III. STANDARDS OF REVIEW: NONSTATUTORY LEGAL ISSUES
Prepared for the Scope of Judicial Review portion of the ABA Administrative
Law Sections Project on the Administrative Procedure Act
Harold J. Krent, Chicago-Kent College of Law
Second Draft: September 2001
A. The Court shall set aside an agency action if it finds that the action exceeds the
authority granted, or violates limitations imposed by:
1. The Constitution
The authority of the federal courts to keep federal agencies within constitutional limits is
unquestioned. As long as review is not otherwise precluded, courts must assess whether agency
actions comply with constitutional commands. Courts consider constitutional challenges both to
the status of agencies, see, e.g., Morrison v. Olson, 487 U.S. 654 (1988) (addressing
constitutional status of Office of Independent Counsel), as well as to the propriety of particular
agency actions. See, e.g., Marshall v. Barlows Inc., 436 U.S. 307 (1978) (addressing
constitutionality of agency search).
When exercising an adjudicative function, agencies themselves may consider a wide
range of constitutional issues. In determining whether agency determinations are consistent with
the Constitution, courts afford no deference to the agencies construction of the constitutional
principle at stake. Cf. United States v. Nixon, 418 U.S. 683, 703-05 (1974).
2. An Agency Rule Having the Force of Law (as opposed to, for example,
internal operating procedures)
Agency rules having the force and effect of law are as binding on agencies as the
Constitution and statutes. Accordingly, courts may review agency action for conformance with
previously promulgated rules. Nader v. Bork, 366 F. Supp. 104, 108-109 (D.D.C. 1973) (an
agency regulation has the force and effect of law, and it is binding upon the body that issues it.).
Agency procedures must be followed as well. Vitarelli v. Seaton, 359 U.S. 535, 539-40 (1959).
The recent Third Circuit decision in Furnari v. Warden, 218 F.3d 250 (3d Cir. 2000), is
instructive. There, an inmate challenged a parole commissions decision denying him a de novo
hearing which he claimed necessary in light of new evidence that had been uncovered. The Court
explained that, because the agency had bound itself to provide a statement of reasons for denying
parole, its failure to do so constituted an abuse of discretion. Id. at 255. See also Schroeder v.
West, 212 F.3d 1265, 1270 (Fed. Cir. 2000); Moret v. Karn, 746 F.2d 989, 992 (3d Cir. 1984)
(An agency abuses its discretion if it fails to follow its own regulations and procedures.).
1
The question of agencies compliance with their own regulations turns on two factors.
First, the regulation must have the force of law. Agency regulations more akin to internal
operating procedures bind the agency as a matter of politics but not law. Private parties cannot
sue the agency directly for failure to comply with rules or policy statements lacking the force of
law. See, e.g., Haitian Refugee Center v. Baker, 953 F.2d 1498, 1508 (11th Cir. 1992); De Silva
v. Smith, 773 F.2d 1021 (9th Cir. 1985); Pasquini v. Morris, 700 F.2d 658, 662-62 (11th Cir.
1983); cf. In re Surface Mining Regulation Litigation, 627 F.2d 1346, 1357 (D.C. Cir. 1980)
(stating that agency directive implementing Presidents Executive Order to be treated as
discretionary rule). Unlike the situation in Furnari, such rules will be enforced at the discretion
of the agency.
This is not to suggest that agency internal operating procedures, general statements of
agency policy, or rules in staff manuals have no impact. When published, agencies can rely on
such rules, 5 U.S.C.  552a, and if agencies depart from their terms, they must explain why they
are changing the rules of the game midstream. Thus, even though internal operating procedures
and staff manuals may not be directly enforceable, aggrieved litigants may argue successfully that
the agency acted arbitrarily by failing to comply with previously articulated rules. The theory of
such relief would not be reversal as a matter of law, but reversal because of an abuse of
discretion  the action is without legitimate reason and adequate explanation, inconsistent with
prior agency policies or procedures. (Scope of Review Statement, V.F.).1
Second, disputes often arise over the meaning of the regulations that agencies must
follow. As with statutes, regulations can be, and often are, ambiguous. Courts must then decide
how much weight to afford the agencys interpretation of the regulation. Although courts would
have no reason to defer to an agencys construction of another agencys regulation, see Martin v.
