This past April, the Supreme Court passed up an opportunity to clarify an important question in County of Maui v. Hawaii Wildlife Fund. Specifically, the Court failed to elaborate on one of the most litigated administrative law issues of this, and the latter part of the last, century: When does the Chevron doctrine apply? The doctrine, named after Chevron USA, Inc. v. NRDC, holds that where statutes are ambiguous, courts must defer to—really, accept if reasonable—the agency’s interpretation of the statute.
Throughout the progression of the County of Maui litigation, very little attention was paid to the Chevron question. The Supreme Court dismissed the doctrine in a single sentence, something of an upgrade from the Ninth Circuit opinion which had buried it in a footnote. The Supreme Court relied on a controversial but burgeoning “waiver” doctrine, which provides that agencies must explicitly invoke Chevron to be eligible for Chevron deference. Perhaps, in light of the uncertain doctrinal ground regarding the “when” question, the Supreme Court was hesitant to potentially modify such a heavily litigated doctrine without the benefit of lower-court reasoning, but, regardless, requiring agencies to assert Chevron expressly only temporarily staves off the ultimate need for doctrinal coherence. County of Maui was almost certainly not an appropriate case for Chevron deference, and it was not a particularly close call.
Chevron’s Two- or Three-Step Framework
An agency interpretation of its authorizing statute can either be persuasive or controlling. If the interpretation is merely persuasive, it is ultimately up to a judge to determine what the “best” understanding of a statute is; the court will accept the agency’s understanding only if it is persuaded on the merits. In this framework, the judge has discretion (subject to appellate review); the agency interpretation is only factor for consideration. However, if an agency interpretation is considered controlling, then the agency binds the courts: the judge does not have discretion but rather must yield to the agency’s view if reasonable. The Chevron doctrine determines whether an agency’s interpretation is or is not controlling, and “Chevron deference” refers to non-discretionary acceptance of the agency’s reasonable view of ambiguous text. The agency does not forfeit Chevron deference by changing its mind: a different, even contrary, view will still command judicial deference so long as it is within the range of allowable agency interpretive authority.
As conventionally formulated, the doctrine envisions a two-step framework: Step One determines if a statute is ambiguous. A statute is ambiguous if multiple reasonable interpretations exist; if there is only one reasonable interpretation, the statute is not ambiguous and the court decides the statutory issue without deference to the agency’s view. Step Two determines if an agency’s offered interpretation is reasonable, whether it is one of the acceptable interpretations of the ambiguous term and if the agency has considered all relevant factors. Step Two is simply another term for the Administrative Procedure Act’s directive that courts may review all agency action to determine if it is arbitrary or capricious. Deference to the agency’s view is not required unless both steps of the framework are satisfied. But not every agency interpretation is eligible for the two-step Chevron framework; that is, not every reasonable interpretation of ambiguous statutory text offered by an agency will bind the courts. There is a preliminary step—sometimes called “Step Zero”—in which courts must determine if the Chevron framework applies at all.
Although the two-step framework has remained fairly stable since the case was decided in 1984 (and we accept it as a given for purposes of this article), the Supreme Court has modified the Step Zero inquiry several times. Christensen v. Harris County, decided at the turn of the century, suggested that only the use of relatively formal agency processes (formal adjudication or rulemaking) could warrant Chevron deference. But in subsequent decisions, the Court embraced a more nuanced approach: First, in United States v. Mead Corp., the Court stepped back slightly, suggesting that the authority to use and actual use of relatively formal procedures would earn a presumption of eligibility for Chevron treatment, but that the lack “of such formal process [would] not alone . . . bar the application of Chevron.” In Barnhart v. Walton, the Court listed a number of factors that could be used to determine if Chevron applies to more informal agency action. Finally, King v. Burwell appeared to add another layer to the Step Zero inquiry, holding that in some “extraordinary cases”—major boundary issues of “deep economic and political significance”—a more explicit congressional delegation would be required to apply the Chevron framework.
County of Maui Background
County of Maui concerned the Clean Water Act (CWA)’s prohibition on the addition of pollutants “from a point source” to navigable waters without a permit from the Environmental Protection Agency (EPA), the agency responsible for enforcing the CWA. Specifically, the question was whether this prohibition reached seepage that traveled through groundwater into the Pacific Ocean. The County of Maui, Hawaii operated a wastewater reclamation plant without an EPA permit. Plaintiffs sued to prevent the County’s emissions without the required permit, relying on a detailed study that found that 64% of the County’s partially treated wastewater injected into two of the plants’ wells ultimately made its way into the ocean.
The County contended that the CWA prohibition applied only to direct additions of pollutants into the ocean: by its argument, a pipe that discharged pollutants directly into navigable waters would require a permit, but a pipe that discharged pollutants directly into anything except navigable waters, say, groundwater, would not be covered by the CWA, even if those pollutants ultimately and in considerable quantity entered navigable waters. In short, as the Court stated, the question concerned the meaning of the word “from”: “The word ‘from’ is broad in scope, but context often imposes limitations. ‘Finland,’ for example, is often not the right kind of answer to the question, ‘Where have you come from?’ even if long ago you were born there.” The plaintiffs asked the Court to read “from” as implying only an origin: if the pollutants stemmed from a point source, then they were covered by the Act. The defendants asked the Court to read “from” as imposing a restriction on the “how” in addition to the “where”: if the pollutants did not immediately or directly enter navigable waters from a point source, then they were not covered.
