Ambiguous Statutes and Judicial Deference To Federal Agencies
| Author | John R. Wright |
| Date | 01 April 2010 |
| Published date | 01 April 2010 |
| DOI | 10.1177/0951629809359035 |
| Subject Matter | Articles |
AMBIGUOUS STATUTES AND JUDICIAL DEFERENCE
TO FEDERAL AGENCIES
John R. Wright
ABSTRACT
The Supreme Court’s Chevron decision raises questions about why Congress
passes ambiguous statutes and why courts defer to agencies rather than impose
their own interpretations. This article presents a model of policymaking where the
legislature chooses strategically between an ambiguous and explicit statute, and
where rulemaking and judicial review follow. The analysis reveals that when sta-
tutes are ambiguous, judges gain few policy advantages by deciding strategically
on the basis of their policy preferences as opposed to simply following Chevron
precedent. The results shows that legislative policy entrepreneurs can frequently
advance their policy interests more successfully with ambiguous than with explicit
language.
KEY WORDS .agencies .American politics .congress .courts
Introduction
Administrative agencies often conduct rulemaking under ambiguous instructions
from Congress. Electric utility rates must be ‘just and reasonable’ (16 U.S.C.
§824d), the regulation of contaminants in drinking water must allow for an ‘ade-
quate margin of safety’ (42 U.S.C. §300g-1), and harmful additives in food pro-
ducts shall be regulated to the extent ‘necessary for the protection of public
health’ (21 U.S.C. §346). These and other instances of ambiguous statutes
appear to shift lawmaking authority from Congress to administrative agencies.
U.S. Supreme Court made clear that ambiguous statutes give agencies virtually
unlimited policymaking authority, and that courts must defer to agencies’ deci-
sions unless those decisions are arbitrary or capricious.
Chevron ostensibly reduces judicial scrutiny of administrative decisions
when statutes are ambiguous, yet judicial review of agency rulemaking is recog-
nized as an important constraint on agency decisions, and more generally, as the
primary means of judicial influence in the policy process (Ferejohn and Shipan,
1989; Shipan, 1997, 2000; Rogers, 2001). Without judicial review, agencies can
Journal of Theoretical Politics 22(2): 217–245 ÓThe Author(s), 2010.
DOI: 10.1177/0951629809359035 Reprints and permissions:
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more easily move policy away from the original legislative bargain. Hence,
Eskridge and Ferejohn (1991: 187) argue that the Supreme Court, by urging
reviewing courts to defer to agencies in Chevron, ‘shirked its obligation to
maintain the constitutional balance among the branches’. Why, then, should fed-
eral courts defer to agency decisions when statutes are ambiguous? And why, if
courts allow agencies to do mostly as they please when legislation is ambiguous,
does Congress pass ambiguous statutes?
I address these questions within a modeling framework where ambiguous sta-
tutes arise endogenously through the strategic interactions of Congress, courts,
and agencies. The analysis identifies a set of conditions where a legislature’s
choice of an ambiguous statute, an agency’s choice of a rule, and a court’s deci-
sion to defer to the agency are optimal choices for the legislature, agency, and
court. I simulate the equilibrium predictions of the model to obtain estimates of
the extent to which equilibrium policy outcomes deviate from agencies’ ideal
policies under ambiguous statutes. The analysis reveals that, when actors are
risk-averse and the position of the legislative median is unknown, judicial defer-
ence to agency rulemaking is generally an optimal policy response to statutory
ambiguity.
Existing models of legislative delegation and agency rulemaking assume
that agencies have precise knowledge of legislative policy intentions when
they promulgate rules, and that legislative policy preferences can be repre-
sented as explicit points on a policy continuum. Thus, when an agency writes
a rule to implement policy, the legislature’s policy ideal point constrains the
location of the final policy outcome. I depart from this traditional framework
here. I conceptualize ambiguous statutes as those where the legislature’s pol-
icy preference is not revealed in the legislative process, so that there is no
explicit point or set of points on a policy continuum to constrain the agency’s
choice of a rule. I suggest that statutory ambiguity can arise when legislators
do not have well-defined policy preferences, and I consider the possibility
that rational legislators intentionally construct ambiguous statutes in order to
obtain more favorable policy outcomes than what might occur under explicit
legislative language, where the legislature’s preferred policy is fully
revealed.
The remainder of the article proceeds in three parts. First is a discussion of
the concepts of ambiguity and delegation and how they have been modeled in
the existing scholarship on legislative–agency–judicial interactions. The formal
model is presented next, followed by the analysis and results.
Ambiguity, Delegation, and Judicial Deference
The significance of ambiguous statutes in the policymaking process was clearly
acknowledged in the U.S. Supreme Court’s opinion in Chevron U.S.A. vNatural
218 JOURNAL OF THEORETICAL POLITICS 22(2)
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