If a statute’s meaning is plain or unambiguous, administrative agencies are bound by the plain meaning of the statute. Also, the administrative agencies should give effect to intention of Congress[i]. However, when a statute or law is ambiguous, an administrator should choose between conflicting reasonable interpretations[ii]. Also, administrative agencies should assure that exemptions of a statute are not so expansively interpreted so that some rights are denied for which that statute was designed[iii]. In Bower v. Federal Express Corp., 96 F.3d 200 (6th Cir. Tenn. 1996), the court held that a two-step process exists for reviewing an agency’s construction of a statutory term in a regulation; 1) if the statutory term is unambiguous, the agency is bound by the plain meaning of the statutory term and has no authority to issue a regulation that contradicts that plain meaning, 2) if the statutory term is ambiguous, then an agency has the authority to issue a regulation interpreting the unclear term as long as its interpretation is reasonable.
The delegation of power by congress to an agency to issue regulations interpreting a statute extends only to the extent of ambiguities in the statute[iv]. The delegated authority to interpret an ambiguous term extends only to the specific subject matter covered by the ambiguous term[v]. Legislative history of a statute may be used to clarify an otherwise ambiguous statutory term, but it may not be used to muddy an unambiguous statutory term[vi]. In order to justify interpretation of a statute by an administrative agency, the interpretation should be necessary[vii]. In Abramson v. Fla. Psychological Ass’n, 634 So. 2d 610 (Fla. 1994), the court held that administrative agencies have the authority to interpret the laws which they administer, but such interpretation cannot be contrary to clear legislative intent.
Thus if the intent of a statute is clear, administrative agencies should give effect to the unambiguously expressed will of Congress. However, when the statute is silent or ambiguous agency may interpret the statute. But the interpretation should be reasonable[viii].
[i] Holly Farms Corp. v. Nat’l Labor Rels. Labor Bd., 517 U.S. 392 (U.S. 1996)
[ii] Springfield Terminal Ry. Co. v. United States Surface Transp. Bd., 472 F. Supp. 2d 89, 95 (D. Mass. 2007)
[iii] Holly Farms Corp. v. Nat’l Labor Rels. Labor Bd., 517 U.S. 392 (U.S. 1996)
[iv] Friends of the Boundary Waters Wilderness v. Bosworth, 437 F.3d 815 (8th Cir. Minn. 2006)
[v] Bower v. Federal Express Corp., 96 F.3d 200 (6th Cir. Tenn. 1996)
[vii] Gunn v. State Bd. of Equalization, 123 Cal. App. 2d 283, 287 (Cal. App. 1954)
[viii] AFGE, Local 2119 v. Rumsfeld, 262 F.3d 649 (7th Cir. Ill. 2001)