The Supreme Court Rules that the Fox Can Guard the Henhouse (Because the Fox Told Them He Can)

by Ogletree, Deakins, Nash, Smoak & Stewart, P.C.

The Supreme Court of the United States has allowed federal agencies to interpret ambiguities in their implementing statutes and directed courts to defer to agency expertise when deciding cases. (Who, after all, knows a statute better than the agency from which it sprang?) This doctrine, known as “Chevron deference” after the1984 case, Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., only requires that an agency’s interpretation be a “permissible” reading of the statute—a very low hurdle for an agency to clear. But lower courts have sharply disagreed over whether, and to what extent, a federal court should defer to a federal agency when interpreting a statute that defines the limits of the agency’s own jurisdiction.

City of Arlington v. FCC involves regulation of wireless towers and antennas. These towers and antennas must be approved by local zoning authorities, but the Telecommunications Act of 1996 placed some hazy parameters on when local authority ends and federal authority begins. The statute requires state and local authorities to act on wireless siting applications “within a reasonable period of time after the request is duly filed.”  Frustrated by permitting delays in some areas, CTIA, the wireless communication industry’s trade association, filed a petition with the Federal Communications Commission (FCC) in July of 2008 to clarify the statutory meaning of “within a reasonable period of time.” In November of 2009, the FCC issued a ruling declaring that “within a reasonable period of time” meant 90 days for collocation applications and 150 days for all others.

State and local governments protested the ruling, complaining that a federal agency should not be allowed to interpret a federal law that sets the boundaries of the agency’s own jurisdiction. Two cities in Texas—Arlington and San Antonio—petitioned the Fifth Circuit Court of Appeals to set aside the FCC’s ruling. Applying Chevron deference to the FCC’s interpretation, the Fifth Circuit upheld the ruling, finding that the agency’s interpretation was a permissible construction of the statute.

In a 6-3 decision handed down on May 20, 2013, the Supreme Court affirmed the Fifth Circuit’s ruling. Justice Scalia wrote the majority opinion, joined by Justices Thomas, Ginsburg, Sotomayor, and Kagan, with Justice Breyer concurring in the judgment in a separate opinion. Chief Justice Roberts and Justices Kennedy and Alito dissented.

The majority opinion rejected the argument against deference as a “mirage,” calling it a not-so-disguised attack on Chevron itself. Justice Scalia explained that determining whether an agency interpretation is “jurisdictional” or“nonjurisdictional” is not a cut-and-dried exercise easily accomplished by separating “big, important ones [rulings]” from “humdrum, run-of-the-mill stuff.” Judges, he wrote, should not waste their time on “mental acrobatics” when Chevron already provides a clear two-step process:

  1. Determine whether the statute at issue is ambiguous. If it is not, then Congress has clearly spoken on the subject, and the agency has no power to interpret an unambiguous statute. But if the statute is ambiguous, proceed to step two.
  2. Ascertain whether the agency’s interpretation is a permissible (read: conceivable) one.

As to the concern over the “fox guarding the henhouse”—i.e., an agency interpreting the scope of its statutory jurisdiction in a manner most favorable to the agency’s priorities—the majority deferred to Congress to expressly define the henhouse: “Where Congress has established a clear line, the agency cannot go beyond it,” wrote Justice Scalia. “[W]here Congress has established an ambiguous line, the agency can go no further than the ambiguity will fairly allow.”

Chief Justice Roberts’ dissent was a “fundamental” disagreement with the majority. Roberts expressed concern over the ever-growing nature of the federal bureaucracy, calling it the “headless fourth branch of government” that “wields vast power and touches almost every aspect of daily life.” Roberts complained that administrative agencies can use Chevron as a “powerful weapon” and expand their own reach, unchecked from any other branch of government. Although he stopped short of calling the results “tyranny,” Roberts nevertheless cautioned that giving an administrative agency the power to interpret its own jurisdiction is potentially dangerous. Practically speaking, agencies will always view their jurisdiction as expansively as possible. Defining that jurisdiction should always be a court’s job, according to Roberts: “In other words, we do not defer to an agency’s interpretation of an ambiguous provision unless Congress wants us to, and whether Congress wants us to is a question that courts, not agencies, must decide.”

City of Arlington v. FCC leaves parties that are dissatisfied with an agency’s interpretation of its own jurisdiction with a pair of options, both with low success rates: make a long-shot argument in litigation that an agency’s interpretation of its statute is completely unreasonable and impermissible, or lobby a frequently-deadlocked Congress to expressly define and limit the agency’s jurisdiction.

John F. Martin is a shareholder in the Washington, D.C. office of Ogletree Deakins.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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