Introduction: Judicial Review of Agency Actions

To this point, we’ve learned about agencies’ procedural obligations under the APA and their authorizing statutes, and how courts review potential violations of procedural requirements. In this part of our course, we learn about how courts review agency actions to determine whether they are substantively unlawful. You will learn how courts review agency actions where an agency’s decision is arbitrary and capricious, or where an agency misinterpreted a statute.

Judicial Review of Statutory Interpretations

We will first learn about how courts review agencies’ statutory interpretations. Because federal agencies get their authority from Congressional statutes, much of agencies’ decisionmaking includes interpreting statutes. Agencies interpret statutes to determine the scope of their rulemaking and adjudicatory authority, and to hammer out the details of their rules, orders, and guidance.

APA Section 706(2)(A) says that courts can hold unlawful and set aside agency actions that are “not in accordance with the law,” and APA Section 706(2)(C) says that courts can hold unlawful and set aside agency actions that are “in excess of statutory jurisdiction, authority, or limitations, or short of statutory right.”

Throughout the past century, courts have given agency decisions a lot of “deference.” Deference is defined as “humble submission and respect,” or “giving agencies the benefit of the doubt.”

Courts give agency decisions a lot of leeway for several reasons:

-Courts are supposed to be politically neutral, while agencies are acting under authority delegated to them by elected Congresspeople and the President. Courts strive to respect the division of powers between the three branches of government.

-Agencies are staffed with experts on the things they regulate: the EPA is teeming with environmental scientists and experts, and the Department of Health and Human Services (“HHS”) hires doctors and public health experts to carry out its Congressionally delegated mandates.

In Chevron v. Natural Resources Defense Council, Inc., the Supreme Court provides the test that courts use to determine how much deference to give agencies’ statutory interpretations.

Recent court opinions, including the Supreme Court's decision in West Virginia v. EPA, demonstrate a pivot away from broad deference to agency decisionmaking in favor of courts, themselves, making decisions about "major questions." We will start with Chevron and read through to the Supreme Court's current stance on agency deference. The swinging pendulum of courts' deference to agencies' decisions coincides with a re-invigoration of the nondelegation doctrine, the principle that Congress cannot delegate its power to other entities.

Chevron v. Natural Resources Defense Council, Inc. (“NRDC”)

467 U.S. 837 (1984)

JUSTICE STEVENS delivered the opinion of the Court.

In the Clean Air Act Amendments of 1977, Congress enacted certain requirements applicable to States that had not achieved the national air quality standards established by the Environmental Protection Agency (EPA). [The 1977 Amendments required permits for “new or modified stationary sources” of air pollution. The EPA promulgated a rule that interpreted the phrase “stationary source” to include a “bubble policy.” The bubble policy treats industrial plants with many pollution-emitting devices (“smokestacks,” etc.) as a single “stationary source.” This interpretation of the statute lets plants with multiple air-polluting devices install or modify one piece of equipment without obtaining a permit, so long as the alteration does not increase the plant’s total emissions. NRDC argued that the EPA misinterpreted the phrase “stationary source,” arguing that Congress did not intend it to include a “bubble policy.” Instead, the NRDC argued that Congress intended that a plant would have to obtain a permit any time it created a new source of pollution or modified an existing source, if the effect is to increase pollution, even if the increased pollution is offset by decreasing pollution from other sources. The Court of Appeals agreed with NRDC, because it believed the NRDC’s interpretation better served the spirit of the 1977 Clean Air Act amendments.]

The basic legal error of the Court of Appeals was to adopt a static judicial definition of the term “stationary source” when it had decided that Congress itself had not commanded that definition [...] 

When a court reviews an agency’s construction of the statute which it administers, it is confronted with two questions. First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.

“The power of an administrative agency to administer a congressionally created . . . program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by Congress.” Morton v. Ruiz, 415 U. S. 199, 231 (1974). If Congress has explicitly left a gap for the agency to fill, there is an express delegation of authority to the agency to elucidate a specific provision of the statute by regulation. Such legislative regulations are given controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute. Sometimes the legislative delegation to an agency on a particular question is implicit rather than explicit. In such a case, a court may not substitute its own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency.

We have long recognized that considerable weight should be accorded to an executive department's construction of a statutory scheme it is entrusted to administer, and the principle of deference to administrative interpretations has been consistently followed by this Court whenever decision as to the meaning or reach of a statute has involved reconciling conflicting policies, and a full understanding of the force of the statutory policy in the given situation has depended upon more than ordinary knowledge respecting the matters subjected to agency regulations. 

“. . . If this choice represents a reasonable accommodation of conflicting policies that were committed to the agency’s care by the statute, we should not disturb it unless it appears from the statute or its legislative history that the accommodation is not one that Congress would have sanctioned.” United States v. Shimer, 367 U. S. 374, 382, 383 (1961).

In light of these well-settled principles it is clear that the Court of Appeals misconceived the nature of its role in reviewing the regulations at issue. Once it determined, after its own examination of the legislation, that Congress did not actually have an intent regarding the applicability of the bubble concept to the permit program, the question before it was not whether in its view the concept is “inappropriate” in the general context of a program designed to improve air quality, but whether the Administrator’s view that it is appropriate in the context of this particular program is a reasonable one. Based on the examination of the legislation and its history which follows, we agree with the Court of Appeals that Congress did not have a specific intention on the applicability of the bubble concept in these cases, and conclude that the EPA’s use of that concept here is a reasonable policy choice for the agency to make.

[The Court reviews the legislative history of the 1977 Clean Air Act amendments, and analyzes the language and Congressional intent of those amendments. While the amendments do not specifically reference the “bubble concept,” the EPA explained, in depth, its rationale for considering a bubble exemption in its proposed rule. In contrast, the legislative history does not mention the “bubble” concept, nor does it speak directly to the “stationary source” interpretation at hand. The Court concluded, “We find that the legislative history as a whole is silent on the precise issue before us. It is, however, consistent with the view that the EPA should have broad discretion in implementing the policies of the 1977 Amendments.”]

The arguments over policy that are advanced in the parties’ briefs create the impression that respondents are now waging in a judicial forum a specific policy battle which they ultimately lost in the agency and in the 32 jurisdictions opting for the “bubble concept,” but one which was never waged in the Congress. Such policy arguments are more properly addressed to legislators or administrators, not to judges.

In these cases the Administrator’s interpretation represents a reasonable accommodation of manifestly competing interests and is entitled to deference: the regulatory scheme is technical and complex, the agency considered the matter in a detailed and reasoned fashion, and the decision involves reconciling conflicting policies. Congress intended to accommodate both interests, but did not do so itself on the level of specificity presented by these cases. Perhaps that body consciously desired the Administrator to strike the balance at this level, thinking that those with great expertise and charged with responsibility for administering the provision would be in a better position to do so; perhaps it simply did not consider the question at this level; and perhaps Congress was unable to forge a coalition on either side of the question, and those on each side decided to take their chances with the scheme devised by the agency. For judicial purposes, it matters not which of these things occurred.

Judges are not experts in the field, and are not part of either political branch of the Government. Courts must, in some cases, reconcile competing political interests, but not on the basis of the judges’ personal policy preferences. In contrast, an agency to which Congress has delegated policymaking responsibilities may, within the limits of that delegation, properly rely upon the incumbent administration’s views of wise policy to inform its judgments. While agencies are not directly accountable to the people, the Chief Executive is, and it is entirely appropriate for this political branch of the Government to make such policy choices — resolving the competing interests which Congress itself either inadvertently did not resolve, or intentionally left to be resolved by the agency charged with the administration of the statute in light of everyday realities.

When a challenge to an agency construction of a statutory provision, fairly conceptualized, really centers on the wisdom of the agency's policy, rather than whether it is a reasonable choice within a gap left open by Congress, the challenge must fail. In such a case, federal judges — who have no constituency — have a duty to respect legitimate policy choices made by those who do. The responsibilities for assessing the wisdom of such policy choices and resolving the struggle between competing views of the public interest are not judicial ones: “Our Constitution vests such responsibilities in the political branches.” TVA v. Hill, 437 U. S. 153, 195 (1978).

We hold that the EPA’s definition of the term “source” is a permissible construction of the statute which seeks to accommodate progress in reducing air pollution with economic growth. “The Regulations which the Administrator has adopted provide what the agency could allowably view as . . . [an] effective reconciliation of these twofold ends . . . .” United States v. Shimer, 367 U. S., at 383.

The judgment of the Court of Appeals is reversed.

The Chevron doctrine gives agencies a lot of deference to interpret statutes where Congress has not spoken directly to the issue. However, there are several limits to that deference. This lesson will describe the boundaries of Chevron deference, namely:

• Chevron deference only applies when agencies’ interpretations have the “force of law.”

• Chevron deference does not apply when judges decide that the agency interpretation concerns a “major question” with “vast economic or political significance.”

Limits on Chevron Deference: Force of Law Requirement

After issuing the Chevron opinion, the Supreme Court clarified that Chevron deference only applies to agency interpretations that have the force of law. The benchmark case for this limitation on Chevron deference is United States v. Mead Corporation. We will read Mead, and then we will read Skidmore v. Swift, which provides guidelines for the “lesser deference” that courts should give to agency interpretations that do not have the force of law. Finally, in Christensen v. Harris County, we will see how courts review interpretations under the lesser Skidmore standard of deference.

United States v. Mead Corp.

533 U.S. 218 (2001)

Justice Souter, delivered the opinion of the Court.

The question is whether a tariff classification ruling by the United States Customs Service deserves judicial deference. The Federal Circuit rejected Customs's invocation of Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984), in support of such a ruling, to which it gave no deference. We agree that a tariff classification has no claim to judicial deference under Chevron, there being no indication that Congress intended such a ruling to carry the force of law, but we hold that under Skidmore v. Swift & Co., 323 U. S. 134 (1944), the ruling is eligible to claim respect according to its persuasiveness.

I

Imports are taxed under the Harmonized Tariff Schedule of the United States (HTSUS), 19 U.S.C. § 1202. [The HTSUS authorizes Customs to fix the final classification and rate of duty applicable to merchandise, and to disseminate guidance about how to secure “a just, impartial, and uniform appraisment of imported merchandise.” The agency fulfills this statutory obligation through “ruling letters” that set tariff classifications for particular imports. According to 19 C.F.R. § 177.9, a ruling letter:

“represents the official position of the Customs Service with respect to the particular transaction or issue described therein and is binding on all Customs Service personnel in accordance with the provisions of this section until modified or revoked. In the absence of a change of practice or other modification or revocation which affects the principle of the ruling set forth in the ruling letter, that principle may be cited as authority in the disposition of transactions involving the same circumstances.”

A ruling letter is binding on all Customs Service personnel until it is modified or revoked, but the letter can be modified or revoked without notice to any person beyond the importer to whom the letter was addressed. The regulations also say that “no other person should rely on the ruling letter or assume that the principles of that ruling will be applied in connection with any transaction other than the one described in the letter.”] Since ruling letters respond to transactions of the moment, they are not subject to notice and comment before being issued, may be published but need only be made “available for public inspection.” [...]

