Chevron In Oral Argument in Sanchez v. Mayorkas (4/23/21)

On April 19, oral argument was held in Sanchez v. Mayorkas (Sup Ct No. 20-315), see transcript here.  The case was not a tax procedure case; nor was it even a tax case.  But the discussion was interesting and indicates some some confusion about Chevron.  I just make several comments about the discussion.  

First, the Government attorney (Tr. 32, 38, 40, 41, 54) that the Government's reading of the statute at Step Two was the “better reading” so that Chevron deference is  inapplicable.  For that reason, the Government attorney asks that the Court say the Government reading is better and “say no more.”  That is true.  If the Court finds that the Government’s interpretation is the better interpretation, Chevron does not apply.  Chevron applies in an outcome determinative sense only if the Court thinks another interpretation is “better” but the Government’s interpretation of the statute is reasonable.  Some of the Justices’ questions indicate confusion about that correct proposition.

Second, Justice Breyer said (Tr. 37): “aren't we in the world where there is  ambiguity in the statute and we have to get into the Chevron issue”?  The answer is no for the reason noted above.  If the agency interpretation is the better interpretation of the ambiguous statutory text, Chevron deference is not needed and does not apply.  Some of the Justices' discussion indicates confusion on that point.

Third, this confusion led to Brand X issue confusion.  Justice Alito asked (Tr. 40) “Well, but, if we say -- if we say the government's -- the government has the better interpretation, won't that foreclose you from later changing your position?”  Under Brand X, the Government can change an interpretation to an interpretation that is reasonable, thus attracting Chevron deference even if not the better interpretation.  The Government answer nails it, saying that under Brand X: “the agency could theoretically decide that, although it's taken a position, it has had this position since 1991, it -- it studied the question further and concluded that the statute was ambiguous and that it should resolve that ambiguity by taking a different interpretation.”  I think in context he meant a different reasonable interpretation since an unreasonable interpretation flunks Chevron Step Two.

Fourth, the Government attorney states a conflated Chevron test as follows (Tr. ___, see also Tr. 40-41):

I think that this Court's precedents say that, in a case like that, the Court will simply look at whether the agency's interpretation is reasonable, and, if so, it need not decide whether any other interpretation is possible.

That is not the first time that Chevron was stated that way.  But I think Chevron is better stated as follows:  At Chevron Step Two after finding the statute ambiguous, if the Court determines that, within the scope of the statutory ambiguity, the agency interpretation is the better interpretation, the Court simply applies the better interpretation without deferring to the Government’s position (see my Second point above).  So, the Court should determine the best among the reasonable interpretations which will permit it to avoid applying Chevron if the agency interpretation is the better and only applying Chevron if the agency interpretation is reasonable although not the better interpretation.  I think that by going through the drill of determining the better interpretation, the Court can avoid applying Chevron altogether if  that is the agency interpretation or, more likely, determine that the statutory text may not really be ambiguous, meaning that it should have stopped at Step One or is unable to find the agency interpretation unreasonable at Step Two.

I thought it might be helpful to some readers to offer the following from the latest draft of my article (will be posted soon on SSRN) that steps through the various possibilities showing how limited Chevron deference really issue.  I omit the footnotes:

For analysis, I break down the deference concept to show that courts consider many agency interpretations, probably most, that do not implicate deference to an agency interpretation.  Consider these categories:

1. If the statute is unambiguous, the statute controls without either the court or the agency interpreting it further.  No deference there.  

2. If the statute is ambiguous and the agency has not interpreted the statute, the court interprets it.  No deference there.  

3. If the statute is ambiguous, the agency has interpreted it, and the court believes the agency interpretation is the best interpretation, that interpretation applies. Since the court reached that same interpretation, the court did not defer to the agency interpretation.  No deference there.  (This Third Category fits what is called Skidmore deference where the court is persuaded that the agency interpretation is best.)

4. If the agency has interpreted the statute, the court believes a different and better interpretation applies, and the court applies its own interpretation rather than the agency interpretation because the court believes the agency interpretation is unreasonable, it does not defer.  No deference there.

5. If, in the same circumstances as the Fourth category except that the agency interpretation is reasonable but not the most reasonable interpretation (in the court’s mind), and the court applies the agency interpretation, then the court has deferred to the agency interpretation.  Deference there.  (This Fifth Category is what is now called Chevron deference but similar deference was accorded prior to Chevron.)

Only in Fifth category does deference have any meaning because only then is it outcome determinative by allowing an agency interpretation to control over the court’s “better” interpretation.  And, as two prominent authors have noted, “Rhetoric notwithstanding, Chevron alone does not truly drive the outcome in most of the cases in which courts apply it.”

Addendum 4/23/21 4:45pm:  Maybe with rigorous application of traditional interpretive skills the range of reasonableness of competing interpretations can be narrowed to 45-55%, so that when the agency interpretation and the competing interpretation(s) fall in that range, the agency interpretation will get the tilt -- i.e. deference in deference speak. Or perhaps the range out to be 49-51% which, in a meaningful sense, that the court is in equipoise as to the better meaning -- i.e., can't determine that one or the other is the better.  In that case, functioning like a burden of persuasion in jury trials, the tie breaker goes to the agency interpretation because the Court cannot determine a better interpretation.  That would, I suppose, be a form of deference, just like the burden of persuasion in a factual state of equipoise may be said to defer to the party not bearing the burden of persuasion.