(3) INTEPRETIVE:

Chevron

2.

Did agency examine relevant data and

articulate satisfactory explanation for its
action?
and, Rational Basis: rational connection
between facts found and choices made?

4 WAYS TO FAIL APA 706(2)(A)

1. Agency relied on factors Congress didnt
want agency to consider
2. Agency failed to consider part of the
problem
3. Explanation given was counter to
evidence
4. Explanation was so implausible that it
cant be attributed to agency expertise

YES

YES
PRONG 2: Did agency act w/ force of law?
Did the decision have the force of law?
Fairness & deliberation?
Issued pursuant to delegated authority?
Formal proceedings that foster fairness and
deliberation?

YES

NO
Statute is ambiguous.
Well, then does the
agency have authority
to interpret the
ambiguity?

Congress gave EXPLICIT DELEGATION

IMPLICIT
to agency to interpret; check State Farm test DELEGATION

GOOD ACTION
Courts are generally more deferential to the
agency because:
1. Maintains the separation of powers
2. Judges are not experts in the agencys
field of work, defer to agency expertise
3. Agencies are accountable

1983 STATE FARM

YES

No ambiguity.
Issue clearly
defined in
APPLY
CONG. MCI

Chevron

STEP TWO: Is the agencys

Congress left gap in interpretation reasonable?

Agency interpretation reasonable if:

1. Regulatory scheme is technical and complex
2. Thorough, reasoned, detailed consideration
3. Reconciled conflicting policies

NOTE: If the court finds that an agencys action is impermissible, the

court will vacate/reverse/remand to the agency for further review.

2001 MEAD

ADJUDICATION

APA 556, 557

Adversarial
you got FERCd

APA 554
Similar to trial with
judicial opinion,

APA 553
notice & comment
with good cause
exception

APA 553(b)(A)
v Interpret(at)ive rules
v general statements of policy
APA is the default baseline, but
Congress free to enact procedural
provisions over the APA

FORMAL RULE

FORMAL ADJUDICATION
Chenery challenge was that
agency should have done
INFORMAL RMing

INFORMAL RULE

INFORMAL ADJUDICATION

Florida RR didnt have the

magic language to bump
it to FORMAL RMing
Nova Scotia did INFORMAL
RMing wrong; failed here

NOTE RE: Chevron

Consider how to
frame the question.
There are multiple
starting points, so this
is not a linear process.
Starting points noted
by deez starz

INTERPRETIVE RULE

POLICY STATEMENT

American Mining challenge

was that agency should
have done INFORMAL
RMing but did not

Hudson v. FAA stated that a

policy statement is a
publication of an agencys new
approach to enforcement

SCALIA: [Court judgment] will lead to ossification of large portions of our

statutory law. Where Chevron applies, statutory ambiguities . . . create a space
for the exercise of continuing agency discretion . . . What a court says is the law
after according Skidmore deference will be the law forever, beyond the power of
the agency to change even through rulemaking.

1944 SKIDMORE

NONLEGISLATIVE

NO APA!

NO

Informal action gets some

respect but not precedential.
Judicial deference (scrutiny)
based on persuasiveness:
1. thoroughness of
agency's investigation
2. logic and validity of
reasoning
3. consistency of its
interpretation over time
4. formality, expertise, etc.

NO

statutory scheme

YES

RULEMAKING

Skidmore

Chevron

STEP ONE: Did Congress speak

directly on the issue?
Use all tools of statutory
interpretation tools

LEGISLATIVE FORCE OF LAW

PRONG 1: Did Congress intend for the agency to be

able to act with the force of law regarding this
subject matter?
Look at organic or statute at issue to see if
Congress granted authority

OFF the grid

FORM

1.

