The D.C. Circuit issued two decisions last week. Both offer early examples of what administrative deference and respect looks like now that courts no longer defer to agency interpretations of statutes under Chevron.

In Pacific Gas & Electric Company v. FERC, the Court once again considered PG&E’s obligations to distribute (“wheel”) its competitor’s energy to its competitor’s customers. The Federal Power Act generally prohibits FERC from requiring utilities to transmit electricity directly to another utility’s “ultimate consumer,” but it grandfathers in consumers to whom the utility “was providing electric service . . . on October 24, 1992.” FERC interpreted the provision to grandfather in not only to actual consumers to whom the utility delivered energy in 1992, but also to other consumers in the same class as those existing customers. FERC’s interpretation requires PG&E to distribute energy more broadly than PG&E believes the statute permits.

Arguing the case in the spring, FERC invoked Chevron deference. But:

The panel (Judges Wilkins, Rao, and Pan) is not the first D.C. Circuit panel to reject a bid for Chevron deference in the wake of Loper Bright. (See here.) But it does more than the other decisions to date to grapple with how a court should now approach an agency’s opinion about what a statute means for the case before it. Although the panel (Judge Rao writing) rejects FERC’s interpretation of the grandfathering provision, it does not offer its own. Instead:

The cited passage from Loper Bright points out that courts may still look to agency interpretations to guide their own: “[A]lthough an agency’s interpretation of a statute cannot bind a court, it may be especially informative to  the extent it rests on factual premises within the agency’s expertise.” But note a subtle shift. While “interpretation” is the subject of the sentence in Loper Bright, “application” is the subject in PG&E.

Interpretation and application are not the same, and there are good reasons to treat factual inputs that inform application differently from those that inform interpretation. Loper Bright was describing the “due respect” the Supreme Court maintains is still due to agency interpretations. This respect is not to be confused with the deference the Supreme Court maintains is due to agency judgments when Congress delegates authority to exercise discretion—discretion agencies sometimes exercise in the course of applying the law. By giving FERC the first crack at applying the Federal Power Act to PG&E’s tariff, is the panel pointing a way to the territory of “Loper Bright deference”? Or circumscribing its domain?

Whether playing for deference or respect, FERC has a good deal of guidance on remand. In addition to the majority’s analysis, the agency has the benefit of a concurrence in which Judge Pan offers her “view of the best reading of the statute,” backed up by a pointed citation to Loper Bright.

Another question post-Chevron is what will happen to precedents interpreting statutes with the assistance of Chevron deference. According to Loper Bright, they remain presumptively good law:

This presumption was on display in the D.C. Circuit’s second decision las week, United Parcel Service v. Postal Regulatory Commission. (If the caption sounds familiar, it’s because the D.C. Circuit decided a companion case with the same caption in March, and UPS is, unsurprisingly, a repeat petitioner on postal matters.) The case concerns the Postal Service’s methodology for calculating prices for its competitive products (i.e., products it offers in competition with other carriers, like UPS). The D.C. Circuit “broadly sanctioned” the Postal Service’s methodology in 2018.

In this case, UPS petitioned the Commission, which oversees the Postal Service, for a rulemaking that would adjust the methodology to better account for holiday cost increases. The Commission denied the petition for a rulemaking but initiated a separate proceeding to investigate some of the concerns UPS raised. The panel (Judge Garcia, joined by Judges Srinivasan and Rogers) denied UPS’s petition for review of the Commission’s denial.

The case is an interesting one for those interested in rulemaking petitions. It has a few unusual features, such as the Commission’s decision to deny the petition even while granting at least some of the relief requested, and the Court’s decision not to apply the deferential standard of review it sometimes applies to agency denials of rulemaking petitions. For purposes of the present post, though, it is most notable that the panel repeatedly relied on its 2018 decision approving the Postal Service’s original methodology. That decision, in turn, relied on Chevron. Equally notable: there’s no mention of Chevron or Loper Bright in last week’s decision.

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