Chevron Deference and Extraterritorial Regulation

Abstract

What happens when Chevron deference meets the presumption against extraterritoriality? Many statutes with potential extraterritorial applications are administered by federal agencies. Should courts determine the geographic scope of such statutes for themselves by applying the presumption? Or should courts defer to reasonable agency interpretations of geographic scope? Are agencies free to change their interpretations of a statute’s geographic scope or to interpret that scope differently than courts have?

This Article argues that the presumption against extraterritoriality should be incorporated at step two of the Chevron framework. Courts should defer to an agency’s reasonable interpretation of a statute’s geographic scope if the agency has considered the normative values that underlie the presumption against extraterritoriality. Contrary to the conventional wisdom, not all normative canons are applied at Chevron step one; moreover, the presumption against extraterritoriality never has been. Agency interpretations of geographic scope should receive deference because agencies are likely to have a better understanding than courts of statutory purposes, regulatory options, and potential conflicts with foreign interests. Agencies can also calibrate extraterritorial regulation to maximize effectiveness and minimize conflicts far better than courts. Finally, this Article argues that agencies may change their minds about geographic scope and that they are free to depart from lower court decisions applying the presumption against extraterritoriality and perhaps even from Supreme Court decisions applying the presumption.

Keywords: Extraterritorial, Presumption Against Extraterritoriality, Statutory Interpretation, Chevron, Skidmore, Administrative Interpretation