Respondent, the Mead Corporation, imports “day planners,” three-ring binders with pages having room for notes of daily schedules and phone numbers and addresses, together with a calendar and suchlike. The tariff schedule on point falls under the HTSUS heading for “[r]egisters, account books, notebooks, order books, receipt books, letter pads, memorandum pads, diaries and similar articles,” which comprises two subcategories. Items in the first, “[d]iaries, notebooks and address books, bound; memorandum pads, letter pads and similar articles,” were subject to a tariff of 4.0% at the time in controversy. Objects in the second, covering “[o]ther” items, were free of duty. 

Between 1989 and 1993, Customs repeatedly treated day planners under the “other” HTSUS subheading. In January 1993, however, Customs changed its position, and issued a ruling letter classifying Mead’s day planners as “Diaries . . . , bound” subject to [the 4.0% tariff.] [Mead challenged the re-classification in the Court of International Trade (“CIT”), which granted the Government’s motion for summary judgment. Mead appealed the decision before the Federal Circuit, where the Government argued that classification rulings, like Customs regulations, deserve Chevron deference. The Federal Court reversed the CIT decision, deciding that classification rulings had a weaker Chevron claim because they “do not carry the force of law and are not, like regulations, intended to clarify the rights and obligations of importers beyond the specific case under review.”] 

We granted certiorari in order to consider the limits of Chevron deference owed to administrative practice in applying a statute. We hold that administrative implementation of a particular statutory provision qualifies for Chevron deference when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority. Delegation of such authority may be shown in a variety of ways, as by an agency’s power to engage in adjudication or notice-and-comment rulemaking, or by some other indication of a comparable congressional intent. The Customs ruling at issue here fails to qualify, although the possibility that it deserves some deference under Skidmore leads us to vacate and remand.

II

When Congress has “explicitly left a gap for an agency to fill, there is an express delegation of authority to the agency to elucidate a specific provision of the statute by regulation,” Chevron, 467 U. S., and any ensuing regulation is binding in the courts unless procedurally defective, arbitrary or capricious in substance, or manifestly contrary to the statute. See [...] APA, 5 U.S.C. §§ 706(2)(A), (D). But whether or not they enjoy any express delegation of authority on a particular question, agencies charged with applying a statute necessarily make all sorts of interpretive choices, and while not all of those choices bind judges to follow them, they certainly may influence courts facing questions the agencies have already answered. “[T]he well-reasoned views of the agencies implementing a statute ‘constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance,’” Bragdon v. Abbott, 524 U.S. (1998) (quoting Skidmore, 323 U.S.), and “[w]e have long recognized that considerable weight should be accorded to an executive department’s construction of a statutory scheme it is entrusted to administer . . . .” Chevron. The fair measure of deference to an agency administering its own statute has been understood to vary with circumstances, and courts have looked to the degree of the agency’s care, its consistency, formality, and relative expertness, and to the persuasiveness of the agency’s position. The approach has produced a spectrum of judicial responses, from great respect at one end, to near indifference at the other. Justice Jackson summed things up in Skidmore v. Swift & Co.:

“The weight [accorded to an administrative] judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.”

Since 1984, we have identified a category of interpretive choices distinguished by an additional reason for judicial deference. This Court in Chevron recognized that Congress not only engages in express delegation of specific interpretive authority, but that “[s]ometimes the legislative delegation to an agency on a particular question is implicit.” Congress, that is, may not have expressly delegated authority or responsibility to implement a particular provision or fill a particular gap. Yet it can still be apparent from the agency’s generally conferred authority and other statutory circumstances that Congress would expect the agency to be able to speak with the force of law when it addresses ambiguity in the statute or fills a space in the enacted law, even one about which “Congress did not actually have an intent” as to a particular result. When circumstances implying such an expectation exist, a reviewing court has no business rejecting an agency’s exercise of its generally conferred authority to resolve a particular statutory ambiguity simply because the agency's chosen resolution seems unwise, but is obliged to accept the agency’s position if Congress has not previously spoken to the point at issue and the agency's interpretation is reasonable, see [...] 5 U.S.C. § 706(2) (a reviewing court shall set aside agency action, findings, and conclusions found to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law”).

We have recognized a very good indicator of delegation meriting Chevron treatment in express congressional authorizations to engage in the process of rulemaking or adjudication that produces regulations or rulings for which deference is claimed. It is fair to assume generally that Congress contemplates administrative action with the effect of law when it provides for a relatively formal administrative procedure tending to foster the fairness and deliberation that should underlie a pronouncement of such force. Thus, the overwhelming number of our cases applying Chevron deference have reviewed the fruits of notice-and-comment rulemaking or formal adjudication. That said, and as significant as notice-and-comment is in pointing to Chevron authority, the want of that procedure here does not decide the case, for we have sometimes found reasons for Chevron deference even when no such administrative formality was required and none was afforded. The fact that the tariff classification here was not a product of such formal process does not alone, therefore, bar the application of Chevron.

There are, nonetheless, ample reasons to deny Chevron deference here. The authorization for classification rulings, and Customs’s practice in making them, present a case far removed not only from notice-and-comment process, but from any other circumstances reasonably suggesting that Congress ever thought of classification rulings as deserving the deference claimed for them here.

No matter which angle we choose for viewing the Customs ruling letter in this case, it fails to qualify under Chevron. On the face of the statute, to begin with, the terms of the congressional delegation give no indication that Congress meant to delegate authority to Customs to issue classification rulings with the force of law. We are not, of course, here making any global statement about Customs’s authority, for it is true that the general rulemaking power conferred on Customs authorizes some regulation with the force of law [...] 

It is difficult, in fact, to see in the agency practice itself any indication that Customs ever set out with a lawmaking pretense in mind when it undertook to make classifications like these. Customs does not generally engage in noticeand-comment practice when issuing them, and their treatment by the agency makes it clear that a letter’s binding character as a ruling stops short of third parties; Customs has regarded a classification as conclusive only as between itself and the importer to whom it was issued, and even then only until Customs has given advance notice of intended change. Other importers are in fact warned against assuming any right of detrimental reliance. 

Indeed, to claim that classifications have legal force is to ignore the reality that 46 different Customs offices issue 10,000 to 15,000 of them each year. Any suggestion that rulings intended to have the force of law are being churned out at a rate of 10,000 a year at an agency’s 46 scattered offices is simply self-refuting. Although the circumstances are less startling here, with a Headquarters letter in issue, none of the relevant statutes recognizes this category of rulings as separate or different from others; there is thus no indication that a more potent delegation might have been understood as going to Headquarters even when Headquarters provides developed reasoning, as it did in this instance [...]

In sum, classification rulings are best treated like “interpretations contained in policy statements, agency manuals, and enforcement guidelines.” Christensen, 529 U. S., at 587. They are beyond the Chevron pale.

To agree with the Court of Appeals that Customs ruling letters do not fall within Chevron is not, however, to place them outside the pale of any deference whatever. Chevron did nothing to eliminate Skidmore’s holding that an agency’s interpretation may merit some deference whatever its form, given the “specialized experience and broader investigations and information” available to the agency, and given the value of uniformity in its administrative and judicial understandings of what a national law requires. 

There is room at least to raise a Skidmore claim here, where the regulatory scheme is highly detailed, and Customs can bring the benefit of specialized experience to bear on the subtle questions in this case: whether the daily planner with room for brief daily entries falls under “diaries,” when diaries are grouped with “notebooks and address books, bound; memorandum pads, letter pads and similar articles,” and whether a planner with a ring binding should qualify as “bound,” when a binding may be typified by a book, but also may have “reinforcements or fittings of metal, plastics, etc.” A classification ruling in this situation may therefore at least seek a respect proportional to its “power to persuade,” Skidmore, supra; see also Christensen. Such a ruling may surely claim the merit of its writer’s thoroughness, logic, and expertness, its fit with prior interpretations, and any other sources of weight  [...]

Since the Skidmore assessment called for here ought to be made in the first instance by the Court of Appeals for the Federal Circuit or the CIT, we go no further than to vacate the judgment and remand the case for further proceedings consistent with this opinion.

Justice Souter references two cases throughout the Mead decision: Skidmore and Christensen. Skidmore is a case from 1944 (long before Chevron or Mead) that lists the factors courts consider when they extend “lesser deference” to agencies’ interpretations of statutes when those interpretations lack the “force of law.” Christensen, which was decided only a year before Mead, explains why courts should extend some deference to agencies’ statutory interpretations even when they do not have the force of law.

Skidmore v. Swift & Co.

323 U.S. 134 (1944)

MR. JUSTICE JACKSON delivered the opinion of the Court.

Seven employees of the Swift and Company packing plant at Fort Worth, Texas, brought an action under the Fair Labor Standards Act to recover overtime. [The employees worked at the packing plant during the day and were paid weekly salaries for that work. However, the same employees also stayed at the fire hall (or “within hailing distance”) three and a half to four nights a week to answer alarms in case of a fire. For this work, employees would be paid fifty to sixty-four cents for every alarm they answered, but would not be paid hourly overtime wages. The employees seek that overtime pay.]

The trial court found [...] as a “conclusion of law” that “the time plaintiffs spent in the fire hall subject to call to answer fire alarms does not constitute hours worked, for which overtime compensation is due them under the Fair Labor Standards Act, as interpreted by the Administrator and the Courts,” and in its opinion observed, “of course we know pursuing such pleasurable occupations or performing such personal chores, does not constitute work.” The Circuit Court of Appeals affirmed.

[W]e hold that no principle of law found either in the statute or in Court decisions precludes waiting time from also being working time [...] We do not minimize the difficulty of such an inquiry where the arrangements of the parties have not contemplated the problem posed by the statute. But it does not differ in nature or in the standards to guide judgment from that which frequently confronts courts where they must find retrospectively the effect of contracts as to matters which the parties failed to anticipate or explicitly to provide for.

Congress did not utilize the services of an administrative agency to find facts and to determine in the first instance whether particular cases fall within or without the Act. Instead, it put this responsibility on the courts. But it did create the office of Administrator, impose upon him a variety of duties, endow him with powers to inform himself of conditions in industries and employments subject to the Act, and put on him the duties of bringing injunction actions to restrain violations. Pursuit of his duties has accumulated a considerable experience in the problems of ascertaining working time in employments involving periods of inactivity and a knowledge of the customs prevailing in reference to their solution. From these he is obliged to reach conclusions as to conduct without the law, so that he should seek injunctions to stop it, and that within the law, so that he has no call to interfere. He has set forth his views of the application of the Act under different circumstances in an interpretative bulletin and in informal rulings. They provide a practical guide to employers and employees as to how the office representing the public interest in its enforcement will seek to apply it. 

The Administrator thinks the problems presented by inactive duty require a flexible solution, rather than the all-in or all-out rules respectively urged by the parties in this case, and his Bulletin endeavors to suggest standards and examples to guide in particular situations. In some occupations, it says, periods of inactivity are not properly counted as working time even though the employee is subject to call. Examples are an operator of a small telephone exchange where the switchboard is in her home and she ordinarily gets several hours of uninterrupted sleep each night; or a pumper of a stripper well or watchman of a lumber camp during the off season, who may be on duty twenty-four hours a day but ordinarily “has a normal night’s sleep, has ample time in which to eat his meals, and has a certain amount of time for relaxation and entirely private pursuits.” [...] “Hours worked are not limited to the time spent in active labor but include time given by the employee to the employer. . . .”

