The John M. Olin Center

Paper Abstract

16. Yehonatan Givati, Strategic Statutory Interpretation by Administrative Agencies, 7/2008.

Abstract: How do administrative agencies interpret the law when it is ambiguous? This paper shows that administrative agencies choose between two strategies of statutory interpretation: the risky strategy — a relatively aggressive interpretation that provokes an appeal by the firm — and the safe strategy — a relatively non-aggressive interpretation that the firm complies with. The agency’s strategy depends on the level of judicial deference, and on litigation costs. It turns out that an increase in the level of judicial deference or in the firm’s litigation cost will not necessarily result in the agency choosing a more aggressive statutory interpretation. Since an increase in the level of judicial deference may result in a shift from the risky strategy to safe one or vice versa, the number of cases in which the court upheld the agency’s interpretation cannot be used to measure the effect of such a change.

16: PDF