USCA1 Opinion

UNITED STATES COURT OF APPEALS

FOR THE FIRST CIRCUIT
_________________________
No. 94-1783
NANCY STRICKLAND, ET AL.,
Plaintiffs, Appellees,
v.
COMMISSIONER, MAINE DEPARTMENT OF HUMAN SERVICES,
Defendant, Appellee,
v.
SECRETARY, U.S. DEPARTMENT OF AGRICULTURE,
Third-Party Defendant, Appellant.
_________________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MAINE
[Hon. D. Brock Hornby, U.S. District Judge]
___________________
_________________________
Before
Selya, Circuit Judge,
_____________
Bownes, Senior Circuit Judge,
____________________
and Stahl, Circuit Judge.
_____________
_________________________

Jennifer H. Zacks, Attorney, Civil Division, Dept. of

___________________
Justice, with whom Frank W. Hunger, Assistant Attorney General,
_______________
Mark B. Stern, Attorney, Civil Division, Dept. of Justice, and
_____________
Jay P. McCloskey, United States Attorney, were on brief, for
_________________
appellant.
Rufus E. Brown, with whom Jack Comart, Pat Ende, and Pine
_______________
___________ _________
____
Tree Legal Assistance were on brief, for appellees.
_____________________
_________________________
February 16, 1995
_________________________

SELYA, Circuit Judge.

SELYA, Circuit Judge.
_____________
of a

regulation promulgated by

This suit questions the validity

the Secretary of

Agriculture in

connection with his management of the Food Stamp Act, 7 U.S.C.

2011-2025

(1988) (the Act).

to explore
U.S.A. Inc.
___________
837

(1984).

the

frontiers of

Answering the question requires us

Chevron
_______

deference.

See
___

Chevron
_______

v. Natural Resources Defense Council, Inc., 467 U.S.

_______________________________________
Because

we believe

that

proper respect

for the

Secretary's

interpretation of

the applicable

statute validates

the regulation, we reverse the district court's order barring its

enforcement.
I.
I.
__
Background
Background
__________
A
A
_
The Food Stamp Act
The Food Stamp Act
__________________
The Act harks

back to

1964.

Congress

passed it

"to

safeguard the health and well-being of the Nation's population by

raising

levels of

U.S.C.

2011.

administered,

nutrition
The Act

program

among low-income

creates a federally
designed

to

according to income and family size.

stamps

to

retailers

purchase
accept

government

redeems

food

the

at

at

food

stamps

The recipient can use these

if

face

funded, but state

distribute

local

stamps as

them

households."

markets.
they

value.

were
The

Participating
cash, for
Secretary

the

of

Agriculture is charged with overseeing the federal aspects of the

food stamp program.
several

See id. at
___ ___

2013.

Agencies selected by the

states administer the state aspects of the program.

2

The

Department ofHuman Services (DHS) performs thisfunction in Maine.

Congress

originally

restricted

eligibility for

food

stamps to families of limited means but made no attempt to define

income (leaving that
directed

the

Secretary

eligibility.
defined
that

chore to

establish

The Secretary

then

net income as gross

income," but excluded

deduction.

See
___

36 Fed.

(enacting former 7 C.F.R.

In

1977,

comprehensive,
specified that,

uniform

Congress

standards

promulgated regulations

of

that

cost of producing

depreciation as a

component of this

Reg.

14102,

14107

(July 29,

1971)

273.1(c)(1)(b)).
retrofitted

revision

of

for purposes of program

2014(d)(9).

In 1971,

income less "the

Congress

detailed

not to include the

U.S.C.

to

the states).

the

the

Act.

statute,

In

Congress

eligibility, income was

"cost of producing self-employed income."

Although the 1977 amendments did not define

the term "cost," the House Committee on Agriculture reported that

"the

Department would be

this regard to

allow some

expected to revise

its regulations in

form of depreciation

`net' business income."

H.R. Rep. No. 464, 95

25 (1977),

1977 U.S.C.C.A.N.

reprinted in
_________ __

in arriving

at

Cong., 1st Sess.

1978, 2001-02.

The

Secretary revisited the topic in 1978 and promulgated regulations

allowing depreciation
income.

as a

cost in

calculating self-employment

See 43 Fed. Reg. 47846, 47912 (Oct. 17, 1978).

