Notice & Comment

Deference for Me, But Not for Thee: State Inconsistency on Administrative Deference, by Michael I. Lurie and Michela Petrosino

How much, if any, deference does a state agency’s guidance deserve? This is an important question of state law, as deference can allow an agency to win even when its legal position is not the best interpretation of the law.^[1] Over the past decade, state legislatures,^[2] state courts,^[3] and the public^[4] have begun to grow wary of the power that deference cedes to state agencies and have started to pare it back. A recent amicus brief filed by the Attorneys General of twenty-seven states might accelerate this trend.

In the amicus brief, which was filed with the United States Supreme Court in Loper Bright Enterprises v. Raimondo, the Attorneys General assert that the Court should overrule its decision in Chevron^[5] and end deference to federal agencies’ regulations.^[6] In Chevron, the Court held that a court must defer to an agency’s regulation that interprets an ambiguous statute if the agency’s regulation is reasonable.^[7] The amicus brief takes umbrage at Chevron deference, arguing that Chevron deference “[c]auses [r]eal [d]amage” by increasing “administrative costs,” “warp[ing] regulatory incentives,” and creating a “power asymmetry between regulated citizens and their regulators.”^[8] According to the amicus brief, Chevron deference “all-but leave[s] agencies to their own devices to decide how far they can go”^[9] and creates a “government-always-wins arrangement.”^[10] The amicus brief also explains that ending Chevron deference will not cause major negative consequences.^[11] The amicus brief also suggests that Chevron deference violates separation of powers and that the courts must have “the final say on what the law is, even when an agency is involved.”^[12]

The Loper Bright amicus brief makes some compelling legal and policy arguments in favor of jettisoning Chevron (even though it downplays the legal and policy arguments in favor of retaining Chevron). And to their credit, some of the signatories to the amicus brief have expressly disavowed Chevron-type deference to their own state’s agencies, consistent with the policy arguments set forth in the Loper Bright amicus brief.

A recent amicus brief that Ohio Attorney General Yost filed with the Ohio Supreme Court in TWISM Enterprises provides a praiseworthy example of this type of consistency.^[13] In TWISM Enterprises, Attorney General Yost asked the court to “hold that the Ohio Constitution bars Ohio courts from deferring to administrative agencies’ legal interpretations” because of the policy problems caused by deference. As Attorney General Yost explained, deference to state agencies results in “systematically biased judgment in cases where the government is a party or a party in interest.”^[14] In Attorney General Yost’s words, relying on an agency’s interpretation of the law “would put a thumb on the scale” just the same as if a court were to rely “on an employer’s interpretation of the law in an employment dispute or a prosecutor’s interpretation of the law in a criminal case. . . .”^[15]

Unfortunately, not all of the signatories to the Loper Bright amicus brief have demonstrated the same commitment to consistency as Attorney General Yost. Several of the signatories continue to press for Chevron-type deference to agencies in their own state, while at the same time decrying deference to federal agencies as bad policy. To provide a few recent examples, the Attorneys General of Georgia,^[16] South Carolina^[17], and Texas^[18] have filed briefs this year that assert that a state agency’s interpretation of a statute is entitled to Chevron-type deference. None of these briefs mention the flaws with Chevron deference raised in the Loper Bright amicus brief.

“[F]oolish consistency” may be “the hobgoblin of little minds,”^[19] but it is anything but foolish to expect the government to treat like situations alike.^[20] Ideally, every signatory to the amicus brief in Loper Bright would take the same step as Attorney General Yost and expressly denounce Chevron-type deference to state agencies (just as they have argued at the federal level). But at a bare minimum, the signatories should stop affirmatively requesting Chevron-type deference to state agencies. To the extent that a signatory to the amicus brief in Loper Bright continues to assert that a state agency’s position is entitled to Chevron-type deference, litigants facing off against these agencies should consider making the courts aware of the contrary arguments presented in the amicus brief.

Michael I. Lurie is of counsel at Reed Smith in the State and Local Tax group. Michela Petrosino is an associate at Reed Smith in the State and Local Tax group.

^[1] See Anthony Caso, Attacking Chevron: A Guide for Practitioners, 24 Chap L. Rev. 633, 644 (2021); see, e.g., Dechert LLP v. Commonwealth,998 A.2d 575, 586 (Pa. 2010).

^[2] Ga. S.B. 185 (2021); Tenn. Code § 4-5-326.

^[3] See, e.g., Tetra Tech EC Inc. v. Wis. Dep’t of Revenue, 914 N.W.2d 21 (Wis. 2018).

^[4] Fla. Amendment 6 (2018).

^[5] Chevron U.S.A. Inc., v. Natural Res. Def. Council Inc., 467 U.S. 837 (1984).

^[6] Brief of Amici Curiae State of West Virginia and 26 Other States in Support of Petitioners, Loper Bright Enterprises v. Raimondo, No. 22-451 (July 24, 2023).

^[7] Id.

^[8] Id. at 4.

^[9] Id. at 7.

^[10] Id. at 11.

^[11] Id. at 24–30.

^[12] Id. at 7–8.