OSHRC, 499 U.S. 144 (1991); Director, OWCP v. General Dynamics Corp., 982 F.2d 790, 795
(2d Cir. 1992), for reasons analogous to Chevron courts might uphold an agencys construction
of its own regulation as long as it is reasonable. Indeed, courts may have more reason to permit
agencies to flesh out their own regulations than to interpret the statutory terms set by Congress.
The process by which the agency formulates its rules, however, ultimately may dictate whether
stronger or weaker deference is afforded.
In Bowles v. Seminole Rock & Sand Co., 325 U.S. 410 (1945), the Supreme Court held
that deference was due an agencys interpretation of its own regulation. In considering a dispute
over a regulation issued by the Office of Price Administration, the Court concluded that the
Secretarys own interpretation of the contested words highest price should control: Since
this [case] involves an interpretation of an administrative regulation a court must necessarily look
to the administrative construction of the regulation if the meaning of the words used is in doubt.
. . [T]he ultimate criterion is the administrative interpretation, which becomes of controlling
1
Some internal rules are merely precatory, and courts rarely will find that agencies acted
arbitrarily merely by failing to follow such rules.
2
weight unless it is plainly erroneous or inconsistent with the regulation. Id. at 413-14. The
Court has often invoked Seminole Rock and reiterated its plainly erroneous or inconsistent
standard. See, e.g., Thomas Jefferson University v. Shalala, 512 U.S. 504, 512 (1994) (collecting
examples).
The rationale for deferring to an agencys interpretation of its own regulations is
analogous to Chevron. If Congress has delegated power to the agency to fill in legislative gaps,
then courts should defer to any reasonable interpretations that the agency forwards of its own
gap-filling regulations. It is more legitimate for an agency than a court to undertake that
function: the power authoritatively to interpret its own regulations is a component of the
agencys delegated lawmaking powers.2 The agency has more expertise, and is more politically
accountable than courts. Congress, in other words, has entrusted agencies with the power to
make law through regulations and to define what those regulations mean.
Consider the Supreme Courts decision in Auer v. Robbins, 519 U.S. 452 (1997). The
dispute focused on the Department of Labors regulation fleshing out the meaning of the Federal
Labor Standards Acts exemption for employees acting in executive, administrative, or
professional capacity. 29 U.S.C.  213(a)(1). The agencys regulation determined that an
employee paid on a salary basis was exempted from the Acts protections. 29 C.F.R.
541.1(f). That exception included employees whose salary was not subject to reduction
because of variations in the quality or quantity of the work performed. 29 C.F.R. 54.118(a).
In litigation, the agency clarified that, to qualify as a salaried employee, no deduction for
shoddy work could be made in practice, or there must be a significant likelihood that, if an
employee violates the pertinent work rules, the employee will be disciplined in a manner
inconsistent with the salary basis rule. Writing for the unanimous Court, Justice Scalia held
that the agencys interpretation of the regulation, even though forwarded for the first time in a
brief, should be entitled to Seminole Rock deference. According to the Court, the Secretarys
interpretation of the regulation is controlling unless plainly erroneous or inconsistent with the
regulation. Id. at 911 (quoting Seminole Rock). The Court explained that there is simply no
reason to suspect that the interpretation does not reflect the agencys fair and considered
judgment on the matter in question. 519 U.S. at 462. Auer suggests, therefore, that strong
deference always should be afforded agency interpretation of the regulations the agency has
issued. Many lower court decisions have followed Auers lead. See, e.g., National Wildlife
Fedn v. Browner, 127 F.3d 1126, 1130 (D.C. Cir. 1997); Public Citizen v. Carlin, 184 F.3d 900,
911 (D.C. Cir. 1999); Akzo Nobel Salt, Inc. v. Federal Mine Safety and Health Review
Commn, 212 F.2d 1301 (D.C. Cir. 2000).