The facts of this case do not fall within any of the specific examples given, but the conclusion of the Administrator, as expressed in the brief amicus curiae, is that the general tests which he has suggested point to the exclusion of sleeping and eating time of these employees from the workweek and the inclusion of all other on-call time: although the employees were required to remain on the premises during the entire time, the evidence shows that they were very rarely interrupted in their normal sleeping and eating time, and these are pursuits of a purely private nature which would presumably occupy the employees’ time whether they were on duty or not and which apparently could be pursued adequately and comfortably in the required circumstances; the rest of the time is different because there is nothing in the record to suggest that, even though pleasurably spent, it was spent in the ways the men would have chosen had they been free to do so.

There is no statutory provision as to what, if any, deference courts should pay to the Administrator’s conclusions. And, while we have given them notice, we have had no occasion to try to prescribe their influence. The rulings of this Administrator are not reached as a result of hearing adversary proceedings in which he finds facts from evidence and reaches conclusions of law from findings of fact. They are not, of course, conclusive, even in the cases with which they directly deal, much less in those to which they apply only by analogy. They do not constitute an interpretation of the Act or a standard for judging factual situations which binds a district court’s processes, as an authoritative pronouncement of a higher court might do. But the Administrator’s policies are made in pursuance of official duty, based upon more specialized experience and broader investigations and information than is likely to come to a judge in a particular case. They do determine the policy which will guide applications for enforcement by injunction on behalf of the Government. Good administration of the Act and good judicial administration alike require that the standards of public enforcement and those for determining private rights shall be at variance only where justified by very good reasons. The fact that the Administrator’s policies and standards are not reached by trial in adversary form does not mean that they are not entitled to respect. This Court has long given considerable and in some cases decisive weight to Treasury Decisions and to interpretative regulations of the Treasury and of other bodies that were not of adversary origin.

We consider that the rulings, interpretations and opinions of the Administrator under this Act, while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance. The weight of such a judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.

[In] this case, although the District Court referred to the Administrator’s Bulletin, its evaluation and inquiry were apparently restricted by its notion that waiting time may not be work, an understanding of the law which we hold to be erroneous. Accordingly, the judgment is reversed and the cause remanded for further proceedings consistent herewith.

Christensen v. Harris County

529 U.S. 576 (2000)

Justice Thomas, delivered the opinion of the Court.

Under the Fair Labor Standards Act of 1938 (FLSA), States and their political subdivisions may compensate their employees for overtime by granting them compensatory time or “comp time,” which entitles them to take time off work with full pay. If the employees do not use their accumulated compensatory time, the employer is obligated to pay cash compensation under certain circumstances. Fearing the fiscal consequences of having to pay for accrued compensatory time, Harris County adopted a policy requiring its employees to schedule time off in order to reduce the amount of accrued compensatory time. Employees of the Harris County Sheriff's Department sued, claiming that the FLSA prohibits such a policy. The Court of Appeals rejected their claim. Finding that nothing in the FLSA or its implementing regulations prohibits an employer from compelling the use of compensatory time, we affirm [...]

I

Petitioners are 127 deputy sheriffs employed by respondents Harris County, Texas, and its sheriff, Tommy B. Thomas (collectively, Harris County). It is undisputed that each of the petitioners individually agreed to accept compensatory time, in lieu of cash, as compensation for overtime.

As petitioners accumulated compensatory time, Harris County became concerned that it lacked the resources to pay monetary compensation to employees who worked overtime after reaching the statutory cap on compensatory time accrual and to employees who left their jobs with sizable reserves of accrued time. As a result, the county began looking for a way to reduce accumulated compensatory time. It wrote to the United States Department of Labor’s Wage and Hour Division, asking “whether the Sheriff may schedule non-exempt employees to use or take compensatory time.” The Acting Administrator of the Division replied:

“[I]t is our position that a public employer may schedule its nonexempt employees to use their accrued FLSA compensatory time as directed if the prior agreement specifically provides such a provision . . . .

“Absent such an agreement, it is our position that neither the statute nor the regulations permit an employer to require an employee to use accrued compensatory time." Opinion Letter from Dept. of Labor, Wage and Hour Div. (Sept. 14, 1992).

After receiving the letter, Harris County implemented a policy under which the employees’ supervisor sets a maximum number of compensatory hours that may be accumulated. When an employee's stock of hours approaches that maximum, the employee is advised of the maximum and is asked to take steps to reduce accumulated compensatory time. If the employee does not do so voluntarily, a supervisor may order the employee to use his compensatory time at specified times.

Petitioners sued, claiming that the county’s policy violates the FLSA because § 207(o)(5)—which requires that an employer reasonably accommodate employee requests to use compensatory time—provides the exclusive means of utilizing accrued time in the absence of an agreement or understanding permitting some other method. The District Court agreed, granting summary judgment for petitioners and entering a declaratory judgment that the county’s policy violated the FLSA. The Court of Appeals for the Fifth Circuit reversed, holding that the FLSA did not speak to the issue and thus did not prohibit the county from implementing its compensatory time policy [...] We granted certiorari because the Courts of Appeals are divided on the issue [...]

At bottom, we think the better reading of § 207(o)(5) is that it imposes a restriction upon an employer’s efforts to prohibit the use of compensatory time when employees request to do so; that provision says nothing about restricting an employer’s efforts to require employees to use compensatory time. Because the statute is silent on this issue and because Harris County’s policy is entirely compatible with § 207(o)(5), petitioners cannot, as they are required to do by 29 U. S. C. § 216(b), prove that Harris County has violated § 207 [...]

In an attempt to avoid the conclusion that the FLSA does not prohibit compelled use of compensatory time, petitioners and the United States contend that we should defer to the Department of Labor’s opinion letter, which takes the position that an employer may compel the use of compensatory time only if the employee has agreed in advance to such a practice. Specifically, they argue that the agency opinion letter is entitled to deference under our decision in Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984). In Chevron, we held that a court must give effect to an agency’s regulation containing a reasonable interpretation of an ambiguous statute.

Here, however, we confront an interpretation contained in an opinion letter, not one arrived at after, for example, a formal adjudication or notice-and-comment rulemaking. Interpretations such as those in opinion letters—like interpretations contained in policy statements, agency manuals, and enforcement guidelines, all of which lack the force of law— do not warrant Chevron -style deference. Instead, interpretations contained in formats such as opinion letters are “entitled to respect” under our decision in Skidmore v. Swift & Co., 323 U. S. 134, 140 (1944), but only to the extent that those interpretations have the “power to persuade,” As explained above, we find unpersuasive the agency’s interpretation of the statute at issue in this case.

Of course, the framework of deference set forth in Chevron does apply to an agency interpretation contained in a regulation. But in this case the Department of Labor’s regulation does not address the issue of compelled compensatory time. The regulation provides only that “[t]he agreement or understanding [between the employer and employee] may include other provisions governing the preservation, use, or cashing out of compensatory time so long as these provisions are consistent with [§ 207(o )].” 29 CFR § 553.23(a)(2) (1999) (emphasis added). Nothing in the regulation even arguably requires that an employer’s compelled use policy must be included in an agreement. The text of the regulation itself indicates that its command is permissive, not mandatory.

Seeking to overcome the regulation’s obvious meaning, the United States asserts that the agency’s opinion letter interpreting the regulation should be given deference under our decision in Auer v. Robbins, 519 U. S. 452 (1997). In Auer, we held that an agency’s interpretation of its own regulation is entitled to deference. But Auer deference is warranted only when the language of the regulation is ambiguous. The regulation in this case, however, is not ambiguous—it is plainly permissive. To defer to the agency’s position would be to permit the agency, under the guise of interpreting a regulation, to create de facto a new regulation. Because the regulation is not ambiguous on the issue of compelled compensatory time, Auer deference is unwarranted.

* * *

As we have noted, no relevant statutory provision expressly or implicitly prohibits Harris County from pursuing its policy of forcing employees to utilize their compensatory time. In its opinion letter siding with the petitioners, the Department of Labor opined that “it is our position that neither the statute nor the regulations permit an employer to require an employee to use accrued compensatory time.” Opinion Letter (emphasis added). But this view is exactly backwards. Unless the FLSA prohibits respondents from adopting its policy, petitioners cannot show that Harris County has violated the FLSA. And the FLSA contains no such prohibition. The judgment of the Court of Appeals is affirmed.

Limits on Chevron Deference: Major Questions Doctrine

In the last few decades, the Supreme Court has placed another limitation on the Chevron Doctrine’s scope. The “major questions doctrine” holds that courts should not defer to agency statutory interpretations that concern questions of “vast economic or political significance.” The Supreme Court justifies this limitation with the non-delegation doctrine. According to the Supreme Court, courts are supposed to interpret “major” legal questions, not administrative bureaucrats. 

Some legal scholars argue that this reading of the non-delegation doctrine mistakenly takes political decisions out of the hands of agency officials appointed by elected leaders and puts the decisions into the hands of courts that lack political accountability. They argue that the major questions doctrine lets judges view statutes de novo, without deferring to agency interpretations, contradicting the Chevron principles. The major questions doctrine runs counter to the idea that important political decisions should be resolved by Congress. 

King v. Burwell is one of a constellation of cases where the Supreme Court relies on the major questions doctrine to override Chevron deference and assert its own statutory interpretation rather than respecting the agency’s interpretation. King v. Burwell, is a case about the Affordable Care Act (“ACA”), one of the most politically controversial laws (if not the most controversial) passed in the Obama era. The Supreme Court did not defer to the Internal Revenue Service (“IRS”) interpretation of the ACA when it decided whether insurance purchased on a Federal or State Exchange qualified for tax subsidies.

King v. Burwell

135 S. Ct. 475 (2015)

CHIEF JUSTICE ROBERTS, delivered the opinion of the Court.

The Patient Protection and Affordable Care Act adopts a series of interlocking reforms designed to expand coverage in the individual health insurance market. First, the Act bars insurers from taking a person’s health into account when deciding whether to sell health insurance or how much to charge. Second, the Act generally requires each person to maintain insurance coverage or make a payment to the Internal Revenue Service. And third, the Act gives tax credits to certain people to make insurance more affordable.

In addition to those reforms, the Act requires the creation of an “Exchange” in each State—basically, a marketplace that allows people to compare and purchase insurance plans. The Act gives each State the opportunity to establish its own Exchange, but provides that the Federal Government will establish the Exchange if the State does not.

This case is about whether the Act’s interlocking reforms apply equally in each State no matter who establishes the State’s Exchange. Specifically, the question presented is whether the Act’s tax credits are available in States that have a Federal Exchange.

I

The Patient Protection and Affordable Care Act grew out of a long history of failed health insurance reform. In the 1990s, several States began experimenting with ways to expand people’s access to coverage [One common State approach was to bar insurers from denying coverage or increasing premiums to people because of pre-existing health conditions.] Those requirements were designed to ensure that anyone who wanted to buy health insurance could do so.

