Seminole Rock and the Separation of Powers
Kovvali, Aneil, Harvard Journal of Law & Public Policy
Under the longstanding precedent of Bowles v. Seminole Rock & Sand Co., (1) a court will defer to an agency's interpretation of its own regulation unless that interpretation "is plainly erroneous or inconsistent with the regulation." (2) The Supreme Court reaffirmed this principle in Auer v. Robbins, (3) and has confidently applied it ever since. (4)
But Seminole Rock deference has also faced significant criticism. In one critique, Professor John Manning argues that Seminole Rock creates perverse incentives by unifying the powers of lawmaking and law-exposition. (5) According to Manning, this characteristic distinguishes Seminole Rock deference from its more famous cousin, Chevron deference. (6) Chevron respects the basic constitutional structure by maintaining the separation between "lawmaking" and "law-exposition." (7) Under Chevron, Congress makes the laws that the executive agency interprets. (8) Under Seminole Rock, the agency itself writes the rules that the agency interprets. (9) By erasing the separation between lawmaking and law-exposition, Seminole Rock creates bad incentives: an agency can grant itself power and flexibility by promulgating vague rules. (10)
In this Note, I contend that separation of powers arguments have a limited domain: only some statutes allow an agency to unify the powers of lawmaking and law-exposition. Many statutes already lay out the substantive basis for agency action. When agencies act under such statutes--whether by rulemaking or otherwise--they are interpreting the law, not creating new obligations.
This clarification has important implications. First, separation of powers arguments have been gaining traction. Justice Scalia, the author of Auer and a once-staunch defender of Seminole Rock deference, (11) recently confessed doubts about Seminole Rock's validity in an opinion drawn from Manning and Montesquieu. (12) If proponents of this view are successful in abolishing Seminole Rock deference, interpretive authority will inevitably shift away from agencies and toward courts.
Second, the discussion sheds light on the broader methodological question of whether constitutional values or congressional intent serves as a better organizing principle for deference doctrine. Professor Manning seeks to derive values from the Constitution and to apply them in a distinctive context. Certain aspects of this program are surely beyond reproach. Judges would be well-advised to draw upon the many wise policy decisions incorporated into the Constitution; unlike academic articles or legislative history, the document is also an unquestionably legitimate external source of guidance. But the lessons of the Constitution are not always clear, and never self-applying. Correctly understood, the separation of powers argument does not support a total rejection of Seminole Rock. Instead, this argument counsels in favor of a new and more careful inquiry into the structure of the particular statutory scheme at issue. Thus, constitutional values may be a less useful organizing principle for this area of the law than a search for congressional intent.
I. NOT ALL RULEMAKING IS "LAWMAKING"
The process of agency adjudication is based on the executive and judicial models of decisionmaking. The notice-and-comment rulemaking process is based on a legislative model. But despite their beguiling forms, the mechanism that the agency uses to make decisions is imperfect evidence of the true nature of the power that the agency is exercising. When an agency engages in rulemaking, it is not necessarily exercising lawmaking power, in the sense of creating new substantive duties for individuals outside the agency. New rules do not always create new opportunities for regulated entities to get into trouble. Indeed, many rules actually reduce the potential for trouble by clarifying existing, vague duties imposed by statute.
Consider the National Labor Relations Board's (NLRB's) reluctance to promulgate rules. …