By Randolph J. May
Special to The National Law Journal
August 8, 2005

The Supreme Court's decision in the Brand X case, affirming the Federal Communications Commission's (FCC) classification of a cable operator's broadband Internet service as an information service, is the term's major communications law decision. The case means that broadband services likely will remain free from the common carrier-type rate and nondiscrimination regulation that attaches to telecommunications services.

But Brand X is also a major administrative law decision. The case amounts to a strong endorsement of so-called Chevron deference, with significant separation of powers implications. The landmark 1984 case of Chevron U.S.A. Inc. v. Natural Resources Defense Council held that if a statutory provision is ambiguous, and if the implementing agency's construction is reasonable, a federal court is required to accept the agency's statutory interpretation, even if it differs from one the court deems better.

Here's why Chevron assumed so much importance. Before the FCC reached its own determination as to the proper classification of broadband service, the 9th U.S. Circuit Court of Appeals already had decided in an earlier unrelated case that it constitutes "telecommunications" under the Telecommunications Act of 1996. When the appeal from the FCC's classification landed back in the 9th Circuit, the court refused to give any deference to the agency's ruling, declaring it was bound by the doctrine of stare decisis to adhere to its earlier precedent.

Wrong, said Justice Clarence Thomas, for the Brand X majority: "Before a judicial construction of a statute, whether contained in a precedent or not, may trump an agency's, the court must hold the statute unambiguously requires the court's construction." The court found that the 9th Circuit had not done so.

Normally, we are disposed to think judicial interpretations trump those of agencies. Justice Antonin Scalia is disposed to think that way as well, which is why he was so exercised in his Brand X dissent. He called Thomas' treatment of Chevron not only "bizarre" but a "breathtaking novelty: judicial decisions subject to reversal by Executive officers."

Scalia certainly mines a rich vein in our constitutional tradition. Recall that Chief Justice John Marshall's famous dictum in Marbury v. Madison, "[i]t is emphatically the province and duty of the judicial department to say what the law is," generally is understood as firmly establishing the role of independent judicial review under our tripartite constitutional structure. It is not surprising then to find that the Administrative Procedure Act provides that a reviewing court "shall decide all relevant questions of law, interpret . . . statutory provisions, and determine the meaning and applicability of the terms of agency action." Had not the 9th Circuit done precisely that?

What gives? Chevron deference is based on the premise that statutory ambiguities constitute implicit delegations of authority from Congress for agencies to fill in the gaps. The Chevron court explained that "an agency to which Congress has delegated policymaking responsibilities may . . . properly rely upon the incumbent administration's views of wise policy to inform its judgments." Even though agencies are not directly accountable to the people, "the Chief Executive is, and it is entirely appropriate for this political branch of Government to make such policy choices."

Notwithstanding Marshall's famous dictum and Scalia's barbs, Thomas' strong reaffirmation of Chevron deference generally makes sense, even though it means that an agency's statutory interpretation may trump an earlier judicial one, and that it may change its mind about a statute's meaning after its earlier interpretation has been judicially affirmed. If Congress disagrees with an agency interpretation, it can legislate unambiguously to set a different policy.

Executive v. independent

But there is another sense in which Brand X raises an interesting and perhaps significant separation of powers issue that neither Thomas nor Scalia address. The agency construing the statutory ambiguity in Chevron was the Environmental Protection Agency (EPA), part of the executive branch; hence, the court's reference to the political accountability of the chief executive and the incumbent administration's policy views. But, unlike the EPA, the FCC is a so-called "independent" regulatory agency not subject to the president's control.

If this is so, the rationale underlying Chevron perhaps should have less force when applied to the FCC. While it is true that the FCC is more politically accountable than the courts, it is arguably more accountable to Congress than to the president. Maybe that is sufficient to justify strong deference to the FCC's rulings. But it is at least worth considering whether the notion of independence claimed by the FCC is consistent with the the notion of political accountability which Chevron used to justify judicial deference to agency interpretations. Perhaps we owe that much to Marshall and the Administrative Procedure Act.

Randolph J. May, an NLJ columnist, is senior fellow at The Progress & Freedom Foundation in Washington. The views expressed are his own.

© 2005 The National Law Journal . All rights reserved. This article is reprinted with permission from The National Law Journal.