FORCE OF LAW Mead

State Farm

Arbitrary and Capricious Standard

Agency action consistent with statute and procedural
requirements, but was so unreasonable to be arbitrary
and capricious, an abuse of discretion, or otherwise not
in accordance with law APA 706(2)(A)

(1) PROCEDURAL

APA challenge to legislative rule, policy

statement

ON the grid

Did Congress intend for action to earn judicial deference?

Congress gave EXPLICIT DELEGATION to agency for this action

ON the grid

Court reviews record hard look,

deferential to agency reasoning

Q3: OTHER
CHALLENGES?

Q2: WHAT WAS THE

AGENCY ACTION & DID
IT FOLLOW THE APA?

Agency action was based on an

impermissible interpretation of statute

OFF the grid

(2) POLICY

Problem with agencys policy choice

INFORM

Q1: DID THE

AGENCY ACT?

1984 CHEVRON

GO TO
NEXT
PAGE

1994 MCI v. AT&T

passive restraints, airbags case

customs: day planners are bound diaries

overnight FLSA overtime

stationary src bubble or smokestack

baby bell SCALIA applies Chevron

ISSUE: standard of review used

for assessing an agencys
substantive policy choices?
HOLD: agency rule is arbitrary
and capricious if 4 factors

ISSUE: Should a tariff classification get judicial

deference? (Skidmore versus Chevron choice)
HOLD: gets Chevron deference when Cong.
intended that action to have the force of law
and action is taken pursuant to intent

ISSUE: What influence should an agency action

that is off the grid on judicial interpretation?
HOLD: judicial deference is given based on the
persuasiveness of agency action; sliding scale
that accords the agency some respect

ISSUE: How much deference do we give an

agencys interpretation of a term in ?
HOLD: depends on if Congress speaks to the
issue (use Congress), explicitly delegated to
interpret (check A+C), implicit (reasonable)

ISSUE: Does modify mean waive?

HOLD: stops at STEP ONE, Cong. spoke
to issue by saying FCC may modify any
req modify waive; STEVENS dissent
purposivist, encourage competition!

LEGISLATIVE
RULEMAKING (Rule)

ADJUDICATION (Order)

FORMAL

APA 556 HEARINGS

APA 557 PROCEEDINGS & RECORD

APA 554 ADJUDICATIONS

Single judge or panel of judges, similar to a trial

v EX: EEOC speaker, NLRB order re: grad student overtime

onerous and time-consuming process

v EX: FERC (you just got FERCd)

Agency only required to do formal RMing if Congress uses

the magic words of on the record after opportunity for an
agency hearing(see Florida E. Coast RR)

ON THE GRID

APA 553 RULE MAKING (N&C RMing most action!)

(a)
(b)

INFORMAL

(c)
(d)
(e)
v

PROCEDURAL

housekeeping, military, foreign affairs exceptions

General notice of proposed rule making published in CFR,
unless subjects already notified. List of necessary elements w/
OFF THE GRID exceptions (see below)
notice & comment procedures and opportunities
Publish at min 30d before effective date w/ exceptions:
substantive rule granting an exemption or relieves a
restriction; any OFF THE GRID or good cause
Right to petition for issuance, remand, repeal of rule
EX: APHIS cow disinfectants, DOE same sex classroom

Chenery II: (Chenery choice) agency can choose between any

RMing and adjudication as long as no abuse of discretion or
statutory directive to do a RMing [re affd by Bell Aerospace]
Chenery I (no post hoc justifications) agency cant
give a justification for its action while under judicial
review

APA!
Informal adjudications do not have any relevant APA provisions, contains
everything else where the decision-making process does not have to be
done on the record after an opportunity for hearing.
v EX: Plan B letter
v EX: customs ruling letters (like an actual judgment without trial
process) in Mead

Florida E. Coast RR: if the words on the record

after opportunity for an agency hearing appears,
agency must do FORMAL RMing; APA is the
default, Congress may require an agency to do
more or less than required

dotted border denotes actions that

generally FAIL Mead PRONG 2

Nova Scotia: agency must follow APA 553 process

(agency ignored comments here), relevant data
relied on in RMing should be exposed to interested
parties (stakeholders) for meaningful comment

NONLEGISLATIVE
APA 553(b)(A) RMing EXCEPTIONS

OFF THE GRID

(b) Contd: Except when notice or hearing is required by statute, this subsection does not apply
A. to interpret(at)ive rules, general statements of policy, or rules of agency organization, procedure, or practice; or
B. when the agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public
procedure thereon are impracticable, unnecessary, or contrary to the public interest.