___
In

1980, a

conference
committee

committee

report

produced by

muddied

report accompanied

the

a joint

waters.

the Food

House-Senate

The

Stamp Act

conference

Amendments of

1980 (the FSAA), Pub. L. No. 96-249, 94 Stat. 357 (1980),

among

other

things,

excludable assets
stamp

decreased

that a family

eligibility.

The

Conf. Rep.
1980

value

memorialized

of

non-

retaining food
the

conferees'

no longer permit depreciation to

in determining net self-employment

income."

H.R.

No. 957, 96th Cong., 2d Sess. 29 (1980), reprinted in

_________ __

U.S.C.C.A.N.

1057,

congressional intent,
text

aggregate

might own while

report

"inten[tion] that the Secretary

be subtracted

the

which,

1070.

however, the

Despite
FSAA made

this

statement

no change

of

in the

of the statutory provision that allowed a deduction for the

"cost of producing self-employed income," 7 U.S.C.

2014(d)(9).

Hard on the heels

the

Secretary

proposed

of this conference committee report,

regulations

aimed

depreciation from the computation of the cost

employment income.

at

eliminating

of producing self-

In the proposal, the Secretary stated:

The regulations implementing the 1977 Act

included a provision allowing depreciation as
a cost of doing business for self-employed
households (
273.11(a)(4)(ii)).
This was
done in compliance with
the legislative
history, H.R. Rep. No. 95-464, p.25.
The
Conference
Report accompanying
the 1980
Amendments suggests that the Secretary delete
depreciation, H.R. Rep. No. 96-957, p.29.
Allowing such costs when determining net
self-employment
income
results
in
an
exemption of amounts not constituting "actual
costs" to the household; households are, in a
sense, given a deduction in advance for the
cost of capital goods which is otherwise not
allowed.
Appropriate changes
are being
proposed to
273.11(a) to correspond to the
Conference Report's suggestion.
46 Fed. Reg. 4642, 4646 (Jan. 16, 1981).
C.F.R.

273.11(a)(4)(ii)

The final regulation, 7

(1994), mimicked

the

proposal

and

instructed the

states to

disregard depreciation

net self-employment income.

B
B

in calculating

_
The Litigation
The Litigation
______________
Nancy and
They ran

Lyle Strickland reside

in Belgrade,

Maine.

a successful construction business until 1990, when the

recession forced them

business,

to downsize.

their profits

applied for, and were

Although

dwindled.

At

they remained

about this

in

time, they

granted, food stamp assistance.

On their

1992 federal tax return, they reported a business loss of $4,686,

largely due
equipment.1

to

claimed depreciation

($24,380) on

construction

In 1993, the DHS informed the Stricklands that they

would no longer receive

food stamps because, based on

their tax

return, they had annual self-employment income, without regard to

depreciation, of
per month

$19,694.

more than twice

a two-person household.
that

This equalled net income of $1,641.16

the food stamp eligibility limit for

See Stipulated Record at

___

5 (confirming

the eligibility ceiling for the relevant period is $766 per

month);

see generally
___ _________

7 C.F.R.

273.9 (1994)

(linking income

standards to the federal poverty level).

Disappointed
Stricklands sued
challenged

the

DHS in

by

the

finding

of

Maine's federal

Secretary's

amended

ineligibility,

district court.

regulation,

the

They

C.F.R.

____________________

1The Stricklands say that

they could not sell their
construction equipment because they would no longer have any
means of producing income. They acknowledge, however, that they
owed more on some pieces of equipment than those pieces were
likely to bring on the open market.

273.11(a)(4)(ii)
equipment

from

determining
offensive

(1994), which excluded depreciation on business

the

allowable

household's

"costs

eligibility

to the mandate of 7 U.S.C.

third-party complaint against the

plaintiffs

then obtained

leave

applicants

or

of a

for

to amend,

in

stamps,

as

food

DHS filed a

The

and asserted

claims

The parties stipulated

to the

certified the Stricklands

class comprising

recipients

business"

2014(d)(9).

and the district court

as representatives

doing

Secretary of Agriculture.

directly against the Secretary.2

relevant facts

of

adversely

all Maine

affected

by

food stamp
the

amended

regulation on or after July 1, 1992.

On
motion

April 8,

1994, the

court granted

for judgment on the stipulated record.

