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SUMMARY OF OPINIONS ISSUED APRIL 1-30, 2004
QUOTATION OF THE MONTH:
“Law consists of statements and elucidations of statements. Each legislative formula is imperfect, as all human things are. Elucidation, often but not always by the courts, has the function of alleviating this; but needs to be conducted according to a known and coherent system.”
FRANCIS BENNION, STATUTORY INTERPRETATION: A CODE 3 (2002)
Household Credit Services v. Pfennig (S.Ct. April 21, 2004) (Thomas)
Statutes/regulations construed: The Truth in Lending Act and the Federal Reserve Board’s Regulation Z, which specifically excludes fees imposed for exceeding a credit limit (over-limit fees) from the definition of “finance charge.”
Conclusion: Regulation Z was a reasonable interpretation of the Act.
Statutory construction tool: “Incident to or in conjunction with”: “The Court of Appeals thus erred in resting its conclusion solely on this particular characterization of the details of credit card transactions, a characterization that is not clearly compelled by the terms and definitions of TILA, and one with which others could reasonably disagree. Certainly, regardless of how the fee is characterized, there is at least some connection between the over-limit fee and an extension of credit. But, this Court has recognized that the phrase ‘incident to or in conjunction with’ implies some necessary connection between the antecedent and its object, although it ‘does not place beyond rational debate the nature or extent of the required connection.’ In other words, the phrase 'incident to' does not make clear whether a substantial (as opposed to a remote) connection is required. Thus, unlike the Court of Appeals, we cannot conclude that the term ‘finance charge’ unambiguously includes over-limit fees. That term, standing alone, is ambiguous.” (citation omitted)
Engine Manufacturers Association v. South Coast Air Quality Management District (S.Ct. April 28, 2004) (an 8-1 decision—Scalia wrote the majority opinion and Souter dissented)
Statutes/regulations construed: First, the Clean Air Act which provides “No State or any political subdivision thereof shall adopt or attempt to enforce any standard relating to the control of emissions from new motor vehicles or new motor vehicle engines subject to this part. No State shall require certification, inspection, or any other approval relating to the control of emissions . . . as condition precedent to the initial retail sale, titling (if any), or registration of such motor vehicle, motor vehicle engine, or equipment.” Second, “Fleet Rules” of the South Coast Air Quality Management District, a political subdivision of California responsible for air pollution control in the Los Angeles metropolitan area and parts of surrounding counties that make up the South Coast Air Basin. The Fleet Rules prohibited “the purchase or lease by various public and private fleet operators of vehicles that do not comply with stringent emission requirements.”
Conclusion: The Fleet Rules were preempted by the Clean Air Act.
Statutory construction tools [in dissent]:
• Legislative history: “[L]egislative history should inform interpretive choice, and the legislative history of this preemption provision shows that Congress’s purpose in passing it was to stop States from imposing regulatory requirements that directly limited what manufacturers could sell.”
• “Practical” reading of statute and Gertrude Stein: “In sum, I am reading standard’ in a practical way that keeps the Act’s preemption of standards in tune with Congress’s object in providing for preemption, which was to prevent the States from forcing manufacturers to produce engines with particular characteristics as a legal condition of sale. The majority’s approach eliminates this consideration of legislative purposes, as well as the presumption against preemption, by acting as though anything that could possibly be described as a standard must necessarily be a 'standard' for the purposes of the Act: a standard is a standard is a standard. The majority reveals its misalliance with Gertrude Stein throughout its response to this dissent.”
• Statutes are “untidy”: “These objections to the Court’s interpretation are not, to be sure, dispositive, standing alone. They call attention to untidy details, and rightly understood legislation can be untidy: statues can be unsystematic, redundant, and fuzzy about drawing lines. As a purely textual matter, both the majority’s reading and mine have strengths and weaknesses. The point is that the tiebreakers cut in favor of sustaining the South Coast Fleet Rules. My reading adheres more closely to the legislative history of §209(a). It takes proper account of the fact that the Fleet Rules with this commercial availability condition do not require manufacturers, even indirectly, to produce a new kind of engine. And, most importantly, my reading adheres to the well-established presumption against preemption.”
[This would have been a great oral argument to watch. Arguing the case were Carter Phillips, Solicitor General Ted Olson, and Seth Waxman. If you have the chance to watch any of these three argue, DO IT!!!]
