A quiet revolution may be brewing in administrative law. For over thirty years, the Chevron doctrine has dominated the legal landscape, requiring courts to give significant deference to federal agency interpretations of the statutes that those agencies administer. But recent Supreme Court decisions, and in particular two cases on the current court’s docket, may signal that the justices are increasingly uncomfortable with the amount of power this doctrine has vested in unelected agency officials – and their decisions may significantly dampen the FCC’s decade-long attempt to construct a law of the Internet.
How the Chevron doctrine works
The two-step Chevron doctrine governs challenges to an agency’s interpretation of a congressional statute that the agency must administer. At step one, the court must decide whether the statutory language is clear or ambiguous. If it is clear, the court must enforce the clear intent of Congress. But if it is ambiguous, under step two the court must defer to the agency’s interpretation if that interpretation is reasonable – even if the court would have interpreted the statute differently or believes the agency’s view is not the best reading of Congress’ intent.
Chevron proved incredibly influential, especially among a generation of lawyers, scholars, and judges concerned with reining in “activist judges.” Given congressional ambiguity, Chevron prevented judges from substituting their personal views for those of the agency. But some worried that, to fight abuse of judicial discretion, the doctrine facilitated similar abuses by agency bureaucracy. A suspicious court confronted the limits of Chevron in the 2000 FDA v. Brown & Williamson Tobacco (0) case, in which the court struck down the FDA’s attempt to regulate tobacco. Although the Food, Drug, and Cosmetic Act could reasonably be read the agency’s way, the court found it unlikely that Congress would have intended such a controversial delegation of authority over such a high-profile topic through such ambiguous statutory language.
Brown & Williamson was considered an outlier for many years, until it reappeared in last year’s Affordable Care Act decision, King v. Burwell (1). In that case, the Supreme Court declined to give Chevron deference to the IRS’s interpretation of an admittedly ambiguous statute governing federal tax credits for states that lacked their own health care exchanges. King cited Brown & Williamson for the proposition that Chevron should not apply to “extraordinary cases,” such as those involving questions of “deep economic and political significance.” The court cannot assume that Congress implicitly delegated such major questions to an agency through ambiguous statutory language.
Implications for the FCC and tech policy
What does any of this have to do with tech policy? King’s refusal to grant Chevron deference in extraordinary cases casts a significant shadow over the FCC’s efforts to regulate Internet providers without a congressional mandate. This was the primary argument of an amicus brief (2) filed in the net neutrality court case, which I signed and which co-blogger Gus Hurwitz helped write. Like the statutory scheme at issue in King, the Open Internet order presents questions of “deep economic and political significance” involving “billions of dollars in spending” and affecting “millions of people.” The Supreme Court has previously found that Title II of the Communications Act, which the FCC relies upon for jurisdiction over broadband providers, is ambiguous, and further that the 1996 Telecommunications Act that represents Congress’ last word on the subject is “not a model of clarity. It is in many important respects a model of ambiguity or indeed even self-contradiction.” But King teaches us that when – as here – major questions are at stake, Chevron is an inappropriate tool to resolve that ambiguity.
A pair of cases on the court’s current docket indicates the justices’ ongoing concern with the power Chevron gives agencies. In Hawkins v. Community Bank of Raymore, argued earlier this month, several justices expressed hostility toward the Federal Reserve’s interpretation of loan “applicants” to include loan guarantors who do not “apply” for a loan in the conventional sense of the word. SCOTUSBlog (3) notes that Justice Kagan questioned whether the agency’s interpretation “creates liability on a scale that Congress wouldn’t have expected.” And Justice Scalia was skeptical of the government’s argument that the agency could simply define the same statutory word differently in different contexts. This, of course, is also an issue in the Open Internet case, which interpreted Section 202’s prohibition on unreasonable discrimination to bar paid prioritization agreements (4) by Internet service providers. Similar agreements with traditional telephone companies were long thought to be permissible under the Act. The court also granted review this month in Sturgeon v. Masica, which involves the National Park Service’s interpretation of a statute limiting its jurisdiction over state land within the boundaries of a national park. The court granted review despite the government’s argument that Chevron should govern the agency’s interpretation of the statute, which sets up the opportunity for the court to consider again the role of the Chevron doctrine when interpreting statutes limiting an agency’s jurisdiction (an issue the FCC won in the 2013 case City of Arlington v FCC (5).)
What to expect going forward: Will the court challenge the FCC’s authority?
The FCC’s authority to regulate Internet providers has always been dubious. Congress last overhauled our telecommunications laws in 1996, when dialup was king. That act focused primarily on manufacturing competition among local telephone companies (remember them?) and mentioned the Internet only a handful of times. The Open Internet order crafts a “law of the Internet” by applying to broadband providers laws originally written to govern the Bell telephone monopoly in 1934, and conveniently waiving the many, many telephone-specific statutory provisions that make no sense when applied to the Internet. The resulting frankenorder bears little resemblance to the network Congress had in mind when passing the statute almost 50 years before the Internet was even invented.
The Internet is unquestionably today’s dominant telecommunications network. But to regulate it, the FCC needs a statute from Congress delineating the purposes and scope of such regulation. The FCC’s attempts to manufacture jurisdiction in Congressional silence ring hollow, and illustrate why the Justices seem to be increasingly reluctant to embrace such a broad reading of Chevron.