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Intrastatutory Federalism and Statutory Interpretation: State Implementation of Federal Law in Health Reform and Beyond

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Intrastatutory Federalism and Statutory Interpretation: State Implementation of Federal Law in Health Reform and Beyond THE YALE LAW JOURNAL ABBE R. GLUCK Intrastatutory Federalism and Statutory Interpretation: State Implementation of Federal Law in Health Reform and Beyond ABSTRACT. State implementation of federal law is commonplace, but has been largely ignored by the interpretive doctrines of legislation and administrative law. We have no Chevron, federalism canon, or anything else for state implementation, nor any doctrines that ask how Congress's decisions to delegate implementation duties to states should affect how ambiguous statutes should be interpreted. For theories of federalism, state implementation raises a different question, namely, whether this "intrastatutory federalism" -an informal federalism that comes from the inside of federal statutes -is something that doctrine should protect. The prevailing functional and sovereignty accounts of federalism seem less relevant for a federalism that comes at the grace of Congress; this federalism belongs to the domain of statutory interpretation. This Essay argues that state implementation of federal law plays many different roles, and that those differences should affect both how statutes are interpreted and how they are conceived from a federalism perspective. Sometimes state implementation effectuates traditional federalism values like experimentation, but at other times it seems to serve more nationalizing functions, like statutory entrenchment and even federal law encroachment. This variety poses challenges for legislation doctrine, because the prevailing canons of interpretation are not designed to capture such differences, and it illustrates that the broad category of cooperative federalism is more nuanced than commonly acknowledged. AUTHO R. Associate Professor of Law and Milton Handler Fellow, Columbia Law School. Many of the ideas in this Essay arose in response to Bill Eskridge and John Ferejohn's terrific book, A Republic ofStatutes, and also took shape in conversations with Alan Weil. Many thanks to Bill, John, and Alan, and also to Bruce Ackerman, Akhil Amar, Tom Baker, Jim Brudney, Meir Feder, Barry Friedman, Josh Geltzer, Michael Graetz, Katie Hall, Rick Hills, John Jacobi, Sandy Johnson, Tim Jost, Ben Kerschberg, A Klevorick, Anita Krishnakumar, Joe Landau, John Manning, Jerry Mashaw, Tom Merrill, Robert Post, Judith Resnik, Sara Rosenbaum, Ted Ruger, Robert Schapiro, Catherine Sharkey, Kevin Stack, Peter Strauss, John Witt, and Ernie Young; workshop participants at Columbia, Fordham, Ohio State University, University of Maryland, University of Pennsylvania, Vanderbilt, and Yale law schools; The Yale Lawjournal editors; and especially Richard Briffault, Sam Bray, Robert Ferguson, Heather Gerken, Gillian Metzger, Henry Monaghan, Anne Joseph O'Connell, Nate Persily, and Chuck Sabel. Nathan Brownback, Alexandra Golden, Richard Lee, James Lyons, Stephanie Wang, Caroline White, Amy Wolf, and particularly Michelle Diamond, Mallory Jensen, and Scott Stifler provided excellent research assistance. 534 ESSAY CONTENTS INTRODUCTION 537 I. FEDERALISM AND FEDERAL LEGISLATION THEORY 545 A. Preliminary Matters: Is Intrastatutory Federalism "Federalism" at All? 547 B. The Absence of Intrastatutory Federalism from the Doctrines and Theories of Statutory Interpretation 551 1. The Absence of Intrastatutory Federalism from the Doctrines of Statutory Interpretation and Administrative Law 553 a. Canons That Concern State-Federal Relations 553 b. Canons That Concern Agency Implementation 556 2. The Absence of Intrastatutory Federalism from Modern Theories of Statutory Entrenchment 56o II. FEDERALISM AS A TOOL OF NATIONAL POWER: ENTRENCHMENT AND ENCROACHMENT THROUGH STATE IMPLEMENTATION 564 A. Nationalizing the "States as Laboratories" Account 566 B. Federalism as a Tool of National Statutory Entrenchment 568 i. Entrenchment Through Polycentricity 568 2. Entrenchment Through the Statutory Bureaucracy 569 3. Entrenchment Through Deliberation 571 C. Federalism as a Tool of Federal "Field Claiming" (or Encroachment) 572 D. State Implementation as an Expression of Federalism Values 574 III. HEALTH REFORM'S MANY THEORIES OF STATE AND FEDERAL RELATIONS 576 A. Brief Overview of the Statute 58o B. Multiple Theories of State-Federal Relations in the ACA 582 1. Why So Many Different Federalisms? 583 2. The ACA's Five Uses of the State-Federal Relationship 584 a. Parallel Federalism as Both Boundary-Shifting and Federalism- Respecting 585 b. Field-Claiming Federalism 587 c. Hybrid Federalism 588 535 THE YALE LAW JOURNAL 121:534 2o11 3. Experimentation, Entrenchment, and Encroachment Through the ACA's Federalisms 589 a. States as Laboratories in the ACA 589 b. States as National Entrenchers in the ACA 590 c. Nonstate, Nonfederal Implementers 592 d. The ACA's Parallel Federalism and Field-Claiming Moves as Boundary Shifting 593 IV. DOCTRINAL IMPLICATIONS 595 A. Why Statutory Interpretation Doctrine? 