Deference--Real Deference--To Agency Less Persuasive Interpretations and APA Review of Agency Discretion (5/4/23)

Yesterday, I spent about 5 hours going through The Papers of Professor Carl McFarland at the UVA Law School Special Collections, here. Professor McFarland was a major player in shaping the Administrative Procedure Act (“APA”), enacted in 1946. What I hoped to find in the long, very long legislative and related history of the APA about (i) the consideration of deference and (ii) the distinction between legislative rules and interpretive rules (called interpretative) in the APA. I found nothing directly addressing those issues in Carl McFarland’s papers, but I did get have an insight from those materials that may help in the deference analysis. I will post that insight below. (As an aside, while at UVA law in 1966 or 1967, I played the role of Professor McFarland in the law school’s annual Libel Show roasting professors.)

While at the UVA Law Library, I recalled that some law professors uploaded to HeinOnline extensive history (statutory, legislative, and otherwise) of the APA. That collection is The Bremer-Kovacs Collection: Historic Documents Related to the Administrative Procedure Act of 1946 (HeinOnline), here. That collection requires a subscription to HeinOnLine, but it can be accessed at many law schools. This is an exhaustive collection; let me repeat that, exhaustive). For discussion of this collection, see Emily S. Bremer and Kathryn E. Kovacs, Editors, Introduction to The Bremer-Kovacs Collection: Historic Documents Related to the Administrative Procedure Act of 1946 (HeinOnline 2021), 106 Minnesota Law Review Headnotes 218 (2022), here. Yesterday, while at the UVA Law Library, I accessed a lot of that history and downloaded key documents in pdf format that I will review for the topics I mentioned in the opening paragraph.

Now to the insight. The insight is that it is clear from the legislative history and the APA itself, that the APA does not affect an agency’s exercise of discretion within the scope of the discretion. APA § 706(2) does permit review for abuse of discretion. But within the scope of discretion, there is no court review.

Relating discretion to deference, as I have noted many times, when the agency reasonable interpretation is better than other reasonable interpretations in the zone of the ambiguity in the statute, a court applying the agency interpretation is not deferring to a less persuasive agency interpretation. Only when a court determines the better interpretation within the ambiguity and nevertheless applies a lesser agency interpretation does it actually defer. In the latter case, real deference (both Chevron and pre-Chevron deference during the long history of deference) may be said to create a zone of deference (or discretion) on a spectrum from reasonable (real deference at Chevron Step Two) to unreasonable (no deference at Chevron Step Two). (Actually, that may be better conceptualized as a binary choice of agency reasonable but not the most persuasive (real deference) and unreasonable (no deference). Unreasonable may be equated to abuse of discretion in the words of § 706(2).

That is the insight I wanted to share. I will now get into a more technical discussion of key statutory and legislative history from the original APA as enacted to current § 706(2). I suspect most readers will not be interested in this, but here it is.

As enacted, Section 10(e) provided

(e) SCOPE OF REVIEW.—So far as necessary to decision and where presented the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of any agency action. It shall (A) * * * (B) hold unlawful and set aside agency action, findings, and conclusions found to be (1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; * * *; ; (3) in excess of  statutory jurisdiction, authority, or limitations, or short of statutory  right; * * * *

The authoritative Attorney General’s Manual on the Administrative Procedure Act 94 (1947) citing parts of the legislative history, says:

Section 10 applies "Except so far as (1) statutes preclude judicial review or (2) agency action is by law committed to agency discretion". The intended result of the introductory clause of section 10 is to restate the existing law as to the area of reviewable agency action. House Hearings (1945) p. 38 (Sen. Doc. p. 84). 

APA § 10(e) was split into § 701(a)(2) and § 706(2) by the time the APA was enacted as positive law in 1966. Public Law 89-554, 80 Stat. 378, 392-393 here The two provisions are:

5 U.S. Code § 701 - Application; definitions
(a) This chapter applies, according to the provisions thereof, except to the extent that—
    (1) statutes preclude judicial review; or
    (2) agency action is committed to agency discretion by law.

5 U.S. Code § 706 - Scope of review
To the extent necessary to decision and when presented, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action. The reviewing court shall—

    (1) * * * *

    (2) hold unlawful and set aside agency action, findings, and conclusions found to be—
        (A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law * * * *
    (3) in excess of statutory jurisdiction, authority or limitations, or short of statutory right.

 You will note that the codified § 701 is the same as APA § 10(e) opening and § 706(2) & (3) are the verbatim same as APA § 10(B)(1) and (3).

So agency discretion was specifically excluded from the APA as enacted and as codified.

What about equipoise in statutory interpretation.

Agency discretion/deference and equipoise. In each of the scenarios above, the choices were binary-- either (1) a reasonable and persuasive agency interpretation at Step Two which is not deference or (2) a reasonable agency interpretation deferred to though less persuasive than another reasonable  interpretation. What if a court is in equipoise as to the better interpretations (one of which is the agency interpretation). If the court defers to the agency interpretations when in equipoise as to interpretations, the court is not deferring to a lesser agency interpretation. Perhaps tilting to the agency is not as offensive to the enemies of deference. Some pundits claim equipoise in legal interpretation is the only valid role for Chevron deference. Others claim that good judges do not experience (or rarely experience) equipoise, so if Chevron only applies in equipoise, it is not that material.