Chevron, Brand X, and Ronald Dworkin's Right-Answers Thesis

In my two previous essays (here and here) on last week's oral arguments in Relentless, Inc. v. Dept. of Commerce and Loper Bright Enterprises, Inc. v. Raimondo, I explained that Justice Kavanaugh's complaint that Chevron deference is destabilizing has, as its ultimate target, all delegations of discretion to administrative agencies. In today's essay, I tackle a different aspect of the cases: the hyper-formalism of one key line of argument that various conservative Justices pushed and how it draws support from a view closely associated with the late Ronald Dworkin.

The conservative Justices' key argument was articulated in various ways but most clearly by Justice Alito in colloquy with Solicitor General Prelogar (which you can find at pages 114-17 of the transcript of the Relentless argument linked above). Below I'll paraphrase it in a way that I think makes it as strong as possible, but first, for the benefit of readers who are not immersed in the finer details of administrative law, a brief primer on the two official steps (there are additional unofficial ones) of the contemporary Chevron doctrine and the 2005 Brand X case.

Chevron says that if a statute contains a gap or an ambiguity an administrative agency that is acting within the scope of its otherwise legitimate authority can fill the gap or resolve the ambiguity, so long as the way it does so is reasonable. That characterization as reasonable is what we know as Chevron deference, because an agency policy that fills a statutory gap or resolves a statutory ambiguity need not adopt a view with which a reviewing court agrees; it need only select from among a range of possibilities that are reasonable. 

But none of that happens until Chevron step 2. At the threshold--Chevron step 1--the court itself must decide as a matter of law whether there even is a statutory gap or ambiguity. And to do that, the post-Chevron cases say, the court does not simply ask whether the bare statutory language has a gap or an ambiguity. The court must first use all of its standard tools for resolving statutory ambiguity--looking to context, terms of art, legislative history (for those jurists who deem it relevant), etc. An agency can get deference at step 2 only if there is a statutory gap or ambiguity after the exhaustion of the judicial tools of statutory interpretation at step 1.

Now consider the Brand X case. In litigation between AT&T and the City of Portland, the Ninth Circuit held that a cable company that provides broadband internet is a "telecommunications services" provider as that term is used in a federal statute (for the purpose of imposing common carrier obligations). Later, the FCC issued a rule that internet service providers, including cable companies that provide broadband, are not telecommunications services providers. Faced with litigation challenging the FCC rule, the Ninth Circuit adhered to its prior determination in AT&T v. Portland rather than deferring to the FCC per Chevron. Agencies are entitled to Chevron deference when they resolve statutory ambiguities, the Ninth Circuit reasoned, but after the holding in AT&T v. Portland, there was no remaining ambiguity--no room to conclude, reasonably or otherwise, that a cable company that provides high-speed internet is not providing telecommunications services.

The Supreme Court, in an opinion by Justice Thomas, reversed. His reasoning was subtle and, to my mind, persuasive. Here it is, with citations and internal quotation marks omitted without my so noting:

A court’s prior judicial construction of a statute trumps an agency construction otherwise entitled to Chevron deference only if the prior court decision holds that its construction follows from the unambiguous terms of the statute and thus leaves no room for agency discretion. This principle follows from Chevron itself. Chevron established a presumption that Congress, when it left ambiguity in a statute meant for implementation by an agency, understood that the ambiguity would be resolved, first and foremost, by the agency, and desired the agency (rather than the courts) to possess whatever degree of discretion the ambiguity allows. Yet allowing a judicial precedent to foreclose an agency from interpreting an ambiguous statute, as the Court of Appeals assumed it could, would allow a court’s interpretation to override an agency’s. Chevron’s premise is that it is for agencies, not courts, to fill statutory gaps. The better rule is to hold judicial interpretations contained in precedents to the same demanding Chevron step one standard that applies if the court is reviewing the agency’s construction on a blank slate: Only a judicial precedent holding that the statute unambiguously forecloses the agency’s interpretation, and therefore contains no gap for the agency to fill, displaces a conflicting agency construction.  . . . Whether Congress has delegated to an agency the authority to interpret a statute does not depend on the order in which the judicial and administrative constructions occur. 

In a dissent that, on this point, spoke only for himself, Justice Scalia disagreed. Anticipating the petitioners' arguments in last week's cases and the comments of the conservative Justices who have now turned against Chevron, he echoed the reasoning of the Ninth Circuit in Brand X. He averred (more or less) that once a court construes a statutory term, it has settled the meaning of that term. There is thus no ambiguity.

Notably, the Justices who ran with the logic of Justice Scalia's Brand X dissent in last week's cases were not just going after Brand X. Their argument was that Brand X is a necessary consequence of Chevron (presumably for the reasons that Justice Thomas articulated for the Court in Brand X itself)--and that this shows that Chevron is wrong. Here's how I would summarize their reasoning:

1) Whether or not an allegedly ambiguous statutory term is construed by a court to mean "A" before an agency takes action on the premise that it means "B," the fact that the court could do so, and, would have to construe the statute one way or another in a pre-agency-action case (like AT&T v. Portland), shows that the conventional tools of statutory construction are always sufficient to resolve ambiguity in a statute.

2) It thus follows that there is never any genuine residual ambiguity left for agencies to resolve reasonably at Chevron step 2, and so courts should never have to defer to agencies.

