Comcast Decision May Thwart EPA CO2 Finding

On April 6, 2010, a three judge panel of the Federal Court of Appeals for the District of Columbia Circuit held unanimously in Comcast Corporation v. FCC that the Federal Communications Commission (FCC) had overstepped its statutory authority in attempting to regulate certain aspects of cable internet service, in a decision written by Judge David S. Tatel. In an earlier article, I wrote about the decision in terms of its impact on the FCC, which may be substantial. Anyone interested in that is invited to read that article. Here, I would like to address the broader implications of the decision on other administrative agencies, particularly the Environmental Protection Agency (EPA).

The decision provides critical guidance on how the D.C. Circuit may eventually rule on current efforts of the EPA to vastly expand its statutory authority over air quality standards. The D.C. Circuit has exclusive jurisdiction to entertain appeals from most FCC decisions as well as the decisions of most federal administrative agencies, including the EPA. The process bypasses intermediate proceedings at the Federal District Court level, and decisions by the D.C. Circuit can be appealed only to the Supreme Court. Nearly always, acceptance of such appeals is discretionary with the Supreme Court through the certiorari process. Very few petitions for grant of a writ of certiorari are granted.

The matters which the EPA are currently trying to resolve are potatoes currently too hot for the Congress to handle. Accordingly, the EPA apparently plans to rely on the Clean Water Act and ocean acidification data -- as to the applicability of which there are serious questions. Also, according to Newsweek:

Unless Congress acts by next January, [EPA Administrator] Jackson says, the EPA will use its authority under America's Clean Air Act to phase in new restrictions on carbon dioxide, the greenhouse gas that contributes to global climate change. The U.S. emits nearly a quarter of the world's carbon dioxide; the EPA has identified it and five other greenhouse gases as a threat to public health. "The difference between this administration and the last is that we don't believe we have an option to do nothing," Jackson told NEWSWEEK. ....

The Nixon-era Clean Air Act was never intended to regulate a pollutant as pervasive as carbon. Both environmentalists and industry heads also acknowledge that Congress would be able to address the problem better. "The only thing everyone agrees on is that a regulatory approach would be more expensive and less effective than legislation," says Paul Bledsoe, spokesman for the National Commission on Energy Policy, an arm of Washington's Bipartisan Policy Center. But until Congress takes up the question, Obama holds the only key to sweeping carbon cuts.

If I read the Comcast case correctly, the rationale relied upon by the D.C. Circuit may prove very inconvenient for the EPA and may put a damper on its attempt to circumvent Congress. I strongly suspect that as I write this article, lawyers at the EPA are reading Judge Tatel's Comcast decision and trying to decide how to evade avoid its implications.

Serendipitously, Judge Tatel of the D.C. Circuit, who wrote the Comcast decision, last year delivered an informal address warning an EPA audience that:

[I]n both Republican and Democratic administrations, I have too often seen agencies failing to display the kind of careful and lawyerly attention one would expect from those required to obey federal statutes and to follow principles of administrative law. In such cases, it looks for all the world like agencies choose their policy first and then later seek to defend its legality. This gets it entirely backwards. It’s backwards because it effectively severs the tie between federal law and administrative policy, thus undermining important democratic and constitutional values. And it’s backwards because whether or not agencies value neutral principles of administrative law, courts do, and they will strike down agency action that violates those principles — whatever the president’s party, however popular the administration, and no matter how advisable the initiative.

As its most fundamental inquiry, administrative law calls upon courts to determine whether an agency’s action falls within the scope of its authorizing legislation. This task often involves no more than reading the law. Then‐Professor Felix Frankfurter, one of the fathers of administrative law, famously admonished his students: “(1) read the statute; (2) read the statute; (3) read the statute!” This is self‐evidently good advice, but you’d be surprised how often agencies don’t seem to have given their authorizing statutes so much as a quick skim. ... After all, agency authority comes only from Congress. If the agency can’t reasonably trace its action to a statute, it has no business acting. Although agencies are more accountable than courts, Congress is more accountable still.

[W]hen reading a set of briefs or listening to oral argument, I sometimes wonder whether the agency consulted its lawyers only after it found itself in court. ....

