wyoming law revie law review/v10 n2/shanor.pdfriverkeeper, inc., 129 s. ct. 1498, 1506–07 (2009)...

CASE NOTE

ADMINISTRATIVE LAW—The Supreme Court’s Impingement of Chevron’s Two-Step; Entergy Corp. v. Riverkeeper, Inc., 129 S. Ct. 1498 (2009)

Marianne Kunz Shanor*

IntroductIon

TheUnitedStatesSupremeCourtdecisioninEntergy Corp. v. Riverkeeper, Inc.notonlycontinuestocallintoquestionthedistinctionbetweensteponeandsteptwooftheChevrondoctrine,butmore importantly, it invigoratessupportforasingle-stepChevron inquiry.1InChevron, U.S.A., Inc. v. Natural Resources Defense Council,theSupremeCourtintroducedatwo-stepdoctrinalframeworkforcourtstoapplyinreviewingadministrativeagencies’constructionofstatutes.2First,acourtmustascertaincongressionalintentonthespecificissue.3IfCongressaddressedthespecificissue,theanalysisendsasboththeagencyandthecourtmustadheretotheclearintentofCongress.4However,ifacourtfindsstatutoryambiguityorsilence,thecourtmustevaluatethesecondstep:whethertheagency’sconstructionofthestatuteispermissible.5

The Supreme Court invoked the two-step Chevron doctrine in Entergy Corp.todeterminewhether§316(b)oftheCleanWaterAct(CWA)authorizedthe Environmental Protection Agency (EPA) to use a cost-benefit analysis inpromulgating technology standards for cooling water intake structures.6 In adisorderly fashion, themajority opinion addressed the second stepofChevronprior to thefirst, observing, “But surely ifCongresshasdirectly spoken to anissue then any agency interpretation contradicting what Congress has saidwould be unreasonable.”7 Entergy Corp. exemplifies the elusive, inconsistent,andunpredictable stateof theChevrondoctrine.8 It is imperative theSupreme

* Candidate for J.D., University of Wyoming, 2011. I would like to thank my family,professors,andtheeditorsoftheWyoming Law Reviewfortheirsupport.

1 129 S. Ct. 1498, 1505–10 (2009); see Matthew C. Stephenson & Adrian Vermeule,Chevron Has Only One Step, 95 Va. L. reV. 597, 597 (2009) (arguing the two-step Chevrondoctrineshouldbecollapsedintoasingle-stepinquiry);infranotes92–172andaccompanyingtext(analyzingEntergy Corp.inconjunctionwiththeChevrondoctrine).

2 Chevron,U.S.A.,Inc.v.NaturalRes.Def.Council,Inc.,467U.S.837,842–43(1984).

3 Id.

4 Id.

5 Id.at843.

6 Entergy Corp.,129S.Ct.at1505.

7 Id.at1505n.4.

8 See 1rIchard J. PIerce, Jr., admInIstratIVe Law treatIse§3.6,at175(4thed.2002).

Court explicitly collapse the two steps of the Chevron doctrine into a single-step inquiry—“whether the agency’s construction is permissible as amatter ofstatutoryinterpretation.”9

ThiscasenotewilldiscussEntergy Corp.inrelationtotheChevrondoctrine.10The background section will first explore the CWA and then will outline theSupremeCourtdecisionChevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc.11 Second, the principal case section summarizes the reasoning behind theopinionsof themajority, the concurrence inpart anddissent inpart, and thedissentinEntergy Corp.12Finally,theanalysissectionarguesthetwo-stepChevrondoctrinemustbecollapsedintoaone-stepdoctrine.13

Background

Clean Water Act: § 316(b) Cooling Water Intake Structures

Pursuant to its authority under the Clean Water Act (CWA), the UnitedStatesEnvironmentalProtectionAgency(EPA)promulgatesrulestoprotectthechemical,biological,andphysicalintegrityofthenation’swaters.14Section316(b)oftheCWAmandatestheEPA“requirethatthelocation,design,construction,andcapacityofcoolingwaterintakestructuresreflectthe best technology available for minimizing adverse environmental impact.”15Coolingwaterintakestructuresdraw water from a nearby source to cool a facility generating electricity orengaginginothercommercialprocesses.16Asthestructuresintakewater,aserious

9 Stephenson&Vermeule,supranote1,at599.

10 See infranotes92–172andaccompanyingtext(examiningtheimportanceofEntergy Corp.andtheChevron doctrine).

11 See infranotes14–53andaccompanyingtext(discussingtheCWAandChevron).

12 See infranotes54–91andaccompanyingtext(presentingtherationalebehindthemajority,thein-partconcurringanddissenting,andthedissentingopinions).

13 See infranotes92–172andaccompanying text (analyzingEntergy Corp. inconjunctionwiththeChevrondoctrine).

14 33U.S.C.§1251(a)(2006).

15 33U.S.C.§1326(b)(1972)(emphasisadded).TheCWAincludesotherstandardsthatcontrolthetypeoftechnologyrequiredtoreducepollutantsfrompointsources.SeeEntergyCorp.v. Riverkeeper, Inc., 129 S. Ct. 1498, 1506–07 (2009) (listing and discussing the other CWAstandardsandthefactorstheagencymayconsiderinpromulgatingregulationsforthosestandards);see also id.at1511(presentinginatableformattheotherCWAstandardsandthefactorstheagencymayconsiderinpromulgationregulations).ForadiscussionoftheotherCWAstandardsandtheirlegislativehistory,seePatriciaRossMcCubbin,The Risk in Technology Based Standards,16duke enVtL. L. & PoL’y F.1,6–23(2005).

16 SaraGersen,Riverkeeper,Inc.v.UnitedStatesEnvironmentalProtectionAgency: Applying the Clean Water Act’s Best Technology Available Standard to Existing Cooling Systems,35ecoLogy L.Q. 269, 269–70 (2008). Watersourcesincludelakes,rivers,streams,andotherwaterbodies.Id.at269.

538 wyomIng Law reVIew Vol.10

threattoaquaticlifeoccursbecauseorganisms—fish,shellfish,eggs,larvae,andplankton—maybecomeimpingedorentrainedintothesystem.17

In1995, theEPApromulgatednewrules for§316(b)of theCWAbasedon different types of facilities and divided the facilities into three phases.18 InestablishingrulesforPhaseIIfacilities,theEPAconductedacost-benefitanalysisto determine whether to require a closed-cycle recirculating cooling watersystem.19TheEPAfoundthecostsassociatedwithretrofittingexistingfacilitieswiththissystemoutweigheditsenvironmentalbenefits.20Thus,thePhaseIIrulepromulgatedbytheEPAdidnotrequirePhaseIIfacilitiestoinstallaclosed-cyclecooling water system.21 Section 316(b) of the CWA does not list any factors,includingcostsorbenefits,theEPAmayconsider inestablishingthestandard;§ 316(b) merely requires the best technology available for minimizing adverse environmental impact.22Consequently,astatutoryinterpretationissuearoseastowhethertheEPAmaypermissiblyincludeacost-benefitanalysisinpromulgatingrulesfor§316(b)oftheCWA.23

17 Reda M. Dennis-Parks, Riverkeeper, Inc. v. United States Environmental ProtectionAgency: Finally a Solution the Court Can Live With . . . Almost,32ecoLogy L.Q. 689, 691 (2005). Impingementoccurswhenaquaticlifebecomessquashedagainsttheintakescreens.Entergy Corp.,129S.Ct.at1502. Entrainmentoftheaquaticlifehappenswhenthesystemsuctionsorganismsintothesystem.Id.

18 Entergy Corp., 129 S. Ct. at 1503. Phase I regulates all new facilities and requiresthose facilities to build a closed-cycle recirculating cooling water system that extracts less waterand therefore causes lessharm to theaquatic life. Id.Phase III standards apply tonewoffshoreoil and gas extraction and other existing facilities, which the EPA manages on a case-by-casebasis. Environmental Protection Agency, Fact Sheet Phase III Final Rule, http://www.epa.gov/waterscience/316b/phase3/ph3-final-fs.html(lastvisitedMar.13,2010).