INTEPRETIVE RULE

POLICY STATEMENT (CATCHALL)

Statement that interprets the language of a statute or clarifies an existing

obligation under existing legislative rule. Is binding and has full force of law
w/o creating new duty.

Statement of general or particular applicability and future effect; not

issued legislatively and is not an interpretive rule. Catch-all creating new
policy w/o binding legal effect.

American Mining: If YES to any of the following, then the

interpretive rule FAILS and is considered LEGISLATIVE:
1. Imposes a new obligation or creates new duty?
2. Published in the CFR? (legal effect)
3. Has agency invoked (used) its legislative authority?
4. Effectively amends an existing legislative rule?

Hudson v. FAA: If YES to any of following, then policy

statement FAILS and is considered LEGISLATIVE:
1. Did the agency have intent to bind?
2. Has the agency given the policy statement
binding effect?

APA challenge to legislative rule, policy statement

SEC v. Chenery II Corp. (1947)
On remand, SEC reached same result as before but
based on the standards of the Holding Company Act
ISSUE: Did this result need to be reached through
RMing? Can adjudication have retroactive effect?
HOLD: Choice between rulemaking and adjudication is left to
the informed decision of the agency as long as there was not
abuse of discretion or statutory directive to do a rulemaking
then agency is free to choose adjudication
US v. Florida E. Coast RR (1973)
ICC set per diem rates by N&C RMing, FECR challenge
ISSUE: Did Interstate Commerce Act require the ICC to
have an on the record hearing before issuing a rule?
HOLD: the phrase after a hearing in the ICA did not require
the ICC to do a formal rulemaking. Must say on the record after
the opportunity for an agency hearing.
US v. Nova Scotia Food Products Corp. (2d Cir. 1977)
FDA promulgated a time-temperature-salinity
regulation for processing hot-smoked whitefish
brought an enforcement action against respondent
who did not follow the regulation because it would
have made the fish inedible.
ISSUE: Respondent had alleged that the agencys ignoring
comments and suggestions during the rulemaking process and
reliance on undisclosed evidence violates the procedures set
forth by the APA 553
HOLD: Failure to comply with the procedures designated by the
APA for the rulemaking process invalidates rule. Scientific
material supporting rule should be released to interested
parties for meaningful comment; agency must answer
important comments regarding the feasibility of the proposed
rule and consider alternatives. THE ONLY ONE WHERE WINS!
American Mining v. MSHA (D.C. Cir. 1993)
American Mining sued on the theory that the
agencys position that certain x-ray readings
qualified as diagnose of lung disease w/in meaning
of reporting regulations was an improper exercise
of legislative authority. (Did not RM or adjudicate!)
ISSUE: Whether MSHAs issuance of its interpretive rule was
actually an impermissible exercise of legislative authority
HOLD: 4-part test to see whether rule is legislative. Interpretive
rule was NO to all 4; was a clarification re: diagnosis definition
Hudson v. Fed. Aviation Admin.(1999)
FAA issued a statement saying that computer
models could be used as an acceptable alternative
to doing actual demos of evacuation plans.
ISSUE: Hudson said that this should have been done
through RMing because it carried legislative force
HOLD: Because there is no actual dispute as to the rules
meaning, the policy statement did not have binding effect and
the FAA was not required to proceed through a RMing. This is
not a different interpretation of the regulation, just an
application of the regulation to a changed situation which calls
for a different policy.