The Fifth Circuit issued a major en banc decision last week in Brackeen v. Haaland, No. 18-11479 (5th Cir.). Far as I know, though, nobody's covered the Court's APA rulings in any depth yet. To address that void in the commentary, I decided to focus my own discussion of the case on those important and, in my view at least, interesting issues.  

I covered the panel opinion here for anyone interested in getting their bearings. I'll begin with the Court's holding approving BIA's assertion of authority to promulgate rules that bind state courts first. Then I'll address the Court's rejection of BIA's imposition of a heightened evidentiary standard for "good cause" under 25 U.S.C. § 1915.

Issue 1: BIA's Authority to Bind State Courts

In the Final Rule, BIA asserted authority to promulgate rules binding on state courts in Indian child custody cases--authority BIA had expressly disclaimed for nearly forty years. Indeed, in guidelines the agency issued after notice and comment back in 1979, BIA reasoned that the idea of a federal agency wielding such authority would be "so at odds with concepts of both federalism and separation of powers that it should not be imputed to Congress in the absence of an express declaration to that effect." Instead, BIA added, "[p]rimary responsibility" for interpreting the ICWA "rests with the courts that decide Indian child custody cases."

In the 2016 Final Rule, however, BIA changed course and promulgated new regulations establishing "binding standards for Indian child-custody proceedings in State courts." BIA expressly rejected the "statements it made in 1979 suggesting that it lacks the authority to issue binding regulations." It now found binding standards "necessary," see 25 U.S.C. § 1952, given "divergent interpretations of ICWA provisions by State courts and uneven implementation by State agencies."

This raised two related questions: (1) whether the ICWA did, in fact, empower BIA to promulgate rules binding on state courts and (2) whether BIA's change-of-position on the issue in the Final Rule ran afoul of the APA? The en banc Court, in an opinion by Judge Dennis, concluded that BIA did have authority under the ICWA to bind state courts and that its change of position on the issue wasn't problematic under the APA.

Judge Dennis's Opinion for the En Banc Court

To decide whether BIA possessed authority under ICWA to promulgate rules and regulations binding on state courts, the Court looked to Chevron. Section 1952 of the ICWA provides BIA with authority to "promulgate such rules and regulations as may be necessary to carry out the provisions of this chapter." That broad language, the Court explained, unambiguously confers on BIA authority to promulgate rules and regulations with the force of law and therefore "binding upon all parties." Yet the Court declined to end its analysis at step one. Because the Final Rule purported to bind state courts--something the Court described as "unusual in the world of administrative law"--it chose instead to "assume arguendo that § 1952 is ambiguous."

Moving to step two, the Court held that BIA's construction of the statute was permissible. “[W]here the empowering provision of a statute states simply that the agency may ‘make . . . such rules and regulations as may be necessary to carry out the provisions of this Act," Judge Dennis explained, "the validity of a regulation promulgated thereunder will be sustained so long as it is reasonably related to the purposes of the enabling legislation." (cites and quotes omitted). No one disputed that the regulations at issue related to the ICWA's purposes. Accordingly, the Court explained, BIA's assertion of statutory authority to issue them was entitled to deference.

Next, the Court addressed BIA's change in interpretation, concluding that the agency's explanation of the change was sufficient to pass muster under the APA. In particular, BIA explained that in the decades since it had interpreted the statute not to provide it with authority to bind state courts, the Supreme Court had held that the text of Section 1952 conferred "a broad and general grant of rulemaking authority" and "presumptively authorize[s the] agenc[y] to issue rules and regulations addressing matters covered by the statute." (cites and quotes omitted). As for its previous worries about federalism and separation of powers, the agency explained that such concerns were misplaced because the Constitution gives Congress plenary power over Indian affairs.

Finally, the agency explained that unlike in 1979, when it had concluded that no binding federal regulations were necessary to carry out the provisions of the Act, decades of experience implementing those provisions had proven that state courts weren't up to the task and, in fact, binding federal standards were necessary after all. In support of that conclusion, the agency cited Mississippi Band of Choctaw Indians v. Holyfield, where the Supreme Court held that the lack of nationwide uniformity resulting from varied state-law definitions of the term "domicile" in Section 1911 of the ICWA frustrated Congress’s goal of ensuring uniform application of the statute. 490 U.S. 30, 45 (1989). The same goal of uniformity, BIA reasoned, favored requiring state courts to follow federal regulations establishing standards for Indian child custody proceedings under the ICWA. The Court agreed with BIA that "Holyfield applies with equal force here."

Judge Duncan's Opinion

Judge Duncan took issue with the en banc majority's conclusion that Section 1952 empowered BIA to promulgate rules and regulations binding on state courts. Like the majority, he assumed without discussion that Chevron applied. He also assumed Section 1952 was silent or ambiguous on the question and therefore began his analysis at step two. In his view, however, BIA's assertion of authority to make rules binding on state courts was not a permissible interpretation of the statute. He offered several reasons:

  1. Where, as here, an agency claims to have discovered in a long-extant statute some new, unheralded power, courts greet the claim with a measure of skepticism (citing UARG etc.).
  2. Such skepticism is especially appropriate here because BIA announced its original interpretation of Section 1952 just months after the ICWA was enacted and has adhered to it consistently for thirty-seven years.
  3. BIA's reasons for brushing aside its original federalism concerns are unconvincing. True, Congress intended ICWA to curtail state authority in some respects. According to Judge Duncan, however, that ignores the key question--i.e., whether Congress intended to do so by empowering a federal agency to issue regulations binding on state courts.
  4. Along similar lines, the fact that Congress can pass laws enforceable in state courts doesn't mean a federal agency may control state courts.
  5. Holyfield is distinguishable and, in any event, was decided decades before BIA announced its new interpretation.  

