CARDOZO LAW REVIEW [Vol. 20:989 1999]
Ernest Gellhorn* and
The central operational standards of our written Constitution —
that executive, legislative, and judicial powers shall be separated and that
each shall be controlled by one (or more) of the three branches of government
— are based on two precepts: first, that governmental powers are limited
to those granted by the Constitution or approved by Congress and the President;
and second, that discretion in any agency or official is constrained by the
Constitution as well as by laws duly enacted pursuant to constitutional
requirements. The first restraint on government lies with Congress, under its
authority to “make all laws” and
thus to make them specific and limited. It has full authority to ensure that an
agency stays within its designated jurisdiction by clear drafting and specific
assignments. To this end, a revived delegation doctrine, which requires
legislation to include “intelligible principle[s]” for measuring the scope and not just the goals of
legislation, could play a critical role in
confining agency discretion and ensuring agency accountability. In this way,
limits on vague and standardless delegations should be a first principle of
constitutional government. Strong policy
grounds continue to support wider application of the doctrine prohibiting
Properly pursued, the delegation doctrine would ensure that major policy
decisions are made by an elected Congress and President, and not an appointive
bureaucracy. It also would give agencies and
courts greater guidance in understanding the scope (and limits) of an
Despite the attractiveness of a revived delegation doctrine in
constitutional law, it also must be acknowledged that the United States Supreme
Court continues to show “no interest in reviving the delegation doctrine
as a check on administrative discretion.”
In upholding wide discretion to the United States Sentencing Commission to
craft mandatory sentencing guidelines in Mistretta v. United
States, Justice Blackmun went so far as to
say that the Court’s “approval of ... broad delegations” without objection “has been driven by a
practical understanding that in our increasingly complex society, ... Congress
simply cannot do its job absent an ability to delegate power under broad
general directives.” Even Justice
Scalia’s dissent in Mistretta agreed with this assessment, although
he derisively characterized the Commission’s authority as a
“junior-varsity Congress.” He
reasoned that the Court has not “felt qualified to second-guess Congress
regarding the permissible degree of policy judgment that can be left to those
executing or applying the law.”
However, the problems of unconfined agency discretion and, more
particularly, of excessive delegations of authority to agencies are not limited
to the scope of congressional delegations or to the standards applied to test
the necessary precision of regulatory laws. Indeed, the larger question, at
least in terms of practical impact and unregulated agency overreaching, is how
to control overly expansive readings by agencies of their mandates. Justices
Blackmun and Scalia may be right that Congress cannot be expected to do a
better job of drafting legislation that sets primary policies, although we will
never really know unless it is expected or commanded by the courts to do so.
However, it is surely the case that, even if the Court required Congress to
adopt more precise and clearer statutes when assigning agencies responsibility
for clean air, a safe and sound banking system, reasonable rules for election
campaigns, or fair competition, difficult, unanticipated issues not answered
directly by the terms of the statutes or their legislative histories would
continue. Arguments over the scope of an agency’s authority cannot be
eliminated and the standards applied to decide such issues are critical in
limiting the discretion of administrative officials.
Designing more effective controls on agency interpretations of their
authority involves two questions: (1) how agencies should read their mandates,
and (2) how courts should review such agency interpretations. Consistent with
separation of powers principles, we believe that agencies should read their
enabling authority restrictively. Assertion of new-found powers should occur
only after receiving a clear statement of intent from Congress. Such a self-imposed standard would help ensure the
legitimacy of agency action outside the traditional scope of its
But the tendency has been to favor a more expansive approach. Regulators
are expected to be proactive. The media interprets this to mean that regulators
should continually press for an expansion of their authority. Perhaps this is
inevitable, although the more careful analysis today holds that regulatory
programs should be confined to market failures, should be limited to solutions
that match specific needs, and should apply market-based standards where
possible. The argument for agency restraint
in interpreting its legislative authority reflects a more basic principle of
legitimacy and authority. Until Congress delegates specific powers to an agency
with a reasonable degree of clarity, there is no basis in law for an agency to
claim such power. The checks and balances central to our constitutional scheme
instruct that laws are passed only after compliance with both the bicameralism
and presentment requirements, not agency preferences or interests.
Such a rule of interpretation is more consistent with constitutional and
prudential norms, and we urge that agencies should adopt it. But we are
skeptical that this recommendation will carry the day. History clearly shows
that, except in highly unusual circumstances,
agencies read their authority expansively and often pursue agendas far beyond
that envisioned when the agencies were created. These many causes include: pressure from the
President or congressional committees; bureaucratic imperatives; and public
(i.e., interest group) demands. Neither the
President nor Congress is likely to narrow agency discretion to limit such
tendencies when it is in their self-interest not to do so. In addition, we do not believe that courts are
likely to expand the clear statement doctrine beyond its current limited scope
where an agency interpretation raises serious constitutional questions.
The second approach for constraining agency assertions of authority, and
the one we develop more fully in this Article, would restore the independent
judicial determination of jurisdictional issues outside the agency’s
primary mandate or subject matter, even if contrary to an agency’s
plausible interpretation (and some readings of Chevron U.S.A., Inc. v.
Natural Resources Defense Council, Inc.).
This approach is not without its problems, of course, but we view it as far
more promising than the alternatives. Admittedly, the United States Supreme
Court cases have limited the application of Chevron more often than they
have applied it and the cases often are difficult to reconcile. But we believe that some members of the present
Court may be receptive to limiting Chevron deference to narrower
questions of legislative ambiguity where it is more likely that Congress both
expected agencies to fill in the gaps and courts to defer to such agency
determinations. In any event, the application
of Chevron deference to peripheral jurisdictional questions has been and
Adoption of a rule denying deference to expansive agency readings of
their jurisdictional claims would not require overruling any precedent.
Moreover, a requirement of independent judicial evaluation of peripheral
jurisdictional issues is consistent with the terms and rationale of
Chevron. The prudential rule of Chevron (and Skidmore v. Swift
& Co.), requiring judicial deference
to reasonable agency interpretations of their enabling acts, was first applied
in limited contexts where the specific scope of the agency’s authority to
apply well-recognized regulatory programs was in doubt. Its purpose was to take
advantage of agency experience and expertise in areas where Congress had
delegated general authority to the agency, but the precise contours of that
power were not clear or its applications to recent developments were
This Article presents the case for restricting the application of
Chevron deference to filling in the interstices of its core legislation,
thereby leaving peripheral jurisdictional issues for independent judicial
determination. This is not to say that agencies cannot argue the case for
greater jurisdiction, including an explanation of why their interpretation
should be given special attention because of the impact of the decision on
their regulatory programs. Nor does it depend upon either support of or
hostility to Chevron. Taking the
agency’s experience and special insights into account because of the merit
of its analysis is one thing; but taking agency interpretations of basic
statutory authority outside traditional areas of agency regulation as
controlling is another.
When agency self-interest is directly implicated, such as when it must
decide whether an area previously unregulated by the agency should now come
within its jurisdiction, the justifications for deference fade. Its experience
and expertise in the new subject matter is limited; it is at most a fiction
that Congress intended that the agency would exercise jurisdiction if it had
addressed the question. It is here that concern about agency aggrandizement is
at its highest. Of course, peripheral jurisdictional issues are not always
readily distinguishable from other more traditional questions, and this is a
major criticism of our approach. But we are satisfied that even in those
circumstances, courts should be cautious in applying Chevron where there
is significant distance between the agency’s traditional regulation and
that being asserted. The need to ensure accountability and limit agency
discretion weighs heavily on the side of not expanding Chevron beyond
its original and limited scope. For our purposes, it is Chevron
deference that is the problem, not Chevron itself. Moreover, if our
jurisdictional concerns can be resolved in step one of Chevron, where
both the agency and court are bound by Congress’ legislative judgment,
then we have reached our goal without adjusting the deference standard.
I. THE PROBLEM OF DYNAMIC INTERPRETATION
The Constitution and the
Administrative Procedure Act
(“APA”) require that agency action be based on authority granted to
the agency by Congress. Unlike common law courts with a recognized power to
create their own authority, as well as to fill in and apply the law, it is
contrary to the constitutional scheme for agencies to regulate areas beyond
those which Congress authorized. These propositions are not unchallenged: They
have been questioned by those who see agencies as recipients of regulatory
power subject to “dynamic statutory interpretation.” Indeed Professor Sunstein also postulates that
“[i]n the modern era, administrative agencies have become America’s
common law courts.” While this argument
has appeal, we necessarily reject it in this Article.
Determining whether an agency’s asserted authority is within a
specifically delegated assignment is subject to numerous rules and principles.