595 B. Which Statutory Interpretation Doctrines? 597 1. The Federalism Canons and the Problem of Broad Default Rules 597 2. The Administrative Law Canons: Mead as a Vehicle for a Statute- Specific Approach to State and Federal Agency Deference 598 a. Potential Constraints on Chevron for Federal Agencies 599 b. A Chevron for the States 6oi i. Accountability 602 ii. Uniformity 604 iii. Institutional Differences Between State and Federal Agencies 604 c. What About All of the Other Nonfederal Implementers? 6o6 3. The Continuing Utility of the Canons 607 C. Practical Applications 609 i. Tensions Between Chevron and the Federalism Presumptions 609 2. Courts That Have Considered a Chevron for the States 611 3. Whether Federal Statutes Can Empower State Implementers To Do What State Law Does Not Authorize 612 4. Confusion About Whether State or Federal Law Is Created by State Implementation Actions 613 D. Toward a More Complete Theory of Intrastatutory Federalism 615 1. Interagency Statutory Interpretation 615 2. Theories of Modern Legislation and the Challenge ofAspirational Statutes 619 CONCLUSION 621 536 INTRASTATUTORY FEDERALISM AND STATUTORY INTERPRETATION INTRODUCTION On the one hand, legislation theory is a stubborn old dog. Indeed, its appearances are so persistently one-dimensional that they continue to give almost no indication that the states have any role whatsoever to play in interpreting federal statutory law. On the other hand, and at the same time, legislation theory is eagerly exploring its relationship with other domains, including constitutional law and administrative law. Increasingly, scholars are arguing that federal statutes are now the primary way in which quasi- constitutional norms are introduced and that federal agency implementation of those statutes is central to their entrenchment. And yet, putting these two hands together, it becomes evident that legislation's constitutional and administrative explorations have not offered any substantial account of federalism, an omission that implies that the states are irrelevant if one's concern is only with the interpretation and implementation of federal statutory law and the way that national values are created and entrenched in American legal culture. But make no mistake: every branch of state government is squarely in the midst of creating, implementing, and interpreting federal statutory law. The most obvious manifestation of this is the number of federal statutory cases adjudicated by state courts, a point to which I have called attention in the past.' But there is another important dimension to this story, and one with many more players: namely, the federal statutory interpretation that takes place not in the courts, but on the ground, by the state governors, state legislators, and state administrative officials whom Congress increasingly places on the front lines in the implementation - and so by necessity, the interpretation- of federal statutory law.' For all the focus in recent statutory interpretation doctrine and theory on the administrative state and on dialogic interpretation, we have virtually no doctrines or theories that acknowledge, much less account for, the role of state implementers in the hermeneutical project of federal statutory construction. 1. See Abbe R. Gluck, Intersystemic Statutory Interpretation:Methodology as "Law" and the Erie Doctrine, 120 YALE L.J. 1898 (2011); Abbe R. Gluck, The States as Laboratories of Statutory Interpretation: Methodological Consensus and the New Modified Textualism, 119 YALE L.J. 1750 (2010). 2. By many accounts, "implementation" is the new interpretation, or at least a very substantial part of it. See United States v. Mead Corp., 533 U.S. 218, 227 (2000) ("[A]gencies charged with applying a statute necessarily make all sorts of interpretive choices . ."); WILLIAM N. ESKRIDGE, JR. & JOHN FEREJOHN, A REPUBLIC OF STATUTES: THE NEW AMERICAN CONSTITUTION (2010); Jerry L. Mashaw, Norms, Practices, and the Paradox of Deference: A Preliminary Inquiry into Agency Statutory Interpretation,57 ADMIN. L. REv. 501 (2005). 537 THE YALE LAW JOURNAL 121:534 2011 Nor do we have any doctrines that attempt to recognize, much less negotiate, the relationship that is created between state and federal agencies when Congress gives them both concurrent authority to implement federal law but is ambiguous about how that authority should be allocated. Nor still, despite all of our public, doctrinal, and scholarly focus on federalism, do we have any story of what this Essay calls "intrastatutory federalism"-an informal, nonconstitutional federalism narrative that acknowledges the various ways in which Congress uses
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