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Stephenson, Matthew

Interest group pluralism presumes that public policy outcomes are determined principally through a contest for influence among organized pressure groups. Most interest groups, however, do not represent themselves in this process. Rather, they rely on professional lobbyists for representation, information, and advice. These lobbyists are agents with their own interests, and these interests may not align perfectly with those of their clients. This essay outlines this principal-agent problem and sketches its possible implications for policy outcomes. In particular, we hypothesize that the lobbyist-client agency problem may bias policy in favor of small homogeneous groups, may exacerbate status quo bias and lead to excessive attention to symbolic issues, may promote expansive delegations to administrative agencies, and may impede systematic reforms to the policy-making process.

This Article explores how the separation of powers affects voters’ electoral strategies, and how this interaction influences the performance of different institutional arrangements. We show that when one political agent, such as the President, acts unilaterally, voters are likely to respond asymmetrically to policy successes and failures in order to offset the risk that the President may be biased or “captured” by special interest groups. When political agents act in concert — such as when the President seeks congressional authorization for a policy initiative — voters prefer a more refined strategy, with less acute asymmetries between political rewards and punishments. Our analysis has positive and normative implications. First, it suggests that presidents do not always prefer to operate with as little congressional interference as possible. Second, it provides a rationalist account for “responsibility shifting” by elected officials — behavior that is usually thought to derive from voter confusion or irrationality. Third, it suggests that separation of powers does not necessarily induce “gridlock” or otherwise reduce the likelihood of policy change. Fourth, it suggests that although separation of powers enhances the efficacy of the electoral constraint on politicians, voter welfare is higher when separation of powers is “optional” rather than mandatory, as when the President may seek congressional authorization for policy initiatives but is not required to do so.

Economists have made great progress in understanding the incentives and behavior of actors who operate outside of traditional economic markets, including voters, legislators, and bureaucrats. The incentives and behavior of judges, however, remain largely opaque. Do judges act as neutral third-party enforcers of substantive decisions made by others? Are judges "ordinary" policymakers who advance whatever outcomes they favor without any special consideration for law as such? Emerging recent scholarship has started to explore more nuanced conceptions of how law, facts, and judicial preferences may interact to influence judicial decisions. This work develops a perspective on judging that can usefully be understood as the modern manifestation of American Legal Realism, a jurisprudential movement of lawyers, judges, and law professors that flourished in the early twentieth century. The purpose of this essay is to introduce, in simplified form, the Realist account of judicial decision making; to contrast this view with alternative theories about law and judging; and to sketch out how a more explicit integration of the Realists' conceptual insights about law and judicial behavior might enrich the rapidly expanding economic work in this field.

In the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), Congress included a provision requiring bankruptcy courts evaluating individual debtors' financial circumstances to utilize certain monthly expense standards developed by the Internal Revenue Service for assessing taxpayers' ability to pay their taxes (the Standards). While the IRS retains a great deal of discretion in applying the Standards for its own purposes, bankruptcy courts have interpreted the BAPCPA as giving the Standards binding force in the bankruptcy context. This unusual arrangement - where a statute regulating one substantive area incorporates documents promulgated by an unrelated administrative agency for use in a different substantive area - presents bankruptcy judges with a set of unfamiliar and difficult administrative law questions. To what extent, if at all, should bankruptcy courts defer to IRS statements, contained in documents other than the Standards themselves, about how the Standards should be applied? May the IRS alter the Standards for its own purposes but not for bankruptcy purposes, or vice versa? What procedures must the IRS use when it modifies the Standards, especially in light of the fact that the Standards now have an apparently binding effect in bankruptcy cases? These questions have become even more pressing since the IRS in 2007 amended the Standards without public notice and comment and provided different effective dates for IRS and bankruptcy court use of the amended Standards. This essay explains from the standpoint of administrative law the difficulties that these questions present and suggest a few possible (and in some cases competing) administrative law theories for thinking about them.

This Article argues that courts can, and often should, implement constitutional guarantees by crafting doctrines that raise the costs to government decisionmakers of enacting constitutionally problematic policies. This indirect approach may implement a kind of implicit balancing of interests, in which the damage to constitutional values is weighed against the strength of the government’s interest in the challenged policy, more effectively than alternative approaches. When the government has better information than the reviewing court about the effect of the challenged policy on constitutionally relevant interests, heightened enactment costs act as a kind of screening device: if the government would still enact a given policy in the face of substantial additional enactment costs, the probability that the policy serves significant government interests is likely to be higher. This Article first develops the theoretical argument as to how (and under what conditions) doctrines that manipulate legislative enactment costs may be more effective tools for judicial implementation of the Constitution than doctrines that require direct judicial assessment of the relative strength of the competing interests. The Article further contends that the federal judiciary already has the capacity to fashion doctrines that function in this way, and indeed current doctrine influences legislative enactment costs more than has generally been appreciated.

Although administrative law doctrine requires courts to defer to an agency’s reasonable statutory interpretation, the doctrine is unclear as to whether an agency gets less deference when it changes its own prior interpretation. We formally analyze how judicial deference to revised agency interpretations affects the ideological content of agencies’ interpretations. We find a nonmonotonic relationship between judicial deference to inconsistent agency interpretations and interpretive extremism. This relationship arises because as courts become less deferential to revised interpretations, the initial agency finds it more attractive to promulgate a moderate interpretation that will not be revised. However, the less deferential the courts, the more extreme this moderate interpretation becomes. Normatively, our results suggest that an interest in responsiveness of interpretive policy to the preferences of the incumbent leadership favors deference to revised interpretations, whereas an interest in ideological moderation favors a somewhat less deferential posture to interpretive revisions.

