The D.C. Circuit, the Trump Administration, and Chevron Step One-and-a-Half, by Daniel Hemel and Aaron Nielson

by Guest Blogger — Saturday, Nov. 19, 2016

While many things in Washington will change as a result of last Tuesday’s results, one thing that will not change is the importance of the D.C. Circuit. The nation’s leading administrative law court will continue to review agency actions in the Trump era, including actions based on agency interpretations of the statutes they administer. And despite some rumblings about the Separation of Powers Restoration Act, D.C. Circuit review of agency statutory interpretations will likely continue to follow the familiar two-step framework set forth in Chevron U.S.A. Inc. v. Natural Resources Defense Council: Is the statute ambiguous (Step One), and if so, is the agency’s interpretation “permissible” (Step Two)?

 

It turns out, however, that the D.C. Circuit has not been following the familiar two-step framework in Chevron cases for quite some time. Rather, as we document in a forthcoming article in the University of Chicago Law Review, the D.C. Circuit has inserted an additional inquiry in between Step One and Step Two. After deciding that the relevant statute is ambiguous but before deciding whether the agency’s construction is permissible, the D.C. Circuit asks a separate question: whether the agency itself recognized that it was dealing with an ambiguous statute. In the D.C. Circuit, a misstep at this intermediate stage is fatal to an agency’s cause: the court will remand if the agency claimed that the statute is clear but the court concludes it is not. In other words, the agency will lose if it mistakenly says that the issue can be resolved at Chevron Step One while the court determines that it should be resolved at Chevron Step Two.

 

Others have referred to this move as “the Prill doctrine” in honor of Prill v. NLRB, the D.C. Circuit case from 1985 that is sometimes cited as the rule’s origin. We think it’s best described as “Chevron Step One-and-a-Half,” because—well—that’s what it is: a way station between Chevron Step One and Chevron Step Two. Whatever one calls it, we think it’s an important feature of the administrative law landscape that deserves more attention than it has received.

 

In one respect, Chevron Step One-and-a-Half presents a puzzle: why do these cases continue to crop up? After all, can’t an agency always circumvent Chevron Step One-and-a-Half by acknowledging (e.g., in the preamble to a final rule or the text of a formal adjudicatory decision) that the relevant statute is ambiguous? Better yet, can’t the agency avoid a Chevron Step One-and-a-Half remand by arguing in the alternative (e.g., “We think the statute is clear, but if it’s ambiguous, we’d stick with this interpretation nonetheless”)? The answer to both questions is “yes,” and yet still, Chevron Step One-and-a-Half continues to rear its head. In the article, we document more than 20 Step One-and-a-Half remands from the D.C. Circuit, along with several more instances in which the D.C. federal district court has invoked the doctrine. Chevron Step One-and-a-Half has also made a cameo appearance in the Ninth Circuit, while the Tenth and Federal Circuits have suggested that they will follow a similar rule. Perhaps most surprisingly, several agencies (including the Departments of Health and Human Services, Interior, and Transportation, the Federal Communications Commission, and the National Labor Relations Board) have been hit with multiple Chevron Step One-and-a-Half remands each. If the doctrine is so easy to circumvent, why don’t we see more circumvention—especially after the agency has encountered Chevron Step One-and-a-Half at least once before?

 

The answer, we suggest, lies in the fact that agency actors sometimes have good reasons (or, at least, good strategic reasons) to insist that a statute is clear despite the risk that a court might find the statute to be ambiguous. One motivation involves intra-agency politics: agency lawyers who prefer a particular outcome might claim that their preferred outcome is statutorily ordained, anticipating that non-lawyers within the agency will be ill-equipped to contest that claim. A second strategic motivation involves intra-executive branch politics: an agency might claim that a particular result is statutorily compelled so as to avoid having to convince the White House’s Office of Information and Regulatory Affairs that the agency’s preferred outcome is cost-justified relative to feasible alternatives. A third strategic motivation involves inter-branch politics: an agency might seek to shirk blame for an unpopular policy by claiming that responsibility lies with Congress. Fourth, an agency might maintain that a statute unambiguously points one way in an effort to prevent future administrations from choosing a different route.

 

After laying out the various reasons why Chevron Step One-and-a-Half cases might continue to arise, our article considers whether these reasons justify the doctrine’s existence. Chevron Step One-and-a-Half is not loved by all: then-Judge John Roberts criticized his colleagues on the D.C. Circuit for using the doctrine to strike down a Drug Enforcement Administration action, and more recently, our co-blogger Nick Bagley has written (in an excellent article forthcoming in the Columbia Law Review) that the doctrine results in “needless punishment” of agencies. Our perspective on Chevron Step One-and-a-Half is more sympathetic: this half step, we think, advances the values that motivate (and help justify) Chevron in the first place. If agencies are entrusted with discretionary power on the grounds that they are more accountable than courts, then judicial review should encourage agencies to take full account for their decisions. Chevron Step One-and-a-Half can serve to encourage this accountability in an administrable way. It can also help to ensure that deference is reserved for cases in which agencies employ the expertise that they (at least ostensibly) have and that courts do not. To be sure, the doctrine imposes “punishment” (in the form of remands and further litigation) on agencies that violate its command, but the punishment, we think, is not without purpose.

 

Like it or hate it, we think we haven’t seen the last of Chevron Step One-and-a-Half. Agency officials in the Reagan, Bush I, Clinton, Bush II, and Obama administrations sometimes claimed that particular positions were congressionally compelled, and the D.C. Circuit sometimes disagreed. Perhaps agencies in the Trump era will break from this pattern, and perhaps the Separation of Powers Restoration Act will spell Chevron’s end. But until then, we expect that Chevron Step One-and-a-Half will continue to influence judicial review of agency statutory interpretation inside the Beltway and beyond.

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