Introduction to American Public Law
Prof. Errol Meidinger
Albert-Ludwigs-Universität, Freiburg
January 2004

Perhaps the most frequently cited decision in modern American Administrative Law is Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (1984). At issue in Chevron was the Environmental Protection Agency's decision to allow "bubble" definitions of pollution sources in Clean Air Act non-attainment areas. (A non-attainment area is one in which the concentration over time of a major regulated pollutant exceeds the regulatory maximum.) The bubble policy allows polluters to treat entire plants as if they exist under a large bubble. The focus of regulation is not on the emissions of individual smokestacks or pieces of equipment within the plant, but rather on the total amount of pollution coming out of the bubble. Polluters are free (within limits that need not be discussed here) to change processes and equipment within the bubbled plant so long as the total amount of pollution coming out of the bubble does not increase.

The bubble policy was adopted in an informal rulemaking proceeding by the recently installed Reagan administration (although it had been seriously considered in the Carter administration and it was already applicable in attainment areas). The Natural Resources Defense Council immediately and vigorously challenged it. NRDC's concern was that the policy would allow polluters to modify equipment within aging plants without making the upgrades to meet the higher standards applicable to new sources and major modifications. The NRDC found this particularly troubling in light of the Clean Air Act's expressed goal of bringing non-attainment areas into attainment. The EPA defended the policy on grounds that it would result in no more pollution over time than a stricter policy -- since many existing polluters had long been avoiding all modifications that might subject them to higher standards, that it would reduce the confusion of having different rules applicable in attainment and non-attainment areas [the same area can be attainment for some pollutants and non-attainment for others], and that it was in fact consistent with the Clean Air Act. The Court of Appeals reversed the agency, primarily on grounds that while the language of the act was ambiguous, the pollution reducing purpose of the non-attainment provisions made the bubble policy "inappropriate" for those areas.

The Supreme Court treated the problem as one of statutory interpretation. The question was whether the bubble definition of "source" was consistent with the Clean Air Act. After carefully reviewing the (somewhat Delphic) definitions of source in the Act (e.g., "building, structure, facility, or installation") the court concluded that the statute did not make a clear choice on the question. Justice Stevens' opinion went on to lay down the following guidelines:

When a court reviews an agency's construction of the statute which it administers, it is confronted with two questions. First [this is now known as "Chevron Step I"], always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue, ["Chevron Step 2"] the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute.

"The power of an administrative agency to administer a congressionally created . . . program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by Congress." Morton v. Ruiz, 415 U.S. 199, 231 (1974). If Congress has explicitly left a gap for the agency to fill, there is an express delegation of authority to the agency to elucidate a specific provision of the statute by regulation. Such legislative regulations are given controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute. Sometimes the legislative delegation to an agency on a particular question is implicit rather than explicit. In such a case, a court may not substitute its own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency...

We have long recognized that considerable weight should be accorded to an executive department's construction of a statutory scheme it is entrusted to administer, and the principle of deference to administrative interpretations "has been consistently followed by this Court whenever decision as to the meaning or reach of a statute has involved reconciling conflicting policies, and a full understanding of the force of the statutory policy in the given situation has depended upon more than ordinary knowledge respecting the matters subjected to agency regulations. . . . ". . . If this choice represents a reasonable accommodation of conflicting policies that were committed to the agency's care by the statute, we should not disturb it unless it appears from the statute or its legislative history that the accommodation is not one that Congress would have sanctioned." United States v. Shimer, 367 U.S. 374, 382, 383 (1961).

In light of these well-settled principles it is clear that the Court of Appeals misconceived the nature of its role in reviewing the regulations at issue. Once it determined, after its own examination of the legislation, that Congress did not actually have an intent regarding the applicability of the bubble concept to the permit program, the question before it was not whether in its view the concept is "inappropriate" in the general context of a program designed to improve air quality, but whether the Administrator's view that it is appropriate in the context of this particular program is a reasonable one. Based on the examination of the legislation and its history which follows, we agree with the Court of Appeals that Congress did not have a specific intention on the applicability of the bubble concept in these cases, and conclude that the EPA's use of that concept here is a reasonable policy choice for the agency to make. . . .

The arguments over policy that are advanced in the parties' briefs create the impression that respondents are now waging in a judicial forum a specific policy battle which they ultimately lost in the agency and in the 32 jurisdictions opting for the "bubble concept," but one which was never waged in the Congress. Such policy arguments are more properly addressed to legislators or administrators, not to judges.

In these cases the Administrator's interpretation represents a reasonable accommodation of manifestly competing interests and is entitled to deference: the regulatory scheme is technical and complex, the agency considered the matter in a detailed and reasoned fashion, and the decision involves reconciling conflicting policies. Congress intended to accommodate both interests, but did not do so itself on the level of specificity presented by these cases. Perhaps that body consciously desired the Administrator to strike the balance at this level, thinking that those with great expertise and charged with responsibility for administering the provision would be in a better position to do so; perhaps it simply did not consider the question at this level; and perhaps Congress was unable to forge a coalition on either side of the question, and those on each side decided to take their chances with the scheme devised by the agency. For judicial purposes, it matters not which of these things occurred.

Judges are not experts in the field, and are not part of either political branch of the Government. Courts must, in some cases, reconcile competing political interests, but not on the basis of the judges' personal policy preferences. In contrast, an agency to which Congress has delegated policymaking responsibilities may, within the limits of that delegation, properly rely upon the incumbent administration's views of wise policy to inform its judgments. While agencies are not directly accountable to the people, the Chief Executive is, and it is entirely appropriate for this political branch of the Government to make such policy choices -- resolving the competing interests which Congress itself either inadvertently did not resolve, or intentionally left to be resolved by the agency charged with the administration of the statute in light of everyday realities.

When a challenge to an agency construction of a statutory provision, fairly conceptualized, really centers on the wisdom of the agency's policy, rather than whether it is a reasonable choice within a gap left open by Congress, the challenge must fail. In such a case, federal judges -- who have no constituency -- have a duty to respect legitimate policy choices made by those who do. The responsibilities for assessing the wisdom of such policy choices and resolving the struggle between competing views of the public interest are not judicial ones: "Our Constitution vests such responsibilities in the political branches." TVA v. Hill, 437 U.S. 153, 195 (1978).

We hold that the EPA's definition of the term "source" is a permissible construction of the statute which seeks to accommodate progress in reducing air pollution with economic growth. "The Regulations which the Administrator has adopted provide what the agency could allowably view as . . . [an] effective reconciliation of these twofold ends. . . ."