Commissioner, 849 F. Supp. 818

____________
the decisive legal

issue in

the plaintiffs'

See Strickland v.
___ __________

(D. Me. 1994).

The court

the following way:

"Can

change the law, simply by directing

framed

Congress

that it be so in legislative

history, without amending the pertinent statutory language?"

Id.
___

at

818.

negative.

Judge

Hornby answered

He then ruled

this

loaded question

that the amended

stand because the Secretary

in

the

regulation could not

had promulgated it in response

to a

perceived congressional directive, not embodied in a duly enacted

statute, rather than in
discretion.

the authentic exercise of administrative

See id. at 820.

___ ___

The Secretary now appeals.

____________________

2From and after the time that the Secretary answered the
plaintiff's first amended complaint, he has pulled the laboring
oar in defending the regulation.
6

II.
II.
___
Applicable Legal Principles
Applicable Legal Principles
___________________________
A
A
_
Standard of Review
Standard of Review
__________________

Interpreting

statute

or

regulation

purely legal question subject to de novo review.

__ ____

presents a

See McCarthy v.
___ ________

Azure, 22 F.3d 351, 354 (1st Cir. 1994); Liberty Mut. Ins. Co. v.
_____
_____________________
Commercial Union Ins. Co., 978
__________________________
Nevertheless, the
not

mosaic."

devoir of

examine

persuasion in

plaintiff challenges

the

review "does

a food stamp

validity

1992).

of the

case in

regulatory

Massachusetts v. Secretary of Agric., 984 F.2d 514, 521

_____________
___________________

(1st Cir.), cert.

_____
court

(1st Cir.

availability of plenary judicial

obviate the

which

F.2d 750, 757

denied, 114
______

even a court
the

(1993).

An

inquiring

empowered to conduct de novo review

__ ____

Secretary's

expressed in the

S. Ct. 81

interpretation

regulation, through a

of

the

must

statute,

deferential glass.

as

See
___

id.
___
B
B
_
The Chevron Doctrine
The Chevron Doctrine
____________________
Judicial
statute

that

interrelated

it

review

of

an

administers

questions, only

agency's
involves

the second

construction
two

of which

separate

of

but

furnishes an

occasion for deference:

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
7

of
Congress.
If, however,
the court
determines
Congress
has
not
directly
addressed the precise question at issue, the
court
does not
simply impose
its own
construction on the statute, as would be
necessary in the absence of an administrative
interpretation.
Rather, if the statute is
silent or ambiguous with respect to the
specific issue, the question for the court is
whether the agency's answer is based on a
permissible construction of the statute.
Chevron, 467 U.S. at 842-43 (footnotes omitted).
_______
In

performing the first part of a Chevron analysis, no

_______

deference is due.
plain

meaning of

Instead,
the

courts must look

statute,

drawing

"particular statutory language at issue,

and design of the statute as a whole."
Inc.,
____

486

U.S. 281,

291 (1988);

its essence

remains unclear whether, and

from

the

the

as well as the language

K Mart Corp. v. Cartier,

_____________
________

accord
______

Dunn v.
____

Agric., 921 F.2d 365, 366-67 (1st Cir. 1990).

______
it

primarily to

if so, to

Secretary of
____________

Beyond this point,

what extent, a court

engaged in

the first stage

of a

Chevron inquiry may

_______

tools of statutory construction,

searching

for

particular

Congress'

issue.

See
___

use other

such as legislative history, in

unambiguously
Dunn,
____

921

F.2d

expressed
at

367

intent on
n.2

(citing

conflicting cases but not resolving the point).

Legislative
criticisms,

and

parallels the
Chevron
_______

history is

the

uncertainty

uncertainty

doctrine.3

subject

to

about its

about its

value in

Respectable authority

many

and

varied

value

in

general

relation to

indicates that

the

it is

____________________

3Critics say, for example, that legislative history is

written by staffers rather than by Congress itself; that it is
easily manipulated; that it complicates the tasks of execution
8

appropriate

to employ

construction"
statutory

all the

"traditional tools

of statutory

in the first part of the Chevron analysis when the

_______

language

Cardoza-Fonseca, 480

itself
U.S.

is

not

dispositive.

421, 432-43,

446

(1987)

See INS
___ ___

v.

