Sunday, May 31, 2020

Really, Skidmore "Deference?" (5/31/20; 2/14/21)

Today, I discuss an interpretation “strategy”--that might not be the right word but bear with me--commonly called Skidmore deference, named for the interpretive process described in Skidmore v. Swift & Co., 323 U.S. 134 (1944), here. I provide links at the end of this blog to the pages in the current (2019) editions of my Federal Tax Procedure book (both 2019 editions)  and to key offerings from this blog that readers might want to read to pursue my thoughts on Skidmore, along with others' thoughts cited therein. These offer background and some overlap on what I discuss today.

I start with my definition of deference. This is in the context of Chevron but applies equally to Skidmore:
Deference is a court applying a reasonable agency interpretation of ambiguous statutory text despite the court’s belief that there is a more reasonable interpretation of the ambiguous statutory text.
This is my definition. I don’t think that it is controversial in the context of Chevron. (Nothing in my definition is original to me; the core concept has been expressed frequently and, so far as I am aware, unanimously (at least extrapolating from the small but, I think, representative cases I have read over the years).)

Chevron requires that a court apply a reasonable agency interpretation despite believing that there is a more reasonable interpretation which the court would apply if Chevron did not command deference. That deference is outcome determinative as to the interpretation in issue.  

But does Skidmore demand deference in this sense? Answering that question requires that we actually read Skidmore. here. Since Skidmore is the law, we should always start with the law. (As Justice Frankfurter is reported to have said, the cardinal rules for statutory interpretation are: “(1) Read the statute; (2) read the statute; (3) read the statute!” Henry J. Friendly, Mr. Justice Frankfurter and the Reading of Statutes, in Benchmarks 196, 202 (1967) (quoting Justice Frankfurter); so, where the case is the law, then read the case, read the case, read the case. The Court said in Skidmore (p. 140):
We consider that the rulings, interpretations and opinions of the Administrator under this Act, while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance. The weight of such a judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.
As I read this, the court should consider the agency interpretation in determining whether, in light of all factors (including the agency interpretation), the court is persuaded as to (i) the agency interpretation or (ii) some other interpretation. The court applies the interpretation that it finds most persuasive – either the agency interpretation or some other interpretation. By adopting the agency interpretation that the court finds persuasive, the court is not deferring to the agency interpretation. Applying the persuasive agency interpretation is not deference at all, as commentators have noted (see p. 96 fn. 444 of the Federal Tax Procedure (Practitioner Edition 2019)).

I just ran across this statement in 2018 from Justice Gorsuch: “Skidmore deference only makes a difference when the court would not otherwise reach the same interpretation as the agency.” E.I. Du Pont De Nemours & Co. v. Smiley, ___ U.S. ___. ___. 138 S. Ct. 2563, 2564 (2018), here (statement respecting denial of certiorari, joined by Chief Justice Roberts and Justice Thomas). As Justice Gorsuch then articulated Skidmore, Skidmore’s application would require that the agency interpretation trump the court’s interpretation and be deference in an outcome determinative sense.

But, in a 2019 concurrence, Justice Gorsuch offered a different spin: that Skidmore permits “courts to decide cases based on their independent judgment and ‘follow [the] agency’s [view] only to the extent it is persuasive.’”  Kisor v. Wilkie, ___ U.S. ___, 139 S.C. 2400, 2448 (2019), here.  The statement was made in the context of considering overruling Auer deference (which, like Chevron, conceptually might be real deference permitting an agency interpretation to apply notwithstanding the court’s own interpretation); if Auer were overruled, then the Skidmore analysis would apply, thus “liberating courts to decide cases on their independent judgment.” As I read this iteration of Justice Gorsuch’s views on Skidmore, the court’s own independent interpretation controls whether the court agrees with the agency interpretation or not. No deference, in an outcome determinative sense, is given the agency interpretation.

I think Justice Gorsuch got it right the second time.

As I discuss in the footnote in the Federal Tax Procedure Book Practitioner Edition (here, p. 96, fn. 444), at oral argument in Kisor (transcript here), other members of the Court seemed to have some similar concerns about whether Skidmore was deference (lightly modified):
Justice Kavanaugh said: “Skidmore deference is really no deference because it --it applies only when it's persuasive, which is true of any argument.” (Transcript of Oral Argument dated 3/27/19, pp. 15-16.)  Justice Roberts then chimed in: “Skidmore deference, which I find hard to get my hands around too --I think I know more what a moiety is than I know what Skidmore deference is.”  (Transcript pp. 26-27.)  The reference to moiety was Justice Breyer’s earlier hyperbolic comment about FDA expertise in guidance as follows: “I mean, they give an example, one of them, where the Court deferred to the understanding of the FDA that a particular compound should be treated as a single new active moiety, which consists of a previously approved moiety, joined by a non-ester covalent bond to a lysine group. Do you know how much I know about that?”  (Transcript p. 11.)
A number of scholars think that deference is not the right word for the concept Skidmore approves. They therefore alternatively call the concept Skidmore respect. E.g., Kristin E. Hickman, The Need for Mead: Rejecting Tax Exceptionalism in Judicial Deference, 90 Minn. L. Rev. 1537, 1552 n. 68 (2006); see also Richard Murphy, Pragmatic Administrative Law and Tax Exceptionalism, 64 Duke L.J. Online 21, 26 (2014) (“In the parlance of general administrative law, ‘Skidmore deference’ or, equivalently, ‘Skidmore respect,’ thus stands for the idea that courts should pay attention to an agency’s construction of a statute that it administers, giving the agency’s analysis whatever weight it reasonably deserves.”).