[T]he “New EPA” that you are discussing today may have excellent programs it is eager to execute. But those programs will be legitimate — and will be sustained in court — only if their implementation conforms to the rule of law.

I hope the folks from the EPA paid attention to Judge Tatel; they have their work cut out, as he recently demonstrated in the Comcast decision. I have no inside information but suspect that the Comcast matter was tickling the back of Judge Tatel's cranium when he delivered the address. He didn't mention it, of course, and delivered the standard caveat that he couldn't speak of specific matters publicly because then he would have to recuse himself from some cases he really enjoys considering.

Like the FCC, the EPA's battleground shifts with time and technology. The Communications Act of 1934 created the FCC to deal with two quite different beasts, radio broadcasting and telephony. Over the years, technology changed dramatically and the Communications Act was amended from time to time to take some but not all of the important changes into account.

In many cases the technology has changed too rapidly for the Congress to keep pace. Consequently, the FCC has tried to use its existing regulatory power to fill the void. Sometimes it has done so wisely and sometimes not. By virtue of its authority to regulate radio broadcasting, the FCC also got authority to regulate television broadcasting. It did get explicit authority to regulate cable television (CATA) and (with some not always gentle prodding from the television industry) feared that it could not meet its statutory responsibility and that public interest in free, local broadcasting would thereby suffer. The FCC ultimately adopted "must carry" rules, "network non-duplication" rules, and rules governing the numbers of distant stations CATV operators could make available and the manner in which they had to do it.

In United States v. Southwestern Cable Co., 392 U.S. 157 (1968), as relied upon in subsequent cases, the Supreme Court held that despite the absence of any specific statutory authority to regulate the CATV industry, the regulations in question were within the ancillary authority of the FCC because the FCC (a) had statutory authority to regulate television stations and (b) had demonstrated that the limited regulations imposed on the CATV industry were necessary in furtherance of its obligation to keep broadcast stations healthy so that it could regulate them. It was required that the FCC meet both parts (a) and (b) of the test. As time marched on, CATV mutated into its present form, making substantial non-broadcast content available to subscribers, often at premium prices. In 1983, the CATV industry was largely deregulated by the Congress, leaving rate regulation to be undertaken locally.

In Comcast, the D.C. Circuit on April 6 held that the FCC had gone too far in attempting to regulate the cable internet services provided by Comcast, as to which the Congress had not spoken. It rejected the FCC's argument that statements of congressional policy in and of themselves granted far reaching regulatory authority.

Policy statements are just that—statements of policy. They are not delegations of regulatory authority. ... Although policy statements may illuminate that authority, it is Title II, III, or VI to which the [FCC's] authority must ultimately be ancillary. (internal citations omitted)(emphasis added)

As the court observed, the FCC did not argue

[T]hat its regulation of an activity over which it concededly has no express statutory authority (here Comcast’s Internet management practices) is necessary to further its regulation of activities over which it does have express statutory authority (here, for example, Comcast’s management of its Title VI cable services). (emphasis added)

Rather, the FCC argued that it had all the authority it needed by virtue of congressional expressions of policy. The D.C. Circuit disagreed strongly, stating that the FCC's position was not only inconsistent with judicial precedent, but that "if accepted it would virtually free the Commission from its congressional tether," opening the door for the FCC to do pretty much anything that pleased it. Judge Tatel's 2009 address mentioned above might well have given a clue to this conclusion.

The final paragraph of Judge Tatel's decision should give the EPA some pause, in the event that those present at his informal address had not listened attentively:

It is true that “Congress gave the [Commission] broad and adaptable jurisdiction so that it can keep pace with rapidly evolving communications technologies.” ... It is also true that “[t]he Internet is such a technology,” indeed, “arguably the most important innovation in communications in a generation.” Yet notwithstanding the “difficult regulatory problem of rapid technological change” posed by the communications industry, “the allowance of wide latitude in the exercise of delegated powers is not the equivalent of untrammeled freedom to regulate activities over which the statute fails to confer ... Commission authority.”

The caution against impermissible agency intrusions to deal with rapid technological advances which the Congress has not got around to regulating should apply with even greater force to impermissible agency intrusions into political and ideological areas where the science is questionable, and into which the current administration has thus far unsuccessfully pressed the Congress to enact legislation which is the subject of much contentious debate.