Justice Scalia joins the entirety of Justice Breyer’s opinion in US v. Home Concrete & Supply, except for the part that talks about Chevron and deference.
Scalia, relying on his Brand X dissent, disagrees with the government’s argument that a Treasury Regulation overturned a 1958 case, Colony (a case Scalia think has also been overturned by the court’s precedents).
It would be reasonable, I think, to deny all precedentialeffect to Colony, Inc. v. Commissioner, 357 U. S. 28 (1958)—to overrule its holding as obviously contrary to our later law that agency resolutions of ambiguities are to beaccorded deference. Because of justifiable taxpayer reliance I would not take that course—and neither does the Court’s opinion, which says that “Colony determines the outcome in this case.” Ante, at 4. That should be the end of the matter.
The plurality, however, goes on to address the Government’s argument that Treasury Regulation §301.6501(e)–1 effectively overturned Colony. See 26 CFR §301.6501(e)–1 (2011). In my view, that cannot be: “Once a court has decided upon its de novo construction of the statute, there no longer is a different construction that is consistent with the court’s holding and available for adoption by the agency.” National Cable & Telecommunications Assn. v. Brand X Internet Services, 545 U. S. 967, 1018, n. 12 (2005) (SCALIA, J., dissenting) (citation and internal quotation marks omitted). That view, of course, did not carry the day in Brand X, and the Government quite reasonably relies on the Brand X majority’s innovative pronouncement that a “court’s prior judicial construction of a statute trumps an agency construction otherwise entitled to Chevron deference only if the prior court decision holds that its construction follows from the unambiguous terms of the statute.” Id., at 982.
Scalia notes that the “umabiguous/ambiguous” standard was not known prior to Brand X. So how could any Court so hold? Poof!
In cases decided pre-Brand X, the Court had no inkling that it must utter the magic words “ambiguous” or “unambiguous” in order to (poof !) expand or abridge execu- tive power, and (poof !) enable or disable administrative contradiction of the Supreme Court. Indeed, the Court was unaware of even the utility (much less the necessity) of making the ambiguous/nonambiguous determination incases decided pre-Chevron, before that opinion made the so-called “Step 1” determination of ambiguity vel non a customary (though hardly mandatory1) part of judicialreview analysis. For many of those earlier cases, therefore, it will be incredibly difficult to determine whether thedecision purported to be giving meaning to an ambiguous, or rather an unambiguous, statute.
And apparently, in the Gospel of Nino, Chevron only has one step!
1“Step 1” has never been an essential part of Chevron analysis.Whether a particular statute is ambiguous makes no difference if the interpretation adopted by the agency is clearly reasonable—and itwould be a waste of time to conduct that inquiry. See Entergy Corp. v. Riverkeeper, Inc., 556 U. S. 208, 218, and n. 4 (2009). The same would be true if the agency interpretation is clearly beyond the scope of any conceivable ambiguity. It does not matter whether the word “yellow” isambiguous when the agency has interpreted it to mean “purple.” See Stephenson & Vermeule, Chevron Has Only One Step, 95 Va. L. Rev. 597, 599 (2009).
Here’s where it gets good:
Instead of doing what Brand X would require, however,the plurality manages to sustain the justifiable reliance of taxpayers by revising yet again the meaning of Chevron— and revising it yet again in a direction that will create confusion and uncertainty. See United States v. Mead Corp., 533 U. S. 218, 245–246 (2001) (SCALIA, J., dissenting); Bressman, How Mead Has Muddled Judicial Review of Agency Action, 58 Vand. L. Rev. 1443, 1457–1475 (2005). . . . But in order to evade Brand X and yet reaffirm Colony, the plurality would add yet another lopsided story to the ugly and improbable structure that our law of administrative review has become: To trigger the Brand X power of an authorized “gap-filling” agency togive content to an ambiguous text, a pre-Chevron determination that language is ambiguous does not alone suffice; the pre-Chevron Court must in addition have found that Congress wanted the particular ambiguity in question to be resolved by the agency. And here, today’s pluralityopinion finds, “[t]here is no reason to believe that the linguistic ambiguity noted by Colony reflects a post-Chevron conclusion that Congress had delegated gapfilling power to the agency.” Ante, at 10. The notion, seemingly, is that post-Chevron a finding of ambiguity isaccompanied by a finding of agency authority to resolvethe ambiguity, but pre-Chevron that was not so. The premise is false. Post-Chevron cases do not “conclude” that Congress wanted the particular ambiguity resolvedby the agency; that is simply the legal effect of ambi-guity—a legal effect that should obtain whenever the language is in fact (as Colony found) ambiguous. . . .
So it is no small number of still-authoritative cases that today’s plurality opinion would exile to the Land of Uncertainty. [Also know as New Jersey. Is that near the Island of Misfit Toys?]
Perhaps sensing the fragility of its new approach, theplurality opinion then pivots (as the à la mode vernacular has it)—from focusing on whether Colony concluded that there was gap-filling authority to focusing on whether Colony concluded that there was any gap to be filled . . .
Rather than making our judicial-review jurisprudencecuriouser and curiouser, the Court should abandon the opinion that produces these contortions, Brand X.