Pharmaceutical Research & Manufacturers of American v. Thompson (D.C. Cir. April 2, 2004) (Henderson)
Statutes/regulations construed: Medicaid statutes.
Conclusion: The court rejected a challenge to the ‘‘Michigan Best Practices Initiative’’, a low-cost state prescription drug coverage program—for beneficiaries of Medicaid and of two non-Medicaid state health programs--which was designed by the State of Michigan and approved by the Secretary of the United States Department of Health and Human Services.
Statutory construction tools:
• Deference: “There is some question, however, what level of deference the court should accord the Secretary’s interpretation of the Medicaid drug payment statute. Ordinarily we review an agency’s interpretation of a statute it is charged with implementing under the familiar and deferential two-part framework of Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). The appellants assert, however, that the Secretary’s decisions approving the Initiative are due only minimal deference, if any, under a line of Supreme Court decisions beginning with Skidmore v. Swift & Co., 323 U.S. 134 (1944), and culminating in United States v. Mead, 533 U.S. 218 (2001). We disagree and conclude the Secretary’s decisions are entitled to Chevron deference.
The appellants contend that the Secretary’s decisions do not qualify for Chevron deference because they do not carry the force of law. In particular, the appellants assert the Secretary’s statutory interpretations here are not the result of a formal administrative process, do not involve agency expertise, are inconsistent with previous HHS interpretations and were developed solely in response to this lawsuit. Thus, the appellants argue, the Secretary’s interpretations are akin to ‘interpretations contained in policy statements, agency manuals, and enforcement guidelines,’ which are ‘beyond the Chevron pale.’ This argument overlooks the nature of the Secretary’s authority. This is not a case of implicit delegation of authority through the grant of general implementation authority. In the case of the Medicaid payment statute, the Congress expressly conferred on the Secretary authority to review and approve state Medicaid plans as a condition to disbursing federal Medicaid payments. In carrying out this duty, the Secretary is charged with ensuring that each state plan complies with a vast network of specific statutory requirements, see generally 42 U.S.C. 1396a, including the prescription rebate agreement provision in section 1396r–8. Through this ‘express delegation of specific interpretive authority,’ Mead, 533 U.S. at 229, the Congress manifested its intent that the Secretary’s determinations, based on interpretation of the relevant statutory provisions, should have the force of law. The Secretary’s interpretations of the Medicaid Act are therefore entitled to Chevron deference. Accordingly, we now review the appellants’ substantive challenges under Chevron.” (citations omitted)
• Deference: “Nonetheless, we note that, while ‘the overwhelming number of . . . cases applying Chevron deference have reviewed the fruits of notice-and-comment rulemaking or formal adjudication,’ Chevron deference may be warranted ‘even when no such administrative formality was required and none was afforded.’ Further, the Secretary’s approval decisions are of a different order from the customs classifications at issue in Mead. The Mead Court observed that 49 different customs offices issued 10,000 to 15,000 customs classifications each year, that ‘their treatment by the agency makes it clear that a letter’s binding character as a ruling stops short of third parties’ and that the agency ‘in fact warned against assuming any right of detrimental reliance.’ In contrast, HHS considers state Medicaid plans for the fifty states and the District of Columbia and has promulgated a uniform prior authorization policy for them.” (citations omitted)
• Tension and unsatisfactory choices: “We acknowledge that there is tension, if not actual inconsistency, between the broad prior authorization power granted under subsection (d)(1)(A), buttressed by the final exempting sentence of subsection (d)(4), and the apparent intent of the formulary provision to broaden drug availability. The appellants are correct that under the Secretary’s construction the formulary provision simply gives the states an alternate, and more cumbersome, means of subjecting drugs to prior authorization. Nonetheless, the tension is a necessary consequence of the language the Congress drafted. The Secretary’s construction permits all of the language to be given its plain meaning, albeit with a somewhat anomalous result. The appellants’ construction, on the other hand, would require a crabbed reading of subsection (d)(1)(A) and of the final sentence of subsection (d)(4) and yet would not produce a coherent statutory scheme. Given these choices—neither entirely satisfactory—we believe the Secretary reasonably chose an interpretation consistent with the literal meaning of the statutory language.”
California Metro Mobile Communications v. Federal Communications Commission (D.C. Cir. April 23, 2004) (Henderson)
Statutes/regulations construed: The Communications Act of 1934 and implementing regulations.