The [requirements] had an unintended consequence: They encouraged people to wait until they got sick to buy insurance. Why buy insurance coverage when you are healthy, if you can buy the same coverage for the same price when you become ill? This consequence—known as “adverse selection”—led to a second: Insurers were forced to increase premiums to account for the fact that, more and more, it was the sick rather than the healthy who were buying insurance. And that consequence fed back into the first: As the cost of insurance rose, even more people waited until they became ill to buy it.

This led to an economic “death spiral.” As premiums rose higher and higher, and the number of people buying insurance sank lower and lower, insurers began to leave the market entirely. As a result, the number of people without insurance increased dramatically [...]

In 1996, Massachusetts adopted the [protections for people with pre-existing conditions]. But in 2006, Massachusetts added two more reforms: The Commonwealth required individuals to buy insurance or pay a penalty, and it gave tax credits to certain individuals to ensure that they could afford the insurance they were required to buy. The combination of these three reforms—insurance market regulations, a coverage mandate, and tax credits—reduced the uninsured rate in Massachusetts to 2.6 percent, by far the lowest in the Nation.

The Affordable Care Act adopts a version of the three key reforms that made the Massachusetts system successful. First, the Act adopts the guaranteed issue and community rating requirements. The Act provides that “each health insurance issuer that offers health insurance coverage in the individual . . . market in a State must accept every . . . individual in the State that applies for such coverage.” The Act also bars insurers from charging higher premiums on the basis of a person’s health. 

Second, the Act generally requires individuals to maintain health insurance coverage or make a payment to the IRS. Congress recognized that, without an incentive, “many individuals would wait to purchase health insurance until they needed care.” So Congress adopted a coverage requirement to “minimize this adverse selection and broaden the health insurance risk pool to include healthy individuals, which will lower health insurance premiums.” In Congress’s view, that coverage requirement was “essential to creating effective health insurance markets.” Congress also provided an exemption from the coverage requirement for anyone who has to spend more than eight percent of his income on health insurance [...] 

Third, the Act seeks to make insurance more affordable by giving refundable tax credits to individuals with household incomes between 100 percent and 400 percent of the federal poverty line. Individuals who meet the Act’s requirements may purchase insurance with the tax credits, which are provided in advance directly to the individual's insurer. 

These three reforms are closely intertwined. As noted, Congress found that the guaranteed issue and community rating requirements would not work without the coverage requirement. And the coverage requirement would not work without the tax credits. The reason is that, without the tax credits, the cost of buying insurance would exceed eight percent of income for a large number of individuals, which would exempt them from the coverage requirement [...] 

In addition to those three reforms, the Act requires the creation of an “Exchange” in each State where people can shop for insurance, usually online. An Exchange may be created in one of two ways. First, the Act provides that “[e]ach State shall . . . establish an American Health Benefit Exchange . . . for the State.” Second, if a State nonetheless chooses not to establish its own Exchange, the Act provides that the Secretary of Health and Human Services “shall . . . establish and operate such Exchange within the State.”

The issue in this case is whether the Act’s tax credits are available in States that have a Federal Exchange rather than a State Exchange. The Act initially provides that tax credits “shall be allowed” for any “applicable taxpayer.” 26 U.S.C. §36B(a). The Act then provides that the amount of the tax credit depends in part on whether the taxpayer has enrolled in an insurance plan through “an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act." 26 U.S.C. §§36B(b)-(c) (emphasis added).

The IRS addressed the availability of tax credits by promulgating a rule that made them available on both State and Federal Exchanges. As relevant here, the IRS Rule provides that a taxpayer is eligible for a tax credit if he enrolled in an insurance plan through “an Exchange,” which is defined as “an Exchange serving the individual market . . . regardless of whether the Exchange is established and operated by a State . . . or by HHS.” At this point, 16 States and the District of Columbia have established their own Exchanges; the other 34 States have elected to have HHS do so.

Petitioners are four individuals who live in Virginia, which has a Federal Exchange. They do not wish to purchase health insurance. In their view, Virginia’s Exchange does not qualify as “an Exchange established by the State,” so they should not receive any tax credits. That would make the cost of buying insurance more than eight percent of their income, which would exempt them from the Act’s coverage requirement. 

Under the IRS Rule, however, Virginia’s Exchange would qualify as “an Exchange established by the State,” so petitioners would receive tax credits. That would make the cost of buying insurance less than eight percent of petitioners’ income, which would subject them to the Act’s coverage requirement. The IRS Rule therefore requires petitioners to either buy health insurance they do not want, or make a payment to the IRS.

Petitioners challenged the IRS Rule in Federal District Court. The District Court dismissed the suit, holding that the Act unambiguously made tax credits available to individuals enrolled through a Federal Exchange. The Court of Appeals for the Fourth Circuit affirmed. The Fourth Circuit viewed the Act as “ambiguous and subject to at least two different interpretations.” The court therefore deferred to the IRS's interpretation under Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984). 

II

[...] When analyzing an agency’s interpretation of a statute, we often apply the two-step framework announced in Chevron, 467 U. S. 837. Under that framework, we ask whether the statute is ambiguous and, if so, whether the agency’s interpretation is reasonable. This approach “is premised on the theory that a statute’s ambiguity constitutes an implicit delegation from Congress to the agency to fill in the statutory gaps.” FDA v. Brown & Williamson Tobacco Corp., 529 U. S. 120, 159 (2000). “In extraordinary cases, however, there may be reason to hesitate before concluding that Congress has intended such an implicit delegation.”

This is one of those cases. The tax credits are among the Act’s key reforms, involving billions of dollars in spending each year and affecting the price of health insurance for millions of people. Whether those credits are available on Federal Exchanges is thus a question of deep “economic and political significance” that is central to this statutory scheme; had Congress wished to assign that question to an agency, it surely would have done so expressly. It is especially unlikely that Congress would have delegated this decision to the IRS, which has no expertise in crafting health insurance policy of this sort. This is not a case for the IRS.

It is instead our task to determine the correct reading of [ACA Section 36B]

[...] We have held that Congress “does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions.” Whitman v. American Trucking Assns., Inc., 531 U. S. 457, 468 (2001). But in petitioners’ view, Congress made the viability of the entire Affordable Care Act turn on the ultimate ancillary provision: a subsub-sub section of the Tax Code. We doubt that is what Congress meant to do. Had Congress meant to limit tax credits to State Exchanges, it likely would have done so in the definition of “applicable taxpayer” or in some other prominent manner. It would not have used such a winding path of connect-the-dots provisions about the amount of the credit.

Petitioners’ arguments about the plain meaning of Section 36B are strong. But while the meaning of the phrase "an Exchange established by the State” may seem plain “when viewed in isolation,” such a reading turns out to be “untenable in light of [the statute] as a whole.” In this instance, the context and structure of the Act compel us to depart from what would otherwise be the most natural reading of the pertinent statutory phrase.

Reliance on context and structure in statutory interpretation is a “subtle business, calling for great wariness lest what professes to be mere rendering becomes creation and attempted interpretation of legislation becomes legislation itself.” For the reasons we have given, however, such reliance is appropriate in this case, and leads us to conclude that Section 36B allows tax credits for insurance purchased on any Exchange created under the Act. Those credits are necessary for the Federal Exchanges to function like their State Exchange counterparts, and to avoid the type of calamitous result that Congress plainly meant to avoid.

In a democracy, the power to make the law rests with those chosen by the people. Our role is more confined—“to say what the law is.” Marbury v. Madison, 1 Cranch 137, 177 (1803). That is easier in some cases than in others. But in every case we must respect the role of the Legislature, and take care not to undo what it has done. A fair reading of legislation demands a fair understanding of the legislative plan.

Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter. Section 36B can fairly be read consistent with what we see as Congress’s plan, and that is the reading we adopt.

The judgment of the United States Court of Appeals for the Fourth Circuit is Affirmed.

West Virginia v. Environmental Protection Agency

Supreme Court of the United States

Decided June 30, 3033

Chief Justice ROBERTS, delivered the opinion of the Court.

The Clean Air Act authorizes the Environmental Protection Agency to regulate power plants by setting a "standard of performance" for their emission of certain pollutants into the air. That standard may be different for new and existing plants, but in each case it must reflect the "best system of emission reduction" that the Agency has determined to be "adequately demonstrated" for the particular category. For existing plants, the States then implement that requirement by issuing rules restricting emissions from sources within their borders.

Since passage of the Act 50 years ago, EPA has exercised this authority by setting performance standards based on measures that would reduce pollution by causing plants to operate more cleanly. In 2015, however, EPA issued a new rule concluding that the "best system of emission reduction" for existing coal-fired power plants included a requirement that such facilities reduce their own production of electricity, or subsidize increased generation by natural gas, wind, or solar sources.

The question before us is whether this broader conception of EPA's authority is within the power granted to it by the Clean Air Act.

[Part I contains an overview and history of the Clean Air Act's regulatory programs, including the Clean Power Plan rule, promulgated in 2015 to regulate carbon dioxide emissions. Carbon dioxide is an air pollutant that causes climate change. The regulations would effectively implement a sector-wide shift in electricity production from coal to natural gas and renewables with rules that would force coal plants to reduce their own production, subsidize an increase in production by cleaner sources, or both. According to projections, implementing the regulations would entail billions of dollars in compliance costs, and require the retirement of dozens of coal-fired plants, which would lead the industry to raise retail consumer electricity prices.

The Clean Power Plan rule never went into effect because the same day that EPA promulgated the rule, dozens of parties, including 27 States, petitioned for review in the D. C. Circuit. The D. C. Circuit court declined to stay the rule, so the challengers sought the same relief from the Supreme Court, which granted a stay, preventing the rule from taking effect. The Obama Administration that promulgated the rule was replaced by the Trump Administration, which repealed the rule in 2019. Trump's EPA claimed that the Clean Power Plan had been "in excess of its statutory authority." The agency added that the questions raised by the Clean Power Plan fell under the "major question doctrine." The EPA explained that courts "expect Congress to speak clearly if it wishes to assign to an agency decisions of vast economic and political significance." The EPA claimed that because the Clean Power Plan was projected to have billions of dollars of impact, and because the rule "would empower EPA to order the wholesale restructuring of any industrial sector," there needed to be a clear statement that Congress intended to delegate authority "of this breadth to regulate a fundamental sector of the economy." 

[Part II Discussion about Article III standing in light of the Clean Power Plan rule's repeal has been omitted.]

Part III

A.

In devising emissions limits for power plants, EPA first "determines" the "best system of emission reduction" [BSER] that— taking into account cost, health, and other factors—it finds "has been adequately demonstrated." 42 U. S. C. § 7411(a)(1). The Agency then quantifies "the degree of emission limitation achievable" if that best system were applied to the covered source. The BSER, therefore, "is the central determination that the EPA must make in formulating [its emission] guidelines" under Section 111. The issue here is whether restructuring the Nation's overall mix of electricity generation, to transition from 38% coal to 27% coal by 2030, can be the "best system of emission reduction" within the meaning of Section 111.

