Massachusetts v. EPA 2007 Chevron Analysis

Massachusetts v. E.P.A., 127 S.Ct. 1438 (2007) Chevron Analysis 1

Background From Standing Discussion The Court has determined that the plaintiffs have standing. The dissent bitterly opposes standing, even though this is a procedural rights case. The court now addresses whether the agency was correct in finding that the Clean Air Act does not give it regulatory authority over green house gases from automobiles. 2

What does the Clean Air Act 7521(a)(1) require the EPA to issue regulations on? [35] "The [EPA] Administrator shall by regulation prescribe (and from time to time revise) in accordance with the provisions of this section, standards applicable to the emission of any air pollutant from any class or classes of new motor vehicles or new motor vehicle engines, which in his judgment cause, [key to the dissent] or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare ... This overlaps DOT regulation of automobiles. 3

Chevron Step 1 The Statute [36] The Act defines "air pollutant" to include "any air pollution agent or combination of such agents, including any physical, chemical, biological, radioactive ... substance or matter which is emitted into or otherwise enters the ambient air." 7602(g). "Welfare" is also defined broadly: among other things, it includes "effects on ... weather ... and climate." 7602(h). As with tobacco and drugs, does CO2 fit? 4

Chevron Step 1 Brown and Williamson Variation Is this what Congress really meant? 5

What was the National Climate Program Act of 1978? In 1978, Congress enacted the National Climate Program Act, 92 Stat. 601, which required the President to establish a program to "...assist the Nation and the world to understand and respond to natural and man-induced climate processes and their implications..." What does this tell us about concerns with greenhouse gasses (GHG) is it just something Al Gore thought up? 6

What did the National Academy of Sciences Tell President Carter? "If carbon dioxide continues to increase, the study group finds no reason to doubt that climate changes will result and no reason to believe that these changes will be negligible... . A wait-and-see policy may mean waiting until it is too late." 7

What did the Global Climate Protection Act of 1987 require the EPA to do? Finding that "manmade pollution -- the release of carbon dioxide, chlorofluorocarbons, methane, and other trace gases into the atmosphere -- may be producing a long- term and substantial increase in the average temperature on Earth," 1102(1), 101 Stat. 1408, Congress directed EPA to propose to Congress a "coordinated national policy on global climate change...Congress emphasized that "ongoing pollution and deforestation may be contributing now to an irreversible process" and that "[n]ecessary actions must be identified and implemented in time to protect the climate." Who was president in 1987? Is this really a liberal plot? 8

The First Global Warming Treaty What is the Kyoto Protocol? Why did the senate say it would reject it? Did it apply equally to all countries? What was Congress worried about? What is the potential economic consequence of the treaty for the US? Was this a partisan vote? Who was President? 9

What were EPA's two findings when it finally ruled on the petition in 2003? (1) that contrary to the opinions of its former general counsels, the Clean Air Act does not authorize EPA to issue mandatory regulations to address global climate change, see id., at 52925- 52929; and (2) that even if the agency had the authority to set greenhouse gas emission standards, it would be unwise to do so at this time. 10

Is this like Chevron or Brown and Williamson? How does the EPA argue that CO2 is not covered? 11

What was the EPA evidence of Congressional intent? [48] In concluding that it lacked statutory authority over greenhouse gases, EPA observed that Congress "was well aware of the global climate change issue when it last comprehensively amended the [Clean Air Act] in 1990," yet it declined to adopt a proposed amendment establishing binding emissions limitations. Id., at 52926. Congress instead chose to authorize further investigation into climate change. 12

Was there specific legislation on global atmospheric issues? EPA further reasoned that Congress' "specially tailored solutions to global atmospheric issues," 68 Fed. Reg. 52926 -- in particular, its 1990 enactment of a comprehensive scheme to regulate pollutants that depleted the ozone layer -- counseled against reading the general authorization of 202(a)(1) to confer regulatory authority over greenhouse gases. Does a specific ozone statute mean all pollutants now need specific statutes? 13

