Kevin M. Stack

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The Yale Law Journal

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SEC v. Chenery Corp.




The Supreme Court regularly upholds federal legislation on grounds other than those stated by Congress. Likewise, an appellate court may affirm a lower court judgment even if the lower court's opinion expressed the wrong reasons for it. Not so in the case of judicial review of administrative agencies. The established rule, formulated in SEC v. Chenery Corp., is that a reviewing court may uphold an agency's action only on the grounds upon which the agency relied when it acted. This Article argues that something more than distrust of agency lawyers is at work in Chenery. By making the validity of agency action depend on the validity of the agency's justification, Chenery's settled rule enforces an aspect of the nondelegation doctrine that has been obscured by more recent decisions that understand nondelegation as involving only a demand for legislative standards, or "intelligible principles." The neglected arm of the nondelegation doctrine, which Chenery enforces, holds that a delegation is constitutionally valid only if it requires the agency exercising the delegated authority to state the grounds for its invocation of power under the statute. Chenery's enforcement of this norm polices the political accountability of agency action by ensuring that accountable decision-makers, not merely agency lawyers, have embraced the grounds for the agency's actions, and it promotes the regularity and rationality of agency decision-making by enforcing a practice of reason-giving. This nondelegation account of Chenery explains why agencies must engage in reasoned decisionmaking to obtain deference under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc. Chenery insists that, to receive Chevron deference, accountable agency actors must explain the bases for their decisions that bind with the force of law. By grounding Chenery in the enforcement of the nondelegation doctrine, this account also suggests that the President's own exercise of statutory power is not immune from Chenery's demands.

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