Conclusion: The court rejected the argument that the FCC lacked authority under the Communications Act of 1934 and the implementing regulations to modify appellant’s trunked radio station by removing one frequency license.
Statutory construction tool: Congressional silence: “CMMC points to nothing in the text or structure of the Communications Act or in its purpose or legislative history (other than the mere existence of the two provisions) that remotely suggests section 316 is limited by section 405. Indeed CMMC offers nary an authority to support its interpretation. And the plain language of section 316 does not disclose any such limitation either: The section vests the Commission with the authority to modify a license ‘either for a limited time or for the duration of the term thereof, if in the judgment of the Commission such action will promote the public interest, convenience, and necessity.’ 47 U.S.C. § 316(a)(1). While the section does explicitly restrict the Commission’s authority to modify a license—that is, the Commission must find the modification in the public interest, convenience and necessity—it imposes no express limitation on when the Commission may do so. The significance of the Congress’s silence here gains additional meaning, we believe, when section 316 is compared with section 312, which latter section authorizes the Commission to revoke a license or construction permit in certain circumstances. Id. at § 312(a)(1)-(7). That the Congress took care to specify in section 312 the circumstances following the grant of a license that warrant its revocation tends to show that if the Congress was focused on post-grant events, it mentioned them. Id. The Congress did not do so in section 316, which fact tends to bolster, if only slightly, the conclusion that section 316 is not limited to circumstances occurring after the license grant. We conclude, however, that section 316 is not unambiguous and therefore consider the gloss the Commission has given it under step two of Chevron, 467 U.S. at 843.”
[Not-commonly-used word watch: “nary.” The word is used in eight D.C. Circuit opinions since 1973. The word is used in five Supreme Court opinions since 1865.]
Duchek v. National Transportation Safety Board (D.C. Cir. April 20, 2004) (Federal Aviation Administration regulations regarding drug testing did not support FAA’s revocation of airman certificates)
Castlewood Products v. Norton (D.C. Cir. April 30, 2004) (interpretation of regulations implementing the Endangered Species Act regarding importing wildlife and plants were reasonable)
Communications Vending Corporation v. Federal Communications Commission (D.C. Cir. April 30, 2004) (FCC’s interpretation of the statute of limitations provision of the Communications Act—i.e., that a cause of action accrues at the time the carrier does the unlawful act—was reasonable)
Newport News Shipbuilding v. Firth (4th Cir. April 5, 2004) (Widener)
Statutes/regulations construed: Provision of the Longshore and Harbor Workers’ Compensation Act that relieves employers of the obligation to make benefit payments in certain circumstances.
Conclusion: An employer cannot obtain relief if it does not comply with mandatory procedural requirements.
Statutory construction tool: Legislative purpose: “Newport News concedes in its arguments, and both the ALJ and the Board found, that Newport did not comply with the language of the statute. Nor does Newport News argue that the statutory exception to this requirement applies. Instead, Newport News argues that it did not need to follow the unambiguous language of § 908(f)(3) because presenting the claim in the first instance to the ALJ, 11 months after Newport News had knowledge that a permanent disability would be in issue, fulfilled the legislative purpose of § 908(f). However, when a statute is unambiguous, as this one is, and provides an explicit scheme for obtaining a benefit, we decline to depart from that unambiguous statutory language. While the procedure Newport utilized in this case may satisfy the purpose for enacting § 908(f), it was not the procedure Congress specifically enacted. When Congress’s direction is clear, we should not depart from its direction, regardless of how inefficient that direction appears to be. We follow that majority. Section 908(f)(3) sets forth a series of explicit procedural hoops, and Newport had to comply with them to receive the benefits of the Act.” (citations omitted)
District Memorial Hospital v. Thompson (4th Cir. April 12, 2004) (Niemeyer)
Statutes/regulations construed: Medicare regulations regulations regarding a special reimbursement that is available under the Medicare program to hospitals providing inpatient acute care to a "significantly disproportionate number of low-income patients."
Conclusion: The regulation was ambiguous and the agency’s interpretation was a reasonable construction of the regulatory language.