19 EnvironmentalProtectionAgency,EconomicandBenefitsAnalysisfortheFinal§316(b)Phase II Existing Facilities Rule (Feb. 2004), http://www.epa.gov/waterscience/316b/phase2/econbenefits/final.htm;see also Gersen,supranote16,at271–72.

20 Environmental Protection Agency, Economic and Benefits Analysis for the Final§ 316(b) Phase II Existing Facilities Rule, D1-3,Table D1-3 (Feb. 2004), http://www.epa.gov/waterscience/316b/phase2/econbenefits/final/d1.pdf.


22 Id.at1511.Compare33U.S.C.§1326(b)(2006)(listingnofactorsfortheEPAtoconsiderinpromulgatingtheregulations),with id.§1314(b)(1)(B)(listingmultiplefactorstheEPAmustconsider in implementing regulations, including the costof the technology in comparisonwiththebenefitsoftheeffluentreduction),id.§1314(b)(4)(B)(listingmultiplefactorstheEPAmustconsiderinpromulgatingregulations,includingthe“reasonablenessoftherelationship”betweenthecostsandthebenefitsoftheeffluentreduction),andid.§1314(b)(1)(B),(b)(2)(B)(listingmultiplefactors theEPAmustconsider in implementingregulations including thecostsofachieving theeffluentreduction).

23 SeeEntergy Corp.,129S.Ct.at1505–11.

2010 case note 539

The Chevron Two-Step

Prior to the United States Supreme Court decision in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., the Court reviewed an agency’sinterpretationof a statute either by applying a reasonableness test or, in somecases,applyingtheCourt’sowninterpretation.24Whenapplyingeitherapproach,theCourtfailedtoarticulatereasoningforwhyoneapproachshouldapplyandtheothershouldnot.25Criticismsbylowercourtsandscholarsforfailuretosustainconsistency or make clear the reasoning behind these inconsistent judgmentsplaguedtheCourtduringthepre-Chevronera.26

In its 1984 decision, Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc.,theUnitedStatesSupremeCourtabandoneditspriorapproachesanddevelopedthetwo-stepdoctrinethatcontinuestodominatejudicialreviewofagencies’interpretationofstatutes.27TheissueinChevroninvolvedtheEPA’sinterpretationoftheterm“stationarysource”intheCleanAirActAmendmentsof1977.28TheEPAargued“stationary source” includedallpollutionemittingdevices within a plant.29 In effect, the EPA embraced the “bubble concept,”whichallowedanexistingplanttoalteroraddapollution-emittingdeviceiftotalemissionsfromtheplantdidnotincrease.30

On appeal from the United States Court of Appeals for the District ofColumbia, the United States Supreme Court outlined a two-step process forcourtstousewhenevaluatingagencies’interpretationofstatutes.31First,thecourtmustlooktothestatuteanddeterminewhetherthestatutoryprovisionatissueisinfactambiguous.32IfCongressionalintentisclear,thecourtandagencymust

24 PIerce,supranote8,§3.1,at137; see also, e.g.,SanfordN.Caust-Ellenbogen,Blank Checks: Restoring the Balance of Powers in the Post-Chevron Era,32B.c. L. reV. 757,764–70(discussingtheHearst Publications andPackard Motor Car Co.casesaspre-Chevrondecisions).Compare Nat’lLaborRelationsBd.v.HearstPubl’ns,322U.S.111,131(1944)(applyingareasonablenesstestandupholdingtheNationalLaborRelationBoard’sinterpretationoftheterm“employee”),withPackard Motor Car Co. v. Nat’l Labor Relations Bd., 330 U.S. 485, 488–90 (1947) (applyingits own interpretation of the term “employee” and overturning the National Labor RelationBoard’sinterpretation).

25 PIerce,supranote8,§3.1,at137.

26 Id.at137–38; see alsoDeniseW.DeFranco,Chevron and Canons of Statutory Construction,58 geo. wash. L. reV. 829, 834–37 (1990) (discussing the U.S. Supreme Court’s differentapproachestoagencies’interpretationsofambiguousstatutespriortotheChevrondecision).

27 467U.S.837,842–43(1984);seeCassR.Sunstein,Chevron Step Zero,92Va. L. reV.187,188(2006)(discussingtheinfluenceofChevronandits“quasi-constitutionaltext”).

28 Chevron,467U.S.at840–41.

29 Id.at840.

30 Id.

31 Id.at842–43.

32 Id.at842.


followtheunambiguouslyexpressedintent.33Second,ifthestatutorylanguageisambiguousorsilent,thenthecourtmustdetermineiftheagency’sinterpretationisapermissibleconstruction.34Iftheagency’sinterpretationispermissible,Chevron demandsdeferencetotheagency.35

Inaddressingthefirststep,whetherCongresshasdirectlyspokentotheissue,courts may invoke “traditional tools of statutory construction.”36Yet, Chevrondoesnotprescribewhatconstitutesatraditionaltoolofstatutoryconstruction.37Furthermore,theUnitedStatesSupremeCourthasusedvariousapproachesfordeterminingifambiguityexists.38First,theCourtmayemployaplainmeaningapproach.39 Second, the Court may consider the statutory text and structure,legislativehistoryandintent,andcanonsofconstruction.40Asaresult,confusionexistsastohowtodetermineambiguityatChevron’sstepone.41Nevertheless,ifacourtfindsCongressdidnotspecificallyaddresstheissue,thecourtproceedstothesecondstep.42

ThesecondstepoftheChevrondoctrineseekstoascertainthepermissibilityoftheagency’sconstructionoftheambiguousorsilentstatute.43TheSupremeCourtdidnotspecificallystatethecriteriatodeterminepermissibility.44However,the

33 Id.at842–43.

34 Id.at843.

35 Id.at844.

36 Id.at843n.9.

37 See id.

38 wILLIam F. Funk, sIdney a. shaPIro & russeLL L. weaVer, admInIstratIVe Procedure and PractIce 149 (3ded.2006).

39 Id.; e.g., Negusie v. Holder, 129 S. Ct. 1159, 1178 (2009) (Thomas, J., dissenting);HouseholdCreditServs.v.Pfennig,541U.S.232,239–40(2004);Nat’lR.R.PassengerCorp.v.Boston&Me.Corp.,503U.S.407,417–18(1992)(applyingplain-meaningapproach).

40 a guIde to JudIcIaL and PoLItIcaL reVIew oF FederaL agencIes 57(JohnF.Duffy&MichaelHerzeds.,2005)[hereinafterguIde];e.g.,Gen.DynamicsLandSys.,Inc.v.Cline,540U.S.581,600(2004) (noting the“text, structure,purposeandhistory” indicatednoambiguityoftheterm“age”undertheAgeDiscriminationinEmploymentAct);UnitedStatesv.RiversideBayviewHomes,Inc.,474U.S.121,131(1985)(determiningreasonablenessbyconsideringthestatute’slanguage,history,andpolicies);see alsoDeFranco,supranote26,at841(statingcanonsofconstruction,thepurposeofthestatute,conflictingpolicyconsiderations,andlegislativeintentshouldbeevaluated).But seeThomasW.Merrill,Textualism and the Future of the Chevron Doctrine,72wash. u. L.Q. 351,355–57(1994)(discussingtheuseoflegislativehistorybytheSupremeCourtinapplyingtheChevrondoctrine).Therearealsootherconstructionmaximsnotlistedinthisarticle.SeeguIde, supra,at57.

41 Funk, shaPIro & weaVer, supra note38,at149–52.


43 Id.at843.

44 See id.at845.However,theCourtcertainlysuggesteddeferenceisappropriatesincetheadministrativeagencyistheexpert.Id.at844.