2
Martin v. Occupational Safety & Health Review Commn, 499 U.S. 144, 151 (1991).
3
Exactly how Seminole Rock deference compares to Chevron deference is difficult to say
with great confidence. The usual judicial formulations of Seminole Rock deference certainly
sound (even) more deferential than Chevron. For example, in Thomas Jefferson University v.
Shalala, the Supreme Court stated that it must give substantial deference to an agencys
interpretation of its own regulations. 512 U.S. at 512 (citations omitted). Explaining further,
the Court wrote: Our task is not to decide which among several competing interpretations best
serves the regulatory purpose. . . . In other words, we must defer to the Secretarys interpretation
unless an alternative reading is compelled by the regulations plain language or by other
indications of the Secretarys intent at the time of the regulations promulgation. Id. (quoting
Gardebring v. Jenkins, 485 U.S. 415, 430 (1988)). The Court added that this broad deference
is warranted especially where the regulation concerns a complex, technical regulatory program.
Id. Perhaps the Court was convinced that agencies are better situated to understand their own
ambiguous regulations as opposed to open-ended terms passed by Congress. Thus, Seminole
Rock might be understood as Chevron plus deference, whereas Skidmore can be understood as
Chevron minus deference.
Nonetheless, despite the theoretical difference in strength of deference, the Seminole
Rock and Chevron formulations likely converge in practice. As the D.C. Circuit noted in
Paralyzed Veterans of America v. D.C. Arena L.P., 117 F.3d 579, 584-85 (D.C. Cir. 1997), [i]n
the aftermath of Chevron, it may be that our deference to agency interpretations of ambiguous
regulations is not different than that which we afford to interpretations of ambiguous statutes. It
would seem that there are few, if any, cases in which the standard applicable under Chevron
would yield a different result than the plainly erroneous or inconsistent standard set forth in
Bowles. Similarly, the Supreme Court in Martin v. OHSRC, 499 U.S. 144, 180 (1991),
directed courts to defer to agency interpretations of regulations if the Secretarys interpretation
is reasonable. The Secretarys interpretation of an ambiguous regulation is subject to the same
standard of substantive review as any other exercise of delegated lawmaking power.
Some have criticized Seminole Rock deference, however, on the ground that agencies
should not have the power to both make and interpret the law.3 Fusing the power to fashion rules
and then interpret them might endanger civil liberties. Moreover, if agencies can both
promulgate regulations and then interpret them, they might have the incentive to issue overly
vague rules, knowing that they could then flesh out the rules through interpretations that would
avoid stringent review.4 Agencies can avoid procedures such as notice-and-comment rulemaking
merely by reinterpreting their own regulations in an enforcement action.
3
See generally John F. Manning, Constitutional Structure and Judicial Deference to
Agency Interpretations of Agency Rules, 96 Colum. L. Rev. 612 (1996); Robert A. Anthony, The
Supreme Court and the APA: Sometimes They Just Dont Get It, 10 Admin. L. J. Am. U. 1
(1996).
4
See, e.g., Jonathan T. Molot, Judicial Perspective in the Administrative State:
Reconciling Modern Doctrines of Deference with the Judiciarys Structural Role, 53 Stan. L.
4
Commentators criticizing Seminole Rock argue instead that less generous deference
should be afforded such agency interpretations under the doctrine articulated in Skidmore v.
Swift & Co. , 323 U.S. 134 (1944). The Skidmore standard provides that an agencys
interpretive position is entitled to respect and that the weight of such a judgment in a
particular case will depend upon the thoroughness evident in its consideration, the validity of its
reasoning, its consistency with earlier and later pronouncements, and all those factors which give
it power to persuade, if lacking power to control. Id. at 140. The more stringent review ex post
would in turn sharpen the ex ante incentives for clearer rules.
Rev. 1, 105-07 (2000); Manning, supra, at 655.