"It is a fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme." Davis v. Michigan Dept. of Treasury, 489 U. S. 803, 809 (1989). Where the statute at issue is one that confers authority upon an administrative agency, that inquiry must be "shaped, at least in some measure, by the nature of the question presented"—whether Congress in fact meant to confer the power the agency has asserted. FDA v. Brown & Williamson Tobacco Corp., 529 U. S. 120, 159 (2000). In the ordinary case, that context has no great effect on the appropriate analysis. Nonetheless, our precedent teaches that there are "extraordinary cases" that call for a different approach—cases in which the "history and the breadth of the authority that [the agency] has asserted," and the "economic and political significance" of that assertion, provide a "reason to hesitate before concluding that Congress" meant to confer such authority.

Such cases have arisen from all corners of the administrative state. In Brown & Williamson, for instance, the Food and Drug Administration claimed that its authority over "drugs" and "devices" included the power to regulate, and even ban, tobacco products. Id., at 126-127. We rejected that "expansive construction of the statute," concluding that "Congress could not have intended to delegate" such a sweeping and consequential authority "in so cryptic a fashion." In Alabama Assn. of Realtors v. Department of Health and Human Servs., 594 U. S. ___, ___ (2021) (per curiam) (slip op., at 3), we concluded that the Centers for Disease Control and Prevention could not, under its authority to adopt measures "necessary to prevent the . . . spread of " disease, institute a nationwide eviction moratorium in response to the COVID-19 pandemic. We found the statute's language a "wafer-thin reed" on which to rest such a measure, given "the sheer scope of the CDC's claimed authority," its "unprecedented" nature, and the fact that Congress had failed to extend the moratorium after previously having done so.

Our decision in Utility Air addressed another question regarding EPA's authority—namely, whether EPA could construe the term "air pollutant," in a specific provision of the Clean Air Act, to cover greenhouse gases. 573 U. S., at 310. Despite its textual plausibility, we noted that the Agency's interpretation would have given it permitting authority over millions of small sources, such as hotels and office buildings, that had never before been subject to such requirements. We declined to uphold EPA's claim of "unheralded" regulatory power over "a significant portion of the American economy." In Gonzales v. Oregon, 546 U. S. 243 (2006), we confronted the Attorney General's assertion that he could rescind the license of any physician who prescribed a controlled substance for assisted suicide, even in a State where such action was legal. The Attorney General argued that this came within his statutory power to revoke licenses where he found them "inconsistent with the public interest," 21 U. S. C. § 823(f). We considered the "idea that Congress gave [him] such broad and unusual authority through an implicit delegation . . . not sustainable." 546 U. S., at 267. Similar considerations informed our recent decision invalidating the Occupational Safety and Health Administration's mandate that "84 million Americans . . . either obtain a COVID-19 vaccine or undergo weekly medical testing at their own expense." National Federation of Independent Business v. Occupational Safety and Health Administration, 595 U. S. ___, ___ (2022) (per curiam) (slip op., at 5). We found it "telling that OSHA, in its half century of existence," had never relied on its authority to regulate occupational hazards to impose such a remarkable measure. 

All of these regulatory assertions had a colorable textual basis. And yet, in each case, given the various circumstances, "common sense as to the manner in which Congress [would have been] likely to delegate" such power to the agency at issue, Brown & Williamson, 529 U. S., at 133, made it very unlikely that Congress had actually done so. Extraordinary grants of regulatory authority are rarely accomplished through "modest words," "vague terms," or "subtle device[s]." Whitman, 531 U. S., at 468. Nor does Congress typically use oblique or elliptical language to empower an agency to make a "radical or fundamental change" to a statutory scheme. MCI Telecommunications Corp. v. American Telephone & Telegraph Co., 512 U. S. 218, 229 (1994). Agencies have only those powers given to them by Congress, and "enabling legislation" is generally not an "open book to which the agency [may] add pages and change the plot line." E. Gellhorn & P. Verkuil, Controlling Chevron-Based Delegations, 20 Cardozo L. Rev. 989, 1011 (1999). We presume that "Congress intends to make major policy decisions itself, not leave those decisions to agencies." United States Telecom Assn. v. FCC, 855 F. 3d 381, 419 (CADC 2017) (Kavanaugh, J., dissenting from denial of rehearing en banc).

Thus, in certain extraordinary cases, both separation of powers principles and a practical understanding of legislative intent make us "reluctant to read into ambiguous statutory text" the delegation claimed to be lurking there. Utility Air, 573 U. S., at 324. To convince us otherwise, something more than a merely plausible textual basis for the agency action is necessary. The agency instead must point to "clear congressional authorization" for the power it claims. 

The dissent criticizes us for "announc[ing] the arrival" of this major questions doctrine, and argues that each of the decisions just cited simply followed our "ordinary method" of "normal statutory interpretation," post, at 13, 15 (opinion of KAGAN, J.). But in what the dissent calls the "key case" in this area, Brown & Williamson, the Court could not have been clearer: "In extraordinary cases . . . there may be reason to hesitate" before accepting a reading of a statute that would, under more "ordinary" circumstances, be upheld. Or, as we put it more recently, we "typically greet" assertions of "extravagant statutory power over the national economy" with "skepticism." Utility Air, 573 U. S., at 324. The dissent attempts to fit the analysis in these cases within routine statutory interpretation, but the bottom line—a requirement of "clear congressional authorization,"—confirms that the approach under the major questions doctrine is distinct.

As for the major questions doctrine "label[ ]," it took hold because it refers to an identifiable body of law that has developed over a series of significant cases all addressing a particular and recurring problem: agencies asserting highly consequential power beyond what Congress could reasonably be understood to have granted. Scholars and jurists have recognized the common threads between those decisions. So have we.

B.

Under our precedents, this is a major questions case. In arguing that Section 111(d) empowers it to substantially restructure the American energy market, EPA "claim[ed] to discover in a long-extant statute an unheralded power" representing a "transformative expansion in [its] regulatory authority." It located that newfound power in the vague language of an "ancillary provision[ ]" of the Act, one that was designed to function as a gap filler and had rarely been used in the preceding decades. And the Agency's discovery allowed it to adopt a regulatory program that Congress had conspicuously and repeatedly declined to enact itself. Given these circumstances, there is every reason to "hesitate before concluding that Congress" meant to confer on EPA the authority it claims under Section 111(d). 

Prior to 2015, EPA had always set emissions limits under Section 111 based on the application of measures that would reduce pollution by causing the regulated source to operate more cleanly. It had never devised a cap by looking to a "system" that would reduce pollution simply by "shifting" polluting activity "from dirtier to cleaner sources." And as Justice Frankfurter has noted, "just as established practice may shed light on the extent of power conveyed by general statutory language, so the want of assertion of power by those who presumably would be alert to exercise it, is equally significant in determining whether such power was actually conferred." FTC v. Bunte Brothers, Inc., 312 U. S. 349, 352 (1941).

[Description of how the Clean Power Plan rule departed from the way the EPA had implemented Section 111 of the Clean Air Act in the past, when the agency based emissions limits on measures that imprve the efficiency at existing power plants instead of shifting to a new type of power generation.]

But, the Agency explained, in order to "control[ ] CO2 from affected [plants] at levels . . . necessary to mitigate the dangers presented by climate change," it could not base the emissions limit on "measures that improve efficiency at the power plants." "The quantity of emissions reductions resulting from the application of these measures" would have been "too small." Instead, to attain the necessary "critical CO2 reductions," EPA adopted what it called a "broader, forward-thinking approach to the design" of Section 111 regulations. Rather than focus on improving the performance of individual sources, it would "improve the overall power system by lowering the carbon intensity of power generation." (emphasis added). And it would do that by forcing a shift throughout the power grid from one type of energy source to another. In the words of the then-EPA Administrator, the rule was "not about pollution control" so much as it was "an investment opportunity" for States, especially "investments in renewables and clean energy."

This view of EPA's authority was not only unprecedented; it also effected a "fundamental revision of the statute, changing it from [one sort of] scheme of . . . regulation" into an entirely different kind. MCI, 512 U. S., at 231. Under the Agency's prior view of Section 111, its role was limited to ensuring the efficient pollution performance of each individual regulated source. Under that paradigm, if a source was already operating at that level, there was nothing more for EPA to do. Under its newly "discover[ed]" authority, however, EPA can demand much greater reductions in emissions based on a very different kind of policy judgment: that it would be "best" if coal made up a much smaller share of national electricity generation. And on this view of EPA's authority, it could go further, perhaps forcing coal plants to "shift" away virtually all of their generation—i.e., to cease making power altogether.

The Government attempts to downplay the magnitude of this "unprecedented power over American industry." The amount of generation shifting ordered, it argues, must be "adequately demonstrated" and "best" in light of the statutory factors of "cost," "nonair quality health and environmental impact," and "energy requirements." 42 U. S. C. § 7411(a)(1). EPA therefore must limit the magnitude of generation shift it demands to a level that will not be "exorbitantly costly" or "threaten the reliability of the grid."

But this argument does not so much limit the breadth of the Government's claimed authority as reveal it. On EPA's view of Section 111(d), Congress implicitly tasked it, and it alone, with balancing the many vital considerations of national policy implicated in deciding how Americans will get their energy. EPA decides, for instance, how much of a switch from coal to natural gas is practically feasible by 2020, 2025, and 2030 before the grid collapses, and how high energy prices can go as a result before they become unreasonably "exorbitant."

There is little reason to think Congress assigned such decisions to the Agency. For one thing, as EPA itself admitted when requesting special funding, "Understand[ing] and project[ing] system-wide . . . trends in areas such as electricity transmission, distribution, and storage" requires "technical and policy expertise not traditionally needed in EPA regulatory development." "When [an] agency has no comparative expertise" in making certain policy judgments, we have said, "Congress presumably would not" task it with doing so. Kisor v. Wilkie, 588 U. S. ___, ___ (2019) (slip op., at 17); see also Gonzales, 546 U. S., at 266-267.

We also find it "highly unlikely that Congress would leave" to "agency discretion" the decision of how much coal-based generation there should be over the coming decades. The basic and consequential tradeoffs involved in such a choice are ones that Congress would likely have intended for itself. Congress certainly has not conferred a like authority upon EPA anywhere else in the Clean Air Act. The last place one would expect to find it is in the previously little-used backwater of Section 111(d).

The dissent contends that there is nothing surprising about EPA dictating the optimal mix of energy sources nationwide, since that sort of mandate will reduce air pollution from power plants, which is EPA's bread and butter. But that does not follow. Forbidding evictions may slow the spread of disease, but the CDC's ordering such a measure certainly "raise[s] an eyebrow." We would not expect the Department of Homeland Security to make trade or foreign policy even though doing so could decrease illegal immigration. And no one would consider generation shifting a "tool" in OSHA's "toolbox," even though reducing generation at coal plants would reduce workplace illness and injury from coal dust [...]

Finally, we cannot ignore that the regulatory writ EPA newly uncovered conveniently enabled it to enact a program that, long after the dangers posed by greenhouse gas emissions "had become well known, Congress considered and rejected" multiple times. At bottom, the Clean Power Plan essentially adopted a cap-and-trade scheme, or set of state cap-and-trade schemes, for carbon. Congress, however, has consistently rejected proposals to amend the Clean Air Act to create such a program. "The importance of the issue," along with the fact that the same basic scheme EPA adopted "has been the subject of an earnest and profound debate across the country, . . . makes the oblique form of the claimed delegation all the more suspect." Gonzales, 546 U. S., at 267-268 (internal quotation marks omitted).

