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Cass R. Sunstein, Avoiding Absurdity? A New Canon in Regulatory law (with notes on interpretive theory) (John M. Olin Program in Law and Economics, Working Paper No. 158, Aug. 2002).

Abstract: Courts have recently developed a new principle of interpretation: Administrative agencies are not bound by the literal language of regulatory statutes, if they are attempting to ensure against absurd or patently unreasonable outcomes. This principle is an effort to allow agencies to overcome the occasionally pathological rigidity of regulatory statutes, at least when those statutes must be applied in circumstances that Congress could not possibly anticipate. The new principle deserves widespread approval. After all, courts have long refused to interpret statutes literally in cases of absurdity. While it is possible to question the extent to which courts should feel free to inquire into the absurdity of an application of a statutory text, agencies have strong advantages over courts, because they are in a better position to know whether literalism, or departures from literalism, will improve the regulatory system. These points are connected with a more general one: Theories of interpretation should focus less on abstractions about democracy and legitimacy, and more on institutional capacities and concrete consequences. An appreciation of this suggestion fits well with courts' emerging enthusiasm for allowing agencies to interpret statutes more flexibly than courts do.