Thursday, May 26, 2022

Chevron and Equipoise In Statutory Interpretation (5/26/22)

In FDRLST Media, LLC v. NLRB, ___ F.4th ___, Slip Op. 13 n. 8 (3rd Cir. 5/20/22), CA3 here and GS here, in a nontax case, Judge Matey said in a concurring opinion:

In short, deference arises in the rare case when no superior statutory reading can be found, not when an inferior construction competes with a best reading.

Judge Matey also said in footnote 8 (somewhat cleaned up by omitting some quotation marks and some case citations; however boldface is supplied by JAT):

   n8 * * * * [The potential for deference] is decreased with a searching application of the statutory text, after which a “court will almost always reach a conclusion about the best interpretation,” leaving “no need to adopt or defer to an agency’s contrary interpretation.” Kisor, 129 S. Ct. at 2448 (Kavanaugh, J., concurring). In other words,” the interpretation requirement of Chevron, “taken seriously, means that courts will have no reason or basis to put a thumb on the scale in favor of an agency.” Id.

As I read that, Judge Matey says that Chevron deference applies only in a state of interpretive equipoise; conversely, if the court determines the better interpretation, the court applies that interpretation without deference.

In my article, John A. Townsend, The Report of the Death of the Interpretive Regulation Is an Exaggeration 120-121 (SSRN December 14, 2021), I discussed the application of Chevron when a court is in equipoise as to the legal interpretation. By equipoise, I mean at least two equally persuasive interpretations, one of which is an agency interpretation entitled to application of the Chevron framework (say, an interpretive notice and comment regulation). Here is the discussion (pp. 120-121, footnotes omitted and boldface in the original):

7. This Category deals with a state of equipoise among reasonable interpretations of ambiguous statutory text, where the court is unable to determine that any of the reasonable interpretations is better than the other. Justice Scalia famously argued in discussing deference that courts are rarely in equipoise as to interpretation of  statutory text, although others think such equipoise maybe more common. Still, the Supreme Court has recognized the possibility of legal interpretive equipoise in other contexts, specifically in the context of application of the rule of lenity where equipoise favors the defendant. In considering an agency reasonable interpretation in the context of other reasonable interpretations of equal persuasiveness(none more persuasive than the other), some default tie-breaker rule is required (as with the rule of lenity). The court would have to pick one of the interpretations to resolve the case. The court could either pick one interpretation arbitrarily–say, flipping a coin–or adopt some arbitrary default rule tie-breaker win to one party or another–say, either for or against the agency interpretation. The tie-breaker arbitrary default would operate like a burden of persuasion in fact finding where, in a state of equipoise, the party bearing the burden of persuasion loses, although a state of equipoise in fact finding is rare. In this equipoise category, the agency interpretation might prevail since the court has not determined any other interpretation more persuasive than the  agency interpretation and thus is not deferring to a less persuasive interpretation. But, importantly, the court will not have determined to apply the agency interpretation over the best interpretation. No deference there.

In short, since I previously defined Chevron deference to apply when a court applies a less reasonable agency interpretation over the court’s better interpretation, I could then pronounce (as I did) that picking the agency interpretation in equipoise did not involve deference to a less reasonable agency interpretation. Judge Matey’s analysis disagrees with my two key precepts: (i) that Chevron deference can apply to a less reasonable agency interpretation; and (ii) Chevron deference does not apply to an agency interpretation as to which the court is in equipoise.

However, I do think Judge Matey is on the right track in concluding that rigorous statutory interpretation may either result in the agency interpretation being the correct interpretation (in which case there is no deference) or applying the other better interpretation without Chevron requiring deference.  See Is Chevron on Life Support; Does It Matter? (Federal Tax Procedure 4/2/22; 4/3/23), here (where I analyze a year dataset of Circuit Court opinions and conclude that there is not much real deference that can be observed).

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