice Thomas, in his Amtrak concurrence, argues that we have improperly abandoned the nondelegation doctrine. Taken to its logical end, Justice Thomas’s approach would nullify statutes like Section 1502. In other words, we won’t have to deal with how Chevron applies to specific delegations of authority because we probably won’t have any specific delegations to begin with. Congress will have to create the rules for consolidated returns all by itself.

I’m guessing that Justice Thomas’s approach won’t be adopted by the Court anytime soon, although I respect his principled approached. Still, the expansion of the nondelegation doctrine helps inform how impossibly difficult it will be to kill Chevron. It’s not just a matter of just re-writing a deference standard. Other pillars of the administrative state would also have to go.

By Andy Grewal

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