A Forgotten Nineteenth-Century Supreme Court Super-Deference Curio, by Richard Murphy
Who among us does not occasionally enjoy a forgotten nineteenth-century Supreme Court decision adopting a super-powerful form of deference that leaves our dear friend Chevron in the dust?[1] And surely there is no time better than the present for such reflections now that Justice Gorsuch has transformed judicial deference to agency statutory constructions into such a “hot topic.”
Still reading? Terrific. Then let’s take a quick trip in the way-back machine to the Supreme Court’s very brief opinion in Peabody v. Stark, 83 U.S. 240 (1872). Like many instances of judicial review of agency action from that time, Peabody involved a dispute regarding how much money somebody owed the government. The plaintiff distillers (collectively, “Stark”) were engaged in that fine Tennessee tradition of distilling spirits, which were subject to a tax. Taxing spirits based on volume of production raises the problem of determining just how much in the way of spirits a given distiller has produced. To avoid this problem, Congress enacted § 20 of the Internal Revenue Act of July 20, 1868, which provided that a distiller could be taxed based on 80% of its production capacity. Surveys of distilleries’ capacities were to be memorialized in written reports made in triplicate. One report was for the assessor, the second was for the Commissioner of Internal Revenue, and the third was for the distiller itself.
Peabody collected tax from Stark based on 80% of his reported capacity. Stark, however, had not received a written copy of the report measuring his capacity. Seizing on this error, Stark sued Peabody, contending that it was illegal to collect the tax based on the measurements in the undelivered report. In response, the District Attorney introduced evidence that, although the written report had not been delivered, Stark had received actual notice of its measurements.
The Supreme Court explained that there were two ways of looking at the statutory provision requiring delivery of a written report. On one view, until a distiller receives proper and official notice, the “harsh” rule of being taxed by capacity rather than actual production “was not to be applied to him.” 83 U.S. at 243. On another view, though, the point of the notice provision is simply “to secure one mode by which the assessed capacity of his distillery should come to the knowledge of the distiller.” Id. Accordingly, actual notice should suffice to allow taxation based on assessed capacity. Id.
One big factor favoring the distiller’s stricter reading of the notice provision was that one of his attorneys had the foresight to send a letter to the Treasury Department inquiring how it had construed the notice provision in the past. A deputy commissioner kindly responded, “it has been uniformly held that the distiller is not bound by the survey until a copy of the report thereof, executed as required by said section, is delivered to him.” Id. at 241. Well, that was a spot of good news for Stark.
The government’s attempted interpretive flip-flop ran counter to the nineteenth-century Supreme Court’s approach to “deference” to agency statutory constructions. During that time, the Court often stated in so many words that it would defer to an agency’s longstanding, consistent statutory construction so long as it was reasonable. (For a rich discussion of the roots of this doctrine and how it differs from modern approaches to deference, see generally Aditya Bamzai, The Origins of Judicial Deference to Executive Interpretation, 126 Yale L. J. 908 (2017)). This stance aided agencies when they stuck to well-established, entrenched statutory constructions, but it also made it more difficult for agencies to change interpretive course. Accordingly, the Peabody Court opined:
In the absence of a clear conviction on the part of the members of the court on either side of the proposition in which all can freely unite, we incline to adopt the uniform ruling of the office of the internal revenue commissioner, holding that the distiller is not liable under the eighty per cent clause, until a copy of the survey in which the tax is assessed has been delivered to him as provided in section ten. It is made to appear to us in a very satisfactory manner that such has been the unvarying rule of that office since the act went into effect, and while we do not hold such ruling as in general obligatory upon us, we are content to adopt it in this case for the reason already mentioned, as well as for its obvious fairness to the government and to the distiller.
Id. at 234-44. Insofar as the preceding passage relied on the well-established doctrine that courts should defer to uniform, reasonable agency statutory constructions, it is unremarkable and fairly forgettable. A handful of later cases and about a half dozen law review articles have cited Peabody for this proposition.
The opening clause of this passage, however, is worth another look. It contemplates that the agency’s (previously) uniform construction should be upheld unless the members of the Court unanimously agreed that it was unreasonable. This approach has an appealingly collegial and humble air to it. It suggests a judicial attitude something like: “We justices are all reasonable people—so, if even one of us thinks that the agency’s statutory construction is reasonable, then it can’t be all that unreasonable, in which case we should uphold it.”
But this collegial unanimity requirement also, of course, seriously supercharges deference. Transposing this approach mechanically to the modern day would flip the result of every non-unanimous rejection of an agency construction under Chevron (or Auer). A few recent examples of such hypothetical flips include Michigan v. EPA, 135 S. Ct. 2699 (2015) (rejecting by 5-4 vote EPA’s construction of Clean Air Act that excluded cost considerations from determination of whether it was “appropriate” to regulate power plants); Utility Air Regulatory Group v. EPA, 134 S. Ct. 2427 (2014) (rejecting by 5-4 vote EPA’s construction of Clean Air Act triggering permitting requirements based solely on greenhouse gas emissions); FDA v. Brown & Williamson, 529 U.S. 120 (2000) (rejecting by 5-4 vote FDA’s assertion of power to regulate tobacco).
The idea of modulating judicial deference via super-majority voting rules sometimes crops up in the law review literature. See especially Jacob E. Gersen & Adrian Vermeule, Chevron as a Voting Rule, 116 Yale L. J. 676 (2007) (discussing the benefits of abandoning Chevron’s two-step in favor of a system requiring super-majority votes to strike down agency statutory constructions). So far as I know, however, Peabody’s extreme example of this approach, combining a form of rationality review with a unanimity requirement, has left no further tracks in the case law. This fate was to be expected. Peabody’s unanimity requirement is the doctrinal equivalent of a casual remark rather than a well-considered approach to the problem of judicial supervision of agency action. Also, imposing a unanimity requirement on a 9-justice Supreme Court would come close to handing an interpretive carte blanche to agencies. (The same cannot be said, though, for imposing a unanimity requirement on 3-judge panels).
Still, at a time when the Chevron doctrine is coming under heavy fire for unconstitutionally concentrating power in the executive branch, perhaps it is worth a moment to reflect that the Supreme Court, if only for a moment, seemed to adopt a far more deferential standard.
Richard Murphy is the AT&T Professor of Law at Texas Tech University School of Law.
[1] Maybe people who get invited to parties?