State Farm  at Chevron Step Two Debated

Judges Dennis and Duncan also debated a fascinating point of Chevron theory that I've discussed at some length in previous posts: whether and to what extent the judicial inquiry at Chevron step two overlaps with the State Farm analysis. Judge Duncan is on record supporting the view that judicial scrutiny of the sufficiency of the agency's explanation is entirely appropriate at Chevron step two (and even step one!). Accordingly, in addressing the BIA's assertion of authority in the Final Rule to promulgate regulations binding on state courts, he treated the reasonableness of BIA's rationale for its change in position as part of the inquiry into the permissibility of BIA's new interpretation.

Judge Dennis argued Judge Duncan "err[ed] by characterizing the question of whether the BIA provided an adequate explanation for its changed position as a component of Chevron step two." In his view, that approach ignores "the conceptual difference between the Chevron inquiry, which asks whether an agency’s substantive interpretation of a statute is a reasonable one, and the procedural question of whether an agency provided an adequate explanation for its decision to switch from one statutory interpretation to another." (citing Brand X).

In my view, there may not be much left of the "conceptual distinction" between Chevron and State Farm that Judge Dennis seeks to defend. Even at Chevron step one, an agency's interpretation will fail if it leads to "absurd results," which really just means that the court can't believe Congress could have possibly intended the policy consequences it believes the agency's interpretation would entail. In such cases, there is no line whatsoever between "substantive interpretation" and "policy choice," yet no one disputes that the "absurd results" canon is one of the traditional tools of interpretation available at Chevron step one.

Nor is there any neat divide between the State Farm inquiry and Chevron step one and a half. Imagine an agency that defends a particular decision on the grounds that the statute gave it no other option. Now imagine further that the statute was, in fact, genuinely ambiguous, meaning the agency actually had other options after all. An agency that bases a particular decision on the mistaken belief that the statute unambiguously requires it cannot possibly be said to have made its decision "based on consideration of the relevant factors" as State Farm demands.

Finally, cases like IANCU and Kisor establish (if it wasn't clear before) that courts must exhaust all traditional tools of construction before concluding that a legal text is genuinely ambiguous. For "only when that legal toolkit is empty and the interpretive question still has no single right answer can a judge conclude that it is more one of policy than of law." Kisor (cleaned up). Of course, if courts only reach Chevron step two after exhausting all traditional tools of construction, then step two will consist of nothing more than a judicial assessment of the reasonableness of the agency's policy choice. As Justice Kavanaugh said after making a similar observation in his Kisor concurrence: "[T]hat is more State Farm than Auer [or Chevron]."

In sum, while I'm instinctively sympathetic to arguments in defense of "conceptual distinctions," I'm afraid the distinction Judge Dennis sought to defend here may be a mirage at this point.  

Issue 2: BIA's Interpretation of Section 1915's "Good Cause" Requirement

Section 1915 of the ICWA establishes preferences for the placement of Indian children that apply in the absence of "good cause" for departing from them. BIA's 1979 Guidelines interpreted that provision to give state courts flexibility in making placement decisions. The Final Rule rejected that interpretation and imposed a requirement that the party seeking departure from the ICWA's placement preferences prove by clear and convincing evidence that good cause existed for departing from them.

Writing for an en banc majority, Judge Duncan held that the BIA's imposition of that heightened evidentiary standard violated Section 1915's plain language. He emphasized that other ICWA provisions expressly imposed heightened evidentiary standards, but Section 1915 did not. Under the expressio unius canon of statutory construction, he reasoned, Congress's express requirement of a heightened evidentiary standard in other parts of the statute demonstrated that its failure to expressly include one in Section 1915 was intentional.

Judge Dennis disagreed. As he saw it, the expressio unius canon didn't apply when interpreting a statute that governs agency action. In that context, he explained, a congressional mandate in one section and silence in another "often suggests not a prohibition but simply a decision not to mandate any solution in the second context, i.e., to leave the question to agency discretion." (cites and quotes omitted). He also criticized Judge Duncan again for treating the adequacy of BIA's explanation for its change of position on the proper interpretation of Section 1915 as part of his analysis at Chevron step two. Judge Duncan's focus on the sufficiency of the agency's explanation of its reasons for changing positions was especially inappropriate, Judge Dennis argued, because the plaintiffs hadn't even raised a State Farm challenge to BIA's approach to Section 1915 in the Final Rule.

In a previous post, I highlighted the apparent disagreement among the circuits regarding the proper approach to the expressio unius canon in Chevron cases. Judge Duncan acknowledged that other courts had endorsed Judge Dennis's view, but he insisted none changed the analysis. "At most," he reasoned, those cases "show that the canon sometimes does not resolve step one." He also emphasized that none of those cases involved a statute like the ICWA, which includes a mandate in one provision and silence in a neighboring provision.

As I explained in my analysis of the panel opinion, I tend to support Judge Duncan's (now the en banc Fifth Circuit's) view of the expressio unius debate.  

Brackeen v. Haaland, No. 18-11479 (5th Cir. Apr. 6, 2021) (en banc)
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