(examining

_______________
legislative history to confirm
suggested by the
Lyng,
____

893 F.2d

respectable
analysis,

statute's language) (dictum);

424, 429

support
in

its

statutory text.

the validity of an interpretation

(1st Cir.

for

the

initial
See,
___

But there

proposition

phase,

e.g.,
____

1990).

does

Massachusetts v.
_____________

that

not

the

look

is also

Chevron
_______

beyond

National R.R. Passenger Corp.

______________________________

Boston & Me. Corp., 112 S. Ct.

___________________

1394, 1401 (1992) (stating

deference is due so long as "the agency interpretation is not

conflict
486
with

v.

that

in

with the plain language of the statute"); K Mart Corp.,

____________

U.S. at 292

("If the agency

the plain language of

give deference to the

regulation is

the statute, a

133-34 (1987)

(Scalia,

agency's interpretation of the statute.");

J., concurring)

Cardoza-Fonseca); Stowell v.
_______________
_______
Cir. 1993)

not in conflict

reviewing court must

NLRB v. United Food & Commercial Workers Union,

____
________________________________________

(1st

the

(criticizing dictum

Secretary of HHS,
________________

(approving deference

484 U.S.

3 F.3d 539,

where "statute

112,

in

543

is silent

with respect to a specific question").

____________________

and obedience; and that it often is shaped by members of Congress

who cannot achieve passage of a desired interpretation in the
actual text of an enacted statute.
See Matter of Sinclair, 870
___ __________________
F.2d 1340, 1342-44 (7th Cir. 1989); see also Stephen Breyer, On
___ ____
__
the Uses of Legislative History in Interpreting Statutes, 65 S.

_________________________________________________________
Cal. L. Rev. 845, 845-47 (1991) (describing various attacks on
legislative history, but defending its use when judges are faced
with unclear statutory language).
9

We think
may, as
event,

difference between these

two views

a practical matter, be more apparent than real.4

we do

determinative.
if

that the

not

find the

Thus,

legislative

history in

In any

this

case

we need not precisely define the function,

any, of legislative history under Chevron.

_______

Rather, we assume

arguendo, but do not decide, that an inquiring court

________

may look in

that direction during the initial stage of a Chevron inquiry.

_______
On this

assumption, the question whether

spoken on a particular
look first
plain
must

to the

question involves two smaller steps.

statute's language.

meaning, answers the

prevail

Congress has

and further

If the text,

interpretive question,
inquiry is

foreclosed.

We

given its

the language
If

no such

readily apparent meaning springs from the statute's text, we next

examine the legislative history, albeit skeptically, in search of

an unmistakable expression of

congressional intent.

And if,

at

that stage, the

statutory

statute itself,

design

and

unequivocal answer

to

the

viewed in

legislative

connection with
history,

the interpretive

the

reveals

question,

the

an

court's

inquiry ends.
Thus,

it

unmistakably clear
Chevron
_______

inquiry

is

only

when a

expression of
moves into

its

court

cannot

discern

congressional intent that

second

stage.

Until

an

the

then,

____________________

4Courts that exclude legislative history during the first

of the Chevron analysis may well decide to consider it
_______
during the second stage in order to determine whether the
agency's interpretation is a permissible one.
Thus, compelling
legislative history probably will preclude a contrary agency
position under either of the two views of Chevron.
_______
stage

10

deference is not a
deference

consideration

looms large.

interpretation

to see

but from that

The court
how

must

it relates

to

point forward,

examine the
the statute.

examination involves a

high degree of

role.

not write a rule that serves

The agency need

respect for the

agency's

This

agency's

the statute

in the
that

best or most

logical manner; it

flows rationally

statute.

from

need only write

a permissible

a rule

construction of

the

See, e.g., Cohen v. Brown Univ., 991 F.2d 888, 899 (1st
___ ____ _____
___________

Cir. 1993) (noting that it is unimportant to the Chevron analysis

_______

whether the court, if writing on a pristine page, would prescribe

a

different

agency's

version of

the regulation).

interpretive regulations

arbitrary,

capricious, or

must

In other

words, an

stand "unless

manifestly contrary to

they are

the statute."

Chevron, 467 U.S. at 844.

_______

To be sure, the Chevron doctrine has a protean quality.

_______
Under it, courts

afford varying degrees

of deference to

interpretations in varying circumstances.

