Supreme Court Upholds Chevron Deference to Agencies

On May 20, 2013, the Supreme Court, in a 6-3 decision, reaffirmed the amount of deference that courts must give to an agency's interpretation of a governing statute. Specifically, in City of Arlington v. FCC, the Court held that courts must apply Chevron deference to an agency's interpretation of an ambiguous statutory provision concerning the scope of the agency's jurisdictional authority.[1] As a result, companies and industry associations wishing to challenge agency action will continue to face substantial hurdles where, as is often the case, the meaning and scope of a statutory provision are at issue.

The Supreme Court's watershed decision in Chevron set forth the now familiar legal test for determining whether a court should grant deference to an agency's interpretation of a statute that it administers.[2] Under Chevron's two-step test, a court must first determine whether Congress has directly spoken on the question at issue. If the intent of Congress is clear, that is the end of the matter. However, if the statute is silent or ambiguous, the court must decide whether the agency's interpretation of a given provision is based on a permissible construction of the statute. As Justice Scalia points out in his majority opinion in City of Arlington, the "Chevron [doctrine] thus provides a stable background rule against which Congress can legislate: Statutory ambiguities will be resolved, within the bounds of reasonable interpretation, not by the courts but by the administering agency."

The question before the Court in City of Arlington was whether such deference applies to an interpretation of an ambiguous statutory provision that would determine the scope of an agency's authority or power to act. The statute at issue in the case was The Communications Act of 1934 ("the Act"), which requires state and local governments to respond to siting applications for wireless telecommunication facilities, such as towers and antennas, within a "reasonable period of time after the request is duly filed." In 2008, the Federal Communications Commission ("FCC"), acting on a petition submitted by the wireless service industry, determined that a "reasonable time" is 90 days for attachments to current buildings and 150 days for attachments to new structures. Several Texas municipalities appealed that FCC ruling, arguing that the agency did not have the authority to interpret the scope of its own jurisdiction under the Act, in this case by ostensibly limiting the power of state and local governments. The U.S. Court of Appeals for the Fifth Circuit deferred to the FCC under Chevron and upheld the agency interpretation. The Supreme Court then affirmed.

In the majority opinion, Justice Scalia addresses head-on the argument that there are two, distinct classes of agency interpretations—one going to the agency's jurisdiction under the statute and the other concerning an agency's exercise of authority where its jurisdiction to act is not in question. The majority rejects the notion put forth by the dissent that, because agencies do not have the power to act unless Congress grants them authority, courts should not give agency interpretations of ambiguous jurisdictional provisions any deference under Chevron. Justice Scalia characterizes this distinction between jurisdictional and non-jurisdictional interpretations as a "mirage," stating, "there is no difference, insofar as the validity of agency action is concerned, between an agency's exceeding the scope of its authority (its "jurisdiction") and its exceeding authorized application of authority that it unquestionably has." The majority concludes that trying to distinguish whether or not a statutory provision is jurisdictional would lead to numerous interpretations throughout the federal courts. According to Justice Scalia, the real question is simply "whether the agency has stayed within the bounds of its statutory authority," regardless of whether that interpretation is characterized as jurisdictional or not.