Most prominent among them is, of course, step two of the Chevron
doctrine that agency interpretations which are reasonable shall be upheld where
Congress has not spoken on the precise question. While agencies often interpret their regulatory
authority expansively, such assertions generally are limited to situations
where the agency clearly has jurisdiction over the practices involved. For
example, when the Federal Trade Commission (“FTC”) pushed its
substantive and procedural authority to the boundaries in cases such as FTC
v. Sperry & Hutchinson Co. and
National Petroleum Refiners Ass’n v. FTC, serious challenges were not raised about the
FTC’s authority to prohibit antitrust and “unfair trade
practice” violations. That is, the trading stamp practices at issue in
Sperry & Hutchinson raised tying issues closely related to
traditional antitrust prohibitions, and the use of substantive rule authority
in National Petroleum involved an interpretation of the FTC’s
rulemaking authority under the FTC Act. Thus, the primary question in cases
such as Sperry & Hutchinson was whether, as in Chevron
itself, the agency had the authority to attack the problem in the manner
asserted. Did the FTC’s rulemaking authority cover substantive rules? Did
its assignment of prohibiting anticompetitive and unfair practices include the
lock-in competitive advantage obtained by trading stamps.
On the other hand, when an agency asserts authority far beyond its
legislative assignment, as occurred in Leedom v. Kyne, the courts have reviewed agency assertions of
jurisdiction even before a final order is issued and without deference to the
agency’s interpretation of its authority. As Judge Friendly concluded in PepsiCo v.
FTC,Leedom allows a court to
review without deference an agency complaint or other action “plainly
beyond its jurisdiction as a matter of law,” even though further
proceedings were contemplated, because the “proceeding ... must prove to
be a nullity.” However, these are
pre-Chevron cases. Whether Chevron modified the Leedom
rule is a question that we will seek to answer.
A. Examples of Agency Action Plainly Beyond
Perhaps emboldened by the role of judicial deference outlined in
Chevron, agencies have increasingly ignored the boundaries of their
delegated authority and made broad claims of jurisdiction into areas long
thought to be outside their jurisdiction. When challenged, agencies know they
can rely on the safe harbor of step two of the Chevron test by arguing
that their jurisdictional conclusions are “reasonable.” Illustrations of such broad claims follow. In
building our model, we are aware of the difficulty of those agency actions that
are marginally, rather than plainly, beyond jurisdiction. Our efforts will
focus on that question in the next Part.
1. FDA Regulation of Tobacco Products
Until the Food and Drug Administration (“FDA”) issued the
proposed rule regulating the advertising and sale of cigarettes and smokeless
tobacco in 1995, other agencies exercised
regulatory control of the customary marketing of tobacco products. The FDA had
acknowledged that it had no jurisdiction either over controls on access to
tobacco products or over advertising and marketing so long as health claims
were not asserted. Although tobacco was a
major sector of the economy, the legislative history, debates, and the hearings
leading to the Food, Drug and Cosmetic Act of 1938 (“FDCA”) did not mention tobacco products.
The inclusion of tobacco products in the FDCA surely would have been
controversial. But the Act, as passed, had the full support of tobacco-state
legislators. There was, in other words, no
expectation in 1938 that the FDA could regulate tobacco products.
To be sure, the FDCA is to be interpreted as liberally as necessary to
ensure that foods, drugs, cosmetics, and medical devices are safe for those who
use them. And Congress has long recognized
that cigarettes and other tobacco products are dangerous to one’s
The FDA, relying on “new evidence” that nicotine is addictive
and has significant pharmacological effects and that nicotine addiction is a
pediatric disease, asserted jurisdiction over the distribution, marketing, and
sale of cigarettes and smokeless tobacco. It
emphasized the health effects of tobacco products and the dangers that
marketing and advertising practices presented in enticing children to begin
smoking. This need was then used to justify a broad reading of the FDCA to
encompass tobacco products as combination products under the drug and device
segments of the Act. A federal district court
accepted the FDA’s argument that the FDA had jurisdiction over tobacco
products (but not their advertising and promotion) under Chevron on two
grounds. First, it found that although Congress did not specifically address
the issue of FDA jurisdiction over tobacco products in the FDCA, it also did
not express a “clear intent to withhold from [the] FDA jurisdiction
to regulate tobacco products in some place other than the text of the
FDCA.” Second, the court found the
agency’s interpretation “reasonable” and thus entitled to Chevron deference.
On appeal, the United States Court of Appeals for the Fourth Circuit
reversed in a two-to-one opinion authored by Judge Widener. First, the court reversed the district court’s
presumption of statutory authority, calling it a “fundamental
misconception.” Once it took this step,
it was relatively easy to retrace and reverse the jurisdictional assumptions
contained in the district court’s opinion. From the Chevron
perspective advocated here, the Fourth Circuit’s approach is preferable.
When expanded areas of jurisdiction are under scrutiny, Chevron
“deference” must itself be viewed skeptically. In this connection,
the court stated: “We also note that ascertaining congressional intent is
of particular importance where, as here, an agency is attempting to expand the
scope of its jurisdiction.”
2. Application of Civil Rights Law to Environmental Decision-Making
Decisions made by agencies such as the Environmental Protection Agency
(“EPA”) and the Nuclear Regulatory Commission (“NRC”)
regarding the permitting of industrial plants and the siting of nuclear
facilities are required to be made in accordance with statutory criteria
related to environmental pollution, safety, and efficacy. For example, the NRC,
created in 1974 and responsible for the
“[p]rincipal licensing and regulation” of nuclear facilities, must consider several factors when evaluating
nuclear facility sites. Among the
considerations previously applied to siting applications are the “intended
use of the reactor,” the safety features
of the facility, and both the
“[p]opulation density and use characteristics of the site
environs.” The NRC reworked the criteria
for siting applications submitted after January 1, 1997. These factors include “the population
distribution, and site-related characteristics,” as well as the “[p]hysical characteristics of
the site.” Thus, until recently, the EPA
and NRC read their mandates as not authorizing them to include civil rights
criteria under Title VI of the Civil Rights Act when deciding permit and site issues.
However, in 1994 both the EPA and NRC had to confront Executive Order
12,898, which they read as mandating a
different approach. The order directed that all federal agencies identify and
address “environmental justice” concerns — e.g., that minority
communities not host a disproportionate number of high-emission chemical or
other hazardous facilities — pursuant to Title VI of the 1964 Civil Rights
Act. The presidential directive specified
that it was designed to sensitize regulatory officials to possible
disproportionate effects of their decisions on minority communities. But, it
was “intended only to improve the internal management of the executive
branch” and did not “create any [enforceable] right, ... substantive
or procedural,” or provide that agency compliance was judicially
A recent decision by the NRC’s Atomic Safety and Licensing Board
(“Board”) illustrates how the Board has relied upon Executive Order
12,898 to expand its authority and reach results inconsistent with the
NRC’s enabling statute. The case, In re Louisiana Energy Services,
L.P., involved the siting of a nuclear
facility, which according to NRC regulations generally requires that a nuclear
plant be located away from sensitive “receptors,” such as hospitals,
schools, and nursing homes. Even though the
Board found these criteria satisfied, it ruled that the site selected was
invalid because minority communities generally are underserved by such
“amenities.” In particular, the
Board severely criticized the staff’s unwillingness to consider siting the
nuclear facility near a popular fishing lake.
Reliance on “quality of life considerations” was held to be improper
because it favored the middle class at the expense of the poor. In reaching this conclusion, the Board relied upon
Executive Order 12,898 as modifying its siting criteria even though the
President’s order expressly did not — because it could not —
expand the NRC’s statutory authority.
Another example concerns an experimental program in California whereby
oil companies obtain extra emissions credits for each old, heavy-emission car
that they buy and scrap. By acquiring extra
emissions credits, these oil companies are able to concentrate statewide
emission sources at refineries located near minority communities, resulting in
an alleged violation of Title VI and the EPA’s siting requirements. These effects have led several community groups to
file a complaint with the EPA, alleging that the “‘Old-Vehicle
Scrapping Program’ results in an adverse disparate impact on regional
communities of color.”
Several opinions issued by the EPA further demonstrate the interplay
between industrial plant permitting and Executive Order 12,898. In In re
Chemical Waste Management of Indiana, Inc.,In re Envotech, L.P, and In re EcoElectrica, L.P., the EPA’s Environmental Appeals Board stated
that the EPA could consider “environmental justice” issues, as set
forth in Executive Order 12,898, in its criteria for reviewing permit
applications. Despite concluding in these cases that Executive Order 12,898 did
not add any substantive requirements to its permitting criteria, the EPA in
effect now considers environmental justice concerns in its permitting
decisionmaking. Thus, like the NRC, the EPA arguably has exceeded its statutory
authority by incorporating Executive Order 12,898 into its permitting
These cases are similar to the FDA’s assertion of authority to
regulate tobacco products where no health claims are made. In the environmental
cases, the agencies’ statutory authority for identifying the criteria to
be applied in permitting and siting decisions is explicit. None of these
criteria, however, includes application of the civil rights laws. All have been
interpreted as limiting the decisional criteria to factors directly related to
the two agencies’ regulatory programs. Moreover, as with FDA’s
tobacco rules, the NRC and EPA cases involve the agency’s application of
an executive order that is not directly part of its regulatory authority, and
thus generally not within Chevron deference. Both agencies’ contrary interpretation of their
authority has resulted in a substantial expansion of that authority in a manner
not considered or probably even imagined by Congress. As appealing as these
assertions of jurisdiction may be as social policy matters, there is no reason
to defer to the agencies’ broad reading of their authority.
