Stack (and Nou) on Regulatory Interpretation (AdLaw Bridge Series)

by Chris Walker — Monday, Nov. 16, 2015@chris_j_walker

Last week the Michigan Law Review published in its online companion a short essay of mine—entitled Inside Regulatory Interpretation: A Research Note—which responds to Kevin Stack’s seminal article on regulatory interpretation Interpreting Regulations. Like Anne O’Connell’s article I reviewed for Jotwell earlier this month, Professor Stack’s article was chosen by the American Bar Association as the best work of administrative law scholarship for the year in which it was published (2012).

In my twelve-page response, I explore the empirical foundations for Professor Stack’s theory of regulatory interpretation (relying on my study of agency rule drafters). You can give the full essay a read here, but here’s the summary from the SSRN abstract:

In Interpreting Regulations, Professor Stack provides the first comprehensive approach to regulatory interpretation and situates this approach within the larger literature on legal interpretation. His theory of regulatory interpretation is simple yet pioneering: “a regulation should be read in light of its purposes, with the regulation’s text and the statement of basis and purpose constituting the privileged interpretive sources.” This Research Note takes a look inside regulatory interpretation to explore the empirical foundation for Professor Stack’s novel approach to regulatory interpretation.

In 2013, the author conducted a 195-question survey of 128 federal agency rule drafters at seven executive departments (Agriculture, Commerce, Energy, Homeland Security, Health and Human Services, Housing and Urban Development, and Transportation) and two independent agencies (the Federal Communications Commission and the Federal Reserve). Part I of this Research Note presents the findings from this study for the questions that were designed to assess Professor Stack’s theory of regulatory interpretation from the perspective of the agency officials who draft these statements of basis and purpose. These findings largely support his theory. Part II then takes a step back to explain how the other findings from the study bear on regulatory interpretation.

As I note in the essay, Professor Stack grounds his theory of regulatory interpretation in purposivism (instead of textualism), but I think it is also quite consistent with a textualist approach. And, sure enough, just this month the Duke Law Journal published an article by Jennifer Nou, entitledRegulatory Textualism, in which she starts with the same theory as Professor Stack (regulatory interpreters should privilege the agency’s statement of basis and purpose as evidence of the regulation’s meaning). Here’s the summary of her terrific article, from the SSRN abstract:

This Article proposes a textualist approach to regulatory interpretation. Regulatory textualism, however, should be distinct from statutory textualism. Judges should interpret regulations armed not with dictionaries or other general linguistic aids, but rather with a hierarchy of sources that sheds light on the text’s public meaning. Methodologically, this approach tailors positive political theory insights to the rulemaking process. That process features a number of pivotal actors, or veto-gates, who must sign off on a regulation before it can proceed. The court’s interpretive task is to privilege those statements that are more likely to be credible—sincere, not strategic—reflections of the text’s public meaning.

Specifically, the judge should first consider the preamble’s provision-by-provision explanations, which frequently respond to public comments raising potential ambiguities. If ambiguity persists, the judge should then consult the regulatory analyses, which predict the rule’s consequences under specific factual scenarios. Both congressional and presidential veto-gates, as well as the public more generally, rely on these analyses when engaging with the regulatory process. Finally, if these materials conflict, the court should then defer to the agency’s interpretation — provided that the agency provides a reasoned explanation. In this manner, regulatory textualism asks how the reasonable reader of a rule would have understood its meaning as negotiated by the President, Congress, and other politically legitimate actors.

The import of these two articles for the actual practice of administrative law should be quite obvious, in light of the rise of the modern administrative state where most lawmaking occurs at the agency level and thus so does most interpretive work. 

I’d only add here that government regulators and their counsel (as well as private lawyers challenging government regulations) should encourage courts to embrace a more consistent theory of regulatory interpretation—one that relies on the statements of basis and purpose, among other interpretive tools that may be unique to the regulatory process. (Professor Nou explores the latter in greater detail in her article.) No doubt much more will be written on this important topic, but Professors Nou and Stack have laid a solid foundation upon which to build. 

 

@chris_j_walker

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About Chris Walker

Christopher Walker is a law professor at The Ohio State University Moritz College of Law. Prior to joining the law faculty, Professor Walker clerked for Justice Anthony Kennedy of the U.S. Supreme Court and worked on the Civil Appellate Staff at the U.S. Department of Justice. His publications have appeared in the Michigan Law Review, Minnesota Law Review, Stanford Law Review, and University of Pennsylvania Law Review, among others. Outside the law school, he serves as one of forty Public Members of the Administrative Conference of the United States and on the Governing Council for the American Bar Association’s Section on Administrative Law and Regulatory Practice. He blogs regularly at the Yale Journal on Regulation.

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