544; Sierra Club v. Larson,
___________
______
To

cite

present

an example
purposes,

that

See Stowell, 3 F.3d at

___ _______

2 F.3d 462, 468-69 (1st

possesses

deference

is

agency

Cir. 1993).

particular pertinence

"particularly

appropriate

for

in

complex and highly specialized areas where the regulatory net has
been intricately woven."

Massachusetts Dep't of Educ. v. United

____________________________
______

States Dep't of Educ., 837 F.2d 536, 541 (1st Cir. 1988) (quoting
_____________________
Citizens Sav. Bank v.
____________________
1985)).

Bell, 605
____

Accordingly, "[m]atters

F.

Supp. 1033,

1042 (D.R.I.

of accounting, unless

they be

the expression of a whim rather than an exercise of judgment, are

11

for the agency."

Id. (quoting Cheshire Hosp. v.

___
______________

Vt. Hospitalization Serv., Inc., 689

________________________________

New Hampshire______________

F.2d 1112, 1117

1982)); accord American Tel. & Tel. Co. v.

______ __________________________

(1st Cir.

United States,
_____________

299

depends

the

U.S. 232, 236-37 (1936).

Ultimately,
persuasiveness
States v.
______
(1st

course,

the agency's

deference

position.

on

See, e.g.,
___ ____

United
______

29 Cartons of *** An Article of Food, 987 F.2d 33, 38

_____________________________________

Cir.

1993).

entitlement

to

interpretation
latitude

of

of

Furthermore,
deference

of

is

a statute.

to adapt [their] rules

not

limited

to

and policies to

Rust v.
____

(1991)

internal

and

administrative

Agencies "must

changing circumstances."
(citations

an

Sullivan, 500
________
quotation

its
be

agency's

initial

given ample

the demands of
U.S. 173,
marks

187

omitted).

Consequently, an explained modification, even one that represents

a

sharp

departure

from a

longstanding

prior

ordinarily retains whatever deference is due.

interpretation,

See id. at 186-87;

___ ___

Stowell, 3 F.3d at 544.

_______
C
C
_
Taming the Oxymoron
Taming the Oxymoron
___________________
"Subsequent legislative
noted,

history"

see, e.g., Continental Can Co.

___ ____ ___________________

is, as

hazards inherent

magnified

when

in virtually

What is more,

all legislative

congressional materials

are

history are

created

after the

fact, and the views of

a subsequent Congress are imputed to

earlier

enacted a

Congress that

given

have

v. Chicago Truck Drivers,

_____________________

916 F.2d 1154, 1157 (7th Cir. 1990), an oxymoron.

the

others

statute.

the

See Consumer
___ ________

12

Prod. Safety Comm'n

____________________
(1980);

v. GTE Sylvania, Inc.,

___________________

United States
______________

v.

Price, 361
_____

U.S.

447 U.S.
304,

313

102, 117

(1960).

Despite these problems, however, such materials occasionally have

been found useful in

decrypting an unclear statute.

Seatrain Shipbuilding Corp. v.

___________________________
(1980);

United States
_____________

(1st Cir. 1985).

post-enactment

See, e.g.,
___ ____

Shell Oil Co., 444 U.S.

_____________

v. Ven-Fuel, Inc., 758 F.2d

_______________

We conclude

that the value,

materials should

Liberty Mut. Ins. Co., 978 F.2d

_____________________

be

572, 596

741, 758-59

if any, of

decided case

such

by case,

see
___

at 755 n.7, but should always be

ingested with a healthy dose of skepticism.

Finally,
subsequent
the

in

evaluating

an

comments by Congress, we

dubious value

of such

constitutional principles.
interpretation

agency's

must keep in

comments, but
First,

also

response

to

mind not only

two overarching

Congress cannot dictate

the

of a statute by a subsequent expression of one of

its committees (even, as here, a joint conference committee); "it

is the function of
say what an
U.S.
amend

the courts and not

enacted statute

552, 566

(1988).

a statute

congressional

merely by

Pierce
______

v. Underwood,
_________

and relatedly,

inserting the

. to

487

Congress cannot

proposed change

in a

in

a report

of a

amendment must

meet the

various constitutional

benchmarks, including
President.

Second,

report (even

committee); the

means."

the Legislature . .

bicameral passage

See U.S. Const. art

___

and presentment

I; see also INS

___ ____ ___

U.S. 919, 944-51 (1983).