Scalia also takes a shot at Justice Kennedy’s dissent:
I must add a word about the peroration of the dissent,which asserts that “[o]ur legal system presumes there will be continuing dialogue among the three branches of Government on questions of statutory interpretation and application,” and that the “constructive discourse,” “ ‘convers[ations],’” and “instructive exchanges” would be “foreclosed by an insistence on adhering to earlier interpretations of a statute even in light of new, relevant statutory amendments.” Post, at 7–8 (opinion of KENNEDY, J.). This passage is reminiscent of Professor K. C. Davis’s visionthat administrative procedure is developed by “a partnership between legislators and judges,” who “working [as] partners produce better law than legislators alone could possibly produce.”2 That romantic, judge-empoweringimage was obliterated by this Court in Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., 435 U. S. 519 (1978), which held that Congressprescribes and we obey, with no discretion to add to the administrative procedures that Congress has created. It seems to me that the dissent’s vision of a troika partnership (legislative-executive-judicial) is a similar mirage. The discourse, conversation, and exchange that the dissent perceives is peculiarly one-sided. Congress prescribes; and where Congress’s prescription is ambiguous the Executive can (within the scope of the ambiguity) clarify that prescription; and if the product is constitutional the courts obey. I hardly think it amounts to a“discourse” that Congress or (as this Court would allow inits Brand X decision) the Executive can change its prescription so as to render our prior holding irrelevant. What is needed for the system to work is that Congress, the Executive, and the private parties subject to their dispositions, be able to predict the meaning that the courtswill give to their instructions. That goal would be obstructed if the judicially established meaning of a technical legal term used in a very specific context could beoverturned on the basis of statutory indications as feebleas those asserted here.
Here is the offending passage from AMK’s dissent, joined by RBG, SS, and EK.
Our legal system presumes there will be continuing dialogue among the three branches of Government on questions of statutory interpretation and application. See Blakely v. Washington, 542 U. S. 296, 326 (2004)(KENNEDY, J., dissenting) (“Constant, constructive discourse between our courts and our legislatures is an integral and admirable part of the constitutional design”); Mistretta v. United States, 488 U. S. 361, 408 (1989) (“Our principle of separation of powers anticipates that thecoordinate Branches will converse with each other on matters of vital common interest”). In some cases Congress will set out a general principle, to be administered in more detail by an agency in the exercise of its discretion. The agency may be in a proper position to evaluate thebest means of implementing the statute in its practicalapplication. Where the agency exceeds its authority, ofcourse, courts must invalidate the regulation. And agencyinterpretations that lead to unjust or unfair consequences can be corrected, much like disfavored judicial interpretations, by congressional action. These instructive exchanges would be foreclosed by an insistence on adhering to earlier interpretations of a statute even in light of new, relevant statutory amendments. Courts instead should be open to an agency’s adoption of a different interpretationwhere, as here, Congress has given new instruction by anamended statute.
And here is how Breyer reconciles Colony, Chevron, and Brand X:
As the Government points out, the Court in Colonystated that the statutory language at issue is not “unambiguous.” 357 U. S., at 33. But the Court decided that case nearly 30 years before it decided Chevron. There is no reason to believe that the linguistic ambiguity noted by Colony reflects a post-Chevron conclusion that Congresshad delegated gap-filling power to the agency. At the same time, there is every reason to believe that the Court thought that Congress had “directly spoken to the question at hand,” and thus left “[no] gap for the agency to fill.” Chevron, supra, at 842–843.
For one thing, the Court said that the taxpayer had thebetter side of the textual argument. Colony, 357 U. S., at
33. For another, its examination of legislative history led it to believe that Congress had decided the question definitively, leaving no room for the agency to reach a contraryresult. It found in that history “persuasive indications” that Congress intended overstatements of basis to fall outside the statute’s scope, and it said that it was satisfied that Congress “intended an exception . . . only in the restricted type of situation” it had already described. Id., at 35–36. Further, it thought that the Commissioner’s inter-pretation (the interpretation once again advanced here) would “create a patent incongruity in the tax law.” Id., at 36–37. And it reached this conclusion despite the fact that, in the years leading up to Colony, the Commissioner had consistently advocated the opposite in the circuit courts. See, e.g., Uptegrove, 204 F. 2d 570; Reis, 142 F. 2d 900; Goodenow v. Commisioner, 238 F. 2d 20 (CA8 1956); American Liberty Oil Co. v. Commissioner, 1 T. C. 386 (1942). Cf. Slaff v. Commisioner, 220 F. 2d 65 (CA9 1955); Davis v. Hightower, 230 F. 2d 549 (CA5 1956). Thus, the Court was aware it was rejecting the expert opinion of theCommissioner of Internal Revenue. And finally, after completing its analysis, Colony found its interpretation of the 1939 Code “in harmony with the [now] unambiguouslanguage” of the 1954 Code, which at a minimum suggeststhat the Court saw nothing in the 1954 Code as inconsistent with its conclusion. 357 U. S., at 37.
It may be that judges today would use other methods todetermine whether Congress left a gap to fill. But that is beside the point. The question is whether the Court in Colony concluded that the statute left such a gap. And, in our view, the opinion (written by Justice Harlan for theCourt) makes clear that it did not.