2010 case note 541

Courtnotedthereviewingcourtdoesnotneedtofindtheagency’sinterpretationas the only permissible one, or even the interpretation the court would reachitself.45TheCourtfurtherexplainedthatambiguitywithinastatutemaybeeitherexplicit or implicit.46 Explicit ambiguity indicates Congress expressly grantedagencies authority to implement a regulation.47 Courts must grant deferenceto agencies regulating an explicit ambiguity,unless the regulation is “arbitrary,capricious,ormanifestlycontrarytothestatute.”48Ifthestatutecontainsimplicitauthority, a reasonable interpretation by an agency controls and a court maynotsubstituteitsowninterpretation.49Ifacourtfindstheagency’sconstructionpermissible,itmustgrantdeference.50

The underlying policies behind the ruling in Chevron included agencyexpertise,politicalaccountability,andcongressionalintent.51Chevroncommencedaneweraofcourts’evaluationsofambiguousstatutesinterpretedbyadministrativeagencies.52TheChevron era continues to evolve and erode as courts apply thedoctrine,asevidencedinEntergy Corp.53

PrIncIPaL case

In Entergy Corp. v. Riverkeeper, Inc., the United States Supreme CourtconsideredwhethertheEPAmayutilizeacost-benefitanalysisinpromulgatingrulesfor§316(b)oftheCWA.54TheEPA’sruleexcludedPhaseIIfacilitiesfromtherequirementofaclosed-cyclecoolingwatersystem.55TheCourtheldtheEPA

45 Id.at843n.11.

46 Id.at843–44.ContraLindaJellum,Chevron’s Demise: A Survey of Chevron from Infancy to Senescence,59admIn. L. reV. 725,779–80(2007)(arguingtheimplicitdelegationinChevronhasbeenlimitedbytheSupremeCourtinsubsequentdecisions).


48 Id.at844.

49 Id.

50 Id.

51 DavidM.Gossett,Comment,Chevron, Take Two: Deference to Revised Agency Interpretations of Statutes,64u. chI. L. reV. 681,688–89 (1997).But see JackM.Beermann,End the Failed Chevron Experiment Now: How Chevron Has Failed and Why It Can and Should Be Overruled,42conn. L. reV.779,795–809(2010)(arguingthepurposesbehindChevron arenotadequate);CassR.Sunstein,Law and Administration After Chevron,90coLum. L. reV. 2071,2074–75(1990)(callingChevronacounter-Marbury).

52 Gossett,supra note51,at688.

53 See generallyJellum,supranote46,at743–81(surveyingSupremeCourtcasesatsteponeoftheChevrondoctrine);KristineCordierKarnezis,Annotation,Construction and Application of “Chevron Deference” to Administrative Action by United States Supreme Court,3a.L.r. Fed. 2d 25 (2005) (providingasummaryofSupremeCourtcasesapplyingtheChevron doctrine).

54 EntergyCorp.v.Riverkeeper,Inc.,129S.Ct.1498,1505(2009).

55 Id. at 1504; see supra notes 18–23 and accompanying text (explaining the Phase IIregulation).


permissibly interpreted§316(b) to allow for theuseof a cost-benefit analysisunderthesecondstepoftheChevrondoctrine.56

Majority Opinion

JusticeScaliadeliveredthemajorityopinion,joinedbyChiefJusticeRobertsandJusticesKennedy,Thomas,andAlito.57ThemajorityinitiallyrecognizedthattheEPAdetermined§316(b)oftheCWApermittedthecomparisonofcostsandbenefits,andnotedthattheEPA’sinterpretationwouldbegranteddeferenceifitwasareasonableinterpretationofanambiguousstatute.58InapplyingtheChevrondoctrine, the majority addressed the second prong of reasonableness withoutfirst consideringwhether§316(b)of theCWAwas ambiguous.59Thedissentcriticizedthemajorityforfailingtoconsiderthefirststeppriortoconsideringthesecondstep.60Inresponse,themajoritystated,“ButsurelyifCongresshasdirectlyspokentoanissuethenanyagencyinterpretationcontradictingwhatCongresshassaidwouldbeunreasonable.”61

TodeterminethepermissibilityoftheEPA’sinterpretation,themajoritynextconsideredthetextof§316(b).62Section316(b),inrelevantpart,provides“anystandardestablished...shallrequirethatthelocation,design,construction,andcapacityofcoolingwaterintakestructuresreflectthe best technology available for minimizing adverse environmental impact.”63TheCourtlookedtothemeaningofthewords“best”and“minimizing.”64Themajoritydeterminedthemeaningof“best”includedefficienttechnologywiththelowestcostperunitofreduction.65ThemajorityalsofoundCongresshadintendedtousetheword“minimizing”as a term of degree and not necessarily as meaning the smallest amount.66Furthermore,theCourtstatedthatotherprovisionsoftheCWA,whichmandatedthesmallestamountofenvironmentalimpact,usedwordssuchas“elimination”


57 Id.at1501.

58 Id.at1505.

59 See id.at1505–10.

60 Id.at1518n.5(Stevens,J.,dissenting).

61 Id.at1505n.4(majorityopinion).

62 Id.at1505.

63 33U.S.C.§1326(b)(2006)(emphasisadded).

64 Entergy Corp.,129S.Ct.at1505–06.

65 Id.at1506.

66 Id.TheCourtcitedanotherprovisionintheCWAasanexample.Id.Theprovisionstates“drasticminimizationofpaperworkand interagencydecisionprocedures.” Id.TheCourtnotedif“minimize”meansthesmallestamountpossibleasrespondentsalleged,then“drastic”becomessuperfluous.Id.

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and“nodischargeofpollutants.”67Therefore, theCourtconcluded the textof§316(b)didnotexcludethecomparisonofcostsandbenefits,whichevidencedthereasonablenessoftheEPA’sinterpretation.68

The majority next compared § 316(b) of the CWA with other CWAstandards for controlling point sources to determine the reasonableness of theEPA’s interpretation.69The CWA provides factors for the EPA to consider inpromulgating rules for the other standards, but does not provide any factorsfor § 316(b).70The majority concluded the congressional silence in § 316(b)permittedcomparisonof thecostsandbenefits.71Otherwise, if theEPAcouldnotconsidercostsandbenefits,itcouldnotconsideranyotherrelevantfactors,which is completely illogical.72 As a result, the majority found the silence in§316(b)indicatedthereasonablenessoftheEPA’sinterpretation.73

ThemajorityalsoaddressedtheEPA’sactionsinterpretingandimplementing§316(b)oftheCWAoverthepastthirtyyears,whichallowedforthecomparisonofcostsandbenefits.74Themajorityfurtherstatedthateventheenvironmentalgroups,states,andpowerutilitiesrealizedsomeformofcost-benefitanalysis isnecessaryintheimplementationofthestandard.75Forallofthepreviouslystatedreasons,themajorityheldtheEPApermissiblyreliedonacost-benefitanalysisinpromulgating§316(b)understeptwooftheChevrondoctrine.76

Justice Breyer: Concurring in Part and Dissenting in Part

Justice Breyer agreed with the majority that the EPA’s interpretation of§316(b)waspermissibleunderChevronsteptwo.77JusticeBreyerconsideredthelegislativehistoryofthevariousCWAstandards,andconcluded§316(b)neither

67 Id.

68 Id.

69 Id.at1506–08(demarcatingtheotherCWAstandardsandconductingacomparisonoftheotherCWAstandardsand§316(b)).

70 Id.at1507(outliningfactorstheEPAmustconsiderinpromulgatingregulationsfortheother CWA standards and stating Congress did not list any factors for the EPA to consider inimplementing§316(b)).

71 Id.at1508.

72 Id.

73 Id.

74 Id. at 1509. The majority referred to several cases including Alaska Department of Environmental Conservation v. E.P.A.,540U.S.461,487(2004),andBarnhart v. Walton,535U.S.212,219–20(2002).

