Chevron's Two Steps
Contrary to a suggestion by Professors Matthew Stephenson and Adrian Vermeule ("Chevron has Only One Step," forthcoming in Va. L. Rev.), Chevron v. NRDC's model for judicial review of agency interpretations of regulatory statutes involves two "steps" – and for good reason. The two-step analysis provides a framework for allocating interpretive authority in the administrative state, by separating those questions of statutory implementation assigned to independent judicial judgment (Step One) from those regarding which courts' role is limited to oversight of agency decisionmaking (Step Two).
At Chevron's first step, courts should begin by identifying whether congressional instructions clearly either require or preclude a choice the agency has made or, instead, whether the agency's choice falls within a range of possibilities permitted by language that Congress has left ambiguous. Agency interpretations that do not fall within the zone of indeterminacy permitted by the statute's language must be struck down. Once courts determine, however, that the existence of ambiguity has placed primary authority for a matter in agency hands, and that the scope of that ambiguity permits the agency choice, the judicial role moves from decision to oversight, and thus to Chevron's second step. At this step, Section 706(2) of the Administrative Procedure Act sets the general standard, and courts inquire as to whether the agency's judgment on a matter within its delegated authority is "reasonable."