III.
III.
____

joint conference

to the

v. Chadha, 462
______

13

Analysis
Analysis
________
A
A
_
Stage One
Stage One
_________
Consistent

with the methodology

we have

begin by examining the plain language of 7 U.S.C.

outlined, we

2014(d)(9) to

determine if it speaks definitively to the necessity of including

depreciation as a "cost" of producing self-employment income.
think

it does

single, unitary

not.

Like many

meaning.

evidence from an economist

words, "cost"

While the plaintiffs

has more

We

than a

proffer opinion

and an accountant to the

effect that

certain professional disciplines routinely calculate depreciation

as

a "cost" of

producing income, that

is only half

the story;

common sense argues that the word "cost" may also legitimately be
restricted
income.

to cash

outlays made

in a

given period

to produce

At bottom, then, the word "cost" is a chameleon, capable

of taking on different meanings, and shades of meaning, depending

on

the subject matter

usage.

See
___

20 C.J.S.

and the circumstances

Cost (1940) (stating
____

term [cost] is one of equivocal meaning").

constructions, "cost"

assuredly can

of each particular
flatly that

"[t]he

And among its varying

mean the

price of,

amount that

must immediately be

See,
___

Webster's Third New International Dictionary

_______________________________________________

e.g.,
____

(1986) (defining "cost" in its

amount or equivalent paid
paid or

given

CHARGE,

an item.

primary sense as signifying

or given or charged

for anything

service rendered:

expended to purchase,

or the

bought or

"the

or engaged to

taken in

515

barter or

be

for

PRICE"); Black's Law Dictionary 312

_______________________
14

(5th ed. 1979)

equivalent

(defining "cost" as "Expense; price.

expended, paid

or charged

The sum or

for something.");

Funk &
______

Wagnalls New Standard Dictionary of the English Language

____________________________________________________________
(1934)

(defining "cost" as "[t]hat

which has to

591

be given for a

thing

in order to procure it; especially, the price paid; outlay

of any kind; expense").

In these circumstances, a credible argument can be made

that, as between two plausible meanings, a reader should give the

word

"cost"

its

ordinary

meaning

specialized meaning preferred by

as

opposed

to

the

accountants or economists.

more

See
___

Perrin v. United States, 444 U.S. 37, 42 (1979) (recognizing that

______
_____________

undefined words in a statute ordinarily should "be interpreted as

taking

their

ordinary, contemporary,

States v. Holmquist,
______
_________
petition
________

36 F.3d

common

154, 159 (1st

meaning"); United
______
Cir. 1994)

(same),

for cert. filed (U.S. Dec. 27, 1994) (No. 94-7485).

___ _____ _____

need not go that far, however; it suffices to say

this context can

naturally be read as excluding

We

that "cost" in

depreciation on

capital goods.
Since

the

issue, we must consult

Congress

has spoken

Stricklands asseverate
2014(d)(9)

statutory

plainly on

the question

that the

not

to the subject

clarity.

We

in the House

their asseveration,

to whether

The

of section

do not agree.

The

report accompanying

the plaintiffs as the

comprises but one

15

resolve the

sub judice.
___ ______

legislative history

the 1977 revamping of the Act, heralded by

linchpin of

does

other sources for guidance as

adds the requisite

lone reference

language

paragraph in

one report of one of the two chambers that passed the law.
a solitary reference may
that
is

sometimes be enough to clear

obscure a statute's text

qualitative, not

which

appellants

controlling weight
obtain here.

the

solitary reference

too slender

under the totality of

See, e.g.,
___ ____

the mists

the relevant inquiry, after all,

quantitative

cling is

While

reed to

to

be accorded

the circumstances that

United States v. Taylor, 752

_____________
______

F.2d 757,

764 (1st Cir. 1985) (noting the hazards of relying on an isolated

fragment

of legislative history

there, a single paragraph in a

21-page committee report), rev'd on other grounds, 477 U.S.

_____ __ _____ _______

131,

152 (1986).
The
expected"

actual statement

that

the Secretary

to include "some form of depreciation"

is couched in

vague and precatory terms.

