Interpretation of law or statute is usually a judicial function[i] however, many statutes are managed by administrative agencies. Therefore, administrative agencies are empowered to interpret an ambiguous laws or statutes that deal with administrative action. Also, administrative agencies have the power to interpret their own legislative rules. If the legislature has given authority to an agency to enforce a statute, then interpretation of that statute by the agency is given great deference by the courts. But courts can substitute their judgment for that agency when reviewing questions of law[ii]. In Kansas Asso. of Public Employees v. Public Employee Relations Bd., 13 Kan. App. 2d 657, 659 (Kan. Ct. App. 1989), the court held that “an agency’s interpretation of a challenged statute may, in fact, be entitled to controlling significance in judicial proceedings.” But if the agency’s decision has a rational basis it will be upheld by the court at the time of judicial review.[iii]
Further in Pearl v. Bd. of Prof’l Discipline of the Idaho State Bd. of Med., 137 Idaho 107, 113 (Idaho 2002), the Supreme Court of Idaho held that courts will give considerable weight to agency’s interpretation of a statute only if it satisfies the following four conditions:
- Legislature must have delegated the agency with the responsibility to administer the concerned statute;
- The interpretation must be a reasonable one;
- The specific issue cannot be determined from the plain statutory language; and
- Presence of rationales underlying the rule of deference.
The rationale that must be present includes[iv]:
- Confidence of the public on the agency’s interpretation;
- Interpretation of agency is a “practical” interpretation of that statute;
- If, after knowing that the statutes are interpreted in a particular manner, the legislature does not alter that interpretation, then it is presumed that it sanctions the agency interpretation.
- If the statute is interpreted “contemporaneously” with the passage of the statute at issue.
- Courts should recognize the expertise of the agency.
Further, when interpreting a statute administrative agencies can choose between two strategies:
- Risky Strategy – a comparatively aggressive interpretation; and
- Safe Strategy – a relatively non-aggressive interpretation
Choosing between the two strategies mostly depends on the level of judicial deference. If there is an increased level of judicial deference, then an agency will chose a safe strategy and vice versa.
Certain restrictions are imposed on an administrative agency’s power to interpret. These includes:
- An administrative agency has no power to pronounce a statute as unenforceable or void. In such a case courts will not abide to that agency interpretation[v].
- Administrative agency cannot settle issues on constitutional law and cannot nullify a statute on constitutional grounds[vi]. But some courts have also held that administrative agencies rarely have power to declare statutes unconstitutional, if the decision is made with care[vii].
- Administrative agency must act within its statutory authority and constitutional limitations. It has no power to modify, reduce or make any other changes in the statutory provisions under which it acquires authority unless, the statute expressly grant that power to that agency[viii].
- Administrative agencies cannot extend the scope of authority of a statute and also cannot appropriate legislative powers or disobey a statute[ix].
- While interpreting a statute, an administrative agency can go beyond the outer limits of Congress’ powers only if there is an indication that Congress intended that result[x].
Although administrative agencies are vested with the power to interpret its laws and statutory authority, finally it is the discretion of the judiciary to decide the limits of administrative agency’s authority. In this situation both courts and agencies must reach a compromise situation where the key intention of the statute can be protected. The main duty of the administrative agency must be to execute the vital aim of the statute. Further, an administrative interpretation can either be prohibited or approved by a legislature by bringing in subsequent legislations overriding or adopting that interpretation.
[i] State ex rel. Stephan v. Kansas Racing Com., 246 Kan. 708, 719 (Kan. 1990)
[ii] Kansas Bd. of Regents v. Pittsburg State University Chapter of Kansas-National Education Asso., 233 Kan. 801, 808-809 (Kan. 1983)
[iii] Kansas Asso. of Public Employees v. Public Employee Relations Bd., 13 Kan. App. 2d 657, 659 (Kan. Ct. App. 1989)
[iv] J.R. Simplot Co. v. Idaho State Tax Comm’n, 120 Idaho 849, 857-859 (Idaho 1991)
[v] Mortham v. Milligan, 704 So. 2d 152, 157 (Fla. Dist. Ct. App. 1st Dist. 1997)
[vi] Yakima County Clean Air Auth. v. Glascam Builders, 534 P.2d 33, 34 (Wash. 1975)
[vii] Nutbrown v. Munn, 311 Ore. 328 (Or. 1991)
[viii] Waterbury v. Commission on Human Rights & Opportunities, 160 Conn. 226, 230 (Conn. 1971)
[ix] Ex Parte Jones Mfg. Co., 589 So. 2d 208, 210 (Ala. 1991)
[x] Edward J. DeBartolo Corp. v. Fla. Gulf Coast Bldg. & Constr. Trades Council, 485 U.S. 568 (U.S. 1988)