Good summary of Chevron (8/30/17)

In Sinclair Wyoming Refining Co. v. EPA, 2017 U.S. App. LEXIS 15192 (10th Cir. 2017), here, a nontax case, Chief Judge Tymkovich offers the following general discussion of Chevron.  This discussion does not require changes to the Federal Tax Procedure Editions, but it is a good summary so I offer it here.

When a court reviews an agency's legal determination, it generally applies the analysis set out by the Supreme Court in Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984). Under Chevron, reviewing courts apply a two-step analysis. Chevron step one asks "whether Congress has directly spoken to the precise question at issue." Id. at 842-43. If Congress's intent is clear, then both the court and the agency "must give effect to the unambiguously expressed intent of Congress." Id. at 843. Courts determine Congress's intent by employing the traditional tools of statutory interpretation, beginning—as always—with an examination of the statute's text. See New Mexico v. Dep't of Interior, 854 F.3d 1207, 1223-24 (10th Cir. 2017). But, if Congress has "not directly addressed the precise question at issue"—if "the statute is silent or ambiguous with respect to the specific issue"—the court must determine at Chevron step two "whether the agency's answer is based on a permissible construction of the statute." Chevron, 467 U.S. at 843-44. 

In some circumstances, however, a court never reaches the Chevron analysis. In such cases, we do not need to answer the step one or step two questions. As the Supreme Court explained in United States v. Mead Corp., 533 U.S. 218, 121 S. Ct. 2164, 150 L. Ed. 2d 292 (2001), the initial step of the Chevron inquiry is actually to determine whether Chevron should apply at all. See Cass R. Sunstein, Chevron Step Zero, 92 Va. L. Rev. 187, 247 (2006) (conceptualizing the inquiry of whether Chevron applies as "Chevron step zero"); see also Gutierrez-Brizuela v. Lynch, 834 F.3d. 1142, 1157 (10th Cir. 2016) (Gorsuch, J., concurring) (discussing the step zero inquiry and the confusion created by Mead). n3
   n3 We note that neither party discussed the Supreme Court's decision in City of Arlington v. Federal Communications Commission, 569 U.S. 290, 133 S. Ct. 1863, 185 L. Ed. 2d 941 (2013), in their supplemental briefs. We have not previously addressed the effect—if any—City of Arlington might have on our application of the Mead inquiry. But we do note that Justice Scalia, writing for the majority in City of Arlington, reaffirmed that courts must determine whether Chevron or Mead controls at step zero. See 133 S. Ct. at 1874 ("The dissent is correct that United States v. Mead requires that, for Chevron deference to apply, the agency must have received congressional authority to determine the particular matter at issue in the particular manner adopted. No one disputes that." (emphasis added)).

In Mead, the Court held that Chevron applies only where "it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority." Mead, 533 U.S. at 226-27. This context-driven determination requires us to examine the method by which the agency exercised its delegated authority. Mead instructs: "It is fair to assume generally that Congress contemplates administrative action with the effect of law when it provides for a relatively formal administrative procedure tending to foster the fairness and deliberation that should underlie a pronouncement of such force." Id. at 229-30. Mead thus created, in effect, a "safe harbor of Chevron deference" for agency interpretations produced via formal agency action—formal rulemaking or adjudication—and those produced via informal notice-and-comment rulemaking. Charles H. Koch, Jr. & Richard Murphy, 3 Admin. L. & Prac. § 10:12 (Feb. 2017 update); see also Richard J. Pierce, Jr., Administrative Law Treatise, § 3.5 (2010) ("After Mead, it is possible to know only that legislative rules and formal adjudications are always entitled to Chevron deference, while less formal pronouncements like interpretative rules and informal adjudications may or may not be entitled to Chevron deference."). 

In situations where Chevron does not apply, Mead requires us to examine the persuasiveness of agency action with no thumb on the scale of judicial deference. As Mead explained, we follow the analysis set forth in Skidmore v. Swift & Co., 323 U.S. 134, 65 S. Ct. 161, 89 L. Ed. 124 (1944). In that case, the Court explained that the weight courts provide an administrative judgment "will depend upon the thoroughness evident in [the agency's] 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. 

Following Mead, the Court examined agency action that was less formal than notice-and-comment rulemaking when it reviewed an opinion letter issued by the Social Security Administration. See Barnhart v. Walton, 535 U.S. 212, 221-22, 122 S. Ct. 1265, 152 L. Ed. 2d 330 (2002). It found that such informal agency action "does not automatically deprive that interpretation of the judicial deference otherwise its due," but rather, whether courts provide Chevron deference "depends in significant part upon the interpretive method used and the nature of the question at issue." Id. The factors the Court considered included the interstitial nature of the legal question, the related expertise of the agency, the importance of the question to administration of the statute, the complexity of that administration, and the careful consideration the agency had given the question over a long period of time. Id. at 222.