Notwithstanding the foregoing, there are scholars who tote up the statistics on courts’ application or claimed application (or, I suspect, in many cases, mere citation) of Skidmore deference and assume that courts apply Skidmore deference in an outcome determinative way. E.g., Kristin E. Hickman and Matthew D. Krueger, In Search of the Modern Skidmore Standard, 107 Colum. L. Rev. 1235 (2007). While courts often routinely--even rotely--cite Skidmore, it is not clear (to me) that those courts articulate that Skidmore compels them to adopt the agency interpretation when they actually are persuaded that another interpretation is better. When they cite Skidmore, I suspect that all they are saying is that they are finding the agency interpretation the most reasonable interpretation. They are not deferring to an agency interpretation in lieu of a more reasonable interpretation.

Extending the argument to Chevron:

I think a similar phenomenon happens with Chevron deference. Often, perhaps a very large percent of the time, when courts noise about Chevron, they do so when, if they had performed the complete interpretive Skidmore analysis (including fairly and fully considering the agency interpretation), they would have reached the same interpretation the agency did, so that they did not defer even though they sprinkled their discussions with Chevron. I think often they do that simply upon determining that the agency interpretation is reasonable, so that they really can stop their analysis without having to take the hard work of Skidmore-type statutory interpretation to realize that the best interpretation is the agency interpretation so that there is no deference at all.

This phenomenon also illustrates that the two-step Chevron test can be conflated to one step, because at Step One, the agency interpretation must be a reasonable interpretation within the scope of the statutory ambiguity; if the agency interpretation is not reasonable within the scope of the ambiguity, Step One is not cleared and, if it is reasonable within the scope of the ambiguity, then Step Two would also be cleared. And, within the constraints imposed by the requirement of reasonableness in the interpretation, how often will a court who struggles hard to determine that its own interpretation is better than the agency interpretation will not then conclude that the agency interpretation is unreasonable. So, either the court (i) agrees with the agency interpretation or (ii) disagrees with the agency interpretation enough to consider it unreasonable and applies its own best interpretation. In either case, there is no deference. To be sure, there is conceptual space allowed by Chevron deference to be outcome determinative, but I think it is constrained.

To show how limited Chevron really is in the context of statutory interpretation in areas assigned to the agency to administer, consider these categories (from the Federal Tax Procedure Book here slightly modified)):
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 common interpretation applies. But, 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 but which, in fact, is really no deference at all because the court is persuaded as to the interpretation it applies; I discuss Skidmore below beginning on p. 97.)
4. If the agency has interpreted the statute and 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 4th 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, as I shall note, similar deference was accorded prior to Chevron as shown in the tax cases such as National Muffler.)

[Note as of 2/14/22:  In a subsequent writing on Chevron, I revised the wording and expanded the Categories to include 6 and 7.  See the Postscript to another article here.]

My hunch is that the circumstances where the Fifth Category is reached are sufficiently constrained that the kerfuffle about Chevron is overblown. For example, two prominent scholars noted: “Rhetoric notwithstanding, Chevron alone does not truly drive the outcome in most of the cases in which courts apply it.” Nicholas R. Bednar & Kristin E. Hickman, Chevron’s Inevitability, 85 Geo. Wash. L. Rev. 1392, 1398 (2017). I think the thrust of that quote is correct, but it is inaptly stated, for if the courts “apply” Chevron, they must have determined that the statute was ambiguous, that the agency interpretation was reasonable although not the best interpretation; in that case, Chevron would be outcome determinative; so I think what they mean is that the court was really agreeing, applying Skidmore persuasion standards, that the interpretation was the most reasonable interpretation without care that Chevron was not applicable. I wonder whether courts’ citations to Chevron when Chevron really is not outcome determinative is a bow to the constituency that put those judges on the bench so that they are not seen as agreeing with an agency interpretation when they really do agree (or at least don’t want to do the hard work of articulating a basis for a more persuasive interpretation), so incanting Chevron can give them cover and make at least a glancing blow against the administrative state by overstating the real power of agencies to "control" judicial statutory interpretation). [Most of this paragraph was added /3/20 at 12:00pm.]

Even if the political headwinds from politicians who imagine that the enemy really is the state (aka administrative agencies through which the state governs) cause Chevron to be overruled, presumably that would leave pre-Chevron deference which, in my mind, is basically the same as post-Chevron deference at least in terms of allowing reasonable agency interpretations of ambiguous statutory text to apply. See National Muffler Dealers Association v. United States, 440 U.S. 472 (1979), here; and United States v. Correll, 389 U.S. 299 (1967), here. Note in this regard that the Court in Mayo--Mayo Foundation for Med. Educ. v. United States, 562 U.S. 44 (2011), here--did not determine that the pre-Chevron National Muffler test would have actually required a different result than Chevron, although, to be sure, the Court had pre-Mayo sent ambiguous signals about whether National Muffler was outside Chevron with some possibility (real or imagined) of different outcomesSee the Federal Tax Procedure, p. 88.

 Other JAT offerings on Skidmore:

Federal Tax Procedure Book 2019 Editions Links:
  • Student edition, here, p. 64.
  • Practitioner edition, here, p. 97.
Federal Tax Procedure Blog entries (reverse chronological order):
  • Even More on Skidmore (Including Equipoise as to Interpretation) (Federal Tax Procedure Blog 7/7/19), here.
  • More on Skidmore (Federal Tax Procedure Blog 10/19/17), here.

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