3) Because courts should never actually get to step 2, there's no reason to have a doctrine of Chevron deference at all.

4) Another way to make this same point is to observe that when a court (in a case like AT&T v. Portland) resolves statutory ambiguity, it is engaged in legal interpretation. Hence, when an agency purports to resolve statutory ambiguity (whether before or after there has been any judicial interpretation of the statutory text), it too is engaged in legal interpretation. But that's inconsistent with the claims by Chevron's champions that the agency is simply exercising policy discretion within the bounds of law. It's also inconsistent with the Marbury-based proposition that it is up to the courts, not other branches, to say what the law is.

Is that line of reasoning persuasive? One way to push back (which Justice Sotomayor emphasized last week) is to qualify the Marbury-based claim about allocation of interpretive authority. Asking softball questions, she elicited ready agreement from SG Prelogar with the proposition that there are various contexts in which courts give deference even on legal questions. (Think about the deference required by statute in habeas cases, for example.) On this view, agencies are indeed engaged in legal interpretation when they fill in statutory gaps or resolve statutory ambiguities, but that's acceptable.

The problem with that pushback is that it doesn't address the primary framing of the objections to Brand X and Chevron. But that doesn't mean it's impossible to offer a response. My response goes like this:

1) We can group statutory texts into roughly three categories: (a) those whose meaning is obvious simply on the face of the text; (b) those whose meaning is not obvious on the face of the text but whose meaning can be authoritatively resolved using the standard tools of statutory interpretation; and (c) those whose meaning remains unclear or ambiguous even after the full use of all the standard tools of statutory interpretation.

2) The critics of Brand X and Chevron claim that (c) is the null set because courts never simply throw up their hands and say that they can't decide what a statute means. With respect to facts, judges and juries sometimes decide that the evidence is inconclusive and therefore they rely on which side has the burden of proof to resolve the case, but that is not how American courts handle questions of law. (Professor Gary Lawson wrote a fascinating article over 30 years ago arguing that legal questions should be subject to standards of proof in that way, but courts have not adopted his approach.)

3) But the critics are mistaken. For one thing, courts do in fact sometimes throw up their hands. Some issues are nonjusticiable political questions precisely because of a lack of judicially discoverable and manageable standards.

4) Even apart from the political question doctrine, the fact that a court decides that a statute means "A" rather than "B" does not imply that the court got that result using the tools of legal interpretation. The obligation to decide the case (if it's justiciable) implies that, even if there's still ambiguity after the deployment of all the standard tools of statutory interpretation, the court will then turn to other sorts of considerations--especially considerations of policy.

5) In so doing, however, the court is venturing beyond its core competence, especially if Congress has created an agency that has specific expertise with respect to the relevant area of policy. We might think of what a court does in such cases as a bit like what a federal court does in a diversity case in which state law is unclear: it makes a so-called "Erie guess" as to what the state courts would say the law is; but if the state high court later decides otherwise, the federal court appropriately defers.

I am persuaded by the line of reasoning I have just set forth. Based on last week's oral arguments, however, I do not think that a majority of the court is. I expect the conservative Justices to resist my point 4). And in so doing, they will likely echo Dworkin's right-answers thesis.

At least in his early work, Dworkin argued that the law provides unique right answers, even in hard cases. As a critique of positivism, the right-answers thesis was principally a response to H.L.A. Hart's view that in hard cases, the law has an open texture, and that in deciding cases in the zone of this open texture, judges exercise discretion. Dworkin's crucial argument against Hart's view was that judges virtually never say they're exercising discretion. Rather, judges approach hard cases in just the same way that they approach easy cases, relying on the same basic toolkit.

Hart pushed back forcefully, most clearly in the posthumously published Postscript to his central book, The Concept of Law. His pushback sounded in a kind of modest legal realism. Yes, Hart acknowledged, judges say they're doing law all the way down, but that's not what they're actually doing.

It's not my aim here to resolve the overall Hart/Dworkin debate or any other questions in general jurisprudence. I will say that, as applied to the Supreme Court and with respect to this one particular issue:

1) It is blindingly obvious that Hart is correct. The frequent divisions among the Justices that correlate exactly with their policy druthers reveal that in resolving ambiguity (whether in statutory or constitutional texts or in prior precedent), the legal materials are not determining a unique right answer.

But . . .

2) The Justices, especially the conservative Justices, are very unlikely to acknowledge as much. The same professional norms that lead Justices to describe their approach as grounded in law rather than discretion as a general matter lead them, pace Dworkin, to say (and perhaps even mistakenly believe) that the law never runs out--and thus to overrule Chevron.

To be clear, I do not expect the opinion(s) overruling Chevron to cite Dworkin. His view of what makes an answer the uniquely correct one depends on his broader views, which were broadly anti-formalist: among other things, Dworkin thought that the right answer is right because it makes the legal materials cohere in light of fundamental principles of political morality. To formalist-leaning conservatives, acknowledging a role for political morality would be anathema.

Nonetheless, I do expect a (misguided) decision overturning Chevron based on the supposition that Chevron entails Brand X but that Brand X is inconsistent with the practice of courts of resolving all statutory ambiguities based on the law, not discretion. And such a decision, even without citing Dworkin, will echo his (also misguided) right-answers thesis.