Chevron deference, in which courts defer to a federal agency’s interpretation of an ambiguous statute in the exercise of its regulatory authority, has long been a topic of contention. It raises questions about the separation of powers, the role of courts, and the reach of unelected agencies that have come to wield tremendous power. In recent years, the Supreme Court has recognized the danger of excessive deference, which among other things has the effect of putting a thumb on the scale in favor of agencies. While not revisiting the nearly 40-year-old Chevron precedent directly (at least yet), the Court has employed the “major questions doctrine,” a clear statement rule requiring “clear congressional authorization” before an agency exercises power on a substantial economic or political question. That was the import of last year’s decision in West Virginia v. EPA rejecting the agency’s draconian emission reduction mandates as an unwarranted power grab.
Justice Brett Kavanaugh, who had expressed skepticism about the way many courts applied Chevron prior to joining the high court, recently voiced similar concerns in a symposium at Notre Dame Law School, which echoed his concurrence in Kisor v. Wilkie (2019). He called attention to Chevron’s footnote nine, which states that “If a court, employing traditional tools of statutory construction, ascertains that Congress had an intention on the precise question at issue, that intention is the law, and must be given effect.” Before concluding that an agency rule is ambiguous, a court must exhaust all “traditional tools of statutory construction.” That renders a finding of ambiguity less likely.
A parallel reconsideration of judicial deference is taking place on the state level. On December 29, the Ohio Supreme Court issued a decision in TWISM Enterprises v. State Board of Registration holding that “the judicial branch is never required to defer to an agency’s interpretation of the law.” At issue was a challenge to a regulatory board’s licensing standard for engineering services firms. Such permission, the agency maintained, could only be issued to an employee, not an independent contractor. That interpretation, the court held, constituted a rewriting of Ohio law. The statutory code required firms to designate a state-registered engineer who was a full-time partner, manager, member, officer, or director in charge of engineering decisions, but it made no distinction between employees and independent contractors. The Ohio firm, a small start-up called TWISM Enterprises, designated a state-registered engineer to be in charge who happened to be an independent contractor, but who actually provided all of the firm’s engineering services.
The judgment for TWISM was 7–0. The court’s opinion was written by Justice Patrick DeWine and joined by Justices Sharon Kennedy, Patrick Fischer, and Michael Donnelly. (Kennedy has since been sworn in as chief justice.) The relevant statutes were silent on whether there was an employment requirement for any designated manager, and since it was a common practice to “outsource management duties to independent contractors,” the plain text of the statute did not support the regulatory board’s position.
As for deference, the court admitted that its own precedents were “muddled,” offering less clarity than even the embattled Chevron standard of federal courts. In fact, prior cases included “at least three different—and irreconcilable—formulations . . . of deference standards,” from “mandatory” to “ambiguity-triggered” to “permissive.” The court had most recently acknowledged the latter type of deference—“it is permissible for a court to consider an administrative construction of the statute.” But “[t]he idea that a court must defer to an agency determination is difficult to reconcile with . . . separation-of-powers concepts.” Such an obligation would hand the judicial power “to say what the law is” to the executive branch and undermine judicial independence.
This dynamic, of course, echoes the same principles on the federal level, and the court included in its analysis quotation of Chief Justice John Marshall’s famous statement in Marbury v. Madison that it is “the province and duty of the judicial department to say what the law is.”
If a court finds statutory text to be ambiguous, it may “consider an administrative interpretation along with other tools of interpretation,” but any weight it “assigns to the administrative interpretation should depend on the persuasive power of the agency’s interpretation and not on the mere fact that it is being offered by an administrative agency.”
The court noted that de novo judicial review of agency interpretations has become the rule in roughly half of the states. It has been catching on in recent years in a number of jurisdictions, including Wisconsin, Utah, Arkansas, Delaware, Kansas, Michigan, and Mississippi.
The renewed vigilance toward the separation of powers is taking place well beyond the U.S. Supreme Court. State court versions of Chevron deference are running on an increasingly empty tank.