Why the Supreme Court Might Overrule Seminole Rock

by Adam White — Wednesday, Sept. 21, 2016

In 1951, when Kenneth Culp Davis published his first comprehensive study of administrative law under the newly enacted APA, he explained that the deference courts give interpretative rules necessarily depends on a range of factors, from “the relative skills of administrators and judges in handling the particular subject matter” to “the extent of judicial confidence in the particular agency,” to other “special circumstances.”

 

On that last factor, Professor Davis appended a long footnote to further analyze one particularly “interesting special circumstance” worth scrutinizing: “the agency’s interpretation of its own rules.” While conceding that “the science of interpretation of administrative rules—both administrative interpretation and judicial interpretation—is still in its infancy,” Davis paused to note a recent Supreme Court decision of just six years earlier, with particularly significant implications.

 

The case, as you might guess, was Seminole Rock.

 

Professor Davis quoted the Court’s rule that an “administrative interpretation . . . becomes of controlling weight unless it is plainly erroneous or inconsistent with the regulation.” But he then contrasted the Court’s holding with a recent decision of the Fourth Circuit, Southern Goods Corp. v. Bowles (1946), which squarely rejected the notion of granting such judicial deference to many classes of agency interpretations. “It would be absurd,” the court held (with my emphasis), “to hold that the courts must subordinate their judgment as to the meaning of a statute or regulation to the mere unsupported opinion of associate counsel in an administrative department.”

 

Davis predicted that the Supreme Court would likely endorse the Fourth Circuit’s skepticism, although he conceded that “[h]ere as elsewhere, judges’ views of the merits of particular cases are likely to govern choices among competing degrees of judicial intervention.”

 

Professor Davis’s brief observations—found in Administrative Law (1951), p. 202, n.72—fairly reflect my own reasons for believing that the Supreme Court will eventually pare back Seminole Rock deference significantly, if not overturn it altogether. Just as Chevron’s simple two-step framework was eventually supplemented with a “Step Zero” inquiry intended to vindicate structural constitutional interests and other prudential concerns, I expect the Supreme Court to eventually endorse a “Seminole Rock Step Zero” to serve as a prerequisite for granting an agency Seminole Rock’s “controlling” deference. (This “Step Zero” label has already been adopted by Sanne Knudsen & Amy Wildermuth, as well as by Will Yeatman, and I do hope it catches on.)

 

Justice Scalia’s own criticism of Seminole Rock and Auer famously adopted Professor Manning’s separation-of-powers analogy: as Montesquieu, Massachusetts, and Madison all warned, liberty requires us to separate the task of legislation from the tasks of interpretation and adjudication. It is an attractive and perhaps even compelling argument. But even more directly, reforming Seminole Rock would vindicate the concerns of another set of framers: the framers of the APA, who recognized the crucial relationship between the procedural protections that precede agency action, and the judicial review protections that follow it.

 

That was the major theme of an amicus brief that I co-authored in the Perez v. Mortgage Bankers Association case, and then in an essay that I wrote for the Cato Supreme Court Review. The APA’s framers recognized the necessary relationship between ex ante procedural protections, and ex post judicial protections. If agency action is preceded by ex ante procedures to protect the public and preserve an opportunity for meaningful public involvement, then ex post judicial review is less necessary. But if an agency action lacks those ex ante protections, then the ex post protections become all the more important.

 

Today scholars sometimes call this the “pay me now or pay me later” principle. Or, to borrow a memorable line from FDR’s Brownlow Committee, the administrative process requires either “prenatal” or “postnatal” safeguards.

 

This intuitive principle was what originally justified the notice-and-comment exception for interpretative rules—and it’s what animated the Labor Department’s critics in Perez, as exemplified by the opinions of Justice Scalia and the other dissenters. Precisely because the problem could not be solved through judicial imposition of ex ante procedures—as Justice Alito observed, “the Paralyzed Veterans doctrine is not a viable cure for these problems—the problem of granting controlling judicial deference to agency’s interpretative rules would need to be solved on the ex post side, by reforming judicial deference to agency interpretations.

 

Of course, with the loss of Justice Scalia, it would be foolish to predict that significant change will come immediately, especially after the Court denied cert in United Student Aid Funds v. Bible despite Judge Easterbrook’s emphatic separate opinion below. But I would not write it off altogether. We already have seen Roberts, Kennedy, Thomas and Alito raise (or at least acknowledge) serious concerns about Seminole Rock. And while the others have largely refrained from commenting upon the new doctrinal debate, the same justices who created Chevron’s Step Zero might ultimately come to the same conclusions with respect to a Seminole Rock Step Zero.

 

As always, it will require the right case, and the right combination of judicial motivations. Justice Ginsburg, for example, is unlikely to chart a new anti-deferential course in, say, Gloucester County School Board v. G.G. But a Trump Administration’s legal interpretations might spur Justice Ginsburg and more than a few judges to pick up their hammers and put some cracks in Seminole Rock.

 

Adam J. White is a research fellow at the Hoover Institution on War, Revolution, and Peace.

 

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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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