Saturday, May 6, 2017

The Separation of Powers Restoration Act and Workers’ Compensation

The interesting aspect of some Federal law dramas playing out this spring is that they are likely to have impact on State law, though one is not quite sure how. Take the issue of judicial review of administrative agencies. This is a topic of interest to workers’ compensation lawyers because nearly all contested workers’ compensation cases are initially decided by administrative agencies. Administrative agencies make factual findings in adjudicated cases and apply the facts they find to existing law. When law on a particular subject is ambiguous, as the agency is attempting to apply law to facts it must also interpret the law in question. The degree to which courts, in the course of appeals of agency decisions, should recognize these agency “statutory interpretations” has been a matter of ongoing debate. Some commentators (and courts) hold that courts should “defer” to agency interpretations; some hold that such interpretations should merely be “respected,” a weak form of deference. Others contend that courts should be exclusively responsible for engaging in statutory interpretation, deeming any deference to agencies to be a form of (unconstitutional?) judicial abdication.

In January, the U.S. House of Representatives passed a Bill—the Separation of Powers Restoration Act of 2017, docketed in the Senate in March, but not yet acted upon by that body—that would abolish the deference standard applied by federal courts since the 1980s, so called Chevron deference as set forth in the Supreme Court’s famous Chevron opinion. Chevron directs courts to uphold agency interpretations of their “organic” statutes where 1) a statutory ambiguity in fact exists; and 2) the interpretation is “reasonable.” The language of the House Bill——states that courts, when reviewing agency action under Administrative Procedure Act, shall:

“. . . decide de novo all relevant questions of law, including the interpretation of constitutional and statutory provisions, and rules made by agencies. Notwithstanding any other provision of law, this subsection shall apply in any action for judicial review of agency action authorized under any provision of law. No law may exempt any such civil action from the application of this section except by specific reference to this section.”

In a nutshell, this provision would abolish both Chevron deference and the Auer/Seminole Rock line of cases by which courts afford deference to administrative agencies’ interpretations of their own rules. Should the Bill become law, Congress will have shifted power from the executive branch to the judiciary, a separation of powers determination that Congress is probably at liberty to make, but one that may lead to surprising results depending on the particular reviewing court and the agency action (or inaction) under consideration.

In any event, the States are obviously not bound by Federal separation of powers rules. In a 2014 article, Professor Aaron Saiger of the Fordham University School of Law contended that only a single state—Maine—followed Chevron more or less verbatim. As Professor Saiger’s review of prior surveys of state application of Chevron-like standards revealed, some states’ courts seem to defer to agency statutory interpretations strongly, some weakly, and some not at all. Nevertheless, Chevron has been generally contentious because of its implicit underwriting of the administrative state. And just as cases like Universal Camera and Overton Park introduced a “movement” of judicial insistence that agencies take a “hard look” at facts, the House Separation of Powers Act suggests a broader policy retreat from the concept of affording deferential review to agency statutory interpretations. For workers’ compensation practitioners and policy makers the bottom-line question is whether you would prefer that statutory ambiguities be resolved in the short term by administrative agencies or courts. I suspect that is not an easy question for most readers to answer.    

Michael C. Duff

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