Had Congress considered and rejected CO2 Regulation? [50] EPA reasoned that climate change had its own "political history": Congress designed the original Clean Air Act to address local air pollutants rather than a substance that "is fairly consistent in its concentration throughout the world's atmosphere," declined in 1990 to enact proposed amendments to force EPA to set carbon dioxide emission standards for motor vehicles, ibid. and addressed global climate change in other legislation, 68 Fed. Reg. 52927. 14

Administrative Policy Rationale for the EPA Position What did EPA want from Congress before regulating green house gasses? What is the regulatory conflicts problem with the EPA regulating gasoline mileage? What does the EPA think of the association between global warming and human production of greenhouse gases? Is this really a technical decision? 15

Impact of Unilateral EPA Regs on Global Warming Treaties Why would motor vehicle regulations conflict with the goal of a comprehensive approach to global warming? Why would such regulations weaken the president's ability to persuade developing countries to lower their emissions? 16

How does the Majority Distinguish Brown and Williamson? Would the EPA have to ban CO2, as the court thought it would have to do with tobacco? Does the Clean Air Act include cost-benefit analysis, unlike the FDCA? Are there other laws and agencies dealing with CO2, as there are for tobacco? What is DOT regulating that affects CO2? Does this conflict? 17

The Majoritys Analysis of the Statute The Clean Air Act's sweeping definition of "air pollutant" includes "any air pollution agent or combination of such agents, including any physical, chemical ... substance or matter which is emitted into or otherwise enters the ambient air ... ." 7602(g). On its face, the definition embraces all airborne compounds of whatever stripe, and underscores that intent through the repeated use of the word "any." Carbon dioxide, methane, nitrous oxide, and hydrofluorocarbons are without a doubt "physical [and] chemical ... substance[s] which [are] emitted into ... the ambient air." The statute is unambiguous. 18

The Majoritys Rejection of the Brown and Williamson Arguments. While the Congresses that drafted 202(a)(1) might not have appreciated the possibility that burning fossil fuels could lead to global warming, they did understand that without regulatory flexibility, changing circumstances and scientific developments would soon render the Clean Air Act obsolete. ... Because greenhouse gases fit well within the Clean Air Act's capacious definition of "air pollutant," we hold that EPA has the statutory authority to regulate the emission of such gases from new motor vehicles. 19

The Majoritys Holding In short, EPA has offered no reasoned explanation for its refusal to decide whether greenhouse gases cause or contribute to climate change. Its action was therefore arbitrary, capricious, . . . or otherwise not in accordance with law. 42 U. S. C. 7607(d)(9)(A). We need not and do not reach the question whether on remand EPA must make an endangerment finding, or whether policy concerns can inform EPA s actions in the event that it makes such a finding. 20

Scalias Dissent Scalia assumes, as with B&W, that CO2 technically fits into the statute, as tobacco fit into the FDCA. In B&W the agency wanted to regulate, thus the question was whether it had authority to do so. In this case, the agency does not want to regulate, so the question is whether it can decline to regulate. Could the FDA have declined to regulate tobacco? Had it done so in response to petitions to make a rule in the past? 21

What does In His Judgment Mean? shall by regulation prescribe . . . standards applicable to the emission of any air pollutant from any class or classes of new motor vehicles or new motor vehicle engines, which in his judgment cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare. 42 U. S. C. 7521(a)(1) This is triggered once it is determined that something can be an air pollutant. 22

Does the Majority Require an Endangerment Finding? The Court, however, with no basis in text or precedent, rejects all of EPA s stated policy judgments as not amount[ing] to a reasoned justification, ante, at 31, effectively narrowing the universe of potential reasonable bases to a single one: Judgment can be delayed only if the Administrator concludes that the scientific uncertainty is [too] profound. Ibid. The Administrator is precluded from concluding for other reasons that it would . . . be better not to regulate at this time. Ibid. 23

The Majoritys Rejection of the Policy Reasons in the Rejection The Court dismisses this analysis as rest[ing] on reasoning divorced from the statutory text. Ante, at 30. While the statute does condition the exercise of EPA s authority on its formation of a judgment, . . . that judgment must relate to whether an air pollutant cause[s], or contribute[s] to, air pollution which may reasonably be anticipated to endanger public health or welfare 24