The statement is neither

its

in

content nor

directory

statement

implies

moreover,

whatever force it

1977 amendments
language of

the existence

its
of

thrust.
agency

may possess is

employ language that very

a previous

regulation,

on the

"would be

In

precise in
itself,

discretion.

the

And,

diluted because the

closely parallels the

same subject,

that

excluded depreciation.
already

When

Congress codifies language that has

been given meaning in

presumption that the

a regulatory context,

meaning remains the same.

there is a

See Commissioner
___ ____________

v. Keystone Consol. Indus., Inc., 113 S. Ct. 2006, 2011-12 (1993)

_____________________________
(explaining that
judicial and
writes

them

Congress is

administrative
into

presumed to

be

aware of

interpretations of

statute);

cf.
___

words

settled
when

it

Greenwood Trust Co.

_____________________

v.

16

Massachusetts,
_____________
when

971 F.2d

Congress borrows

usually brings along

818, 827 (1st

a

word from

Cir. 1992)

(noting that

legal source,

the

its prior judicial interpretations),

word

cert.
_____

denied, 113 S. Ct. 974 (1993).

______
We
traditional

add

two

related

infirmities

that

generally, see supra note 3 &

___ _____
where, as

here,

points.
attend

First, we
legislative

think

the

history

accompanying text, are accentuated

its proponents

focus

on a

single,

isolated,

somewhat

tentative

statement

contained in

single

document

produced by a single chamber of a bicameral legislature.

although

we

recognize

the

uncertain

value of

post-enactment

materials, we deem the provocative statements in the

Senate conference report

Second,

1980 House-

competent to lend an element of opacity

to already murky waters.

To sum
2014(d), though
suck

the

up, the legislative history

suggestive, is

elasticity

from

underlying section

simply not definitive

the

word

"unambiguously expressed intent of

"cost"

Congress."

enough to

and

convey

an

Chevron, 467 U.S.

_______

at 842-43.
B
B
_
The District Court's Slant
The District Court's Slant
__________________________
Nor
Secretary's

do we

share the

change

deference

because

jawboning

that

congressional

in
it

the
mandate.

district court's

position

forfeits

occurred

as

Secretary

mistakenly

In the
17

first

any

view

entitlement

knee-jerk

place,

that the

response

perceived
we

to

to

as

know of

no

sufficient

basis

characterization
accompanied
credit

for

of

the

disregarding
conference

the 1982 regulations, as a

this characterization.

the absence of meaningful

the

Secretary's

committee's

report, which

"suggestion."

Hence, we

By like token, we are obliged, in

impeachment, to accept the Secretary's

stated reason for making the change

that households

were, in a

real sense, being given an unwarranted anticipatory deduction for

the costs of replacing capital goods, and that the practice ought
to be

stopped

at face

value.

This is

exactly the

type of

"reasoned explanation" that, when accompanying an agency's change

of position,
Court.

can evoke

the deference

contemplated by

the Rust
____

When an agency explicates a principled basis for revising

an interstitial rule in a plausible way, judges should not simply

shrug it off.
We

make one

assume that the

officers

are

presume

that

unbroken

final

point.

Executive Branch is
dolts.
the

Here, for

Secretary

skein of cases, see,

___

Courts

must not

lightly

untutored, or that

cabinet

example,

we are

either overlooked
e.g., Bowsher v.
____ _______

714, 721-27

(1986) (reviewing caselaw and

of powers);

Rhode Island v.
____________

or

reluctant to
misread

an

Synar, 478 U.S.

_____

history of separation

Narragansett Indian Tribe,

_________________________

19 F.3d

685, 699 (1st Cir.) (acknowledging that "[i]n our republican form

of government, legislators make laws by writing statutes"), cert.

_____
denied, 115 S.
______

Ct. 298

(1994), and concluded

that he was

duty

bound to rewrite the rule simply because the conference committee

groused about

it.

We think

it is much more

realistic to infer

18

that the

conference committee's unredacted comments

wake-up call,
Court

sparking the sort

explicitly

government,

served as a

of reexamination that

sanctioned.

In

our

inter-branch communication

tripartite

the Rust
____
system

and cooperation

of

are not

terrible diseases, to be avoided at all costs, but, rather, are a

tested means of improving the health of the body
evidence

politic.

Thus,

that such a rapport exists, without more, does not cast

doubt on the validity of agency action.