3. Federal Reserve Board’s Interpretation of the Glass-Steagall
To ensure their safety and soundness, the Bank Holding Company Act of
1956 and the Glass-Steagall Act have long prohibited commercial banks from engaging
in nonbanking activities or from owning voting shares in any company that is
not a bank. This insulation of commercial
banks from investment banking and dealing in securities was thought necessary
to avoid conflicts of interest that had resulted in breaches of fiduciary
duties by banks in the collapse of the early 1930s and to restore confidence in
the integrity of the commercial banking system.
However, changing times have led to calls for the elimination of the
Glass-Steagall firewall to make U.S. banks more competitive. Commercial banks
have long argued that they must be allowed to enter many markets, including the
securities and insurance business, if they are to remain viable. For example, Citicorp, a bank holding company, and
Travelers Group Inc., a holding company for securities, insurance, and other
financial services firms, recently sought to merge under the Bank Holding
Company Act. Commenters, however, argued that
approval of the merger would violate the Glass-Steagall Act by allowing for the
combination of a member bank with one of the largest U.S. securities
firms. Despite these concerns, the Federal
Reserve Board (“FRB”) approved the merger finding that
“Travelers has committed to conform the activities of [its domestic
subsidiaries that cannot be affiliated with a bank under section 20 of the
Steagall Act] to the requirements of the Glass-Steagall Act and the
[FRB’s] orders and interpretations thereunder.”
Traditional lending has become a much smaller market for banks because
large companies can raise capital independently at a lower cost by selling
bonds, commercial paper, and stocks in the capital market. In addition, U.S.
banks have fallen behind large German and Japanese banks that have, among other
things, acquired investment banks and engaged in the insurance business. But
proposals for reform have stalled because insurance groups and smaller
commercial banks (who are allowed to sell insurance under an exception to the
prohibition of commercial banks from engaging in nonbanking activities) fear that they would be squeezed by larger banks if
the Glass-Steagall prohibitions were eliminated. As a result, proposals in
Congress to increase the power of banks to deal in securities and insurance
have failed because the political power of small banks and insurance agents,
who reside in every congressional district, has neutralized the influence of
To overcome this legislative impasse, the FRB unilaterally
“amended” section 20 of Glass-Steagall by a change in Regulation
Y which implements the statutory provisions
separating commercial banking from nonbanking activities. Regulation Y had long interpreted section 20 as
prohibiting bank holding companies from acquiring a subsidiary unless it was
“engaged principally” in permissible activities. But under the revised regulation, the FRB has
broadly expanded the range of permissible activities and allowed bank holding
companies to purchase investment banks if seventy-five percent, of the new
subsidiary’s activities were permissible. Formerly the threshold was ninety percent, and the
permissible activities category was interpreted narrowly.
By allowing banks to shift permissible functions, such as underwriting
of government bonds or dealing in securities for a customer to a subsidiary,
the new limitations have the effect of allowing commercial banks to acquire
investment banks and, perhaps, other commercial entities, without restriction.
For example, the FRB has approved the purchase by Bankers Trust Co. (a
commercial bank) of Alex. Brown & Sons (an investment bank) even though
Alex. Brown ranked sixth in underwriting initial public offerings of stock in
1996 and was a leading underwriter of high technology stocks. The practical effect of the FRB’s aggressive
reading of its powers is the collapse of the statutory firewall without the
benefit of legislation.
Again, the result in these cases may well be good policy. Only a few
years ago, dire predictions were made that commercial banks would soon suffer
the fate of the dinosaur. Investment banks, mutual funds, and other financial
services were actively making loans and deposits, a business that had long been
the protected preserve of commercial banks. Under amended Regulation Y, banks
are repositioning themselves to respond to such competition, although
newly-approved subsidiary enterprises may make it more difficult for bank
auditors and regulators to measure the safety and soundness of U.S. banks. On
another level, however, this dynamic interpretive response by the FRB to
modernize its authority without congressional authorization seems clearly
contrary to its legislative mandate and separation of powers principles.
Whether the policy is wise is not at issue. Our only point is that adoption in
the face of a long-standing contrary understanding by the FRB and Congress
should, if challenged, eliminate any Chevron-inspired claim for judicial
4. Redefining the Definition of the Term State
Most interpretations of agency authority that disregard express or
implied jurisdictional limits involve narrow issues that seldom create public
controversy. Thus, they are unlikely to cause recognized policy mischief.
Nonetheless, the attitude that an agency may do whatever is necessary even
though it is not directly authorized to do so is lawless, not merely creative.
One recent example of such “creeping” assertions of jurisdiction
without statutory support is the rule proposed by the Federal Housing Finance
Board (“Finance Board”) to redefine the term State in its
membership regulations by adding American Samoa and the Northern Mariana
Islands to its list. The revised definition
would allow the financial institutions of both entities to be eligible for
membership in the Federal Home Loan Bank. As a result, member banks in the
Samoan territory and Mariana commonwealth would now be eligible for fund
advances and other financial services from the Finance Board.
On the surface, this inclusion of American Samoa and Northern Mariana
Islands within the scope of the Federal Home Loan Bank seems unobjectionable.
It may be consistent with the broad coverage Congress intended for savings and
loan institutions that are already insured entities under other regulatory
programs. In contrast to the FRB’s reinterpretation of the Glass-Steagall
Act, there would appear to be no opposition to including Samoan and Mariana
thrifts as members of the Finance Board. Nonetheless, the route chosen by the
Finance Board to expand its membership in light of a more limited statutory
directive raises serious questions.
The difficulty is that the Federal Home Loan Bank Act (“FHLBA”) clearly defines the “term
‘State’ [to] include the District of Columbia, Guam, Puerto Rico,
and the Virgin Islands of the United States.” The FHLBA does not include either American Somoa or
the Northern Mariana Islands in this list. In addition, the defined term is
specifically relied upon elsewhere in the FHLBA, and in particular, in defining
the criteria for membership eligibility.
Thus, under traditional rules of statutory construction, including expressio
unis, the omission of American Samoan and the North Mariana Islands from
the statute appears to be intentional and exclusive. Nor is this omission
contradicted by evidence of a strong contrary legislative intent.
The case for including the North Mariana Islands is arguably stronger
because specific provisions of the Covenant Agreement executed by the United States and the North Mariana
Islands at the time they became a commonwealth already made the FHLBA
applicable to them. No such justification
can be offered for American Samoa. Indeed, the Finance Board’s proposed
rule openly acknowledges that “bills currently are being considered in
Congress that would achieve this same result legislatively.” Why administrative action was necessary or
permissible under the circumstances is not explained. For our purposes, this
becomes an admittedly small, but nonetheless instructive, example of why
Chevron deference is not appropriate and should not be applied on
judicial review, assuming of course that this becomes a step two case.
Each of these examples has appeal as substantive regulatory policy.
None, however, appears to be grounded in statutory authority. All can, and
probably should, be decided by a reviewing court without deference to the
agency’s views. Indeed, each assertion of authority warrants special
skepticism because of the agency’s obvious self-interest. To the extent these decisions on review do not land
in step one of Chevron, they should find no safe harbor in step two.
II. JUDICIAL LIMITATIONS ON CHEVRON DEFERENCE
In their debate over the application of Chevron deference to
agency jurisdiction, Justices Brennan and Scalia sharply disagreed over whether
it “applies to an agency’s interpretation of a statute designed to
confine its authority.” Both Justices
relied upon the same authorities to support their contrary positions while
neither admitted any doubts or limitations about his position.
Were the question so simple, it seems to us that Justice Scalia’s
position is clearly correct. Of course, Chevron allows an agency to
interpret the scope of its jurisdictional authority; otherwise the rule is a
nullity because there would be almost no statutory interpretations to which it
could be applied. Filling statutory gaps, such as deciding how pollution is to
be measured — smokestack by smokestack as the environmental-petitioners
argued, or plant by plant as EPA urged and Chevron decided —
ultimately is a question about the scope of the agency’s authority.
On the other hand, Justice Scalia’s further argument that it is
both “necessary and appropriate” that such deference encompass all
reasonable “administrative interpretation[s] of [an agency’s]
statutory jurisdiction or authority”
lumps jurisdictional issues into a single category as if all cases are alike.