75 Entergy Corp.,129S.Ct. at1510.Theenvironmentalgroups,states,andpowerutilitiesobservedthestatutedidnotmandatetheEPAtoforcetheindustrytoprotectonefishforbillionsofdollars.Id.

76 Id.

77 Id.at1515(Breyer,J.,concurringinpartanddissentinginpart).


requires nor forbids the use of comparison of costs and benefits.78 However,hedeterminedCongress intended to restrict theEPA’suseof the analysis to astandardof“reasonable”underthecircumstances.79

Justice Breyer ultimately dissented from the majority’s holding because hebelievedthecaseshouldberemandedtotheEPAforconsiderationofitspermitvarianceundertherulesfor§316(b).80Undertherules,afacilitymaybegrantedapermitvarianceifitcanshowthecostsofinstallationare“significantlygreaterthan”thebenefits.81TheEPA’spriorstandardrequiredashowingofcosts“whollydisproportionate” to thebenefits.82SinceJusticeBreyerdidnot thinktheEPAadequatelyexplainedthenewstandard,hewouldremandforittodosoorapplythe“whollydisproportionate”standard.83

Dissenting Opinion

JusticeStevens,joinedbyJusticesSouterandGinsburg,issuedadissentingopinion.84 The dissent argued that Congress intended to prohibit the EPA’suse of a cost-benefit analysis in promulgating § 316(b) of the CWA.85 JusticeStevenscriticizedtheuseofacost-benefitanalysisbecauseittypicallyfindsthecostsoutweightheenvironmentalbenefits.86Forthisreason,thedissentarguedthat Congress clearly indicates when the EPA is permitted to utilize the cost-benefitmethod.87

ThedissentnextaddressedtheCWAstandardsandlegislativehistory.88ThedissentarguedCongressspecifiedintheotherCWAstandardswhethertheEPAwaspermittedtouseacost-benefitanalysisand§316(b)’ssilenceindicatedtheEPAmaynotuseacost-benefitanalysis.89Thedissentalsofoundit“puzzling”

78 Id.at1512–13.

79 Id.Astandardof“reasonableness”includesnotnecessarilyafulldrawncost-benefitanalysis,butonewhichdoestakeintoconsiderationthecostsofadecision.Id.at1514–15.

80 Id.at1515.

81 Id.

82 Id.

83 Id.at1515–16.

84 Id.at1516(Stevens,J.,dissenting).

85 Id.

86 Id.at1516–17.

87 Id.The Court relied on Whitman v. American Trucking Ass’ns, 531 U.S. 457, 467–69(2001)(findingthattheEPAcouldnotusecost-benefitanalysisinimplementingaCleanAirActregulationforasectionthatwassilentonthematter,whereothersectionsgavetheEPAauthoritytoconsidercosts).Entergy Corp.,129S.Ct.at1517–18(Stevens,J.,dissenting).

88 Id. at 1518–22; see id. at 1511 (majority opinion) (providing a table listing the otherCWAstandards).

89 Id. at1518–22(Stevens,J.,dissenting).

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themajorityskippedthefirststepofChevronandproceededtothesecondstep.90Consequently, thedissent found§316(b)unambiguousundersteponeof theChevrondoctrineandthattheEPAthereforeactedimpermissibly.91

anaLysIs

The United States Supreme Court should explicitly collapse the two-stepChevrondoctrineintoasingle-stepinquiry:“whethertheagency’sconstructionis permissible as a matter of statutory interpretation.”92 In Entergy Corp. v. Riverkeeper, Inc.,theSupremeCourtheldtheEPA’suseofacost-benefitanalysispermissibleunder§316(b)oftheCWA.93However,inreachingthisconclusion,theCourtfurtheredtheuncertaintythathasemergedinapplyingthetwostepsoftheChevrondoctrinetoagencies’interpretationofstatutes.94

Themajority’sanalysisinEntergy Corp.beganwithsteptwooftheChevrondoctrine by asking whether the EPA’s interpretation of § 316(b) of the CWAwaspermissible.95This appears mismatched with the traditionalChevron two-step.96The root of this issue is captured by the banter between the majorityand the dissent; the dissent was “puzzled” by the majority, which addressedthesecondstepof theChevrondoctrineprior to thefirst step.97 JusticeScalia’spoignantresponsenoted,“ButsurelyifCongresshasdirectlyspokentoanissuethenanyagency interpretationcontradictingwhatCongresshassaidwouldbeunreasonable.”98

90 Id.at1518n.5.

91 See id.at1520–21.



94 See infranotes146–53andaccompanyingtext(discussingtheinconsistencyoftheSupremeCourt’sapplicationoftheChevron doctrine).

95 See EntergyCorp.v.Riverkeeper,Inc.,129S.Ct.1498,1505(2009).TheCourtstatedtheEPA’sconstructionof§316(b)oftheCWA—allowingacomparisonofthecostsassociatedwiththetechnologyinrelationtotheenvironmentalbenefits—governed,solongas it isareasonableinterpretation,not even the only interpretationor the one the courtwould choose. Id. Section316(b) of the CWA mandates the EPA to “require that the location, design, construction, andcapacityofcoolingwaterintakestructuresreflectthe best technology available for minimizing adverse environmental impact.”33U.S.C.§1326(b)(1972)(emphasisadded).

96 Entergy Corp.,129S.Ct. at1518n.5(Stevens,J.,dissenting);see Chevron,U.S.A.,Inc.v.NaturalRes.Def.Council,Inc.,467U.S.837,842–43(1984)(providingstepone,thensteptwo).

97 Entergy Corp.,129S.Ct.at1518n.5(Stevens,J.,dissenting).

98 Id. at 1505 n.4 (majority opinion); see also supra notes 57–76 and accompanying text(discussingthemajority’sanalysis).


Two-Step or One-Step?

As a practical matter, the Chevron doctrine contains only one single step,nottwo.99Whenscrutinizedclosely,Chevron’stwostepsbegthesamequestion:“whether the agency’s construction is permissible as a matter of statutoryinterpretation.”100Courts’applicationsoftheChevrondoctrinedemonstratetheredundancyofthetwo-stepanalysisandthenecessitytoconsolidatethedoctrineintoasingle-stepinquiry.101

Step One Applied

In a court’s application of step one, the analysis of step two becomesunavoidably intermingled.102 The underlying purpose behind step one is todeterminewhether ambiguity exists in the statutory language.103The languagewithin statutes usually contains ambiguity, although it may vary in degree.104Noprecisemethodofanalysistodetermineambiguityexistsunderstepone.105Therefore, courts generally look to traditional tools of statutory construction,such as theplainmeaningof the text,dictionaries, and the statute’s structure,

99 Stephenson & Vermeule, supra note 1, at 597–98 (arguing Chevron’s two-step analysisshould be combined into a single inquiry); see Clark Byse, Judicial Review of Administrative Interpretation of Statutes: An Analysis of Chevron’s Step Two,2admIn. L.J. 255,256n.10(1988)(notingChevron’stwostepscouldbeconflatedintoone,because“iftheintentofCongressisclear,a nonconforming interpretation would necessarily be unreasonable”); Gary Lawson, Outcome, Procedure and Process: Agency Duties of Explanation for Legal Conclusions,48rutgers L. reV.313,344n.5(1996)(statingtheChevrontestmaybecombinedintoasinglestepwiththesameresultsasapplicationofthetwo-steptest);RonaldM.Levin,The Anatomy of Chevron: Step Two Reconsidered,72chI.-kent. L. reV.1253,1284(1997)(suggestingiftheissueiswhetheranagencydecisionconflictswithanunambiguousstatute,thecourtshouldnotusetwosteps,butaunifiedinquiryatstepone); see also JasonJ.Czarnezki,An Empirical Investigation of Judicial Decisionmaking, Statutory Interpretation, and the Chevron Doctrine in Environmental Law,79u. coLo. L. reV.767,809(2008)(citingexamplesofcasescombiningtheChevrondoctrineintoasinglestep);OrinS.Kerr,Shedding Light on Chevron: An Empirical Study of the ChevronDoctrine in the U.S. Court of Appeals,15yaLe J. on reg.1,30(1998) (finding in1995and1996,allof theU.S.CourtsofAppealsopinions applying theChevron doctrine combined the two steps into a single step twenty-eightpercentofthetime).