Is Scalia Correct? The Majority says that is not requiring an endangerment finding in the holding. Scalia is correct that this appears to conflict with the language rejecting the policy reasons in the response to the petition for rulemaking. Under this reasoning, Scalia dissents, seeing this an unreasonable intrusion of the court into a political question. 25

What does Mass v. EPA Really Say? Can the rejection of the reasons in the petition be reconciled with retaining the secretary s discretion to determine whether to regulate an air pollutant? Obama issues an endangerment finding, so this did not become an issue on remand. The intent was to prod Congress into passing a climate bill. Trump has not wanted to withdraw the endangerment finding for fear of empowering the state climate cases. 26

King v. Burwell, 576 U.S. (2014) Formalizes the elephant in the mousehole problem: Are there things that so important that they should not be left to the agency through ambiguous drafting? How is this complicated by the IRS not being a health care agency? Would the plain language of the statute advance congressional intent in this case? Why did Roberts want to save the ACA? 27

Gonzales v. Oregon, 546 U.S. 243 (2006) The Controlled Substances Act creates the prescription drug requirement: DOJ Reg: [prescriptions] 'be issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.'' What are the undefined terms? Traditionally the state defined these terms Some states allow non-physicians to write prescriptions Most states have additional limits on controlled substances. 28

Does the CSA give the AG Authority over Assisted Suicide? Oregon passes an assisted suicide law - physicians can write prescriptions for lethal amounts of drugs. Bush II administration opposed assisted suicide AG issues an interpretive rule that assisted suicide is not proper medical purpose what would this trigger? Who gets to define legitimate medical purpose? Why doesn't this allow medical marijuana? What is the predicate for being a drug that can be prescribed under the CSA? 29

Example - Court/Agency Conflicts in Interpretation 30

FCC Regulations on Telecommunications Why is federal regulation and preemption necessary for radio and broadcast TV? Definition of Telecommunications "Telecommunications" is defined in the Act as "the transmission, between or among points specified by the user, of information of the user's choosing, without change in the form or content of the information as sent and received. What sort of communications did this contemplate? Why can you show sexually explicit content on cable TV and the Internet, but not on broadcast TV? 31

What is an Information Service? Communications Act defines "information services" as "the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications. This was pre-Internet. How is this different from a telecommunications service? Originally, the FCC did not regulate information services, thus no preemption of state action. 32

What is the Internet under the FCC? The broadband provider - your connection to the Internet backbone. May also be your ISP, or your ISP may contract with the broadband provider. Are broadband internet providers telecommunications or information services under the original meaning of the Act? If they are telecommunications services, can the state regulate them? 33

AT&T CORP. v. City of Portland, 216 F. 3d 871 (CTA9 2000) Portland wants to regulate broadband providers Why might a locality want to regulate broadband? Industry says they are telecommunications providers, thus not subject to local regulation 9th Cir agrees that they are telecommunications providers, looking at the statute. Does it matter whether the FCC has regulated them? 34

NCTA et al. v. Brand X, 545 U.S. 967 (2005) FCC then promulgates a rule defining broadband providers as information services. Would this let Portland regulate them? Does the holding in AT&T CORP. v. City of Portland bar this rule? Why does timing matter? Was the court reviewing a rule in that case? What if the court had said that the Act clearly defines broadband as telecommunications? 35

The Continuing Saga of Net Neutrality The information services classification came back to bite the FCC on net neutrality. Verizon v. FCC, 740 F.3d 623 (D.C. Cir. 2014) held that the agency could not impose net neutrality provisions on information services. The FCC then promulgated a rule reclassifying internet service providers as telecommunications services, which could be regulated. This was upheld in US Telecom Association v. FCC, 825 F.3d 674 (D.C. Cir. 2016). The Trump FCC has gone back to the telecommunications definition, which hands the ball back to Portland and other municipalities. 36

Chevron was about notice and comment rules What if the court is not looking at a rule? 37

