Just how much discretion will the courts give to the MassDEP to interpret legislative intent when it implements legislative directives such as a requirement to develop rules under the Global Warming Solutions Act? The answer, according to a recent decision by a Superior Court judge, is a surprising amount.
The decision, in a case entitled Isabel Kain v. MassDEP, Suffolk Superior Court Civ. Action No. 14-02551, concerned a challenge to MassDEP’s compliance with a requirement in the state Global Warming Solutions Act (the “GWS Act”) to enact regulations establishing declining annual emission limits for greenhouse gases (“GHGs”). M.G.L. c. 21N, § 3(d). The challenge was brought by several citizens advocacy groups and individuals who claimed that MassDEP had failed to carry out a clear statutory obligation to promulgate regulations by a date specified in the GWS Act.
Under the GWS Act, the Secretary of Energy and Environmental Affairs is required to adopt a statewide GHG limit effective in calendar year 2020, and MassDEP is required to adopt regulations “establishing a desired level of declining annual aggregate emission limits for sources or categories of sources that emit greenhouse gas emissions.” M.G.L. c. 21N, § 3(d). Such regulations were mandated to take effect on January 1, 2013, and to expire on December 31, 2020. See St. 2008, c. 298, § 16. The plaintiffs in this case alleged that MassDEP failed to meet this statutory requirement.
As a guidepost for understanding how courts will interpret statutes, under federal law there is a well-defined process for determining whether an agency has properly construed a statutory mandate. Using the analytical framework established by the U.S. Supreme Court in Chevron USA v. NRDC, 467 U.S. 837 (1984), a court first determines whether Congress has directly spoken to the issue. If the court finds that the intent of Congress is clear, then the agency must adhere to that intent or the court will overturn the agency’s action. If the court, however, finds that the intent of Congress is not clear – that is, if the statute is ambiguous – then the court conducts a second analysis to determine whether the agency’s action is based on a permissible interpretation of the statute, and the court grants deference to the expertise of the agency involved. “[C]onsiderable 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….” Id. at 844.
In Massachusetts, the Supreme Judicial Court follows a nearly identical two-step process to determine whether a state agency’s interpretation of a statutory mandate is permissible. See Franklin Office Park Realty Corp v. DEP, 466 Mass. 454 (2013). First, the court “use(s) conventional tools of statutory interpretation’ to determine ‘whether the Legislature has spoken with certainty on the topic in question.” As under federal law, if a court finds that a state statute is unambiguous, the court will reject any agency action that does not give effect to the legislative intent. The Legislature’s intent is therefore critical and no deference is offered to an agency if the intent is clear. If the Legislature has not directly addressed an issue, and the statute is therefore ambiguous, the court will move to a second-step in the analysis and will determine whether the agency’s interpretation is reasonable, granting substantial deference to that agency’s particular expertise. “In this second step, we will disturb an agency’s interpretation of its statutory mandate only if it is ‘patently wrong, unreasonable, arbitrary, whimsical, or capricious’.” Id. at 460, citing Brookline v. DEQE, 398 Mass. 404, 414 (1986).
These well-worn paths for court review of statutory mandates require that the reviewing court first determine whether a statute is clear. This ensures that the court will give effect to legislative intent when the legislature has spoken clearly. Only if a statute is not clear does the court move to the second step and evaluate the agency’s action, granting deference to the agency’s view where the agency is exercising discretion in its area of expertise.
In Kain v. MassDEP, the central question before the Superior Court was whether MassDEP had adhered to the rule development requirements of the GWS Act, and the litigants squared off on the question of how to interpret the statutory mandate to adopt regulations establishing a desired level of declining annual aggregate emissions. Specifically, they argued about whether the agency’s actions had complied with the requirements of the statute to enact regulations by January 1, 2013.
The state Attorney General’s office, filing its brief on behalf of MassDEP, defended MassDEP’s actions by arguing an extraordinary position, that the language in § 3(d) of the GWS Act only required MassDEP to set “aspirational target levels” that would “help the secretary and the Department keep the state on track to meet the required 2020 reduction level.” See Defendant’s Opposition to Plaintiff’s Motion for Judgment at 4. Regardless of your views on the outcome of the case, this argument was quite novel. The Attorney General’s office, in an attempt to maneuver around the two-step analytical framework, argued that a legislative mandate to promulgate regulations could be unambiguously interpreted as merely an aspirational goal. It is unusual to have an Attorney General’s office argue that the state legislature does not intend to require action when it sets a statutory deadline. [We would note that this argument was made in 2014, and it is not clear whether the new Attorney General, Maura Healey, who took office in January 2015, would advocate a similar position.]
The Superior Court, to its credit, did not embrace the aspirational goal argument. However, neither did it adopt the position of the plaintiffs that the statute unambiguously required MassDEP to adopt specific rules. Instead, the Court determined that by affording the agency “the deference to which it was entitled by law,” it could conclude that MassDEP had “fulfilled the essential mandate” of §3(d).
In its application of deference, the Court seemingly merged the two-step statutory evaluation process and ignored the initial question of whether the statute was ambiguous. While the Court noted that the most important factor in statutory interpretation is legislative intent, it did not determine whether the statute was, in fact, a clear expression of legislative direction. Instead, the Court reasoned:
Upon review, the Court has determined that it need not decide which (if either) party’s reading of § 3(d) is correct in this regard; because under either construction of the statute, and according the agency the deference to which it is entitled by law, DEP has fulfilled the essential mandate of §3(d).
The difficulty of this analysis is that instead of analyzing the statutory requirement first and reaching a conclusion about whether the Legislature spoke clearly, the Court leaped directly to a review that afforded MassDEP deference. The Court took this position further, cautioning that “[t]his court should be extremely wary of entering into controversies where we would find ourselves telling a coequal branch of government how to conduct its business.” (Citing Mass. Redemption Coalition v. Sec. of Exec. Branch of Env’l Affairs, 68 Mass. App. Ct. 67, 70 (2007).)
The risk in this analysis is that the Court appears to have side-stepped its critical function of protecting clear legislative direction by deferring immediately to the discretion of an administrative agency. By deferring to MassDEP, the Court essentially placed a state administrative agency in a position of being a more powerful branch of government than the Legislature, a position that the review standard would seemingly forbid.
The decision of the Court in Kain v. MassDEP upheld MassDEP’s implementation of the rule development requirements in § 3(d) of the GWS Act. The Court found that the agency had implemented three rules, each of which met “the essential mandate of § 3(d),” although after the statutory deadline: a sulfur hexafluoride rule limiting leakage from electrical power equipment, a carbon dioxide trading program rule tracking the commitments the state made in the Regional Greenhouse Gas Initiative, and a rule adopting the California motor vehicle emission requirements.
It is not surprising that the Court found MassDEP had complied with the GWS Act, given that the Court afforded the agency broad deference in its interpretation of the statutory mandate. One of the plaintiffs in the case has announced its intent to appeal so it is likely the decision will be reviewed by an appellate court. It remains to be seen whether a reviewing court will conduct a different, more traditional, analysis of the statutory interpretation, or whether the appellate court will look favorably on the Superior Court’s broad deference to administrative action.