Yesterday, I posted Draft Article on Interpretive Regulations and Chevron Deference (Federal Tax Procedure 8/31/21), here, where I solicited review assistance for a draft article. One of the major topics of the article is judicial deference to agency interpretations, now called Chevron deference. In the draft article, I differentiated between judicial deference to agency interpretations and judicial deference to opinions of other judges or courts. I state in the article: “Care must also be taken when using the term deference because it is employed in other contexts to serve a similar, but not the same, function whereby judges defer or give special respect to (i) other specialized courts for legal interpretations in their areas of expertise” or (ii) to particular judges. I then offered this footnote with a “war story” (fn 279 in the current draft article):
The footnote (3 paragraphs) is:
n279 A good example is deference or special respect sometimes
accorded Tax Court interpretations in specialized areas of tax law, despite the
usual interpretation of § 7482 to require de novo review. See Amandeep S. Grewal, The Un-Precedented
Tax Court, 101 Iowa L. Rev. 2065, 2096 (2016) (Tax Court “even sometimes
receives special deference from the appellate courts,” collecting in footnote
211 examples of cases where. because of Tax Court’s special expertise, the
courts of appeals give “respect” or even defer to Tax Court legal
interpretations); Leandra Lederman, (Un)Appealing Deference to the Tax Court,
63 Duke L.J. 1833 (2014) (collecting authority related to deference or
something like it to Tax Court review and concluding that courts of appeals
should give de novo review to Tax Court legal interpretations without
deference); and Andre L. Smith, Deferential Review of the United States Tax
Court: The Chevron Doctrine, 37 Va. Tax Rev. 75 (2017) (arguing for Chevron
deference or something like it for Tax Court legal interpretations).
Another
example from personal experience that intersected with then Judge Stevens who
later, as Justice Stevens, authored the Chevron opinion. While with the Department of Justice Tax
Division Appellate Section, I handled the appeal in Standard
Oil Co. (Indiana) v. Commissioner, 465 F.2d 246 (7th Cir. 1972). The issue involved an esoteric oil and gas
tax concept termed “economic interest.”
Judge Stevens said in the opinion (p. 251, n. 15): “We give special deference to the views of
the Fifth Circuit which has considered the issue on several occasions.” I think
that there was an understanding at the time such as Judge Stevens articulated
that the Fifth Circuit had special expertise in the area of oil and gas
taxation deserving of what he called deference.
I am not suggesting that then Judge Stevens meant deference in exactly
the way he later deployed the term deference in Chevron or courts used
the term deference to agency interpretations pre- and post-Chevron, but
I do think Judge Stevens meant something stronger than Skidmore-type deference (or persuasion). On what Skidmore means, if anything, see p. 75, n. 307; and Really, Skidmore "Deference?" (Federal Tax Procedure Blog 5/31/20; 2/14/21), here.
Yet other
examples are where the Supreme Court or other courts give some special
consideration, even “hints of deference,” given a lower court’s or even a
specific judge’s expertise. Aaron-Andrew
P. Bruhl, Following Lower-Court Precedent, 81 U. Chi. L. Rev. 851,
868-869 (2014).
Other Comments (Personal War Story Off-Topic):
Standard Oil was an interesting case. I won’t get into the merits, but, for some reason the head of Standard Oil’s tax department, Joseph Goetten, took special interest in the case. Coincidentally, Goetten had formerly been Chief of DOJ Tax Appellate, the section in which I worked. He and others from the Standard Oil tax department showed up for the oral argument in Chicago (Standard Oil (of Indiana) headquarters city. At oral argument, Standard Oil was represented by Lee Park, a senior and well-respected member of the Washington DC tax bar, and on the brief by Glenn Archer, later made AAG Tax. Park made the opening argument. At some point, one or perhaps two of the panel members expressed dissatisfaction that Park kept going back to the seminal economic interest case of Anderson v. Helvering, 310 U.S. 404 (1940). The panel did not seem impressed with Park’s argument which lasted the full time an appellant was given (I think in this case, 30 minutes), leaving no time for reply argument because his rambling took too long. I then made my argument. I would plan my oral arguments to take about 5-10 minutes, which left time to address matters that came up in opening argument and any questions from the panel during my argument. As I started my argument, I was pretty sure that the panel was on the government’s side on the issue presented and there was no need to extend the argument. There was nothing in opening argument that I had not anticipated and the panel asked me no questions (that I recall). I therefore completed my argument in about 10 minutes or less. The panel then noted that there would be no reply because Park had used the time during opening. Park requested a few extra minutes to make a reply. Of course, I had said nothing in my oral argument that was not in the brief and should have been covered in Park’s opening argument. The panel rejected Park's request, noting curtly that (as best I recall) “We know Appellant’s argument.” I was stunned because, even though I thought we had the better position, I thought the panel's response was blunt, even rude. So, I bestirred myself to request to speak and said that I had not used most of my time on my oral argument and would be pleased to yield some of that to Park. The panel curtly rejected that overture. So Park was shut out of a reply. I left feeling confident in the result.
About a week later, I was working in my office and the Chief of the Appellate Section (my boss) asked me to come to his office. He didn’t state why. I went to his office as requested. When entering his office, I observed Park, Goetten and Archer sitting across the desk from my Chief. My Chief introduced me to the three. Of course, I already knew Park. My Chief then said that Goetten had formerly been Chief of DOJ Tax Appellate (my Chief’s predecessor) and had said something like the following: “Townsend made inappropriate arguments at the oral argument and, if I were still Chief of DOJ Tax Appellate, I would fire Townsend for making the arguments.” I was stunned. I recovered quickly by saying that I only made the arguments that were in the brief (which had been reviewed and approved in DOJ Tax Appellate) and that, if they wanted to persist in the claim that I made inappropriate oral arguments, I happened to know something that was not commonly known—the 7th Circuit recorded oral arguments. Like I say, I understood at the time that it was not commonly known and am not sure how I knew that (or maybe I just made it up for the counter-bluff). I further said that, given the nature of the claim, I felt that the Court would entertain a motion to obtain a copy of the recording. Goetten then said “Oh, no, that won’t be necessary. Really all we [Standard Oil] want is to submit a supplemental brief.” To which I said, he could represent to the Court in the motion for a supplemental brief that DOJ Tax Appellate had no objection, provided that we could file a responsive brief. The meeting then ended. After they left, my Chief said that he thought Goetten’s claim about me was false and highly inappropriate, but never said anything else about it.
I don’t recall whether the Court gave Standard Oil permission to file a supplemental brief. I have no recollection of filing a responsive supplemental brief and do not have a responsive supplemental brief in my retained copies of briefs from DOJ Tax Appellate. I suspect that, like the denial of reply argument, the Court denied the motion for supplemental briefing.
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