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Will Arlington v. FCC Decision Greenlight Net Neutrality?

May 24, 2013 J

James Valvo

On May 20, the Supreme Court handed down a potentially important decision in Arlington v. FCC.  This decision further embeds the Court’s deference to administrative agencies’ interpretation of statutes.  Justice Scalia wrote for the majority that it was irrelevant that this case dealt with the FCC’s interpretation of its own jurisdiction; he insisted the landmark Chevron test still applies.  Scalia wrote that the question is “always whether the agency has gone beyond what Congress has permitted it to do, there is no principled basis for carving out some arbitrary subset of such claims as ‘jurisdictional’.”

The facts in Arlington are quite simple.  Wireless telecommunications require the siting of cell towers and antennas, which require local permits.  In order to ensure that wireless infrastructure installations were not unduly delayed, Congress instructed in §332 of the Telecommunications Act of 1996 that local authorizes must do so “within a reasonable period of time,” but did not say how long that was.  The FCC promulgated rules instructing that between 90-150 days was a reasonable period of time, while granting localities allowances to show they needed longer.  The City of Arlington, Texas objected claiming that Congress never gave the FCC the authority to define this term, even though it resides in one of the agency’s statutes.  Arlington asserted that that the courts must determine whether a locality acted within a reasonable period of time.

And so is presented the classic question in administration law: who determines what the statute means?  Do the courts get to “decide what the law is” or do agencies get deference to interpret the ambiguous words of a statute?

The courts have long applied the Chevron test to these questions and the only wrinkle in Arlington was whether the characterization of the question as jurisdictional, as opposed to substantive, made any difference.  The Court held that it did not.  Scalia wrote that “there is no difference … between an agency’s exceeding the scope of its authority … and its exceeding authorized application of authority that it unquestionably has.”  The inquiry is the same: has the agency overstepped its bounds.  Once it is thus framed, the Court had no trouble finding that the term was ambiguous and that the FCC’s regulation was a permissible construction of the statute.

Chief Justice Roberts wrote a spirited dissent outlining the dangers created when courts allow agencies too much discretion to define their own power.  “Agencies are creatures of Congress; an agency literally has no power to act … unless and until Congress confers power upon it … Whether Congress has conferred such power is the relevant question of law that must be answered before affording Chevron deference,” Roberts wrote.  The question isn’t simply whether the statute is ambiguous but “whether authority over the particular ambiguity at issue has been delegated to the particular agency.”  Roberts’ question calls to mind Cass Sunstein’s Step Zero inquiry that encourages courts to examine whether to apply Chevron before jumping right into questions of ambiguity and agency interpretation.

This view of too much judicial discretion to agencies is well taken.  Especially in areas that are arguably jurisdictional, judges should play a bigger role in determining whether an agency is creating new powers for itself.  Jim Huffman, dean emeritus at Lewis & Clark Law School, commented on the Arlington ruling that “Regrettably, there is little doubt that even more power will be arrogated to the administrative state before the Supreme Court has another opportunity to begin restoring the separation of powers.”

Waiting on Verizon

Arlington made only a relatively minor clarification in an otherwise well-litigated area of law.  However, this case has been closely watched because of Verizon’s challenge to the FCC’s Open Internet Order, which is currently pending in the Court of Appeals for the D.C. Circuit.  That court has already slapped the FCC down once for trying to overstep its authority and regulate the Internet in Comcast v. FCC; it’s widely agreed that the court was poised to do so again in the Verizon case.  However, it’s possible Arlington could change the lower court’s calculus.  The New York Times’ Edward Wyatt notes: “The appeals court was expected to hear arguments in [Verizon] this spring, but deferred the case until next fall.  Court watchers have speculated that the delay may have been spurred by anticipation of” the Arlington decision.

Noted free market tech author Scott Cleland doesn’t think the Arlington decision will derail the Verizon challenge because “the FCC’s Open Internet Order is so unambiguously far outside the bounds of the FCC’s statutory authority, that Chevron deference is unlikely to apply,” even in a post-Arlington world.  Cleland gives three reasons the outcome in Verizon isn’t in real jeopardy.  First, the FCC’s order directly conflicts with Congress’s intent in the 1996 act that it desired to preserve a free and open Internet that is “unfettered by Federal or State regulation.”  Second, that Congress sought to “promote competition and reduce regulation” while the FCC order aimed to regulate toward “end-user control”, “free expression” and an “open platform,” none of which Congress instructed it to pursue, either ambiguously or otherwise.  Third, §706 of the 96 Act “calls for ‘removing barriers to infrastructure investment,’ but the FCC’s Open Internet order is about creating potential new regulatory barriers to infrastructure investment. Exact opposites are not ambiguous.”  Chevron and Arlington will only apply in the case of ambiguous statutes.  FCC’s order is clearly outside the bounds.

Note the Ripples

One court may have already altered a decision in response to Arlington.  Judge Emmet Sullivan in the U.S. District Court for the District of Columbia just dismissed an environmental challenge under the Toxic Substances Control Act (TSCA) that sought to compel EPA to regulate lead from various kinds of ammunition, including buckshot.  EPA declined to do so and the groups challenged the agency’s determination that lead ammunition is not covered under TSCA.  Judge Sullivan deferred to EPA’s determination its own “jurisdiction,” much like the Supreme Court did in Arlington.  Roger Martella, one of the leading authorities on environmental law, noted that “I do think that the Supreme Court’s decision [in Arlington] from last Monday made it significantly harder for the plaintiffs to” challenge the EPA determination.

Affording any branch of government too much unfettered authority to define its own powers is dangerous.  That’s why each branch is set up to check the others.  The Chevron doctrine has long been challenged as granting too much deference to agencies.  Arlington goes one step further and lumps arguably jurisdictional questions that define the scope of an agency’s rulemaking powers in with the substantive determinations themselves.  While Arlington will hopefully not dissuade the Court of Appeals for the D.C. Circuit from (again) overturning the FCC’s Open Internet Order, it will likely have repercussions on future agency rulemakings.

Mr. Valvo is the director of policy at Americans for Prosperity.

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