100 Stephenson&Vermeule,supranote1,at599;accordLawson,supranote99,at314n.5.

101 See infra notes 102–64 and accompanying text (discussing applications of the ChevrondoctrinebytheSupremeCourtandcourtsofappeals).

102 See Stephenson&Vermeule,supranote1,at599–600.

103 PIerce, supra note 8, § 3.6, at 169 (“A court’s task in applying step one is todetermine the existence, or nonexistence, of ambiguity in the relevant language of an agency-administeredstatute.”).

104 Id. § 3.1, at 137; see, e.g., Negusie v. Holder, 129 S. Ct. 1159, 1171 (2009) (Stevens,J., concurring in part and dissenting in part) (finding the majority of statutes have a degreeofambiguity).

105 Chevron,U.S.A.,Inc.v.NaturalRes.Def.Council,Inc.,467U.S.837,843n.9(1984)(directingcourtstouse“traditionaltoolsofstatutoryconstruction”todetermineCongress’sintent,butfailingtodefine“traditionaltoolsofstatutoryconstruction”).

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history,andpurpose.106Byemployingtraditionaltoolsofstatutoryconstruction,thecourtwillfindarangeofstatutorymeaningsintendedbyCongress.107Therangeofstatutorymeaningsincludesstatutoryinterpretationsthatthecourtwouldconsiderreasonable,andalsoincludesthecourt’spreferredinterpretation.108Thecourt will then determine if the statute is ambiguous by considering whetherthe agency’s interpretation falls within this range, which is step two of theanalysis—whether the agency’s construction of the statute is permissible.109 Ifthecourtfinds theagency’sconstructionwithin the range, itmustuphold theagency’sinterpretation.110Butifthecourtfindstheagency’sinterpretationoutsidethe range, then the agency’s interpretation conflicts with the clearly expressedCongressional intent.111Consequently,acourtcannotdecide steponewithoututilizingtheanalysisofsteptwo.112

Many of the Supreme Court’s opinions exemplify the redundancy of theChevrondoctrineatstepone.113Forexample,inMCI Telecommunications Corp. v. AT&T,theCourtdecidedtheFederalCommunicationsCommission(FCC)

106 See supra notes 36–42 and accompanying text (discussing the various methods courtsemploytoanalyzestepone).

107 Stephenson & Vermeule, supra note 1, at 601 (discussing the range of permissibleinterpretations determined by the court, which the statute allows). “Chevron supposes thatinterpretation is an exercise in identifying the statute’s range of reasonable interpretations,” notfinding only one single meaning. Id.; see also Beermann, supra note 51, at 817–18 (noting inChevron, the Court did not adhere to the “directly spoken to” language of Chevron’s first step,indicatingthereisnotonlyonesinglemeaning).

108 Stephenson & Vermeule, supra note 1, at 601 (discussing the range of permissibleinterpretationsdeterminedbythecourt,whichthestatuteallows); see Chevron,467U.S.at843n.11(findingtheagency’sconstructiondoesnothavetobetheonlypermissibleconstructionoreventheconstructionthecourtwouldreach).

109 Stephenson&Vermeule,supranote1,at601(notingthecourtmustupholdtheagency’sconstructionifitiswithintherangeofpermissibleinterpretations);PIerce, supranote8,§3.6,at169(“Thequestionforthecourt[atstepone]iswhethertheagency’sconstructionofthelanguageiswithintherangeofmeaningsthatcouldbeplausiblyattributedtotherelevantstatutorylanguage.”);see alsoChevron,467U.S.at843(providingthesecondstepoftheChevrondoctrine).


111 Id. If the agency’s interpretation falls outside of the range, it may also be considered astep-twodecision.Id.at601.Thecourtcouldfindambiguitywithinthestatuteandthenruletheagency’sinterpretationfallsoutsidetherange,thereforemakingitanimpermissibleinterpretation.Id.at601–02; see infranotes126–43andaccompanyingtext(discussingtheredundancyof theChevrondoctrineatsteptwo).

112 Stephenson&Vermeule,supranote1,at599–602.

113 CompareFood&DrugAdmin.v.Brown&WilliamsonTobaccoCorp.,529U.S.120,132–33(2000)(decidedatstepone),Nat’lCreditUnionAdmin.v.FirstNat’lBank&TrustCo.,522U.S.479,499–500(1998)(same),Sullivanv.Stroop,496U.S.478,482–83(1990)(same),andBd.ofGovernorsofFed.ReserveSys.v.DimensionFin.Corp.,474U.S.361,368(1986)(same), withWhitman v. Am.Trucking Ass’ns, 531 U.S. 457, 484–85 (2001) (decided at steptwo),andAT&TCorp.v.IowaUtils.Bd.,525U.S.366,392(1999)(same).ConfusionexistsastowhetherWhitmanisadecisiondecidedatsteponeorsteptwo.JeFFrey s. LuBBers, a guIde to FederaL agency ruLemakIng 499n.123(4thed.2006).


exceeded its authoritybydecidingallnondominant longdistancecarriersmayoptionallyfiletariffs.114Theissueinvolvedtheambiguityoftheterm“modify”undertheTelecommunicationsAct,whichgrantstheFCCtheabilityto“modify”therequirementsoftheAct.115TheFCCarguedtheterm“modify”included“abasic or important change in,” citing only Webster’s Third New International Dictionary.116 TheFCCconcludeditsdecisiontoallowthenondominant longdistancecarrierstooptionallyfiletariffsonly“modified”therequirements.117TheCourtlookedtonumerousdictionariestofindtheterm“modify”unambiguouswithonesinglemeaning—a“moderatechange.”118However,indeterminingthislackofambiguity,theCourtcomparedtheFCC’sinterpretationof“modify”—“abasic or important change in”—with the other dictionary definitions.119 As aresult, the Court blended the two steps by determining the ambiguity of theterm“modify” (stepone)byusing theFCC’s interpretation(partof step two’sreasonablenessanalysis).120

The Supreme Court also decided Immigration & Naturalization Service v. Cardoza-FonsecaatsteponeoftheChevrondoctrine.121UndertheImmigrationand Nationality Act, the Attorney General may grant asylum under § 243(h)if “it is more likely than not that the alien would be subject to persecution,”orunder§208(a) if thealienhasa“well-founded fear”ofpersecution.122TheImmigration andNaturalizationService (INS) in litigationheld§243(h) and§ 208(a) required the same standard of proof—more likely than not.123 TheSupremeCourtconsideredtheplainmeaningofthestatutorylanguage,founditdidnotcontainambiguity,andconcludedtheINS’sinterpretationofthestatutefailedtomeetsteponeofChevron.124Certainly,thedecisioncanalsobedeemedastep-tworeversal,becausetheSupremeCourtcouldhavefoundambiguityanddecided the INS’s interpretation of § 243(h) and § 208(a) was an impermis-sibleinterpretation.125

114 512U.S.218,234(1994); see Beermann, supranote51,at820(discussingMCI asanexampleoftheplainmeaningapproach).

115 MCI,512U.S.at225.

116 Id.at225–26.

117 Id.

118 Id.at227–28.

119 Id.at224–28.

120 SeeStephenson&Vermeule,supranote1,at599–600.

121 480U.S.421,430–32(1987).

122 Id.at423.

123 Id.at425.

124 Id. at 446–49.TheSupremeCourtnoted§208(a) allows for a subjective component,while§243(h)onlyallowsforanobjectivecomponent.Id.at431.

125 PIerce, supranote8,§3.6,at170(notingtheCourt’sdecisioninCardoza-FonsecacouldbeconsideredaChevronstep-tworeversalbecausetheINS’sinterpretationwasnotapermissibleconstructionofthestatute).