C.

[...] Capping carbon dioxide emissions at a level that will force a nationwide transition away from the use of coal to generate electricity may be a sensible "solution to the crisis of the day." But it is not plausible that Congress gave EPA the authority to adopt on its own such a regulatory scheme in Section 111(d). A decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body. The judgment of the Court of Appeals for the District of Columbia Circuit is reversed, and the cases are remanded for further proceedings consistent with this opinion.

It is so ordered.

Justice KAGAN, with whom JUSTICE BREYER and JUSTICE SOTOMAYOR join, dissenting.

Today, the Court strips the Environmental Protection Agency (EPA) of the power Congress gave it to respond to "the most pressing environmental challenge of our time." Massachusetts v. EPA, 549 U. S. 497, 505 (2007).

Climate change's causes and dangers are no longer subject to serious doubt. Modern science is "unequivocal that human influence"—in particular, the emission of greenhouse gases like carbon dioxide—"has warmed the atmosphere, ocean and land." The Earth is now warmer than at any time "in the history of modern civilization," with the six warmest years on record all occurring in the last decade. The rise in temperatures brings with it "increases in heatrelated deaths," "coastal inundation and erosion," "more frequent and intense hurricanes, floods, and other extreme weather events," "drought," "destruction of ecosystems," and "potentially significant disruptions of food production." If the current rate of emissions continues, children born this year could live to see parts of the Eastern seaboard swallowed by the ocean. Rising waters, scorching heat, and other severe weather conditions could force "mass migration events[,] political crises, civil unrest," and "even state failure." And by the end of this century, climate change could be the cause of "4.6 million excess yearly deaths."

Congress charged EPA with addressing those potentially catastrophic harms, including through regulation of fossil-fuel-fired power plants. Section 111 of the Clean Air Act directs EPA to regulate stationary sources of any substance that "causes, or contributes significantly to, air pollution" and that "may reasonably be anticipated to endanger public health or welfare." 42 U. S. C. § 7411(b)(1)(A). Carbon dioxide and other greenhouse gases fit that description. EPA thus serves as the Nation's "primary regulator of greenhouse gas emissions." And among the most significant of the entities it regulates are fossil-fuel-fired (mainly coal- and natural-gas-fired) power plants. Today, those electricity-producing plants are responsible for about one quarter of the Nation's greenhouse gas emissions. Curbing that output is a necessary part of any effective approach for addressing climate change.

To carry out its Section 111 responsibility, EPA issued the Clean Power Plan in 2015. The premise of the Plan— which no one really disputes—was that operational improvements at the individual-plant level would either "lead to only small emission reductions" or would cost far more than a readily available regulatory alternative. That alternative—which fossil-fuel-fired plants were "already using to reduce their [carbon dioxide] emissions" in "a cost effective manner"—is called generation shifting. As the Court explains, the term refers to ways of shifting electricity generation from higher emitting sources to lower emitting ones— more specifically, from coal-fired to natural-gas-fired sources, and from both to renewable sources like solar and wind. A power company (like the many supporting EPA here) might divert its own resources to a cleaner source, or might participate in a cap-and-trade system with other companies to achieve the same emissions reduction goals.

This Court has obstructed EPA's effort from the beginning. Right after the Obama administration issued the Clean Power Plan, the Court stayed its implementation. That action was unprecedented: Never before had the Court stayed a regulation then under review in the lower courts. The effect of the Court's order, followed by the Trump administration's repeal of the rule, was that the Clean Power Plan never went into effect. The ensuing years, though, proved the Plan's moderation. Market forces alone caused the power industry to meet the Plan's nationwide emissions target—through exactly the kinds of generation shifting the Plan contemplated. So by the time yet another President took office, the Plan had become, as a practical matter, obsolete. For that reason, the Biden administration announced that, instead of putting the Plan into effect, it would commence a new rulemaking. Yet this Court determined to pronounce on the legality of the old rule anyway. The Court may be right that doing so does not violate Article III mootness rules (which are notoriously strict). But the Court's docket is discretionary, and because no one is now subject to the Clean Power Plan's terms, there was no reason to reach out to decide this case. The Court today issues what is really an advisory opinion on the proper scope of the new rule EPA is considering. That new rule will be subject anyway to immediate, pre-enforcement judicial review. But this Court could not wait—even to see what the new rule says—to constrain EPA's efforts to address climate change.

The limits the majority now puts on EPA's authority fly in the face of the statute Congress wrote. The majority says it is simply "not plausible" that Congress enabled EPA to regulate power plants' emissions through generation shifting. But that is just what Congress did when it broadly authorized EPA in Section 111 to select the "best system of emission reduction" for power plants. The "best system" full stop—no ifs, ands, or buts of any kind relevant here. The parties do not dispute that generation shifting is indeed the "best system"—the most effective and efficient way to reduce power plants' carbon dioxide emissions. And no other provision in the Clean Air Act suggests that Congress meant to foreclose EPA from selecting that system; to the contrary, the Plan's regulatory approach fits hand-in-glove with the rest of the statute. The majority's decision rests on one claim alone: that generation shifting is just too new and too big a deal for Congress to have authorized it in Section 111's general terms. But that is wrong. A key reason Congress makes broad delegations like Section 111 is so an agency can respond, appropriately and commensurately, to new and big problems. Congress knows what it doesn't and can't know when it drafts a statute; and Congress therefore gives an expert agency the power to address issues—even significant ones—as and when they arise. That is what Congress did in enacting Section 111. The majority today overrides that legislative choice. In so doing, it deprives EPA of the power needed—and the power granted—to curb the emission of greenhouse gases [...]

In short, when it comes to delegations, there are good reasons for Congress (within extremely broad limits) to get to call the shots. Congress knows about how government works in ways courts don't. More specifically, Congress knows what mix of legislative and administrative action conduces to good policy. Courts should be modest.

Today, the Court is not. Section 111, most naturally read, authorizes EPA to develop the Clean Power Plan—in other words, to decide that generation shifting is the "best system of emission reduction" for power plants churning out carbon dioxide. Evaluating systems of emission reduction is what EPA does. And nothing in the rest of the Clean Air Act, or any other statute, suggests that Congress did not mean for the delegation it wrote to go as far as the text says. In rewriting that text, the Court substitutes its own ideas about delegations for Congress's. And that means the Court substitutes its own ideas about policymaking for Congress's. The Court will not allow the Clean Air Act to work as Congress instructed. The Court, rather than Congress, will decide how much regulation is too much.

The subject matter of the regulation here makes the Court's intervention all the more troubling. Whatever else this Court may know about, it does not have a clue about how to address climate change. And let's say the obvious: The stakes here are high. Yet the Court today prevents congressionally authorized agency action to curb power plants' carbon dioxide emissions. The Court appoints itself—instead of Congress or the expert agency—the decisionmaker on climate policy. I cannot think of many things more frightening. Respectfully, I dissent.

We know now that courts apply a very deferential standard of review when they evaluate agencies’ interpretations of statutes. Now we will learn about the standard of review courts use to evaluate all of the other decisions agencies make. That standard of review is established in the APA. APA Section 706(2)(A) says that courts can hold unlawful and set aside agency actions, findings, and conclusions that are “arbitrary and capricious.” 

The arbitrary and capricious standard of review is most commonly used to assess the factual basis of agency informal, notice-and-comment, rulemaking, but it applies to all agency actions according to the APA. 

Under the “arbitrary and capricious” standard of review, courts look to see whether agencies have taken a “hard look” at the underlying questions of policy and fact upon which their decisions are based. According to the hard look doctrine, gencies have to justify their decisions with adequate reasoning to pass muster under the arbitrary and capricious standard. In practice, the arbitrary and capricious standard and review is very similar, if not identical, to step two of the Chevron test. In the second step of Chevron, courts defer to the agency’s interpretation of the statute so long as the interpretation is reasonable. We will see in Overton Park and State Farm that the courts give agencies a lot of deference under the arbitrary and capricious standard of review.

What is The Substantial Evidence Standard?

The APA sets a different standard of review when courts are reviewing formal rulemaking or adjudication procedures. Section 706(2)(E) says that reviewing courts can hold unlawful agency agency action, findings, and conclusions that are "unsupported by substantial evidence in a case subject to sections 556 and 557 of this title or otherwise reviewed on the record of an agency hearing provided by statute..." This "substantial evidence" standard assumes that there is a detailed record of agency decisions and rationales that was created in formal rulemaking or adjudication procedures.

In practice, courts have applied the 706(2)(E) substantial evidence standard similarly to the arbitrary and capricious standard. While the Supreme Court has said that the “substantial evidence” standard is even more deferential than the arbitrary and capricious standard of review, the standards are so similar and so deferential that they are functionally the same. In assessing both formal and informal adjudication, reviewing courts generally avoid second-guessing or revisiting agency fact-finding in formal adjudication, only doing so in rare cases when the agency decision is “clearly erroneous” or when there is definite and firm evidence that the agency acted in error. Dickinson v. Zurko, 527 U.S. 150 (1999) (describing the “substantial evidence” standard of review).

Citizens to Preserve Overton Park v. Volpe

401 U.S. 402 (1971)

Opinion of the Court by MR. JUSTICE MARSHALL, announced by MR. JUSTICE STEWART.

The growing public concern about the quality of our natural environment has prompted Congress in recent years to enact legislation designed to curb the accelerating destruction of our country’s natural beauty. We are concerned in this case with § 4(f) of the Department of Transportation Act of 1966 and § 18(a) of the Federal-Aid Highway Act of 1968. These statutes prohibit the Secretary of Transportation from authorizing the use of federal funds to finance the construction of highways through public parks if a “feasible and prudent” alternative route exists. If no such route is available, the statutes allow him to approve construction through parks only if there has been “all possible planning to minimize harm” to the park.

Petitioners, private citizens as well as local and national conservation organizations, contend that the Secretary has violated these statutes by authorizing the expenditure of federal funds for the construction of a six-lane interstate highway through a public park in Memphis, Tennessee. Their claim was rejected by the District Court, which granted the Secretary’s motion for summary judgment, and the Court of Appeals for the Sixth Circuit affirmed. After oral argument, this Court granted a stay that halted construction and, treating the application for the stay as a petition for certiorari, granted review. We now reverse the judgment below and remand for further proceedings in the District Court.

Overton Park is a 342-acre city park located near the center of Memphis. The park contains a zoo, a nine-hole municipal golf course, an outdoor theater, nature trails, a bridle path, an art academy, picnic areas, and 170 acres of forest. The proposed highway, which is to be a six-lane, high-speed, expressway, will sever the zoo from the rest of the park [...] 

In April 1968, the Secretary announced that he concurred in the judgment of local officials that I-40 should be built through the park. And in September 1969 the State acquired the right-of-way inside Overton Park from the city. Final approval for the project—the route as well as the design— was not announced until November 1969 [...] Neither announcement approving the route and design of I-40 was accompanied by a statement of the Secretary’s factual findings. He did not indicate why he believed there were no feasible and prudent alternative routes or why design changes could not be made to reduce the harm to the park.

