A Hispanic-Administrative Law Reading of Loper Bright

On Underdetermination and Administrative Discretion

We are happy to welcome back Professor José Ignacio Hernández to the New Digest. José is a Constitutional and Administrative Law Professor at Catholic University and Central University (Venezuela). He is also an invited Professor at PUCMM (Dominican Republic), Castilla La Mancha and La Coruña (Spain), and a Senior Associate at the Center for Strategical and International Studies.  

Like in The Adventure of Silver Blaze, the curious incident with Loper Bright is not what the Court said but what the Court did not say.  

The overruling of Chevron was not a surprise. It is unclear, though, what exactly the Court overruled because Chevron was described as "so indeterminate and sweeping". In any case, the overruling reasons coincided with the previous opinions of the Supreme Court that have considered that Congress must prevail in the decision-making process, that agencies are mere creatures of statute, and that statutes cannot include any broad delegation in areas of vast economic and social importance. In sum, as Loper Bright states, courts "must exercise their independent judgment in deciding whether an agency has acted within its statutory authority" because " agencies have no special competence in resolving statutory ambiguities. Courts do".  

However—and this is the curious incident—the Supreme Court did not say that any discretion authority vested by Congress is incompatible with judicial review under the primacy of Art. III. Quite the contrary, and as Adrian Vermeule suggests, the Court could have opened the way to another form of deference—the brand-new Loper Bright doctrine.  

Indeed, Loper Bright can be read based on the distinction between statutory ambiguity (the core of the now-defunct Chevron doctrine) and discretion authority.   

That distinction resembles a distinction between two critical institutions of Hispanic American Administrative Law, deeply studied by the Spanish jurist Eduardo García de Enterría and recently summarized by Luis Arroyo Jimenez: the undetermined legal concept and administrative discretion.   

Since the emergence of the welfare state during the 20th century, legislation approved by Congress has used undetermined concepts, particularly of a technical or economic nature. The classic example is the law that authorizes the public administration to act when a building is in ruin without defining what "ruin" is. The Italian doctrine studies those cases as technical discretion. Still, in Spain, they are analyzed as legal concepts underdetermined by the law that the public administration could determine through technical or scientific activity. Therefore, with its expertise, the public administration will conclude whether a building is ruined.  

When dealing with undetermined or vague legal concepts, the only valid solution is to determine whether a building is in ruins. Vague legal concepts do not allow for discretion, meaning the judiciary can review its interpretation without limitations. However, some countries acknowledge that even though vague legal concepts do not imply discretionary power, the technical interpretations made by the public administration should be given weight based on their technical expertise unless there are clear signs of abuse or excessive use of power. 

On the contrary, the law can vest discretionary powers that allow the public administration to interpret and define the public interest case by case. According to García de Enterría, in those situations, there are several possible solutions, and, as a result, judicial review cannot substitute judicial judgment in place of the policy decision vested exclusively in the public administration. However, courts can review the procedural and substantive conditions set by the law, and, more importantly, they can control the arbitrariness of the public administration. The judicial review over arbitrariness, as Brewer-Carías concludes, is based on general principles of law that are determined (determinatio) from the juridical order.  

That distinction can be used to read Loper Bright more systematically.  

According to the new doctrine, courts should exert a de novo review in case of statutory ambiguities because "ambiguity is not a delegation to anybody, and a court is not somehow relieved of its obligation to independently interpret the statute” (at 22). The term “statutory ambiguity” could be interpreted similarly to the "undetermined legal concepts", meaning that using vague or ambiguous concepts in the statute does not confer discretionary powers and, consequently, does not result in any deferential review. That is the exact point that justified overriding Chevron because the precedent granted a deferential review over permissible interpretations of ambiguous statutes. As explained, some Hispanic countries accept that although vague concepts do not grant any discretionary power, their implementation by the public administration should be presumed valid because of the technical capability needed to apply those concepts. On the contrary, other countries deny any deferential review, considering that courts have the technical expertise to review vague concepts.  

But Loper Bright also accepts that Congress can confer discretionary authority on agencies subject to constitutional limits. In that case, courts should “stay out of discretionary policymaking”, which does not mean absolute immunity from judicial review. On the contrary, courts must “fulfill their obligations under the APA to identify and respect such delegations of authority independently, police the outer statutory boundaries of those delegations, and ensure that agencies exercise their discretion consistent with the APA” (at 26).  

Discretionary authority is like administrative discretion in Hispanic American Law, per García de Enterría´s principle. It allows for multiple possible solutions based on discretionary powers, and judicial review cannot replace the policy selection of those options. However, certain elements must be reviewed, especially concerning the validity conditions established in the Administrative Procedure Act (APA). Notably, courts can oversee arbitrariness. Loper Bright can be interpreted within this context: "When the best interpretation of a statute is that it delegates discretionary authority to an agency, the role of the reviewing court under the APA is, as always, to independently interpret the statute and carry out the will of Congress within constitutional limits". The judicial review of discretionary authority relies heavily on the Court´s power to deem unlawful and set aside agency action, findings, and conclusions deemed arbitrary, capricious, or abuse of discretion.  

The comparative approach to Loper Bright, based on Hispanic American Law, could help distinguish two solutions. The interpretation of statutes by the agencies is subject to a de novo review when the statute uses ambiguous, vague, or undetermined legal concepts. Still, when the statute grants discretionary authority, the separation of powers demands a deferential review. Judicial review's most important role is determining if the statute's discretionary interpretation is arbitrary but without invading policy space.  

Regrettably, Loper Birght did not elaborate on this vital assertion, which prevented it from solving the deference problem. Judicial review regarding discretionary authority is deferential because courts should "stay out of discretionary policymaking." That does not mean judicial review is banned: a deferential approach is a judicial review under Art. III of the Constitution. However, the new doctrine remains silent about how judicial review could fill the gap that results in granting discretional authority by statutes.  

To fill that gap, courts should apply what Sunstein and Vermeule call the morality principles, which, from a comparative perspective, resembles the general principles of law of the Hispanic American Law, as I have explained. The judicial review over arbitrariness, under Section 706, must rely on general principles of law. That is how, in Hispanic American Administrative Law, the judicial review over administrative discretion is exercised: applying general principles that fill the gap between the administrative action and the statute.  

The U.S. Administrative Law should move from lex to the jus to achieve that objective. The "agencies as creatures of the statute" resemble an administrative action whose contents will depend on delegations by the statute (lex). However, that approach does not work regarding discretionary authority. The only way to ensure a judicial review is to recognize that beyond the statute (lex), the rule of law also embodies general principles of law (jus). 

*** 

Almost fifty years ago, Eduardo García de Enterría concluded that the evolution of the U.S. administrative law should lead to: 

“recognize that the Administration (and even more, an Administration with vast welfare tasks to provide essential assistance to its population) necessarily requires administrative powers with a margin of deference from the judiciary.” 

A pending issue still impedes the U.S. from evolving in that direction. No constitutional interpretation of administrative law recognizes that agencies "require administrative powers with a margin of deference from the judiciary."