Why the Court Should Reexamine Administrative Law's Chenery II Doctrine

34 Pages Posted: 12 Oct 2023

See all articles by Gary Lawson

Gary Lawson

Boston University School of Law

Joseph Postell

Hillsdale College

Date Written: August 2023

Abstract

Part I of this article begins by discussing some fundamental constitutional principles that were
raised, sometimes implicitly and indirectly, in the Chenery cases. Those principles point to limits on
administrative adjudication that go well beyond those recognized in current doctrine. We do not
here seek to push those principles as far as they can go, though we offer no resistance to anyone
who wants to trod that path. Instead, we identify and raise those principles to help understand the
scope and limits of actual doctrine. Our modest claims here are that constitutional concerns about
at least some classes of agency lawmaking in adjudication (1) are serious enough to warrant a close look at unqualified articulations of a Chenery II “doctrine” and (2) warrant at least a presumption against recognizing agency power to choose adjudication as a form of lawmaking. In other words, they form a lens through which one can take a fresh look at a now-canonical case.

Part II then discusses the progress of the litigation and decisions in both Chenery I and Chenery II.
As the correspondence among the justices and other circumstances of the cases reveal, the Court
did not conclude in Chenery II that, as an absolute rule, “the choice made between proceeding by
general rule or by individual, ad hoc litigation is one that lies primarily in the informed discretion
of the administrative agency.” While that language comes from the Court’s decision in Chenery
II, the broader context of the case indicates that the Court qualified the scope and domain of this
principle.

Part III discusses the development of the law following the Chenery II case. The limits implicit
in the Court’s 1947 decision have largely been lost in the ensuing three-quarters of a century.
Nonetheless, in Part IV, we suggest that these later developments can be interpreted in two ways,
both of which question the notion of a limitless Chenery II “doctrine.” Either agencies are interpreting and applying their governing statutes when issuing orders that are not pursuant to general rules, or they are establishing “embedded rules” that are contained in orders. If the former, then various doctrines governing agency legal interpretation, arbitrariness, and unfair surprise apply. If the latter, then doctrines addressing embedded rules should apply. Both paths suggest that it is incorrect simply to think of a Chenery II doctrine that enables agencies to act via rulemaking or
adjudication at their discretion. Thus, we argue that the Court should overturn, clarify, or simply
ignore unqualified recitations of a broad Chenery II principle in future cases, relying instead on
alternative principles to address agencies’ choice between rulemaking and adjudication.

Part V briefly suggests a few potential applications of this new approach to explain how the law
might change in a post-Chenery II world. While we believe that a post-Chenery II legal regime
would afford better protection for individual rights and due process of law, the roots of much of
what we recommend can already be found in various administrative law sources and doctrines,
none of which have proven to be fundamentally disruptive to the administrative state.

Suggested Citation

Lawson, Gary and Postell, Joseph, Why the Court Should Reexamine Administrative Law's Chenery II Doctrine (August 2023). Pacific Legal Foundation Research Paper Series Research Paper No. 2023/02, Available at SSRN: https://ssrn.com/abstract=4599319 or http://dx.doi.org/10.2139/ssrn.4599319

Gary Lawson (Contact Author)

Boston University School of Law ( email )

765 Commonwealth Avenue
Boston, MA 02215
United States
617-353-3812 (Phone)

Joseph Postell

Hillsdale College ( email )

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