5
Such arguments, however, are not fully persuasive. First, Congress possesses the same
check of revising the delegation irrespective of whether the agency is interpreting a statute or a
regulation. Congress can overrule or modify the one just as easily as the other. Second, if a
court overturns an agencys interpretation, the agency can reissue a clarified regulation that
reflects its current interpretation. Third, the separation of powers argument is not dispositive
given that agencies widely interpret both statutes and regulations in enforcing their legislatively
delegated tasks. Indeed, agencies exercise a mixture of functions in many contexts. Cf.
Withrow v. Larkin, 421 U.S. 35 (1975). Fourth, one would think that agencies have greater
expertise in divining the meaning of agency regulation than courts. Courts construing regulations
might supplant agencies as subsidiary policymakers under delegated grants of authority from
Congress. Although agencies can always issue a revised regulation, a judicial gloss raises the
costs of maintaining the agencys preferred regulatory interpretation. Fifth, agency
interpretations of regulations must of necessity include interpretations of the statutory language
the regulations were designed to implement. Chevron deference to interpretations of statutes in
regulations, therefore, logically should extend to deference of interpretations of those regulations
themselves. Finally, at times clearer rules do not serve the public interest. A standard-like rule
may better protect the public than if the agency were compelled to issue bright-line rules.5
Yet, a different argument against strong deference to agency interpretations of regulations
may be more convincing. In most contexts, the agencys interpretation is not preceded by notice
and comment; nor has it emerged from the agencys adjudicative role. Rather, the interpretation
often arises in the midst of enforcing the law, hardly a circumstance that gives one confidence
that the resulting interpretation has been well considered. From a political process perspective,
strong deference seems unwarranted if the agency interpretation has been hastily reached and
little discussed.
Indeed, the Supreme Courts recent decision in Christensen v. Harris County, 120 S. Ct.
1655 (2000), by curtailing Chevron deference for an opinion letter, might by analogy caution
against strong deference to agency interpretations of their own regulations. The Court in
Christensen concluded that interpretations contained in policy statements, agency manuals, and
enforcement guidelines, all of which lack the force of law[,] do not warrant Chevron-style
deference. 120 S. Ct. at 1663. Christensen suggests that Chevron deference principally should
be reserved for agency interpretations issued as part of the rulemaking or adjudication process.
5
For a defense of Seminole Rock, see generally Scott H. Angstreich, Shoring Up
Chevron: A Defense of Seminole Rock Deference to Agency Regulatory Interpretations, 34 U. C.
Davis L. Rev. 49 (2000).
6
Viewed another way, a court should only accord an agency interpretation strong deference
when the agency is interpreting a regulation in a context in which Congress intended the agency
act to have the force of law.6 Agencies interpret regulations most often in contexts in which one
cannot easily infer a congressional delegation of the power to make law, whether in litigation or
opinion letters. Indeed, most agency interpretations of regulations are not the outgrowth of any
defined process, have not been tested by the crucible of public participation (through rulemaking
or adjudication before the agency), and may reflect nothing more than the result of litigation
pressures. Congress would not lightly imbue such interpretations with the presumption of
correctness.
Ultimately, the question of the degree of deference to afford agency interpretations of
their own regulations presents a close question that eventually will be resolved by the Supreme
Court. The Christensen process perspective suggests, however, that only Skidmore deference
should be afforded to agency interpretations of regulations that are forwarded outside of either a
rulemaking or adjudication. Cf. Mission Group Kansas, Inc. v. Riley, 146 F.3d 775 (10th Cir.
1998) (refusing to accord strong deference to agency interpretation of regulation because
interpretation not subject to notice and comment rulemaking); IAL Aircraft Holding, Inc. v.
FAA, 206 F.3d 1042, 1045-46 (9th Cir. 2000) (refusing to extend deference to agency
interpretation of its regulation on grounds that interpretation was litigating position that agency
had not expressed elsewhere before).7 Note that the question of whether to defer to agency
interpretations of their own interpretive rules or policy statements will seldom arise given that so
little turns on whether the agency interpretation is correct -- the interpretive rules and policy
statements themselves only warrant Skidmore deference. See, e.g., Shalala v. Guernsey Memorial
Hospital, 514 U.S. 87, 99 (1995) (relating that interpretive rules do not have the force and
effect of law and are not accorded that weight in the adjudicatory process.); Hoctor v. United
States Dept of Agriculture, 82 F.3d 165 (7th Cir. 1996).
