STB, FRA judicial ally under attack

If Judge Neil Gorsuch is Senate-confirmed to the Supreme Court, federal regulatory agencies such as the Surface Transportation Board (STB) and Federal Railroad Administration (FRA) could be closer to losing a handy, trusted and effective judicial ally in their interpretations of the statutes they administer.

Gorsuch likely will encourage the Court to send to the dustbin of history its 1984 ruling known as the “Chevron deference.” That ruling instructed judges to accept a regulatory agency’s “reasonable”—neither arbitrary nor capricious—interpretation of a statute. The Republican-controlled Congress is considering similar action legislatively.

Gorsuch’s target, shared by many political conservatives, is regulatory activism by flashpoint administrative bodies such as the Environmental Protection Agency. The STB and FRA are collateral roadkill.

Regulatory agency findings of fact are not at risk, nor are interpretations of a statute where the intent of Congress is clear to a court. The Chevron deference attaches to regulatory agency interpretations of statutory ambiguities.

Gorsuch, currently a member of the 10th Circuit Court of Appeals in Denver, expressed his negative view of the Chevron deference in a concurring opinion published just hours before the announcement of his Jan. 31 nomination to the Supreme Court.

As for the attack on the Chevron deference by congressional Republicans, the House on Jan. 25 voted 238-183 to pass the Regulatory Accountability Act, a provision of which would, in the words of its sponsor, House Judiciary Committee Chairman Bob Goodlatte (R-Va.), “end judicial deference to bureaucrats’ statutory and regulatory interpretations.” The Senate has not considered the bill.

Says a now-retired litigator with the STB’s Interstate Commerce Commission predecessor, “The Chevron deference is a quasi-presumption in the agency’s favor. It is most significant in close cases where there is a divided appellate court,” such as when the STB’s 15-month merger moratorium survived a 2-1 vote in July 2000 by the District of Columbia Circuit Court. In considering whether the STB’s interpretation of its underlying statute was compatible with the STB’s moratorium ruling, the court ruled it was “within the bounds of the Board’s statutory authority” and “was neither arbitrary and capricious nor otherwise improper.”

The fate of the Chevron deference could also play a role in a currently pending STB rulemaking. The STB is considering granting captive rail shippers, through competitive switching and under certain limitations, access to a competing railroad. The shippers seek relief under a statute that uses terms such as “practicable,” “in the public interest,” and “necessary to provide competitive rail service,” whose meaning has been challenged as in the eyes of the beholder.

“I don’t think one can predict whether eliminating the Chevron deference would help carriers or shippers,” the retired litigator said. “It depends how far the agency pushes the envelope in its reading of the applicable statute. Courts can easily factor in an agency’s alleged expertise in its field without considering it equivalent to expertise in statutory interpretation.”

Gorsuch, in his Jan. 25 concurring opinion, said that in the absence of the Chevron deference, regulatory agencies would “continue to offer guidance on how they intend to enforce [their underlying] statutes [but] judicial review of the law’s meaning would limit the ability of an agency to alter and amend existing law.”

Fans of the Chevron deference argue that if Congress doesn’t like what an agency is doing, it can change the law—or be more specific in writing laws so as to avoid ambiguities. They also argue that elimination of the Chevron deference only substitutes judicial bias for regulatory agency bias in interpreting statutory ambiguities. Moreover, statutorily ambiguous terms such as “public interest” and “reasonable rate” are best interpreted by an expert agency.

Supporters of Goodlatte’s legislation say the reason courts are better equipped to interpret statutory ambiguities is one of consistency—that courts adhere to precedent, whereas regulatory agencies are more prone to change their views, especially if there are political considerations. Of course, judicial nominations and confirmations also are often determined by politics.

To read the 1984 Supreme Court decision, Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., CLICK HERE.