Chevron was, at least potentially, implicated by the EPA’s stance. The agency’s views had been modified during the litigation. Before the Ninth Circuit, EPA argued that there must be a “direct hydrological connection” between the point source and the navigable waters, such that pollution transfer via precipitation, for example, would not be covered; however, pollution transfer via groundwater—a hydrological connection—would require a permit. However, in a subsequently released interpretive statement, the EPA argued that while the CWA covered some indirect additions of pollutants into navigable waters, all releases of pollutants into groundwater were exempt from the permit requirement.
The Ninth Circuit had ruled that the Act covered all pollutants to navigable water which were “fairly traceable” to a point source. The Supreme Court rejected this standard as unreasonable, holding that it was not consistent with the Act’s structure and history, which revealed a congressional desire for state control of groundwater generally. However, the Court nonetheless ruled for the plaintiffs, rejecting the EPA’s position. Justice Stephen Breyer, writing for the majority, found that the Act covered “the functional equivalent[s]” of direct discharges, taking into account a number of factors, most prominently time and distance:
“Where a pipe ends a few feet from navigable waters and the pipe emits pollutants that travel those few feet through groundwater (or over the beach), the permitting requirement clearly applies. If the pipe ends 50 miles from navigable waters and the pipe emits pollutants that travel with groundwater, mix with much other material, and end up in navigable waters only many years later, the permitting requirements likely do not apply.”
Why did the Court reject the EPA’s position? The majority first dismissed the possibility of Chevron deference because neither the EPA nor the Solicitor General had argued it should be applied. Of course, it is unlikely given Christensen-Mead that an agency interpretive statement would qualify for Chevron treatment (although lower courts have waffled on that issue). Still, the Court noted that agency interpretations, even if not eligible for Chevron, are often given “particular attention . . . in light of the agency’s expertise in a given area, its knowledge gained through practical experience, and its familiarity with the interpretive demands of administrative need.” But even this level of respect was not enough to salvage the EPA’s stance, which the Court ultimately found “neither persuasive nor reasonable.” Justice Breyer reasoned that several parts of the statute were difficult to reconcile with the EPA’s position if Congress had intended the EPA to have no control over groundwater, why would wells—which ordinarily discharge into groundwater—have been explicitly included in the definition of “point source”? Moreover, the justices seemed particularly concerned with the enormity of the potential loophole the EPA and County of Maui interpretation would create, saying that such interpretations “seem to exclude a pipe that hangs out over the water and adds pollutants to the air, through which the pollutants fall to navigable waters . . . . [T]he absurdity . . . is obvious enough.” Notwithstanding this supposed absurdity, Justices Alito, Gorsuch, and Thomas all dissented, each stating that discharges into groundwater were not covered by the Act. Perhaps pointing to the folly of statutory interpretation, only Justices Thomas and Gorsuch agreed as to why that outcome was mandated.
Step Zero and County of Maui
Even if the point had been preserved, County of Maui was almost certainly not an appropriate Chevron case. In examining whether the EPA’s interpretation should have been eligible for Chevron deference, two aspects of the case provide reason to doubt that Congress intended delegation.
First, the EPA’s interpretive statement was almost entirely a legal argument—not one invoking the particular expertise of the agency. The EPA differentiated its position from past interpretive statement by citing its “comprehensive analysis of the [Clean Water Act’s] text, structure, legislative history, and judicial decisions.” It argued that its interpretation was “the best, if not the only, reading of the CWA.” The policy justifications cited included the need for clarity (which is a reason for a rule but not any particular rule) or the economic impact of regulation (a factor not given weight by the statute), but the agency failed to address why the goals of the Act would be better achieved if EPA could devote its resources elsewhere or if the states had more autonomy in dealing with groundwater. As it had done in previous interpretive statements on the issue, the EPA chiefly argued congressional intent. In other contexts, courts are often (rightly) skeptical of agencies who offer only legal justifications, because such justifications do not employ the specialized agency expertise thought to warrant deference. When an agency fails to be explicit about the policy and factual bases motivating an interpretive decision, the courts have little reason to defer to the agency’s view of the matter, since the courts are the ultimate expositors of a statute’s meaning.
Second, the scope of the dispute was extremely broad. County of Maui would seem to have been a relatively easy application of King v. Burwell’s “extraordinary case” limitation. The Court reasoned in King that, barring additional (perhaps explicit) indicia of congressional intent to delegate, an issue’s “central[ity] to the statutory scheme” precludes application of the two-step framework. If the range of “reasonable” interpretations of a particular word or phrase could nonetheless radically transform the statute, there is at least some reason to doubt that Congress meant to delegate interpretive authority on that issue, and thus more reason to think that courts should police the line. Moreover, for such disputes, we might have reason to think that Congress would want a single answer, not dramatically different enforcement regimes depending on who runs the agency charged with their enforcement. A single answer, even if incorrect, might be preferable to Congress, in part because such single answers are more likely to be statutorily amended. In considering whether Chevron should apply at all, the courts should take into account whether agency oscillation on the particular interpretive question is consistent with the statute’s text and purpose. It would be quite strange if Congress envisioned the CWA as imposing restrictions on states which could be cyclically lifted according to shifting political winds.
The controversy over Chevron undoubtedly contributes to vaguely-defined doctrine, but doctrinal vagueness undoubtedly contributes to the controversy over Chevron. As Justice Breyer has argued, the doctrine should shift based on the reasonableness of presuming Congressional intent, and the Supreme Court’s progressive transition from mechanical rules into standards has been for the better. But regardless of whether the Court seeks to continue in that direction or reverse course, it should provide guidance to lower courts: Chevron does little to ease the judiciary’s burden or help maintain the appropriate scope of agency action if lower court judges must constantly field cases asking them to define the doctrine’s boundaries.