On the other hand, some interpretations of substantive or legislative regulations will be
articulated in an agency adjudication or in a rulemaking. In those settings, the agencys
interpretation is reached only after consideration is given to future applications. Such
interpretations merit the full Seminole Rock deference. Thus, Christensen arguably augurs a
significant limitation of Auer, and the deference accorded agency interpretation of regulations
should hinge on the context in which the interpretation is forwarded.
3. Federal Common Law (in the rare cases in which it applies)
6
See Robert A. Anthony, Which Agency Interpretations Should Bind Citizens and the
Courts?, 7 Yale J. on Reg. 1, 39-40 (1990).
7
Cf. Donna Nagy, Judicial Reliance on Regulatory Interpretations in SEC No-Action
Letters: Current Problems and a Proposed Network, 83 Corn. L. Rev. 921, 992-993 (1998)
(addressing question of judicial deference to SEC interpretation of its rules in SEC No-Action
letters).
7
Federal courts rarely assert federal common law as a basis for constraining agencies. On
occasion, however, courts have relied squarely on their own lawmaking authority to invalidate
administrative decisions on such grounds as res judicata and collateral estoppel. Tait v. Western
Md. Ry., 289 U.S. 620 (1933); Clark-Cowlitz Joint Operating Agency v. FERC, 775 F.2d 366,
373-76 (D.C. Cir. 1985).
For instance, consider the First Circuits decision in Bath Iron Works Corp. v. Director,
OWCP, 125 F.3d 18 (1st Cir. 1997). There, an employee injured on the job obtained benefits
pursuant to state workers compensation proceedings. He received an award of 25% disability
due to a serious knee injury and when the disability deepened over time successfully applied for
an increase to a 50% award. Thereafter, the employee sought a further award from the employer
under the Longshore Act, 33 U.S.C.  901, et seq. The Department of Labor Benefits Review
Board granted him full disability, rejecting the employers collateral estoppel argument. The
First Circuit, however, reversed the agencys determination, holding that the agency should have
given collateral estoppel effect to the state agencys prior determination: the tendency is plainly
in favor of applying collateral estoppel in administrative contexts. Id. at 21. The court imposed
federal common law requirements on the agency.
4. Any Other Source of Law That is Binding on the Agency, Including a
Consent
Decree or Other Judicial Order, International Law, and (to the
extent applicable and enforceable by their terms) Executive Orders
Subsection 4 is a catchall section that covers sources of law other than those mentioned
above. Courts may independently construe and redress violations of, all sources of law. For
instance, in United States v. Armour & Co., 402 U.S. 673, 681-83 (1971), the Court considered
applicability of a consent decree, and of growing importance, agencies must follow the law of
nations as well as domestic law. Cf. Weinberger v. Rossi, 456 U.S. 25 (1982) (construing
regulation narrowly to avoid conflict with the law of nations). At times agencies must abide by
executive orders. See, e.g. CIA v. Sims, 471 U.S. 159 (1985); Weinberger v. Romero-Barcelo,
456 U.S. 305 (1982). However, most executive orders stem from the Presidents inherent
authority to manage the executive branch and therefore do not provide an enforceable limit on
the agencys powers. The agency head may face political repercussions for not following such
orders, but no secondguessing in court. See Xin-Chang Zhang v. Slattery, 55 F.3d 732 (2d Cir.
1995) (For whatever reasons, the Attorney General did not adhere to this order and the Bush
Administration did not follow up on it. However, it is not the role of the federal courts to
administer the executive branch.); Chen Zhou Chai v. Carroll, 48 F.3d 1331 (4th Cir. 1995); In
re Surface Mining Regulation Litigation, 627 F.2d 1346, 1357 (D.C. Cir. 1980); Independent
Meat Packers Assn v. Butz, 526 F2d 228, 234 (8th Cir. 1975).
8