When a court reviews an agency's construction of the statute which it administers, it is confronted with two questions. First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines that Congress has not directly addressed the precise question at issue, the second question for the court is whether the regulation is based on a permissible construction of the statute.
The district court of Columbia set aside a Environmental Protection Agency (EPA) regulation, implementing permit requirements for nonattainment states pursuant to the Clean Air Act Amendments of 1977 (Act) on the ground that the statute was silent or ambiguous. A car manufacturer sought review, arguing that the Environmental Protection Agency (EPA) regulation permitting states to treat all of the pollution-emitting devices within the same industrial groupings as though they were encased within a single bubble was a reasonable construction of the statutory term "stationary source".
Did the lower court err in setting aside a regulation because a statute was silent or ambiguous with respect to the specific issue?
The judgment was reversed. In support of its ruling, the Supreme Court held that if a statute was silent or ambiguous with respect to the specific issue, the question for a court was whether the agency's action was based on a permissible construction of the statute. Further, considerable weight was to be accorded to an agency's construction of a statutory scheme. The Court noted that while the legislative history of the statute was silent on the instant issue, it did reveal that the EPA's interpretation was fully consistent with one of the two principal goals of the statute -- namely, allowance of reasonable economic growth. Accordingly, the EPA's interpretation was entitled to deference.