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Step Two Applied

Application of step two by courts further demonstrates the superfluity ofthe two steps.126 In applying step two, the agency’s constructionof the statutewillbedeemedimpermissibleifitclearlyconflictswiththestatutethathasbeendetermined in step one to be ambiguous on the matter at issue.127The courtwillcomparetheagency’sinterpretationwiththestatutorytexttofindwhethertheagency’sinterpretationdeservesdeference.128Asaresult,acourtonlyappliessteptwobyemployingstepone.129Therefore,JusticeScalia’sfootnotecorrectlynotediftheagency’sinterpretationconflictswithCongressionalintent,itmustbedeemedunreasonable.130

Entergy Corp.exemplifiesthefactthatapplyingsteptwoinherentlyincorporatesstepone.131ThemajorityheldtheEPA’sdecisiontouseacost-benefitanalysisfor§316(b)permissibleundersteptwooftheChevrondoctrine.132However,imagineiftheCourtfoundtheEPA’sinterpretationunreasonableorimpermissible.TheCourtwouldcomparetheagency’sinterpretationwithCongressionalintentandfind that the agency’s interpretation is excluded by Congressional intent andis therefore impermissible.133 In effect, this finding would show Congress didactually speak to and possess intentions regarding the precise issue at hand.134

126 Stephenson&Vermeule,supranote1,at600;see infra notes127–43andaccompanyingtext(demonstratingtheredundancyofsteptwowithstepone).

127 Stephenson&Vermeule,supranote1,at600;seeChevron,U.S.A.,Inc.v.NaturalRes.Def.Council,Inc.,467U.S.837,845(1984).

128 Stephenson & Vermeule, supra note 1, at 600; e.g., Holly Farms Corp. v. Nat’l LaborRelationsBd.,517U.S.392,401–05(1996)(evaluatingtheagency’sinterpretationwiththestatutorylanguage“onthefarm”todeterminewhethertheagency’sinterpretationwasreasonable);Babbittv.SweetHomeChapterofCmtys. foraGreatOr.,515U.S.687,697–703(1995)(comparinggenerally the agency’s interpretation with the Endangered Species Act); Good Samaritan Hosp.v.Shalala,508U.S.402,414–20(1993)(assessingthereasonablenessoftheagency’sdecisionbycomparingtheagency’sinterpretationwiththestatutorylanguage).


130 See id.at597–98.

131 SeeEntergyCorp.v.Riverkeeper,Inc.,129S.Ct.1498,1505–08(2009).

132 Id.at1510.

133 See Stephenson & Vermeule, supra note 1, at 599–600. In discussing Chevron, theUnitedStatesCourt ofAppeals for theEleventhCircuit noted, “[T]heremust be twoormorereasonablewaystointerpretthestatute,andtheregulationmustadoptoneofthoseways.Thosetworequirementsareobviouslyintertwined.”FriendsoftheEvergladesv.S.Fla.WaterMgmt.Dist.,570F.3d1210,1219(11thCir.2009).

134 Stephenson&Vermeule,supranote1,at600;see also SweetHomeChapterofCmtys.foraGreatOr.v.Babbitt,30F.3d190,193(D.C.Cir.1994)(findingsteponerequirestraditionaltoolsofstatutoryconstruction,whicharealsopertinenttosteptwo,concludingtheexactpointwhereanagencydecisionmaybeinvalidatedisunclearandnotingthattheChevronCourtneverspecifiedwhichstepitwasapplying).


Instead,theCourtcouldfindCongressdidspeaktotheissueandconsequentlyholdtheagency’sconstructioninconsistentwithsteponeratherthaninvalidatetheconstructionatsteptwo.135

Illustrating this principle, in 1999 the United States Supreme Court forthe first time found an agency’s interpretation impermissible under step twoinAT&T v. Iowa Utilities Board.136 TheFCCpromulgatedanorderundertheTelecommunications Act of 1996 requiring incumbent local exchange carrierstoopenaminimumofsevenoftheirnetworkelementstoothercarriers.137TheSupremeCourtfoundtheFCC’sorderneglectedtoconsiderseveralofthestatute’srequirements.138First,theFCCdidnotconsiderwhetheritwas“necessary”fortheothercarrierstoaccesstheincumbentcarriers’networks.139Second,theFCCfailedtoconsiderwhethertheothercarrierswouldbe“impaired”fromenteringthemarketwithoutaccesstotheincumbentcarriers’networks.140Consequently,theSupremeCourtfoundtheFCC’sinterpretationofthestatuteunreasonable,but did not cite Chevron.141The Court could have determined no ambiguityexistedwithinthestatutorylanguageandtheFCCfailedtofollowunambiguouscongressional intent, thus deciding the case at step one.142 Decisions renderedat the second step of Chevron exemplify that the two steps really beg thesamequestion.143

Importance of the One-Step Analysis

ExplicitstandardsforevaluatingeithersteponeorsteptwooftheChevrondoctrinedonotexist.Forstepone,Chevronurgescourtstousetraditionaltoolsofstatutoryconstruction,butdoesnotdelineatethetypesofdevicesthatconstitute


136 525U.S.366,392(1999).

137 Id.at387–88.TheprovisionoftheTelecommunicationActatissueinAT&T Corp. states:

In determining what network elements should be made available for purposes ofsubsection (c)(3) of this section, the Commission shall consider, at a minimum,whether—(A)accesstosuchnetworkelementsasareproprietaryinnatureisnecessary;and (B) the failure to provide access to such network elements would impair theabilityofthetelecommunicationscarrierseekingaccesstoprovidetheservicesthatitseekstooffer.

47U.S.C.§251(d)(2)(1994)(emphasisadded).

138 AT&T Corp.,525U.S.at387–88.

139 Id.at388–92.

140 Id.

141 Id. at 392. The Court does employ language similar to Chevron step two and manycommentatorsconsiderthisastep-twodecision.guIde,supranote40,at89n.138.


143 Id.at600.

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traditionaltoolsofstatutoryconstruction.144Moreimportantly,theCourtdoesnot specifically articulate a standard of permissibility—what is and is not apermissibleconstructionoftheambiguousstatute—forsteptwo.145

TheUnitedStatesSupremeCourtcontinuallyusesinconsistentandelusiveapplicationsoftheChevrondoctrineinreviewingcasesofstatutoryinterpretationbyagencies.146TheCourtappliestheChevrondoctrinewithvaryingforceandattimes ignores the doctrine completely.147 Additionally, the Court describes theChevrondoctrineindifferentandconflictingmanners.148

Generally,courtsfocusonsteponeoftheinquiryandseldominvalidatetheagency’s interpretation on step two.149 In particular, the Supreme Court only

144 guIde,supranote40,at57.

145 Levin,supranote99,at1260.ChevrondistinguishesbetweenexpressdelegationofauthoritygiventoanadministrativeagencybyCongressandinterpretativeauthoritynotexpresslygivenbyCongress.88C.J.S.Pub. Admin. Law & Procedure§220(2009).Courtsreviewexpressdelegationofauthoritytoanagencyunderthestandardofarbitrary,capricious,ormanifestlycontrarytothestatute.Id.; see also Chevron,467U.S.at843–44.Interpretativeorimplicitauthorityisatissueinthiscasenote,whileexpressdelegationofauthorityisnot.

146 PIerce, supranote8,§3.6,at175–89;Levin,supranote99,at1260;e.g.,UnitedStatesv.MeadCorp.,533U.S.218,229(2001)(notingChevrondeferenceisappropriatewhenCongressgrantedanagencythepowertomakearulecarryingtheforceoflaw);seeCzarnezki,supranote99,at774–76.Compare Dolev.UnitedSteelworkersofAm.,494U.S.26,42–43(1990)(refusingtograntChevrondeference),withid.at43–47(White,J.,dissenting)(disagreeingwiththemajorityandapplyingChevrondeference);compare Miss.Power&LightCo.v.Mississippi,487U.S.354,380–83 (1988) (applying the Chevron framework and granting deference), with id. at 386–90(Brennan,J.,dissenting)(decliningtoapplytheChevrondoctrine).But seeSmileyv.Citibank,517U.S.735,739–45(1996)(grantingdeferenceunderChevronbyallJustices).