Leading up to Mead: Christensen v. Harris County, 529 U.S. 576 (2000) What did the court rule? Here . . . we confront an interpretation contained in an opinion letter, not one arrived at after, for example, a formal adjudication or notice-and-comment rulemaking. Interpretations such as those in opinion letters--like interpretations contained in policy statements, agency manuals, and enforcement guidelines, all of which lack the force of law--do not warrant Chevron-style deference. Why is this consistent with our definition of a guidance document? 38

When does Chevron Apply? - United States v. Mead, 533 U.S. 218 (2001) Chevron was a notice and comment rule Why does the notice and comment process better assure that an agency legal interpretation is sound? Mead is a letter ruling on the classification of a product for tariff purposes (Daytimer calendars) No notice and comment, thus no vetting Can be changed at a later date without notice and comment - does not bind the agency Should this letter ruling get Chevron deference? 39

The Mead Test ...administrative implementation of a particular statutory provision qualifies for Chevron deference when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority.[rulemaking] Remanded for Skidmore analysis. What would you look for to decide if Mead applied? 40

Barnhart v. Walton, 535 U.S. 212 (2002): Chevron/Skidmore Hybrid? This is a SSA interpretation of a statute that is in various guidance documents. The agency treats these as binding should they be rules? Despite this not being a rule, the Court (Breyer) applied Chevron, but only after using factors that look like persuasiveness to decide whether agency s interpretation of the statute should get Chevron. 41

The Barnhart Factors The importance of interpretation to agency policy; The period that the agency has held the view; The legal expertise of the agency; The complexity of the problem; How does this look like the analysis in Brown and Williamson? How can the agency strengthen its case for deference under Barnhart? 42

Applying Barnhart HUD issues guidance on construction of the anti- kickback provisions in a real estate act Published in the register as policy statements with no notice and comment Legal effect? Should the court defer to these under Barnhart? Yes, according to the Second and Ninth Circuits; no, according to the Seventh Circuit. (If the court defers to them, maybe they should be rules.) 43

Public Citizen v. U.S. Dept. of Health and Human Services, 332 F.3d 654 (D.C. Cir. 2003) Is the Medicare Manual a notice and comment regulation? Did the agency have the authority to make law on this issue? Did the court find that the manual was a regulation with the force of law as to a third party? How would you argue under Mead and then Barnhart that Chevron should not apply? How can the Medicare Manual be binding on providers if it does not have the force of law? Is it binding on the agency? 44

Whitman v. American Trucking Assns., 531 U.S. 457 (2001) You can lose on 2 Chevron Step One The court found that the Clean Air Act was ambiguous on the point Chevron Step Two The court found that the agency had stepped outside of the ambiguity and overreached its authority. Think about this as arbitrary and capricious analysis when we finish the next section. 45

Interpretation of an Agency's Own Rules Courts should defer to an agency interpretation of its own rules. Seminole Rock (1945), upheld by Auer, (1997) What if it just repeats the statute in the rule? Does this transform the statute into a regulation entitled to more deference? Does a modern court have more information about the basis for a the rule than in it would have in 1945? Are rules more complex and interrelated than 1945? How should this influence deference? 46

Do the Courts Really Follow Chevron/Mead? Scholars have studied the actual behavior of the appeals courts and the United States Supreme Court in applying these tests The courts are more likely to use Chevron when there is notice and comment or formal adjudications, and more likely to use Mead/Barnhart/Skidmore for less formal actions. However, there are a lot of cases where formal actions get Mead and some cases in which less formal actions get Chevron. Some courts even ignore Chevron if asked to by the agency. 47

ABA Adlaw Conference 2008 - Justice Garland, 2nd Cir, on Chevron: If you have an ambiguous statute, and need Chevron deference, do not say that the interpretation is clear and there is no other way to construe the law. Say it is ambiguous and you are making a reasonable interpretation based on your knowledge of the statute and the regulatory circumstances. 48

The Implications of Ambiguous Standards Assume you are agency council. Assume you have an ambiguous statute and the agency wants to propose a new rule Also assume that you want to avoid reversal in the courts because of the delay and cost How does your advice differ if you are sure you will get Chevron, versus if there is a significant chance you will get Skidmore/Barnhart? 49