Petitioners contend that the Secretary’s action is invalid without such formal findings and that the Secretary did not make an independent determination but merely relied on the judgment of the Memphis City Council. They also contend that it would be “feasible and prudent” to route I-40 around Overton Park either to the north or to the south. And they argue that if these alternative routes are not “feasible and prudent,” the present plan does not include “all possible” methods for reducing harm to the park. Petitioners claim that I-40 could be built under the park by using either of two possible tunneling methods [...]

[The standard of review in] § 706 of the Administrative Procedure Act provides that a “reviewing court shall . . . hold unlawful and set aside agency action, findings, and conclusions found” not to meet six separate standards. In all cases agency action must be set aside if the action was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law” or if the action failed to meet statutory, procedural, or constitutional requirements. In certain narrow, specifically limited situations, the agency action is to be set aside if the action was not supported by “substantial evidence.” And in other equally narrow circumstances the reviewing court is to engage in a de novo review of the action and set it aside if it was “unwarranted by the facts.”

Petitioners argue that the Secretary's approval of the construction of I-40 through Overton Park is subject to one or the other of these latter two standards of limited applicability. First, they contend that the "substantial evidence" standard of § 706(2)(E) must be applied. In the alternative, they claim that § 706(2)(F) applies and that there must be a de novo review to determine if the Secretary’s action was “unwarranted by the facts.” Neither of these standards is, however, applicable.

Review under the substantial-evidence test is authorized only when the agency action is taken pursuant to a rulemaking provision of the Administrative Procedure Act itself, 5 U.S.C. § 553, or when the agency action is based on a public adjudicatory hearing. See 5 U.S.C. §§ 556, 557. The Secretary’s decision to allow the expenditure of federal funds to build I-40 through Overton Park was plainly not an exercise of a rulemaking function. And the only hearing that is required by either the Administrative Procedure Act or the statutes regulating the distribution of federal funds for highway construction is a public hearing conducted by local officials for the purpose of informing the community about the proposed project and eliciting community views on the design and route. The hearing is nonadjudicatory, quasi-legislative in nature. It is not designed to produce a record that is to be the basis of agency action—the basic requirement for substantial-evidence review. 

Petitioners’ alternative argument also fails. De novo review of whether the Secretary’s decision was “unwarranted by the facts” is authorized by § 706(2)(F) in only two circumstances. First, such de novo review is authorized when the action is adjudicatory in nature and the agency fact finding procedures are inadequate. And, there may be independent judicial fact finding when issues that were not before the agency are raised in a proceeding to enforce nonadjudicatory agency action. Neither situation exists here.

Even though there is no de novo review in this case and the Secretary’s approval of the route of I-40 does not ultimately have to meet the substantial-evidence test, the generally applicable standards of § 706 require the reviewing court to engage in a substantial inquiry [...] 

The court is first required to decide whether the Secretary acted within the scope of his authority. This determination naturally begins with a delineation of the scope of the Secretary’s authority and discretion [...] Also involved in this initial inquiry is a determination of whether on the facts the Secretary’s decision can reasonably be said to be within that range. The reviewing court must consider whether the Secretary properly construed his authority to approve the use of parkland as limited to situations where there are no feasible alternative routes or where feasible alternative routes involve uniquely difficult problems. And the reviewing court must be able to find that the Secretary could have reasonably believed that in this case there are no feasible alternatives or that alternatives do involve unique problems.

Scrutiny of the facts does not end, however, with the determination that the Secretary has acted within the scope of his statutory authority. Section 706(2)(A) requires a finding that the actual choice made was not “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” To make this finding the court must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment. Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. The court is not empowered to substitute its judgment for that of the agency.

The final inquiry is whether the Secretary’s action followed the necessary procedural requirements. Here the only procedural error alleged is the failure of the Secretary to make formal findings and state his reason for allowing the highway to be built through the park.

Undoubtedly, review of the Secretary’s action is hampered by his failure to make such findings, but the absence of formal findings does not necessarily require that the case be remanded to the Secretary. Neither the Department of Transportation Act nor the Federal-Aid Highway Act requires such formal findings. Moreover, the Administrative Procedure Act requirements that there be formal findings in certain rulemaking and adjudicatory proceedings do not apply to the Secretary’s action here [...] 

Moreover, there is an administrative record that allows the full, prompt review of the Secretary’s action that is sought without additional delay which would result from having a remand to the Secretary.

That administrative record is not, however, before us. The lower courts based their review on the litigation affidavits that were presented. These affidavits were merely “post hoc” rationalizations which have traditionally been found to be an inadequate basis for review. And they clearly do not constitute the “whole record” compiled by the agency: the basis for review required by § 706 of the Administrative Procedure Act. 

Thus it is necessary to remand this case to the District Court for plenary review of the Secretary’s decision. That review is to be based on the full administrative record that was before the Secretary at the time he made his decision. But since the bare record may not disclose the factors that were considered or the Secretary's construction of the evidence it may be necessary for the District Court to require some explanation in order to determine if the Secretary acted within the scope of his authority and if the Secretary's action was justifiable under the applicable standard.

The court may require the administrative officials who participated in the decision to give testimony explaining their action. Of course, such inquiry into the mental processes of administrative decisionmakers is usually to be avoided. And where there are administrative findings that were made at the same time as the decision, there must be a strong showing of bad faith or improper behavior before such inquiry may be made. But here there are no such formal findings and it may be that the only way there can be effective judicial review is by examining the decisionmakers themselves. 

The District Court is not, however, required to make such an inquiry. It may be that the Secretary can prepare formal findings [...] that will provide an adequate explanation for his action. Such an explanation will, to some extent, be a “post hoc rationalization” and thus must be viewed critically. If the District Court decides that additional explanation is necessary, that court should consider which method will prove the most expeditious so that full review may be had as soon as possible.

Reversed and remanded.

Motor Vehicle Manufacturers Association v. State Farm Mutual Automobile Insurance

463 U.S. 29 (1983)

JUSTICE WHITE delivered the opinion of the Court.

The development of the automobile gave Americans unprecedented freedom to travel, but exacted a high price for enhanced mobility. Since 1929, motor vehicles have been the leading cause of accidental deaths and injuries in the United States. In 1982, 46,300 Americans died in motor vehicle accidents and hundreds of thousands more were maimed and injured. While a consensus exists that the current loss of life on our highways is unacceptably high, improving safety does not admit to easy solution. In 1966, Congress decided that at least part of the answer lies in improving the design and safety features of the vehicle itself. But much of the technology for building safer cars was undeveloped or untested. Before changes in automobile design could be mandated, the effectiveness of these changes had to be studied, their costs examined, and public acceptance considered. This task called for considerable expertise and Congress responded by enacting the National Traffic and Motor Vehicle Safety Act of 1966. The Act, created for the purpose of “reduc[ing] traffic accidents and deaths and injuries to persons resulting from traffic accidents,” directs the Secretary of Transportation or his delegate to issue motor vehicle safety standards that “shall be practicable, shall meet the need for motor vehicle safety, and shall be stated in objective terms.” In issuing these standards, the Secretary is directed to consider “relevant available motor vehicle safety data,” whether the proposed standard “is reasonable, practicable and appropriate” for the particular type of motor vehicle, and the “extent to which such standards will contribute to carrying out the purposes” of the Act. 

[...] We review today whether [the National Highway Traffic Safety Administration (“NHTSA”)] acted arbitrarily and capriciously in revoking the requirement in Motor Vehicle Safety Standard 208 that new motor vehicles produced after September 1982 be equipped with passive restraints [otherwise known as automatic seatbelts and airbags] to protect the safety of the occupants of the vehicle in the event of a collision. Briefly summarized, we hold that the agency failed to present an adequate basis and explanation for rescinding the passive restraint requirement and that the agency must either consider the matter further or adhere to or amend Standard 208 along lines which its analysis supports.

I

The regulation whose rescission is at issue bears a complex and convoluted history. Over the course of approximately 60 rulemaking notices, the requirement has been imposed, amended, rescinded, reimposed, and now rescinded again.

As originally issued by the Department of Transportation in 1967, Standard 208 simply required the installation of seatbelts in all automobiles. It soon became apparent that the level of seatbelt use was too low to reduce traffic injuries to an acceptable level. The Department therefore began consideration of “passive occupant restraint systems” — devices that do not depend for their effectiveness upon any action taken by the occupant except that necessary to operate the vehicle. Two types of automatic crash protection emerged: automatic seatbelts and airbags. [No rulemaking was successful for a decade, until President Carter appointed Brock Adams as the U.S. Secretary of Transportation.]

Within months of assuming office, Secretary Brock Adams [...] issued a new mandatory passive restraint regulation, known as Modified Standard 208. The Modified Standard mandated the phasing in of passive restraints beginning with large cars in model year 1982 and extending to all cars by model year 1984. The two principal systems that would satisfy the Standard were airbags and passive belts; the choice of which system to install was left to the manufacturers [...] 

In February 1981, however, Secretary of Transportation Andrew Lewis reopened the rulemaking due to changed economic circumstances and, in particular, the difficulties of the automobile industry. Two months later, the agency ordered a one-year delay in the application of the Standard to large cars, extending the deadline to September 1982, and at the same time, proposed the possible rescission of the entire Standard. After receiving written comments and holding public hearings, NHTSA issued a final rule (Notice 25) that rescinded the passive restraint requirement contained in Modified Standard 208.

II

In a statement explaining the rescission, NHTSA maintained that it was no longer able to find, as it had in 1977, that the automatic restraint requirement would produce significant safety benefits. This judgment reflected not a change of opinion on the effectiveness of the technology, but a change in plans by the automobile industry. In 1977, the agency had assumed that airbags would be installed in 60% of all new cars and automatic seatbelts in 40%. By 1981 it became apparent that automobile manufacturers planned to install the automatic seatbelts in approximately 99% of the new cars. For this reason, the lifesaving potential of airbags would not be realized. Moreover, it now appeared that the overwhelming majority of passive belts planned to be installed by manufacturers could be detached easily and left that way permanently. Passive belts, once detached, then required “the same type of affirmative action that is the stumbling block to obtaining high usage levels of manual belts.” For this reason, the agency concluded that there was no longer a basis for reliably predicting that the Standard would lead to any significant increased usage of restraints at all [...]

State Farm Mutual Automobile Insurance Co. and the National Association of Independent Insurers filed petitions for review of NHTSA’s rescission of the passive restraint Standard. The United States Court of Appeals for the District of Columbia Circuit held that the agency’s rescission of the passive restraint requirement was arbitrary and capricious. [The D.C. Court of Appeals found] that the rescission of Standard 208 was arbitrary and capricious for three reasons. First, the court found insufficient as a basis for rescission NHTSA’s conclusion that it could not reliably predict an increase in belt usage under the Standard. The court held that there was insufficient evidence in the record to sustain NHTSA’s position on this issue, and that, “only a well justified refusal to seek more evidence could render rescission non-arbitrary.” Second, a majority of the panel concluded that NHTSA inadequately considered the possibility of requiring manufacturers to install nondetachable rather than detachable passive belts. Third, the majority found that the agency acted arbitrarily and capriciously by failing to give any consideration whatever to requiring compliance with Modified Standard 208 by the installation of airbags [...]