147 PIerce, supranote8,§3.6,at175–89;e.g.,Nat’lCable&Telecomm.Serv.v.BrandXInternet Servs., 545 U.S. 967, 982–83 (2005) (holding only precedent clearly precluding theagency’sinterpretationwillpreventdeference);SolidWasteAgencyv.U.S.ArmyCorpsofEng’rs,531U.S.159,172–73(2001)(citingconstitutionalissuesasthereasonfornotapplyingChevrondeference);MaislinIndus.,U.S.,Inc.v.PrimarySteel,Inc.,497U.S.116,134–35(1990)(findingpreviousSupremeCourtprecedentoverridestheChevrondoctrine);seeSunstein,supranote27,at191(notingtheinitialinquiryofwhethertheChevron doctrineappliesis“Chevronstepzero”).See generallyThomasW.Merrill,Judicial Deference to Executive Precedent,101yaLe L.J. 969,980–85(1992)(surveyingSupremeCourtcasesinvolvingaquestionofdeference).

148 PIerce, supranote8,§3.6,at175–89;see Beermann,supranote51,at817–22(discussingthedifferentapproachestheCourtappliesatstepone);see also supranotes36–42andaccompanyingtext(addressingthevariousapproachestheSupremeCourthasusedonsteponeoftheChevrondoctrine).CompareChevron,U.S.A.,Inc.v.NaturalRes.Def.Council,Inc.,467U.S.837,842(1984)(findingthefirststepoftheChevronanalysisis“whetherCongresshasdirectlyspokentotheprecisequestionatissue”),withKMartCorp.v.Cartier,Inc.,486U.S.281,291–92(1988)(statingfirststepoftheChevrondoctrineusestheplainmeaningofthestatute)andNat’lCreditUnionAdmin.v.FirstNat’lBank&TrustCo.,522U.S.479,501–02(1998)(applyingthe“canonofconstructionthatsimilarlanguagecontainedwithinthesamesectionofastatutemustbeaccordedaconsistentmeaning”indeterminingambiguityunderstepone).

149 Czarnezki, supranote99,at775;Lawson, supranote99,at314; see, e.g.,UnitedStatesv.Geiser,527F.3d288,299(3dCir.2008)(findingtheterm“persecution”unambiguousatstep


twiceinvalidatedanagency’sconstructionofastatuterelyingsolelyonsteptwoofthedoctrine.150Sincesteponeinherentlyinvolvessteptwo,thepracticalityandefficacyofapplyingsteptwoasitsownindependentstepbecomesquestionable.151Inaddition, if theSupremeCourt continues tomakecriticaldecisions relyingsolelyonstepone,manywillbelievethecaseisoverwhentheCourtfinishestheanalysisofstepone.152Oftencourts’opinionsdecidedatsteponemaybewrittenasstep-twoopinions.153

The Supreme Court’s failure to provide guidelines for step two of theChevron doctrine has caused not only tremendous inconsistency within itsown jurisprudence,butalso for the lowercourtsapplying thedoctrine.154Twoapproachesdominatethesecondstepanalysisinthelowercourts,asnoestablishedcriteriaforpermissibilityexist.155First,somecourtsfindanagency’sinterpretation

one);Beckerv.Fed.ElectionComm’n,230F.3d381,390–97(1stCir.2000)(holdingtheFederalElectionCampaignActof1971ambiguousonwhetheritcoverscorporatedonationstononpartisandebates,butconcludingtheagency’sinterpretationwaspermissible);Mosquera-Perezv.I.N.S.,3F.3d553,555–59(1stCir.1993)(focusingonsteponeanddetermining§1253(h)(2)(B)oftheImmigrationandNationalityAct as ambiguous,butfinding the agency’s interpretationwasnotunreasonable, arbitrary, or capricious); CSXTransp. v. United States, 867 F.2d 1439, 1442–44(D.C.Cir.1989)(applyingsteponeandconcluding“anyrate”isunambiguous);Wyo.FarmBureauFed’nv.Babbitt,987F.Supp.1349,1371–72 (D.Wyo.1997) (finding ambiguity in the term“population”understeponeandfindingtheagency’sinterpretationaspermissibleundersteptwo).

150 Czarnezki, supra note 99, at 775. The two Supreme Court opinions are Whitman v. American Trucking Ass’ns,531U.S.457,485(2001),andAT&T Corp. v. Iowa Utilities Board,525U.S.366,392(1999).Czarnezki,supranote99, at775n.35.Priorto1997,theCourthadneversolelyusedsteptwotoinvalidateanaction.Levin,supranote99,at1261.

151 Levin, supra note 99, at 1262 (questioning whether step two of the Chevron doctrine“servesanyusefulpurpose”).

152 Id.(statinglitigantsandlowercourtsmaybelieveiftheCourtmovestosteptwotheyare“homefree”).CourtshaveappliedChevronwelloveronehundredtimes.PIerce,supranote8,§3.6,at168.Onlytwocaseshavebeendecidedsolelyatsteptwo.See LuBBers,supra note113,at499n.123.Asaresult,twooutofonehundredprovidesatwopercentchanceofbeingoverturnedsolelyatsteptwo.

153 Stephenson&Vermeule,supranote1,at600;Levin,supranote99,at1282–83;see supranotes118–30andaccompanyingtext(discussingtheMCIandCardoza-Fonsecastep-oneopinionsandhowtheSupremeCourtcouldhavedecidedthematsteptwo);e.g.,Saysanav.Gillen,590F.3d7,13–18(1stCir.2009)(findingstatutorylanguageunambiguousatstepone,butcontinuingtheanalysisandconcludingevenifthelanguagewereambiguous,theagency’sinterpretationwouldbeunreasonableatsteptwo).

154 SeeLawson,supranote99,at342.CompareStiverv.Meko,130F.3d574,577(3dCir.1997) (noting the distinction between implicit and explicit statutory gaps, finding the agency’sinterpretationasareasonableaccommodation,andthuspermissible),withNorthpointTech.,Ltd.v.F.C.C.,412F.3d145,151(D.C.Cir.2005)(statingapermissibleconstructionofastatuteusesthesameanalysisas thearbitrary,capricious,ormanifestlycontrarytothestatutestandard).See infra notes 154–64 and accompanying text (discussing the various approaches circuit courts ofappealsapplyatsteptwo).

155 guIde, supra note 40, at 86; Ronald M. Levin, A Blackletter Statement of Federal Administrative Law,54admIn. L. reV.1,38(2002).

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permissibleif it isreasonableandmayalsoconsiderwhethertheinterpretationharmonizes with the statute’s plain language, purpose, and origin.156 Second,othercourtswillonlyfindanagency’sinterpretationofastatuteimpermissibleifitisnotarbitraryorcapricious.157

Natural Resources Defense Council, Inc. v. EPA demonstrates the divisionamongthelowercourtsontheapproachtodeterminepermissibilityundersteptwo of the Chevron doctrine.158 In that case, the EPA promulgated a rule forstorm-water discharges, excluding the requirement of obtaining a permit forcertaindischargesofsediments.159ThemajorityopinionnotedthefailureoftheEPAtofollowitspreviousdecisionsinthearea.160Consequently,thecourtfoundtheEPA’snewrulearbitraryandcapriciousunderthesecondstepofChevron.161ThedissentcriticizedthemajorityforrelyingontheEPA’spriorapproachandinstead applied a reasoned analysis test.162The dissent argued the EPA gave areasonedexplanationforthechangeinitsrulingandthereforesatisfiedthesecond

156 88C.J.S.Pub. Admin. Law & Procedure§220(2009);e.g.,Pac.Nw.GeneratingCoop.v.Dep’tofEnergy,580F.3d792,806(9thCir.2009)(determiningareviewingcourtowesdeferencetoareasonableagencyinterpretationfillinganimplicitstatutorygapleftbyCongress);FortHoodBarbersAss’nv.Herman,137F.3d302,308(5thCir.1998)(findinganagency’s interpretationpermissibleifnotirrationalandreasonablyrelatedtothestatutorypurpose).