His argument assumes that all jurisdictional issues are identical and asserts,
without further analysis, that there is no discernible line between an
agency’s authority and an agency’s “authorized application”
of its authority. But as Justice Breyer has
explained, “there are too many different types of circumstances, including
different statutes, different kinds of application, different substantive
regulatory or administrative problems, and different legal postures in which
cases arrive, to allow ‘proper’ judicial attitudes about questions of
law to be reduced to any single simple verbal formula.”
We therefore explore a multifaceted approach toward developing a
peripheral jurisdictional limitation on the Chevron rule. It relies on
several factors that we believe should be applied in deciding whether to defer
to an agency’s interpretation of its authority. Included among these
factors are: whether Congress intended that courts defer to the agency under
the circumstances; whether the jurisdictional claim is within the zone of
interests regulated by the agency, or alternatively, whether it is clearly
outside the agency’s regular authority; and whether the statutory terms
and structure are consistent with the expanded jurisdictional claim.
A. Likely Congressional Intent
By its own terms Chevron is more limited than Justice
Scalia’s argument assumes. Its rule of deference “comes into play ...
only as a consequence of statutory ambiguity, and then only if the reviewing
court finds an implicit delegation of authority to the agency.” Thus, the first question to be decided by the
reviewing court, once it has determined that Congress did not address the issue
itself, is whether “Congress has explicitly left a gap for the agency to
fill [and whether] there is an express delegation of authority to the agency to
elucidate a specific provision of the statute by regulation.” When that express delegation is made, the
agency’s regulation is upheld unless it is arbitrary and
capricious. Even where the “legislative
delegation to an agency on a particular question is implicit rather than
explicit,” the court may find that
Congress “implicitly decided” that agency experience and expertise
were likely to be critical in determining whether the agency’s authority
encompasses the proposed action. In that circumstance, the “court may not
substitute its own construction of a statutory provision for a reasonable
interpretation made by the administrator of the agency.”
Where, however, no implicit delegation of law-interpreting authority was
granted to the agency, deference to the agency’s judgment on
jurisdictional issues cannot be traced to congressional intent. Without such
support, Chevron teaches that basic coverage issues on the scope of the
agency’s regulatory authority are for Congress to decide because there is
no basis for presuming that it intended otherwise. In other words, deference to
an agency’s interpretation of its primary jurisdictional coverage requires
that a distinction be made between those interpretations that are within the
agency’s experience and expertise — and thus likely to have been
intended by Congress for agency interpretation — and those that are
outside this framework, and therefore subject to independent judicial
The more significant the question and the greater the impact that
expansion of the agency’s jurisdiction is likely to have, the greater the
likelihood that Congress did not intend implicitly to delegate that
determination to an agency. Nothing is more important to an agency than the
scope of its regulatory authority. But agencies are established to implement
regulatory programs authorized by Congress and not to decide whether those
programs should be extended into new areas. In addition, the need for outside
review and increased judicial scrutiny of agency-initiated expansion of its
legislative authority outweighs any interest in agency sovereignty. Simply put,
agencies are not common law courts. The underlying concern, as
Chevron’s architecture recognizes when it requires courts to make
the first determination of whether Congress answered the precise question at
issue, is that agencies have no comparative advantage in reading statutes and
that agency self-interest may cloud its judgment. The principle of deference
under Chevron’s step two is limited to reasonable agency
interpretations precisely because of a concern that “the decision to
regulate may be motivated by designs for agency aggrandizement rather than by a
disinterested assessment of statutory authority and appropriate
Justice Breyer’s analysis of how Chevron should be applied
has focused closely on assessing what a legislator supporting the statute at
issue would have expected. He argues that the principal question in deciding
whether step two should be invoked is whether the statute’s legislative
supporters would have expected questions of subject matter coverage to be
decided by the agency or a reviewing court. Several factors are likely to
decide this question. If the jurisdictional question at issue is an important
one, likely to have a major impact on the regulatory program and those being
regulated, it seems probable that members of Congress voting for the bill would
not have wanted the courts to defer to the agency’s views. For example,
whether the FRB could breach the firewall between commercial and investment
banking established by the Glass-Steagall Act is not something a legislator
voting for the measure probably would have intended. Similarly, it seems
unlikely that the Congress approving the FDCA expected it to cover a major
segment of the economy not previously regulated by the FDA and not discussed in
any legislative consideration.
On the other hand, if the question is interstitial involving an
application of expected authority within the agency’s primary mission
— e.g., does the FRB’s authority under Glass-Steagall empower it to
define further what constitutes “banking” and “non-banking”
activities; or does the FDA’s authority over food and drugs encompass
requiring warning labels to protect consumers with specific allergies — it
is more likely that the supporting Congress would have wanted courts to defer
to the agency’s reasonable views. Even here, of course, Congress may have
by other actions — e.g., by expressing serious concerns with any change in
the separation between banking and nonbanking activities or by requiring
warning labels on various alcoholic beverages posing dangers to public
health — given strong indication that
the issue is reserved expressly for Congress to decide and therefore cannot be
This examination of whether Congress meant to make an implicit
delegation of jurisdiction to the agency is only the first measure for deciding
whether the agency’s interpretation of its authority warrants deference.
Agency experience and expertise can be described in many ways to encompass
almost any question. Similarly, the interpretation of a statute is invariably
important, at least to the challenging parties (as was true of the plant versus
smoke-stack issue in Chevron itself). Thus, a more structured framework
identifying additional criteria to measure likely congressional intent is
needed. One suggestion, implied in Justice Brennan’s opinion in
Mississippi Power where he stated that no deference should be given to
an agency interpretation of “a statute designed to confine the scope of
its jurisdiction,” is that
Chevron deference is not appropriate when an agency is asserting
authority outside its core powers.
B. Peripheral Jurisdictional Issues
In Leedom v. Kyne, the Supreme
Court upheld a district court ruling that the lower court had jurisdiction to
overturn an agency decision that clearly “exceeded its statutory
power” and which was “contrary to a specific prohibition” in its
enabling authority. Although its holding
only specified that the final order requirement did not prevent the trial court
from reviewing interim agency findings otherwise not subject to judicial
review, the Court’s decision in Leedom has relevance for the
application of Chevron deference to agency statutory interpretations. At
bottom, Leedom is predicated on the theory that agency actions clearly
outside its regular authority deserve immediate nondeferential judicial review.
To ensure that self-serving agency interests do not influence the decision of
the scope of agency authority, review is warranted, indeed necessary.
Leedom’s significance is limited by the procedural posture of the
case before the Court where, because of its jurisdictional argument, the agency
did not dispute the plaintiff’s claim that the agency had acted in excess
of its jurisdiction. Nonetheless, the Court’s rationale that there was a
strong inference that Congress intended that the statutory provisions governing
the general jurisdiction of the courts was controlling supports the view that
jurisdictional issues outside an agency’s core powers are different.
Under Leedom and other cases, reviewing courts independently have
examined agency claims of regulatory authority to take action clearly beyond
the scope of the agency’s traditional area of responsibility. In
Leedom itself, the Court found that where the agency had sought the
claimed regulatory authority from Congress and been denied, and where the
agency’s exercise of the claimed regulatory power would raise serious
constitutional questions, jurisdiction to review the agency’s actions was
warranted even though no final order had been issued. This approach is similar to that followed under the
clear statement doctrine which is relied upon by courts to read agency
authority narrowly where constitutional rights would otherwise be
implicated. However, none of these cases
directly examines the scope of review applicable to challenged agency
1. The Agency’s Primary Regulatory Assignment
The first criterion for determining whether Chevron deference
should apply is whether the questioned jurisdiction is within the agency’s
core regulatory assignment. It is presumptively unlikely that Congress intended
to allow an agency to decide for itself whether an area of regulation is within
its regulatory jurisdiction where the enabling legislation is silent on that
authority. An agency only has those powers delegated to it by Congress because
any other presumption would mean that enabling legislation was always an open
book to which the agency could add pages and change the plot line. Otherwise
the enabling act would not significantly confine agency authority because
finding “some rationale” to support expansion of agency authority
would seldom be difficult. To defer to the agency interpretation in this
circumstance, even if that reading is reasonable, removes the independent check
that courts exercise over agency actions.
Indeed such deference flies in the face of the APA itself, which in section
558(b) denies an agency the authority to impose sanctions on issues, rules, or
orders “except within jurisdiction delegated to the agency.”
For example, the safety of foods, drugs, and devices is the FDA’s
primary authority; the truthfulness of advertising claims is the FTC’s
principal responsibility; and the safety of consumer products not involving
foods, drugs, and devices is within the usual regulatory domain of the Consumer
Product Safety Commission. If the asserted jurisdiction appears to fit within
the role specifically assigned to the agency and the interpretive question is
of the scope of its application — such as the most appropriate means for
measuring effluent sources for applying pollution control requirements set
forth in the Clean Air Act (as in Chevron) — the presumption of
deference that Chevron commands is applicable unless Congress has
clearly indicated otherwise.
