Monday, November 17, 2003

Law Review Articles

Two new law review articles of mine are available on SSRN:
TELRIC vs. Universal Service: A Takings Violation?


Federal Communications Law Journal, Forthcoming

Local phone companies are trapped between two utterly contradictory pricing systems. At the retail level, they are forced by federal and state law to offer universal service to all customers at relatively equal prices - and often at prices that are inversely related to the cost of service (as when residential users are charged less than business customers, even though they are more expensive to serve). But on the wholesale level, the Federal Telecommunications Act of 1996 forces local phone companies to lease their equipment and lines to their competitors at rates that are based on the cost of service.

This combination of contradictory pricing systems is unwise and potentially disastrous. It allows competitive phone companies to enter markets where customers are relatively over-charged, while leasing the local phone companies' lines at cost. Meanwhile, the local phone companies are left serving the under-charged customers (i.e., those in rural and residential areas) due to their universal service obligations. As a result, local phone companies may have a viable claim that the Takings Clause has been violated.

Salerno v. Chevron: What To Do About Statutory Challenges


Administrative Law Review
, Vol. 55, No. 3, Summer 2003

The Chevron standard for judging agency statutory interpretations is ubiquitous in administrative law cases. But few scholars have noticed that the Supreme Court in 1993 spoke approvingly of a standard that seems to be utterly different from Chevron: the Salerno standard, from United States v. Salerno, in which the Court said that no facial challenge to a law can succeed unless the plaintiff demonstrates that there is no set of circumstances in which the law could be applied constitutionally. In Reno v. Flores, the Court said the Salerno no-set-of-circumstances test equally applies to challenges arguing that an agency regulation is inconsistent with the agency's authorizing statute.

It is extraordinarily difficult to see how the Salerno standard could be consistent with Chevron. Chevron allows the court to overturn the agency's decision if the regulation is either 1) directly contradicted by the statute or 2) unreasonable. But the Salerno standard seems to require that the agency's regulation be upheld if even one set of circumstances existed in which the regulation was consistent with the statute. The conflict between Chevron and Salerno has caused courts to struggle with the question whether to follow Reno v. Flores or not.

My purpose in this article is to reconcile the Court's approval of what I will call "statutory Salerno" with the preexisting Chevron doctrine. This reconciliation will require a substantial re-conceptualization of Salerno itself; here I rely heavily on the exemplary work of Marc Isserles. In Isserles's view, Salerno is merely descriptive, not normative. That is, the "no set of circumstances test" is not a "test" at all, in the normal use of that word. Rather, the phrase "no set of circumstances" merely describes what happens when a statute is declared facially invalid. And such a ruling is usually based, not on counting up the number of invalid applications of the statute, but on some substantive constitutional doctrine that literally looks only at the "face" of the statute.

If this view of Salerno is correct, then the analogue in the statutory context is none other than Chevron Step One. Under Step One, if a statute is clear as to a particular issue, and the agency’s regulation is contrary to the statute, then the regulation is to that extent facially invalid. As a result, the regulation must be vacated on its face and/or remanded to the agency for further consideration. In any event, a facial challenge under Step One is judged not by imagining all possible applications of the regulation, but by a direct "facial" comparison of the regulation and the authorizing statute. Here as under the modified view of Salerno, facial considerations come first, causing the invalidity of all potential applications, not the other way around.


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