C
C
_
Stage Two
Stage Two
_________
Once

we

have concluded

both

that

Congress has

not

spoken

authoritatively

on the

precise

question

and that

the

Secretary's change of heart is not outside Chevron's precedential

_______

orbit, the remaining pieces of the puzzle fall neatly into place.

Fairly read, the amended regulation is reasonable in light of the

Act's

avowed purpose

those unable to

of supplementing

the purchasing

afford nutritionally adequate diets.5

that excluding depreciation from income more

the

ability of

power of

family to

purchase

The idea

accurately reflects

food and,

thus,

better

____________________

5Indeed, the amended regulation, which uses "cost" in its

lay sense rather than in the specialized plutonomic sense, may
better serve the Act's purposes. In any given accounting period,
depreciation is likely to have scant effect on cash flow
even
its proponents must admit that depreciation is, at best, an
approximation (that is, a guess) that exists primarily, if not
exclusively, on paper
and it may bear little if any relation to
an actual decrease in the value of a capital asset.
Moreover,
although depreciation may account for money set aside to replace
a piece of equipment, there is no guarantee that such equipment
will in fact be replaced with similar equipment or with any
equipment at all.
19

indicates

the

Implementing

need
such an

for
idea

food

stamps,

merely shifts

is
the

hardly

heretical.

emphasis of

the

relevant measure
loss

from an

accountant's conception of

to a layperson's conception of cash flow.

conclude

that the

Secretary's

amended

regulation,

is

the

Secretary's

regulatory sense.

handiwork, as

expressed in
or

the

manifestly

Chevron, 467 U.S. at 844.

_______

The Stricklands
why

Hence, we cannot

"arbitrary, capricious,

contrary to the statute."

profit and

themselves are a good

second

thought

illustration of

makes

perfectly

good

In 1992 the Stricklands had revenue in hand of

more than twice the amount designated as the "maximum" income for
a

family of

two receiving

food

Secretary could reasonably

degree

stamps.

We believe

conclude that households

of cash availability

are no more in

than families with half as much

of their income, ineligible

that the

having this

need of food stamps

take-home pay

who are, by dint

for participation in the

food stamp

program.
To

be

sure,

the

contentions that point in

than

food stamp

purchase,

deductible.

business
They

certain

business

employment income

equipment,
argue

elect to

for

that

rental
failure

food stamp recipients

activities

because,

if

overstates the real profit

20

cavalcade

They

a somewhat arbitrary

recipients who

also

depreciation discourages

the other direction.

excluding depreciation gives

self-employed

plaintiffs muster

of

argue that

preference to

rent, rather
payments
to

are

recognize

from undertaking

an attributed

self-

they receive, they

will forfeit food stamp eligibility.

valid

constitute

arguments against the wisdom (or, more aptly put, the lack

of wisdom) of the amended

that both

regulation, they do no more than

the plaintiffs'

word "cost"
same

While these may

as it is used in the

token,

however,

situation, it

Secretary's readings of
statute are imperfect.

both readings

are

plausible.

the

By the

In that

is up to the Secretary, not the courts, to balance

the relevant

policy considerations

implementation
accommodate

and the

show

of

two

or more

statutory

and formulate a
term

that

interpretations

rule.

can

must be

The

reasonably
left

to the

agency.
We hold,

therefore, that the amended

regulation is an

entirely permissible interpretation of the statute, and, as such,

is an entirely permissible exercise of the Secretary's authority.

Accord St. Amour v.
______ _________
(Vt.

1992)

Department of Social Welfare, 605

____________________________

(considering

identical

issue

and

exclusion of depreciation under section 2014(d)).

IV.
IV.
___
Conclusion
Conclusion

A.2d 1340

upholding

the

__________
We need

go no further.6

exclude depreciation from the

income is not
U.S.C.

cost of producing

inconsistent with

2014(d)(9).

The Secretary's

Moreover,

decision to

self-employment

the language and

history of

the decision is

grounded in

____________________

6This case does not require us to decide whether selfemployed food stamp recipients must be given some alternative
deduction, such as a
deduction for replacement costs, in
recognition of either the cost of acquiring capital goods or
their consumption in the course of producing income.
21

reasonable

interpretation of

regulation must be upheld

statute.

Since the

amended

under Chevron principles, the district

_______

court's contrary judgment is

Reversed.
Reversed.
________

the

22