On the other hand, if the agency has not previously regulated the
product or service, or asserted the power to do so, then there seems to be
little basis for assuming that Congress would have wanted courts to defer to
agency interpretations. Indeed, to be consistent with the Chevron
reliance on congressional intent, the presumption in that circumstance should
be that interpretive deference is not appropriate unless Congress has expressly
said so. For example, the FDA has long regulated foods, drugs and devices if
unsafe (adulterated) or if marketed in a
misleading way (misbranded). But it has not
heretofore regulated or restricted the marketing of lawful products where the
message is truthful and not targeted at unlawful sales. In this situation,
Chevron deference is not appropriate because it is outside the area that
the FDA has traditionally controlled. That is, without textual support in the
statute to imply a delegation to the agency, there should be no presumption of
2. Statutory Structure, Operational Effect, and Legislative History
In deciding whether an agency’s core jurisdiction includes activity
not previously regulated, courts should independently review the same materials
they would otherwise consider in deciding whether step one of Chevron
(i.e., did Congress answer the jurisdictional question directly) applied. These
include the structure of the statute, the
operational effect of expanding the agency’s jurisdiction, and the legislative history of that
authority. If the statutory structure,
operational effect, and legislative history do not positively support the
agency’s claimed authority, then Chevron deference is not
appropriate where the regulation would extend beyond the agency’s primary
areas of responsibility. The agency necessarily has no experience and probably
no expertise in the new arena, further eliminating any justification for
judicial deference to its jurisdictional conclusions. Here the courts are
equally competent to figure out what Congress intended, and they do not have
the inherent conflict of power aggrandizement.
Applied to nuclear facility siting issues, the statute, as well as clear
precedent, have established the criteria by which such decisions are made. They
do not include civil rights tests of Title VI or criteria as set forth in
Executive Order 12,898. Here, of course, it is not even the agency (NRC) but
the White House that suggests the expansion of jurisdiction. Similarly, the
defining terms of the Federal Housing Finance Act as well as its legislative
history give no indication that Congress intended for the Finance Board to
expand the scope of the meaning of a state to include territories
(American Samoa) or commonwealths (Northern Mariana Islands) without express
authorization. The purpose of the Glass-Steagall Act, as well as the debates
and reports issued when it was adopted, make clear that the wall between
commercial banking and nonbanking activities was not to be breached, even in
exceptional circumstances. Likewise, the FDA’s exercise of authority over
the truthful marketing of tobacco products is supported neither by the
structure nor the legislative history of the FDCA as amended by the Medical
Devices Act. Similarly, the legislative
history of the FDCA contains no mention of tobacco products nor does it
indicate that the FDA was given regulatory power over tobacco products as
customarily marketed. Silence in this circumstance is especially telling
because tobacco was a significant part of the economy, particularly in the
states whose members were prominent supporters of the FDCA.
The reliance on the structure and operational effect of the enabling
legislation and on its legislative history to decide whether the assertion of
jurisdiction warrants judicial deference is fully consistent with the rationale
of Chevron. Chevron itself specifically relied upon the structure
of the Clean Air Act, the effect of plant-wide effluents, and the Clean Air
Act’s legislative history in determining Congress’s intent under step
Other traditional justifications for deference to agency interpretation
— that the agency is better positioned to assess practical needs and
regulatory requirements; that as the designers of the enabling legislation the
agency knows more about what Congress intended and how it would have answered
the question if put to it; and that deference ensures greater uniformity in
interpreting the legislative authority — do not necessarily apply to
agency interpretations of peripheral claims. Agencies have no comparative
advantage in determining from the structure, terms, and legislative history of
the enabling legislation whether it covers new or additional areas. Step one of
Chevron expressly recognizes this as an area of special judicial
competence. As an interested party, the agency’s views should carry no
special weight with a reviewing court whose judgment is likely to be
independent and measured — and thus more acceptable.
C. Additional Criteria
Additional criteria for locating the boundaries between step one and
step two of Chevron are designed to further identify when deference is
inappropriate because Congress probably did not intend to pass this question to
the agency for decision. Three are identified, but if this framework were to be
adopted, further development would be desirable.
1. Distance of Asserted Jurisdiction
The distance between an agency’s core jurisdiction and the proposed
extension of its authority is obviously relevant. The closer the new regulatory
program is to the agency’s primary assignment, the more likely it is that
Congress would have expected the agency to make that decision and thus included
it, at least implicitly, within step two deference. Correlatively, the more
distant the regulation is from the agency’s primary program the less
likely it is that Congress would have wanted the agency to expand its
jurisdiction. In this circumstance, deference is inappropriate.
This criterion seems particularly relevant in addressing the authority
of the EPA, NRC, and FDA to encompass civil rights or tobacco issues within
their mandates. Neither the EPA nor NRC had previously applied civil rights
criteria in making siting and permit decisions. Nor did existing criteria
discriminate against any racial group. That facilities generally should not be
located near recreational areas is common sense; that recreational facilities
may be used less frequently by minority groups is likely to reflect
imponderable issues of personal choice and resources. It is hard to see how
such a decision is racially based. Here, the expansion of the agencies’
authority demonstrates a difference of kind, not just of degree.
2. Importance of Issue
In applying Chevron, the kind of statutory construction question
presented often should be dispositive of the issue of deference. Is it a matter
of detail in a statute whose general application is undisputed (as in
Chevron) or is it a fundamental issue of the limits of administrative
jurisdiction. Judge, now Justice, Breyer captures this point in his opinion in
Mayburg v. Secretary of Health and Human Services as follows:
The less important the question of law, the more interstitial its
character, the more closely related to the everyday administration of the
statute and to the agency’s (rather than the court’s) administrative
or substantive expertise, the less likely it is that Congress (would have)
“wished” or “expected” the courts to remain indifferent to
the agency’s views. Conversely, the larger the question, the more its
answer is likely to clarify or stabilize a broad area of law, the more likely
Congress intended the courts to decide the question themselves.
Applying this criterion to the FRB’s revision of the Glass-Steagall
firewall, it seems unlikely that Congress meant to leave “so important and
delicate a legal question” to the
agency to decide. Not only was the statute carefully considered at the time the
Glass-Steagall Act was adopted, but Congress’s reconsideration in recent
years has resulted in a stalemate because of intense lobbying pressure from
warring industries. This is no Bob Jones situation. In these
circumstances it is for Congress, not the agencies, to decide such significant
“political, as well as policy, concerns.” On the other hand, the designation of small islands
as states, making them eligible for membership in the Federal Home Loan Bank,
is far less momentous either as a political issue or for its impact on the
Federal Home Loan Bank, even though Congress was currently considering the same
issue for American Somoa.
3. Related Regulatory Assignments Housed in Other Agencies
Where more than one statute is relevant, the usual rule of statutory
construction is to look at all statutes “together, as if they were one
law.” That is, a reviewing court must
look at all relevant statutes on the same subject in determining
Congress’s intent. In addition,
Chevron is limited to agency interpretations of the statutes they
administer; no special weight is given to
agency interpretations of other, nonorganic statutes.
Applying these concepts to an agency’s assertion of regulatory
authority, a central question is whether another agency also has responsibility
in the field, and if so, whether it is likely that Congress would have intended
that more than one agency was to oversee the area. While duplicative regulatory
authority is sometimes authorized by Congress — e.g., both the Department
of Justice (“DOJ”) and FTC have authority to prohibit anticompetitive
mergers and unreasonable restraints of trade
— that is the exception rather than the rule, and the usual presumption is
that Congress does not intend to divide regulatory responsibility among two or
This issue of exclusive (or joint) authority is applicable to both the
environmental siting/permitting cases as well as the FDA’s tobacco rule.
Title VI of the Civil Rights Act is enforced by the DOJ and the Equal
Employment Opportunity Commission. Neither the EPA nor the NRC have specific
enforcement responsibilities under the Civil Rights Act. And the criteria
authorized by Congress for making siting and permitting decisions have not
included civil rights tests. Equally dubious
is the FDA’s attempt to regulate the marketing of tobacco products where
specific legislation on warning labels and access grant enforcement authority
to other agencies.
The reading of Chevron proposed here — of not giving
deference to agency assertions of authority beyond the core jurisdiction
delegated by Congress — is consistent with the language and rationale of
Chevron. Immediately after articulating a two-part test for determining
when deference was appropriate, the Court explained that the power to
administer a congressionally established program “necessarily requires the
formulation of policy and the making of rules to fill any gap left,
implicitly or explicitly, by Congress.”