Statutory construction tools:
• Deference—agency’s construction of its own regulation: “In considering the Secretary’s construction of 42 C.F.R. § 412.106, we give ‘substantial deference to [the] agency’s interpretation of its own regulations.’ More precisely, ‘the agency’s interpretation must be given ‘controlling weight unless it is plainly erroneous or inconsistent with the regulation.’’” (citation omitted).
• Deference—interpretation of Medicare regulations: “[T]he Supreme Court has noted that deference to the Secretary’s interpretations of Medicare regulations is ‘all the more warranted,’ because Medicare is ‘‘a complex and highly technical regulatory program,’ in which the identification and classification of relevant ‘criteria necessarily require significant expertise and entail the exercise of judgment grounded in policy concerns.’’”
• Deference—agency’s construction of its own regulation: "The agency’s interpretation ‘need not be the best or most natural one by grammatical or other standards.’ Rather, it need only be ‘a reasonable construction of the regulatory language.’” (citation omitted)
In re Trak Auto Corporation (4th Cir. April 22, 2004) (Michael)
Statutes/regulations construed: Two provisions of Chapter 11 of the Bankruptcy Code: § 365(f)(1), which generally allows a debtor to assign its lease notwithstanding a provision restricting assignment, and § 365(b)(3)(C), which specifically requires a debtor-tenant in a shopping center to assign its lease subject to any provision restricting use of the premises.
Conclusion: Section § 365(b)(3)(C), the more specific provision, controls in this case.
Statutory construction tool: General/specific: “When two provisions in a statute are in conflict, ‘a specific [provision] closely applicable to the substance of the controversy at hand controls over a more generalized provision.’ Under this canon, § 365(b)(3)(C) controls because it speaks more directly to the issue, that is, whether a debtor-tenant assigning a shopping center lease must honor a straightforward use restriction.”
United States v. Graham County Soil (4th Cir. April 29, 2003) (Duncan--Wilkinson dissented)
Statute/regulation construed: The False Claims Act.
Conclusion: The six-year limitations period of the False Claims Act applies to retaliation claims under the Act.
Statutory construction tool: When Congress alters the wording of the statute: “‘When Congress alters the wording of a statute, we must presume Congress intended a change in the law. However, the authority cited by Lackey, Brewster v. Gage, 280 U.S. 327, 337 (1930), makes clear that this doctrine is relevant when Congress uses language ‘so differing from that used in the earlier act’ that it could not but demonstrate Congress’s intent to work a change in the law. The dissent’s reliance on Lackey is circular, as the few newly added words on which it is predicated are so equivocal that we must discern Congress’s intent from the remainder of the section and its context, as we have attempted to below; the simple fact of revision does not demonstrate intent, the text does.” (citations omitted)
Denny’s v. Cake (4th Cir. April 12, 2004) (holding that the Anti-injunction Act’s prohibition on enjoining state court proceedings applies to any such proceeding pending at the time the federal court acts on the request for injunctive relief, regardless of when the state court action was filed)
Schramm v. Shipco Transport (4th Cir. April 15, 2004) (holding that the term “discharge” under the Carriage of Goods by Sea Act "means the removal of the goods at their final port of destination, and hence COGSA also cover[s] the temporary unloading" of goods at an intermediate port)
United States v. Williams (4th Cir. April 15, 2004) (rejecting the argument that, under criminal statute making possession of a “machinegun” illegal, the possession of a frame or receiver does not constitute possession of a “machinegun”)
LAW REVIEW ARTICLE RECOMMENDATIONS:
Recently posted on the Social Science Research Network’s “Legislation and Statutory Interpretation” Journal:
James J. Brudney & Corey Ditslear, Canons of Construction and the Elusive Quest for Neutral Reasoning
Arthur Lupia & Mathew D. McCubbins, Lost in Translation: Social Choice Theory is Misapplied Against Legislative Intent
ENGLISH COMMON-LAW TRIVIA QUESTION:
[Name of first person to answer correctly will be posted on this weblog. Please e-mail answers to firstname.lastname@example.org.]
Still unanswered from the last update:
In a famous case early in his career, Edward Coke won by arguing that the opposing counsel misquoted the Latin text of the relevant statute. What was the name of the case (extra credit if you give the year)? What was the statute?
Congratulations to Anne Barnes, who correctly identified Scandalum Magnatum as the statute.
Statutory Construction Zone
The Web's first weblog devoted to federal statutory construction, by Gary O'Connor
May 02, 2004
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