Agencies promulgate rules to implement statutorily authorized
regulatory programs. These rules, although established by an
administrative agency, maintain the force and effect of law. To be able to
promulgate rules, an agency must be granted by Congress the power to do so,
either explicitly or implicitly, through statute. To control the process
by which agencies create these rules, Congress has enacted statutes, such
as the Administrative Procedure Act (APA), that dictate what procedures an
agency must follow to establish a final, legally binding rule.
Often, the organic statute that allows an agency to implement a program through
rulemaking may be ambiguous. The agency must then interpret the ambiguous
terms of the statute in order to establish the regulatory program. The
Supreme Court, in Chevron U.S.A., Inc. v. Natural Resources Defense
Council, established the Chevron test, which requires courts to
defer to an agency’s interpretation of an ambiguous statute if the agency’s
interpretation is reasonable. However, what happens if an agency’s regulation
is ambiguous? The Supreme Court ruled in Bowles v. Seminole Rock
& Sand Co., back in 1945, that a court must accept an agency’s interpretation
of its own regulations unless it is “plainly erroneous.”
Since the Court handed down the Seminole Rock decision, the Court has
outlined certain exceptions to the rule. Courts will not defer to an
agency’s interpretation if the regulation itself is clear, if the agency
suddenly changes its interpretation, or if the agency’s regulation merely “parrots”
the statutory language. Finally, courts generally prevent agencies from levying
punitive fines against regulated entities if the regulated party could not
have reasonably known how the agency planned to interpret the regulation.
Agency regulations provide the backbone of a large number of federal programs.
It is important to understand how courts treat an agency’s promulgated
regulations in order to understand how a rule may be applied to the public
and regulated entities. This report discusses how courts currently treat
an agency’s interpretation of its own ambiguous regulations and discusses the arguments
raised in the recent Supreme Court opinion from Decker v. Northwest
Environmental Defense Center, in which some members of the Court
indicated a willingness to reconsider Seminole Rock deference. The
report also discusses the justifications for and arguments against maintaining
this judicial deference. .
Date of Report: July 16, 2013
Number of Pages: 13 Order Number: R43153 Price: $29.95
For email and phone orders, provide a Visa, MasterCard, American Express, or Discover card
number, expiration date, and name on the card. Indicate whether you want e-mail
or postal delivery. Phone orders are preferred and receive priority processing.