Express delegations are tested under the arbitrary or capricious test under
section 706(2)(A) of the APA. But where “the legislative delegation to an
agency on a particular question is implicit,” the reviewing court
“may not substitute its own construction of a statutory provision for a
reasonable interpretation made by the administrator of an agency.” In either case, section 558(b) of the APA
admonishes the agency and the court to determine that its actions are
“within [the] jurisdiction delegated to the agency.”
By its terms, Chevron does not apply to extension of an
agency’s jurisdiction beyond its core powers. In making such
extraterritorial judgments, the agency is no longer filling gaps but annexing
new territory. If, after analyzing the
statutory text and structure, and considering the pertinent legislative
history, the court determines that the agency action is beyond its core
jurisdiction, the court should decide for itself whether the action was
authorized by Congress. This does not mean, of course, that such authority
should not be found. But a court should not hesitate to strike agency action
which is “effectively the introduction of a whole new regime of regulation
... , which may well be a better regime but is not the one that Congress
The absence of deference does not mean that a court will not find that
the agency has jurisdiction. What it means, however, is that the court will not
assume jurisdiction. Rather, the burden of proof is on the agency to
demonstrate that Congress expressly or implicitly authorized it to act. If an
agency’s jurisdictional claim is denied, express authorization from
Congress can always be sought. That, it seems to us, is the better balance
under our scheme of separation of powers as it has been interpreted by the
Chevron case. It also coincides with our modern nondelegation doctrine:
Congress can delegate in vague or “implicit” terms and the courts
under Chevron will defer, but if Congress does not even go that far, no
Chevron deference should be forthcoming.
* Professor of Law, George Mason University School of
** Dean & Professor of Law, Benjamin N. Cardozo
School of Law, Yeshiva University.
 U.S. CONST. art. 1, § 8.
 J.W. Hampton, Jr. & Co. v. United
States, 276 U.S. 394, 409 (1928).
See generally David Schoenbrod,
The Delegation Doctrine: Could the Court Give It Substance?, 83 MICH. L.
REV. 1223, 1249-74 (1985); David Schoenbrod, Goal Statutes or Rules
Statutes: The Case of the Clean Air Act, 30 UCLA L. REV. 740, 803-26
See Ernest Gellhorn,
Returning to First Principles, 36 AM. U. L. REV. 345, 352 (1987) (urging
that the delegation doctrine be revived on a limited basis to prohibit
“excessive delegations that are clearly used to create private
See RICHARD PIERCE ET AL.,
ADMINISTRATIVE LAW AND PROCESS 54 (2d ed. 1992); see also Peter H.
Aranson et al., A Theory of Legislative Delegation, 68 CORNELL L. REV.
1, 5 (1982) (analyzing “certain causes and consequences of the
congressional delegation of legislative authority to executive-branch agencies
and independent commissions”).
See David Epstein & Sharyn
O’Halloran, The Nondelegation Doctrine and the Separation of Powers: A
Political Science Approach, 20 CARDOZO L. REV. 947, at 955-56 nn.24-26
(1999); Elizabeth Garrett, Accountability and Restraint: The Federal Budget
Process and the Line Item Veto Act, 20 CARDOZO L. REV. 871 (1999); Dan M.
Kahan, Democracy Schmemocracy, 20 CARDOZO L. REV. 795 (1999); David
Schoenbrod, Delegation and Democracy: A Reply to My Critics, 20 CARDOZO
L. REV. 731 (1999); Peter H. Schuck, Delegation and Democracy: Comments on
David Schoenbrod, 20 CARDOZO L. REV. 775 (1999).
 PIERCE ET AL., supra note 5, at
 488 U.S. 361 (1989).
Id. at 374.
Id. at 372.
Id. at 427 (Scalia, J.,
Id. at 416.
See National Cable Television
Ass’n v. United States, 415 U.S. 336 (1974) (reading the FCC’s
authority to collect fees narrowly by applying a “clear statement”
standard). For the effects of a judicial command that an agency does not
construe an act so broadly as to raise a delegation doctrine problem, see
International Union, UAW v. OSHA, 938 F.2d 1310 (D.C. Cir. 1991).
See, e.g., JAMES O. FREEDMAN,
CRISIS AND LEGITIMACY: THE ADMINISTRATIVE PROCESS AND AMERICAN GOVERNMENT 93-94
(1978). But see JERRY L. MASHAW, GREED, CHAOS & GOVERNANCE: USING
PUBLIC CHOICE TO IMPROVE PUBLIC LAWS 151-53 (1997) (suggesting that “vague
delegations” may be a superior means of accountability and legitimacy).
See generally STEPHEN BREYER,
REGULATION AND ITS REFORM (1982).
See, e.g., INS v. Chadha, 462
U.S. 919 (1983).
 The most celebrated exception is
airline deregulation which was led by the Civil Aeronautics Board
(“CAB”) and approved by Congress. See Airline Deregulation Act
of 1978, Pub. L. No. 95-504, 92 Stat. 1705 (codified as amended at 49 U.S.C.
§§ 40,101-40,120 (1994)). Airline deregulation was surely not the
product of regulatory inertia or restrictiveness. Yet neither was it a function
of jurisdictional aggrandizement. Alfred Kahn, the CAB’s chairman during
its deregulatory phase, focused the agency on its central mission — that
of preserving a healthy airline industry — by narrowing rather than
expanding the agency’s rulemaking powers. See THOMAS K. MCCRAW,
PROPHETS OF REGULATION 261-99 (1984) (outlining CAB chairman Alfred Kahn’s
role in implementing deregulatory policies). Thus, while in many respects
Chairman Kahn was no less ambitious in setting the CAB’s agenda than Dr.
Kessler was in setting the FDA’s agenda, see infra text
accompanying notes 48-51, Kahn clearly acted “within jurisdiction” as
that term is interpreted under section 558(b) of the APA. See infra note
See, e.g., E.I. Du Pont de
Nemours & Co. v. FTC, 729 F.2d 128 (2d Cir. 1984) (refusing to enforce an
FTC order); Official Airline Guides, Inc. v. FTC, 630 F.2d 920 (2d Cir. 1980)
(same); Boise Cascade Corp. v. FTC, 637 F.2d 573 (9th Cir. 1980) (same); see
also Jeffrey H. Liebling, Comment, Judicial Usurpation of the
F.T.C.’s Authority: A Return to the Rule of Reason, 30 J. MARSHALL L.
REV. 283 (1996) (discussing the narrowing of the FTC’s authority by the
See Aranson et al.,
supra note 5.
See Jonathan R. Macey,
Organizational Design and Political Control of Administrative Agencies,
8 J.L. ECON. & ORG. 93 (1992); Kenneth Shepsle, Bureaucratic Drift,
Coalitional Drift, and Time Consistence: A Comment on Macey, 8 J.L. ECON.
& ORG. 111 (1992).
 467 U.S. 837 (1984).
See KENNETH CULP DAVIS &
RICHARD J. PIERCE, JR., ADMINISTRATIVE LAW TREATISE § 3.6 (2d ed. Supp.
See, e.g., St. Luke’s
Hosp. v. Secretary of Health and Human Servs., 810 F.2d 325, 331 (1st Cir.
1987) (Breyer, J.).
See Mississippi Power &
Light Co. v. Mississippi ex rel. Moore, 487 U.S. 354, 377-91 (1988). In
Mississippi Power, Justices Brennan, Marshall, and Blackmun joined in a
dissenting opinion that argued, inter alia, that Chevron had no
application to jurisdictional disputes, whether core or peripheral. In a
concurring opinion, Justice Scalia argued that it did. In this Article, the
term “peripheral” is intended to represent those jurisdictional
questions that reflect territory outside the ambit of the agencies’
traditional or “core” exercises of authority.
 323 U.S. 134 (1944).
 In fact, we count ourselves among the
supporters of the Chevron rule as a necessary accommodation to the
impracticality of applying the delegation doctrine. Nondeferential judicial
review, after all, has almost as much potential to disrupt congressional
delegations as does a revived nondelegation doctrine. But for Chevron to
become a workable alternative to nondelegation, it must also have limits.
 U.S. CONST. art. I, § 8, cl.
 5 U.S.C. §§ 551-559 (1994).
Note especially section 558(b) which provides that “[a] sanction may not
be imposed or a substantive order issued except within jurisdiction
delegated to the agency and as authorized by law.” Id. §
558(b) (emphasis added). This often overlooked provision articulates an
independent APA ground for scrutinizing jurisdictional decisions. See
John F. Duffy, Administrative Common Law in Judicial Review, 77 TEX. L.
REV. 113 (1998). And it should be remembered that an agency is entitled to no
Chevron deference in its interpretation of the APA. See infra
See Cass R. Sunstein, Is
Tobacco a Drug? Administrative Agencies As Common Law Courts, 47 DUKE L.J.
1013, 1020 (1998) [hereinafter Sunstein, Is Tobacco a Drug?].
Id. at 1059.