157 88C.J.S.Pub. Admin. Law & Procedure§220;e.g.,Riverkeeper,Inc.v.E.P.A.,358F.3d174,184(2dCir.2004)(determininganagency’sconstructionofastatuteisimpermissibleunderthesecondstepofChevronifitis“arbitrary,capricious,ormanifestlycontrarytothestatute”);N.Y.Pub.InterestResearchGroupv.Whitman,321F.3d316,324(2dCir.2003)(assertingwhenthequestion isabout the reasonablenessofanagency’saction, thearbitraryandcapricious standardapplies);Nat’lAss’nofRegulatoryUtil.Comm’rsv.I.C.C.,41F.3d721,726–27(D.C.Cir.1994)(“[T]he inquiryat thesecondstepofChevronoverlapsanalyticallywithacourt’s taskundertheAdministrativeProcedureAct(APA), . . . indeterminingwhetheragencyactionisarbitraryandcapricious(unreasonable).”);see MotorVehicleMfrs.Ass’nv.StateFarmMut.Auto.Ins.Co.,463U.S.29,43(1983)(findingacourtshouldconsiderthefollowingtodeterminewhetheranagency’sactionisarbitraryandcapricious:whethertheagencyusedfactorsCongressdidnotintendforittoconsider,theagencycompletelyfailedtoaddressanimportantpartoftheissue,theagencygaveanexplanationthatiscontrarytotheevidence,ortheaction“issoimplausiblethatitcouldnotbeascribedtoadifferenceinviewortheproductofagencyexpertise”);PIerce,supranote8,§3.6,at173–74(statingmanycircuitcourtsofappealsapplytheState Farmreasonablenessstandardforthesecondstep).

158 526F.3d591,602–11(9thCir.2008);see am. Bar ass’n, deVeLoPments In admInIstratIVe Law and reguLatory PractIce 2007–2008, at 94–96(JefferyS.Lubbersed.,2009)(discussingtheconfusionthatexistsbetweensteptwooftheChevron doctrineandarbitraryandcapriciousreviewinNatural Resources Defense Council, Inc. v. E.P.A.).

159 Natural Res. Def. Council,526F.3dat593–94.

160 Id.605–07.

161 Id.at606.

162 Id.at608–09(Callahan,J.,dissenting).


stepofChevron.163ThissplitdecisionshowstheconfusionthatexistsamonglowercourtswithsteptwooftheChevrondoctrineandthe“arbitraryandcapricious”reviewstandard.164

Insteadofclarifyingsteptwo,theCourtshouldeliminatethetwo-stepprocessandconsolidateitintoonesingleinquiry:“whethertheagency’sconstructionispermissibleasamatterof statutory interpretation.”165Aspreviously stated, theSupremeCourtandlowercourtspersistentlyapplydifferingstandardsforeachstepoftheChevronanalysis.166Judicialeconomyrequiresthedifferentcourtstoutilizethesamestandard;otherwise,courtsmayreachdifferingresultsonthesameissue.167Thesingle-step inquiryprovidestheframeworkforcourtstomaintainflexibilitywhileensuringastandardallcourtswillapplyconsistently.168

Furthermore,alloftheunderlyingpurposesbehindtheChevrondoctrine—agency expertise, political accountability, and congressional intent—remainwith the single-step inquiry.169 For example, in Entergy Corp., the Courtfurther advanced the purpose of political accountability by granting deferenceto the EPA’s interpretation of § 316(b) of the CWA.170 Under the one-stepanalysis, administrative agencies may still be held politically accountable fortheir controversial decisions and retain the flexibility to alter their regulatorydecisions.171Thus,whiletheuseofcost-benefitanalysisbyadministrativeagencies

163 Id.at609–11.

164 SeeguIde,supranote40,at86.

165 Stephenson&Vermeule,supranote1,at 600;seealsoLevin,supranote99,at1284.

166 See supranotes102–64andaccompanyingtext(discussingtheapplicationoftheChevrondoctrinebytheSupremeCourtandthecircuitcourtsofappeals).

167 PIerce, supranote8,§3.6,at175;seeAmandaPeters,The Meaning, Measure, and Misuse of Standards of Review,13LewIs & cLark L. reV.233,240–41(2009)(discussingjudicialeconomyinrelationtouniformstandardsofreviewforappellatecourts);supranotes102–64andaccompanyingtext(discussingtheapplicationoftheChevrondoctrinebytheSupremeCourtandthecircuitcourtsofappeals).

168 Stephenson&Vermeule,supranote1,at 604.

169 See id.at605–09; supranote51andaccompanyingtext(discussingtheunderlyingpurposesbehindtheChevrondoctrine).

170 SeeHarvardLawReviewAss’n,Clean Water Act: Judicial Review of Cost-Benefit Analysis,123harV. L. reV.342,351(2009).

171 See id.;Stephenson&Vermeule,supranote1,at608–09;AntoninScalia,Judicial Deference to Administrative Interpretations of Law,1989duke L.J.511,517–18(1989)(notingoneadvantageof the Chevron doctrine is an agency’s ability to change its decision compared to static judicialprecedent on statutory interpretation and another advantage is an agency experiences politicalaccountability throughpressureby theExecutive,Congress and its constituencies to interpret astatute“correctly”).

2010 case note 555

172 See HarvardLawReviewAss’n,supra note170, at342–52;EntergyCorp.v.Riverkeeper,Inc., 129S.Ct. 1498, 1510 (2009) (holding the EPA’s use of cost-benefit analysis permissible,but not requiring the EPA to use cost-benefit analysis). See generally Frank Ackerman & LisaHeinzerling,Pricing the Priceless: Cost-Benefit Analysis of Environmental Protection,150u. Pa. L. reV. 1553(2002)(advocatingagainsttheuseofcost-benefitanalysisinenvironmentalprotection);EricA.Posner,Controlling Agencies with Cost-Benefit Analysis: A Positive Politicacal Theory Perspective,68 u. chI. L. reV. 1137 (2001) (arguing in favor of administrative agencies employing cost-benefitanalysis).

173 See supranotes57–76andaccompanyingtext.


175 Stephenson & Vermeule, supra note 1, at 600; see supra notes 92–172 and accom-panyingtext.


177 Entergy Corp.,129S.Ct.at1505n.4.

remainscontroversial,theEPAmaybeheldpoliticallyaccountableandalteritsdecisiontouseacost-benefitanalysisintheregulationof§316(b)oftheCWAunderthesingle-stepinquiry.172

concLusIon

InEntergy Corp. v. Riverkeeper, Inc.,theUnitedStatesSupremeCourtheldtheEPA’suseofacost-benefitanalysis insettingstandardsfor§316(b)oftheCWApermissible.173Inreachingitsdecision,theCourtemployedthetwo-stepChevrondoctrine.174However,theCourt,ineffect,blurredthelinebetweenthetwostepstothepointwherethestepsencompassonlyonequestion:“whethertheagency’sconstructionispermissibleasamatterofstatutoryinterpretation.”175Thisdecisionstandsasaclearexampleoftheneedtocollapsethetwo-stepframeworkintoonesinglestep.176AsJusticeScaliastated,“ButsurelyifCongresshasdirectlyspokentoanissuethenanyagencyinterpretationcontradictingwhatCongresshassaidwouldbeunreasonable.”177


wyoming law revie law review/v10 n2/shanor.pdfriverkeeper, inc., 129 s. ct. 1498, 1506–07 (2009)...

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