In carrying out their duties, federal administrative agencies must often interpret statutes and regulations that are not entirely clear. Sometimes an agency’s interpretation of an ambiguous legal text may not seem like the best or most natural interpretation of that text. Nonetheless, a staple of modern federal administrative law doctrine is the principle of judicial deference to administrative interpretations of both congressional statutes and agency regulations. The seminal case on judicial deference to reasonable agency statutory interpretations is, of course, Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc. In the context of administrative interpretations of the agency’s own regulations, the leading authority is the Supreme Court’s 1945 decision in Bowles v. Seminole Rock & Sand Co., which held that an agency’s construction of its own regulation should be given “controlling weight unless it is plainly erroneous or inconsistent with the regulation.” More recent Supreme Court cases—including Thomas Jefferson University v. Shalala and Auer v. Robbins—have reaffirmed the Seminole Rock principle of judicial deference to an agency’s reasonable construction of its own regulations.

Although Chevron deference and Seminole Rock deference are closely related, there has been much more thorough exploration of the theoretical underpinnings and practical consequences of Chevron. This has not eliminated doubt or disagreement about the nature, validity, or wisdom of Chevron deference, but a consensus has gradually emerged that Chevron is grounded in a presumption (likely a legal fiction) about congressional intent. That presumption is in turn grounded in a set of pragmatic considerations—most notably expertise, accountability, and uniformity—that are thought to favor administrative over judicial construction. Furthermore, in part because of the self-conscious and sophisticated reflection on Chevron’s justifications, courts and commentators have become increasingly attentive to questions regarding the proper scope and limits of what Professors Merrill and Hickman have described as “Chevron’s domain.” Although Chevron was widely seen as replacing an open-ended, multifactor inquiry with a more rule-like framework, a strain in the doctrine and commentary has long suggested that the case for Chevron deference is not equally strong in all contexts, and indeed such deference might sometimes be inappropriate.

This view reached its apotheosis in United States v. Mead Corp., in which the Supreme Court held that some agency statutory interpretations—particularly those contained in interpretive rules, informal orders, or other pronouncements issued without extensive procedures—were presumptively not entitled to Chevron deference. Such interpretations fall outside Chevron’s domain, and therefore receive at most a measure of judicial respect, pursuant to the Court’s 1944 decision in Skidmore v. Swift & Co. Although Mead and much subsequent commentary emphasized procedural formality as the key consideration marking the boundaries of Chevron’s domain, other strands of the doctrine have suggested that something less than full Chevron deference might be appropriate when, for example, several agencies share interpretive authority over the same statute, when an agency’s interpretation of a statutory provision has been inconsistent over time, or when the interpretive question is unusually fundamental or important. The academic literature is rife with proposals for further refinements to Chevron’s domain, as well as defenses and criticisms of the limits the Court has already developed.

By contrast, courts and commentators have paid less attention to analogous questions regarding Seminole Rock’s domain. Indeed, Seminole Rock has attracted less attention and discussion than Chevron in general, and the discussion that does exist has tended to focus on wholesale critiques or defenses of Seminole Rock, rather than questions regarding possible limits on the set of administrative interpretations that qualify for such deference. Yet this is starting to change: emerging strands of both the academic literature and the caselaw have begun to take seriously, and to grapple with, questions regarding Seminole Rock’s proper scope. This trend has accelerated in the wake of Mead. Indeed, post-Mead circuit court cases have sent mixed signals regarding the effect of that decision on Seminole Rock deference. This Article builds on prior work by posing—and suggesting some preliminary answers to—the question of whether there ought to be limits to Seminole Rock’s domain, comparable (though perhaps not identical) to the limits that have been advocated, and in some cases recognized, for Chevron’s domain.

We have three objectives in this Article: the first is descriptive, the second analytic, and the third prescriptive. Our descriptive objective is to provide a succinct summary of the state of the current doctrine regarding the limits—or lack thereof—on Seminole Rock’s domain. Our analytic objective is to develop a taxonomy of the considerations that courts might plausibly use to develop midlevel doctrinal rules or presumptions that would limit Seminole Rock’s domain, and to assess the costs and benefits of these different doctrinal possibilities. Our prescriptive objective is to advocate—tentatively—a subset of these possible rules. Of these three objectives, the analytic objective is paramount. More important than any particular doctrinal change, is the development of a more sophisticated framework for thinking about issues of Seminole Rock’s domain, so that these issues and problems can be confronted squarely and explicitly.

We analyze the interaction between electoral accountability and separation-of-powers by comparing three regimes: ‘Unilateral Authority’ (the President has exclusive decision-making power); ‘Mandatory Checks’ (the President cannot change policy without congressional assent); and ‘Opt-in Checks’ (the President may seek congressional authorization or act unilaterally). We find: (1) voters use asymmetric electoral rewards and punishments to offset the risk of politician bias, but voters rely less on this blunt instrument if there are internal checks; (2) adding a veto player need not alter the ex ante likelihood of policy change; and (3) voter welfare is highest under Opt-In Checks and lowest under Unilateral Authority.

Chevron, U.S.A. v. Natural Resources Defense Council lays out a two-step process that courts must follow when they review a federal agency's construction of a federal statute. We argue that Chevron, rightly understood, has only one step. The single question is whether the agency's construction is permissible as a matter of statutory interpretation. The two Chevron steps both ask this question, just in different ways, and are thus mutually convertible: any opinion written in terms of one step can be written, without loss of content, in terms of the other step. Chevron's artificial division of a unitary inquiry causes material confusion among commentators and courts, and has no benefits; administrative law should jettison the two-step framework.