See also Richard A. Merrill,
The FDA May Not Regulate Tobacco Products As “Drugs” or as
“Medical Devices,” 47 DUKE L.J. 1071 (1998).
See Chevron U.S.A., Inc. v.
National Resources Defense Council, Inc., 467 U.S. 837, 843-44 (1984).
 405 U.S. 233 (1972); see also
FTC v. Brown Shoe Co., 384 U.S. 316, 320 (1966) (holding that the FTC had the
“power to find ... an anticompetitive practice unfair, subject of course
to judicial review”).
 482 F.2d 672 (D.C. Cir. 1973)
(upholding the FTC’s authority to implement trade regulation rules). The
court concluded that “the Federal Trade Commission is authorized to
promulgate rules defining the meaning of the statutory standards of the
illegality the Commission is empowered to prevent.” Id. at 698.
 358 U.S. 184, 188 (1958) (reviewing
agency assertions of jurisdiction in a suit brought “to strike down an
order of the [NLRB] made in excess of its delegated powers and contrary to a
specific prohibition in its Act”).
 The NLRB had attempted to include in
the “unit” for collective bargaining purposes “employees whom it
found were not professional employees.” Id. at 188-89. The Court
held that the NLRB had “attempted [an] exercise of power that had been
specifically withheld.” Id. at 189; see also Rockford
Redi-Mix Co. v. Zipp, 632 F.2d 30, 31-33 & n.6 (7th Cir. 1980) (holding
that the NLRB’s refusal to issue an unfair labor practice complaint may be
reviewable by a court if the NLRB has exceeded its delegated powers);
Associated Builders & Contractors, Inc. v. Irving, 610 F.2d 1221, 1226-28
(4th Cir. 1979) (same); Bova v. Pipefitters & Plumbers Local 60, 554 F.2d
226, 228-29 (5th Cir. 1977) (same).
 472 F.2d 179, 187 (2d Cir. 1972);
see also Railway Labor Executives’ Ass’n v. National Mediation
Bd., 29 F.3d 655 (D.C. Cir. 1994) (en banc).
 472 F.2d at 187.
See infra text accompanying
notes 104-07 (discussing Mississippi Power & Light Co. v. Mississippi ex
rel. Moore, 487 U.S. 354 (1988)).
 The magnitude of this safe harbor is
reflected by the fact that the Supreme Court has never struck down an agency
interpretation relying on step two. See Ronald M. Levin, The Anatomy
of Chevron: Step Two Reconsidered, 72 CHI.-KENT L. REV. 1253, 1261
 One of the authors, Ernest Gellhorn,
has served as a consultant to the tobacco industry on issues of statutory
construction and Chevron deference.
See Regulations Restricting the
Sale and Distribution of Cigarettes and Smokeless Tobacco Products to Protect
Children and Adolescents, 60 Fed. Reg. 41,314 (1995) (to be codified at 21
C.F.R. pts. 801, 803, 804, 897) (proposed Aug. 11, 1995) (FDA proposed rule and
jurisdictional analysis), published as final rule, 61 Fed. Reg. 44,396 (1996).
See Brown & Williamson
Tobacco Corp. v. FDA, 153 F.3d 155 (4th Cir. 1998) (denying the FDA
jurisdiction over the regulation of tobacco products), petition for cert.
filed, 67 U.S.L.W. 3484 (U.S. Jan. 19, 1999) (No. 98-1152).
 21 U.S.C. § 301 (1994).
See Brown & Williamson Tobacco
Corp., 153 F.3d at 168 n.15 (stating that two main supporters of the Act
were from two leading tobacco states).
See United States v. An Article
of Drug ... Bacto-Unidisk ...., 394 U.S. 784, 798 (1969).
See 21 U.S.C. §§
331(a), 352(j) (drug or device misbranded if “dangerous to health when
used in the dosage, or with the frequency or duration prescribed, recommended,
or suggested in the labeling thereof”); see also Public Health
Cigarette Smoking Act of 1969, Pub. L. No. 91-222, § 4, 84 Stat. 87, 87-90
(1970) (amending 15 U.S.C. §§ 1331-1338 (1994)) (warning label
See Coyne Beahm, Inc. v. FDA,
966 F. Supp. 1374, 1384 (M.D.N.C. 1997), rev’d, Brown &
Williamson Tobacco Corp. v. FDA, 153 F.3d 155 (4th Cir. 1998), petition for
cert. filed, 67 U.S.L.W. 3484 (U.S. Jan. 19, 1999) (No. 98-1152).
See id. at 1393-97.
Id. at 1380 (emphasis
Id. at 1384.
See Brown & Williamson Tobacco
Corp. v. FDA, 153 F.3d at 161. In particular, the court reviewed the FDCA
as a whole rather than through the prism of the definitional sections alone as
the district court had done. See id. at 163 & n.11 (citing Adams
Fruit Co. v. Barrett, 494 U.S. 638, 650 (1990); Federal Maritime Comm’n v.
Seatrain Lines, Inc., 411 U.S. 726, 745 (1973) (warning against
Id. at 161.
Id. at 162.
See 10 C.F.R. § 1.1
 42 U.S.C. § 5843(b)(1)
See 10 C.F.R. § 110.00
(1998) (setting forth the factors).
Id. § 110.00(a)(1).
See id. §
Id. § 110.00(b).
See id. § 110.20.
Id. § 100.20(a).
Id. § 100.20(c).
 42 U.S.C. § 2000(d) (1994).
See James H. Colopy, Note,
The Road Less Traveled: Pursuing Environmental Justice Through Title VI of
the Civil Rights Act of 1964, 13 STAN. ENVTL. L.J. 125, 181 & n.176
(1994) (referencing EPA statements denying that it had civil rights
 3 C.F.R. 859 (1995), reprinted
in 42 U.S.C. § 4321 (1994).
Id. at 863.
 45 N.R.C. 367 (1997).
See id. at 388, 396.
See id. at 408.
See id. at 394-97.
See id. at 387.
See Chrysler Corp. v. Brown,
441 U.S. 281, 308-13 (1979) (ruling that executive orders must be authorized by
statute to have legal effect); Meyer v. Bush, 981 F.2d 1288, 1296 n.8 (D.C.
Cir. 1993) (holding that the executive order lacks “legal
significance”); New River Valley Greens v. United States Dep’t of
Transp., 1996 U.S. Dist. LEXIS 16547, at *16-20 (W.D. Va. Oct. 1, 1996)
(holding that executive orders do not create enforceable rights or
See Branford C. Mank, The
Environmental Protection Agency’s Project XL and Other Regulatory Reform
Initiatives: The Need for Legislative Authorization, 25 ECOLOGY L.Q. 1,
26-31 (1998) (describing a lawsuit challenging the validity of the
See John Chambers, The
Supreme Court Has Agreed to Take up an Issue That Has Stymied Regulators and
Judges: Waste Disposal Facilities Planned for Construction in Minority
Areas, NAT’L L.J., June 22, 1998, at B6.
Id. The complaint filed with
the EPA is captioned as Communities for a Better Environment v. South Coast
Air Quality Management District, EPA File No. 10R-97-R9 (filed June 23,
1997). See id. at B7 n.23.
 1995 EPA App. LEXIS 25 (June 29,
 1996 EPA App. LEXIS 4 (Feb. 15,
 1997 EPA App. LEXIS 5 (Apr. 8,
See United States v. Florida E.
Coast Ry. Co., 410 U.S. 224, 236 n.6 (1973) (holding that the ICC does not have
primary responsibility for administering the APA and its interpretations
“do[ ] not carry the weight, in ascertaining the intent of Congress, that
an interpretation by an agency ‘charged with the responsibility’ of
administering a particular Glass-statute does”); Air N. Am. v. Department
of Transp., 937 F.2d 1427, 1436-37 (9th Cir. 1991) (same)
 Bank Holding Company Act of 1956, 12
U.S.C. § 1841.
 Banking Act of 1933, 12 U.S.C. §
227, 48 Stat. 162.
See 12 U.S.C § 1843
(1994); see also 12 U.S.C §§ 24, 78, 221, 335, 377,
See Richard W. Steveson,
Financial Services Heavyweights Try Do-It-Yourself Deregulation, N.Y.
TIMES, Apr. 7, 1998, at A4 (discussing the “gambl[e]” of Citicorp (a
bank) and Travelers (an insurance company) in merging, despite a ban existing
on such combinations).
See Order Approving Formation
of a Bank Holding Company and Notice to Engage in Nonbanking Activities, 84
Fed. Res. Bull. 985, 985 (1998).
Id. at 1004.
Id. at 985.
See Nationsbank of N.C., N.A.
v. Variable Annuity Life Ins. Co., 513 U.S. 251 (1995).
 Bank Holding Companies and Change in
Bank Control (Regulation Y), 12 C.F.R. pt. 225 (1998).