III

Both the Act and the 1974 Amendments concerning occupant crash protection standards indicate that motor vehicle safety standards are to be promulgated under the informal rulemaking procedures of the Administrative Procedure Act. 5 U.S.C. § 553. The agency’s action in promulgating such standards therefore may be set aside if found to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. §706(2)(A). We believe that the rescission or modification of an occupant-protection standard is subject to the same test [...] 

Petitioner Motor Vehicle Manufacturers Association (MVMA) disagrees, contending that the rescission of an agency rule should be judged by the same standard a court would use to judge an agency's refusal to promulgate a rule in the first place — a standard petitioner believes considerably narrower than the traditional arbitrary-and-capricious test. We reject this view. The [Motor Vehicle Safety Act] expressly equates orders “revoking” and “establishing” safety standards; neither that Act nor the APA suggests that revocations are to be treated as refusals to promulgate standards [...] 

The Department of Transportation accepts the applicability of the “arbitrary and capricious” standard. It argues that under this standard, a reviewing court may not set aside an agency rule that is rational, based on consideration of the relevant factors, and within the scope of the authority delegated to the agency by the statute. We do not disagree with this formulation. The scope of review under the “arbitrary and capricious” standard is narrow and a court is not to substitute its judgment for that of the agency. Nevertheless, the agency must examine the relevant data and articulate a satisfactory explanation for its action including a “rational connection between the facts found and the choice made.” In reviewing that explanation, we must “consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.” Normally, an agency rule would be arbitrary and capricious if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise. The reviewing court should not attempt itself to make up for such deficiencies; we may not supply a reasoned basis for the agency’s action that the agency itself has not given. SEC v. Chenery Corp., 332 U. S. 194, 196 (1947). We will, however, “uphold a decision of less than ideal clarity if the agency’s path may reasonably be discerned.” For purposes of these cases, it is also relevant that Congress required a record of the rulemaking proceedings to be compiled and submitted to a reviewing court and intended that agency findings under the [Motor Vehicle Safety Act] would be supported by “substantial evidence on the record considered as a whole.” [...]

V

The ultimate question before us is whether NHTSA’s rescission of the passive restraint requirement of Standard 208 was arbitrary and capricious. We conclude, as did the Court of Appeals, that it was. We also conclude [...] that further consideration of the issue by the agency is therefore required. We deal separately with the rescission as it applies to airbags and as it applies to seatbelts.

A

The first and most obvious reason for finding the rescission arbitrary and capricious is that NHTSA apparently gave no consideration whatever to modifying the Standard to require that airbag technology be utilized [...] 

The agency has now determined that the detachable automatic belts will not attain anticipated safety benefits because so many individuals will detach the mechanism. Even if this conclusion were acceptable in its entirety, standing alone it would not justify any more than an amendment of Standard 208 to disallow compliance by means of the one technology which will not provide effective passenger protection. It does not cast doubt on the need for a passive restraint standard or upon the efficacy of airbag technology [...] 

What we said in Burlington Truck Lines, Inc. v. United States, 371 U. S., at 167, is apropos here:

“There are no findings and no analysis here to justify the choice made, no indication of the basis on which the [agency] exercised its expert discretion. We are not prepared to and the Administrative Procedure Act will not permit us to accept such . . . practice. . . . Expert discretion is the lifeblood of the administrative process, but ‘unless we make the requirements for administrative action strict and demanding, expertise, the strength of modern government, can become a monster which rules with no practical limits on its discretion.’

We have frequently reiterated that an agency must cogently explain why it has exercised its discretion in a given manner, and we reaffirm this principle again today [...]

Petitioners also invoke our decision in Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc., 435 U. S. 519 (1978), as though it were a talisman under which any agency decision is by definition unimpeachable. Specifically, it is submitted that to require an agency to consider an airbags-only alternative is, in essence, to dictate to the agency the procedures it is to follow. [Petitioners misread Vermont Yankee.] In Vermont Yankee, we held that a court may not impose additional procedural requirements upon an agency. We do not require today any specific procedures which NHTSA must follow. Nor do we broadly require an agency to consider all policy alternatives in reaching decision. It is true that rulemaking “cannot be found wanting simply because the agency failed to include every alternative device and thought conceivable by the mind of man . . . regardless of how uncommon or unknown that alternative may have been . . . .” But the airbag is more than a policy alternative to the passive restraint Standard; it is a technological alternative within the ambit of the existing Standard. We hold only that given the judgment made in 1977 that airbags are an effective and cost-beneficial life-saving technology, the mandatory passive restraint rule may not be abandoned without any consideration whatsoever of an airbags-only requirement.

B

Although the issue is closer, we also find that the agency was too quick to dismiss the safety benefits of automatic seatbelts. NHTSA’s critical finding was that, in light of the industry’s plans to install readily detachable passive belts, it could not reliably predict “even a 5 percentage point increase as the minimum level of expected usage increase.” The Court of Appeals rejected this finding because there is “not one iota” of evidence that Modified Standard 208 will fail to increase nationwide seatbelt use by at least 13 percentage points, the level of increased usage necessary for the Standard to justify its cost. Given the lack of probative evidence, the court held that “only a well justified refusal to seek more evidence could render rescission non-arbitrary.” 

Petitioners object to this conclusion. In their view, “substantial uncertainty” that a regulation will accomplish its intended purpose is sufficient reason, without more, to rescind a regulation. We agree with petitioners that just as an agency reasonably may decline to issue a safety standard if it is uncertain about its efficacy, an agency may also revoke a standard on the basis of serious uncertainties if supported by the record and reasonably explained. Rescission of the passive restraint requirement would not be arbitrary and capricious simply because there was no evidence in direct support of the agency’s conclusion. It is not infrequent that the available data do not settle a regulatory issue, and the agency must then exercise its judgment in moving from the facts and probabilities on the record to a policy conclusion. Recognizing that policymaking in a complex society must account for uncertainty, however, does not imply that it is sufficient for an agency to merely recite the terms “substantial uncertainty” as a justification for its actions. As previously noted, the agency must explain the evidence which is available, and must offer a “rational connection between the facts found and the choice made.” Generally, one aspect of that explanation would be a justification for rescinding the regulation before engaging in a search for further evidence.

In these cases, the agency’s explanation for rescission of the passive restraint requirement is not sufficient to enable us to conclude that the rescission was the product of reasoned decisionmaking. To reach this conclusion, we do not upset the agency’s view of the facts, but we do appreciate the limitations of this record in supporting the agency’s decision. We start with the accepted ground that if used, seatbelts unquestionably would save many thousands of lives and would prevent tens of thousands of crippling injuries [...] We move next to the fact that there is no direct evidence in support of the agency’s finding that detachable automatic belts cannot be predicted to yield a substantial increase in usage. The empirical evidence on the record, consisting of surveys of drivers of automobiles equipped with passive belts, reveals more than a doubling of the usage rate experienced with manual belts. Much of the agency’s rulemaking statement — and much of the controversy in these cases — centers on the conclusions that should be drawn from these studies. The agency maintained that the doubling of seatbelt usage in these studies could not be extrapolated to an across-the-board mandatory standard because the passive seatbelts were guarded by ignition interlocks and purchasers of the tested cars are somewhat atypical. Respondents insist these studies demonstrate that Modified Standard 208 will substantially increase seatbelt usage. We believe that it is within the agency's discretion to pass upon the generalizability of these field studies. This is precisely the type of issue which rests within the expertise of NHTSA, and upon which a reviewing court must be most hesitant to intrude.

But accepting the agency’s view of the field tests on passive restraints indicates only that there is no reliable real-world experience that usage rates will substantially increase. To be sure, NHTSA opines that “it cannot reliably predict even a 5 percentage point increase as the minimum level of expected increased usage.” But this and other statements that passive belts will not yield substantial increases in seatbelt usage apparently take no account of the critical difference between detachable automatic belts and current manual belts. A detached passive belt does require an affirmative act to reconnect it, but — unlike a manual seatbelt — the passive belt, once reattached, will continue to function automatically unless again disconnected. Thus, inertia — a factor which the agency’s own studies have found significant in explaining the current low usage rates for seatbelts — works in favor of, not against, use of the protective device. Since 20% to 50% of motorists currently wear seatbelts on some occasions, there would seem to be grounds to believe that seatbelt use by occasional users will be substantially increased by the detachable passive belts. Whether this is in fact the case is a matter for the agency to decide, but it must bring its expertise to bear on the question [...]

The agency also failed to articulate a basis for not requiring nondetachable belts under Standard 208. It is argued that the concern of the agency with the easy detachability of the currently favored design would be readily solved by a continuous passive belt, which allows the occupant to “spool out” the belt and create the necessary slack for easy extrication from the vehicle. The agency did not separately consider the continuous belt option, but treated it together with the ignition interlock device in a category it titled “Option of Adopting Use-Compelling Features.” The agency was concerned that use-compelling devices would “complicate the extrication of [an] occupant from his or her car.” “[T]o require that passive belts contain use-compelling features,” the agency observed, “could be counterproductive [, given] . . . widespread, latent and irrational fear in many members of the public that they could be trapped by the seat belt after a crash.” In addition, based on the experience with the ignition interlock, the agency feared that use-compelling features might trigger adverse public reaction.

By failing to analyze the continuous seatbelts option in its own right, the agency has failed to offer the rational connection between facts and judgment required to pass muster under the arbitrary-and-capricious standard. We agree with the Court of Appeals that NHTSA did not suggest that the emergency release mechanisms used in nondetachable belts are any less effective for emergency egress than the buckle release system used in detachable belts. In 1978, when General Motors obtained the agency’s approval to install a continuous passive belt, it assured the agency that nondetachable belts with spool releases were as safe as detachable belts with buckle releases. NHTSA was satisfied that this belt design assured easy extricability: “[t]he agency does not believe that the use of [such] release mechanisms will cause serious occupant egress problems . . . .” While the agency is entitled to change its view on the acceptability of continuous passive belts, it is obligated to explain its reasons for doing so [...]

JUSTICE REHNQUIST, with whom THE CHIEF JUSTICE, JUSTICE POWELL, and JUSTICE O'CONNOR join, concurring in part and dissenting in part.

I join Parts I, II, III, IV, and V-A of the Court's opinion. In particular, I agree that, since the airbag and continuous spool automatic seatbelt were explicitly approved in the Standard the agency was rescinding, the agency should explain why it declined to leave those requirements intact. In this case, the agency gave no explanation at all. Of course, if the agency can provide a rational explanation, it may adhere to its decision to rescind the entire Standard.

I do not believe, however, that NHTSA’s view of detachable automatic seatbelts was arbitrary and capricious. The agency adequately explained its decision to rescind the Standard insofar as it was satisfied by detachable belts [...]

The agency’s changed view of the standard seems to be related to the election of a new President of a different political party. It is readily apparent that the responsible members of one administration may consider public resistance and uncertainties to be more important than do their counterparts in a previous administration. A change in administration brought about by the people casting their votes is a perfectly reasonable basis for an executive agency’s reappraisal of the costs and benefits of its programs and regulations. As long as the agency remains within the bounds established by Congress, it is entitled to assess administrative records and evaluate priorities in light of the philosophy of the administration.