See 12 U.S.C. § 377
See Revenue Limit on
Bank-Ineligible Activities of Subsidiaries of Bank Holding Companies Engaged in
Underwriting and Dealing in Securities, 61 Fed. Reg. 68,750, 68,752 (1996)
(effective Mar. 6, 1997).
See id. at 68,751.
See Applications Approved Under
Bank Holding Company Act, 84 Fed. Res. Bull. 507, 511 (1998); Orders Issued
Under the Bank Holding Company Act, 83 Fed. Res. Bull. 780, 780-84 (1997)
(order approving notice to engage in nonbanking activities).
 Membership Eligibility, 62 Fed. Reg.
49,943, 49,943 (1997).
 12 U.S.C. §§ 1421-1449
Id. § 1422(3).
Id. § 1424(a)(1)(A).
See Covenant to Establish a
Commonwealth of the Northern Mariana Islands in Political Union with the United
States of America §§ 502(a)(1), 502(a)(2) (1986) (cited in
Membership Eligibility, 62 Fed. Reg. 49,943, 49,944 (1997)). Both the
legislation approving the commonwealth and the related presidential
proclamation make this clear.
Id. at 49,944.
See National Credit Union
Admin. v. First Nat’l Bank & Trust Co., 522 U.S. 479 (1998)
(unanimously applying Chevron step one to reverse an agency’s
interpretation of its jurisdictional authority over credit unions).
 Mississippi Power & Light Co. v.
Mississippi ex rel. Moore, 487 U.S. 354, 380 (1988); see Quincy
M. Crawford, Chevron Deference to Agency Interpretations That Delimit the
Scope of the Agency’s Jurisdiction, 61 U. CHI. L. REV. 957 (1995).
Mississippi Power & Light
Co., 487 U.S. at 381.
 This contention by Justice Scalia,
that jurisdictional cases are indistinguishable, also is contradicted by his
very next sentence conceding that there is, however, a discernable line where
Congress has defined such authority in “plain terms” and its
intention is obvious, “in which case the agency has no discretion” to
decide otherwise. Id. at 382. This of course may reflect Justice
Scalia’s view that he is more comfortable deciding issues of agency
authority in Chevron step one and if so we have no quarrel. See
Michael Herz, Deference Running Riot: Separating Interpretation and
Lawmaking Under Chevron, 6 ADMIN. L.J. AM. U. 187, 220-21 (1992) (seeking
to reconcile Justice Scalia’s views by placing both substantive and
jurisdictional issues in step one, rather than step two).
 Stephen Breyer, Judicial Review of
Questions of Law and Policy, 38 ADMIN. L. REV. 363, 373 (1986) [hereinafter
Breyer, Judicial Review].
 Sea-Land Serv., Inc. v. Department of
Transp., 137 F.3d 640, 645 (D.C. Cir. 1998) (citing Chevron U.S.A., Inc. v.
Natural Resources Defense Council, Inc., 467 U.S. 837, 842-44 (1984)).
Chevron, 467 U.S. at
 Step two of Chevron requires
the reviewing court to defer to the agency if the agency’s interpretation
is “reasonable.” For an analysis that this standard should be merged
with the “arbitrary and capricious” test under 5 U.S.C. §
706(2)(A) (1994), see Levin, supra note 40.
Chevron, 467 U.S. at 844.
 Thomas W. Merrill, Judicial
Deference to Executive Precedent, 101 YALE L.J. 969, 1024 (1992); see
also Cass R. Sunstein, Constitutionalism After the New Deal, 101
HARV. L. REV. 421, 467 (1987) (referring to agency aggrandizement by stating
that “foxes should not guard henhouses”). We much prefer this view of
Professor Sunstein to his agencies as common law courts one. See
Sunstein, Is Tobacco a Drug?, supra note 29.
See 21 U.S.C. § 352(e)(1)
 Mississippi Power & Light Co. v.
Mississippi ex rel. Moore, 487 U.S. 354, 387 (1988).
 358 U.S. 184 (1958).
Id. at 186, 188.
See id. at 188-91.
See, e.g., National Cable
Television Ass’n v. United States, 415 U.S. 336, 342-43 (1974); Kent v.
Dulles, 357 U.S. 116, 129 (1958); Ashwander v. Tennessee Valley Auth., 297 U.S.
288, 345-48 (1936) (Brandeis, J., concurring).
See Breyer, Judicial
Review, supra note 107, at 364-65 (“[C]urrent doctrine is anomalous.
It urges courts to defer to administrative interpretations of regulatory
statutes, while also urging them to review agency decisions of regulatory
 5 U.S.C. § 558(b) (1994). This
section adds a statutory basis for the requirement that agencies act within
their jurisdiction, and, since agencies are not entitled to Chevron
deference in interpreting the APA, it also adds an independent basis for
judicial review. See supra note 28.
See 21 U.S.C. § 342
(1994) (adulterated food), id. § 351 (adulterated drugs and
See id. § 343 (misbranded
food); id. § 352 (misbranded drugs and devices).
See United Sav. Ass’n v.
Timbers of Inwood Forest Assocs., 484 U.S. 365, 371 (1988).
See Dole v. United
Steelworkers of Am., 494 U.S. 26, 35-41 (1990).
See Atherton v. FDIC, 519 U.S.
213, 228-31 (1997).
 21 U.S.C. § 360 (1994).
See United States v.
Rutherford, 442 U.S. 544, 554 n.10 (1979) (“[O]nce an agency’s
statutory construction has been ‘fully brought to the attention of the
public and Congress,’ and the latter has not sought to alter that
interpretation although it has amended the statute in other respects, then
presumably the legislative intent has been correctly discerned.”); see
also Bob Jones Univ. v. United States, 461 U.S. 574 (1983):
Nonaction by Congress is not often a useful guide, but the nonaction
here is significant.... In view of its prolonged and acute awareness of so
important an issue, Congress’ failure to act on the bills proposed on this
subject provides added support for concluding that Congress acquiesced in the
[agency’s] rulings ....
Id. at 600-01. Sometimes a matter is so clear that no express
provision is needed. See NLRB v. Bell Aerospace Co., 416 U.S. 267,
 740 F.2d 100 (1st Cir. 1984);
see St. Luke’s Hosp. v. Secretary of Health and Human Servs., 810
F.2d 325, 331 (1st Cir. 1987) (Breyer, J.).
 740 F.2d at 106 (citations
 Breyer, Judicial Review, supra
note 107, at 371.
 United States v. Stewart, 311 U.S.
60, 64 (1940) (citing United States v. Freeman, 44 U.S. (3 How.) 556, 564
See Argentine Republic v.
Amerada Hess Shipping Corp., 488 U.S. 428, 434-35 & n.3 (1989) (concluding
that a later, more “comprehensive statutory scheme” prevails over
earlier statute). Similarly, “when two statutes are in conflict, a
specific statute closely applicable to the substance of the controversy at hand
controls over a more generalized provision.” Farmer v. Employment Sec.
Comm’n, 4 F.3d 1274, 1284 (4th Cir. 1993).
See Chevron U.S.A., Inc. v.
Natural Resources Defense Council, Inc., 467 U.S. 837, 843 (1984).
See Adams Fruit Co. v.
Barrett, 494 U.S. 638, 649-50 (1990).
See 15 U.S.C. § 18 (1994)
(mergers); id. § 1 (DOJ authority regarding restraints of trade);
id. § 45(a)(1) (FTC authority regarding restraints of trade).
See, e.g., Martin v.
Occupational Safety and Health Review Comm’n, 499 U.S. 144, 151 (1991)
(“Under most regulatory schemes rulemaking, enforcement, and adjudicative
powers are combined in a single administrative authority.”); see
also Martin v. Pav-Saver Manuf. Co., 933 F.2d 528, 530 (7th Cir. 1991)
(citing Martin, 499 U.S. at 151).
 The application of “civil
rights” criteria in the Bob Jones case is distinguishable. There
the Court upheld the agency’s construction of the Internal Revenue Code as
denying tax benefits under § 501(c)(3) to racially discriminatory private
religious schools because they did not come within common law standards of
charity, namely, they did not “serve a public purpose” and were
“contrary to established public policy.” Bob Jones Univ. v. United
States, 461 U.S. 574, 586 (1983).
See discussion supra
 Chevron U.S.A., Inc. v. Natural
Resources Defense Council, Inc., 467 U.S. 837, 843 (quoting Morton v. Ruiz, 415
U.S. 199, 231 (1974)) (emphasis added).
Id. at 844.
 5 U.S.C. § 558 (1994).
See Chevron, 467 U.S. at 844
(“If Congress has explicitly left a gap for the agency to fill, there is
an express delegation of authority to the agency to elucidate a specific
provision of the statute by regulation.”).
 MCI Telecomms. Corp. v. AT&T, 512
U.S. 218, 234 (1994) (striking down FCC policy).
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