Saturday, March 25, 2023

Overlap Between Chevron Deference and Skidmore Respect; Chevron Deference Masking Skidmore Respect (3/25/23)

 I have argued in various postings on this blog that:

1. Chevron means that, for ambiguous statutory text, the court may apply reasonable agency regulations interpretations. (Please note that in this opening statement I do not call Chevron a deference regime.) Further, reasonable agency interpretations include (i) interpretations that are the better interpretation of the statute (by definition a reasonable interpretation) and (ii) interpretations that are not the better interpretation of the statute but still reasonable (whatever that means). Finally, based on my anecdotal but I think representative review of the cases where courts of appeals invoke Chevron to apply the reasonable agency interpretation but do not declare which of the subcategories the agency reasonable interpretation falls into, most of the time the court is at category (i) which is not deference. If that is right (I think it is), courts are not deferring to the agency interpretation in subcategory (i). Chevron deference applies only in subcategory (ii).

a. Chevron deference generally applies only to regulations promulgated with notice and comment. For this discussion, I assume that the Chevron-qualified notice and comment regulations were properly promulgated (i.e., no foot-faults in the procedures to promulgate notice and comment regulations).

2. Skidmore is not deference, because it does not permit a court to adopt an agency interpretation that is not the better of the possible reasonable interpretations. Rather, Skidmore only requires consideration of the agency interpretation in determining the better interpretation of the statute. Skidmore does not require or even permit the court to defer to an agency interpretation that is not persuasive as the better reading of the statute. Skidmore is not even weak deference, as often claimed. Hence careful judges and scholars avoid referring to Skidmore as a deference authority. Even Justices when discussing Skidmore recently have noted that Skidmore is not deference. See Really, Skidmore "Deference?" (Federal Tax Procedure Blog 5/31/20; 2/14/21), here, where I quote the Justices’ discussion in oral argument in Kisor v. Wilkie, 588 U.S. ___, 139 S.Ct. 2400 (2019), with a link to the transcript of and local page citations to the oral argument.

a. Skidmore respect generally applies only to subregulatory agency interpretations not entitled to Chevron deference. (I use the term subregulatory guidance as agency guidance other than in a procedurally properly promulgated notice and comment regulation.) However, logically, Skidmore respect can apply at Chevron Step One if the agency interpretation is determined the better interpretation, thus pre-empting Chevron Step Two which is the only step in the Chevron Framework where a court can defer to an agency interpretation. (Caveat: my anecdotal reading of the cases and inferences therefrom is that courts rarely invoke Skidmore at Chevron Step One but probably do some type of Skidmore-type analysis without naming it at Step Two where they determine the agency regulation interpretation is reasonable and thus seem to defer (of course, the better interpretation is reasonable and needs no deference; I’ll come back to this later.)

b. I noted that Skidmore can apply at Chevron Step One. It may also apply before the Chevron Framework is invoked--i.e. before Step One. If the agency interpretation is the better interpretation of the statute, it might even resolve ambiguity which is the predicate to the Chevron Framework. 

I now extend those arguments.

Scholars who seem to buy into the notion that Skidmore is a weak form of deference claim that Skidmore respect for subregulatory guidance produces agency wins almost as much as Chevron deference for regulations interpretations. William N. Eskridge & Lauren N. Baer, The Continuum of Deference: Supreme Court Treatment of Agency Statutory Interpretations from Chevron to Hamdan, 96 Geo. L. J. 1083, 1142-1143 (2008) (citing Kristin Hickman and Matthew Krueger, In Search of the "Modern" Skidmore Standard, 107 Colum L. Rev. 1235, 1271-80 (2007) and noting, using an older data set, “The agency win rate in Chevron cases (76.2%) is less than three percentage points higher than the agency win rate in Skidmore cases (73.5%).”).

I think they are inferring from the agency win rate for Skidmore for subregulatory guidance indicates deference because the win rate approaches the win rate for Chevron deference for regulations. Of course, merely reading Skidmore will teach that Skidmore is not deference because the court has to determine that the agency interpretation is persuasive – i.e., the better interpretation.

I introduce a different interpretation of these close win rates. My interpretation is that the closeness of the win rates suggests that courts seeming to invoke Chevron as outcome determinative most often are applying the better agency interpretation which is not deference. I have analyzed two one-year (somewhat overlapping) data sets where Courts of Appeals seem to be deferring to the agency interpretation but may not really be deferring--they chant reasonable but they are really doing what judges do, that is to apply the better interpretation. In not one single case in the data sets did any court indicate it was deferring to a less persuasive or less reasonable agency interpretation. Chevron Step Two Reasonableness and Agency Best Interpretations in Courts of Appeals (Federal Tax Procedure Blog 2/9/23), here; and Is Chevron on Life Support; Does It Matter? (Federal Tax Procedure Blog 4/2/22; 4/3/22), here. Stopping at finding the agency interpretation reasonable is inconclusive as to whether the court is applying the agency interpretation because (i) it is most persuasive (thus not needing deference) or (ii) it is reasonable but not the most persuasive (thus needing deference). And in the inconclusive category of only finding an agency interpretation reasonable, I infer from close reading of the cases, that, if the courts had stated which subcategory applied, most of the cases would fall in the category (i) which is not deference.

One of the more astute observers of the appellate scene, including the role of Chevron, Second Circuit Judge Jon O. Newman (Wikipedia here) also came to the conclusion about the  prevalence of subcategory (i) in applying Chevron. See On Reasonableness: The Many Meanings of Law’s Most Ubiquitous Concept, 21 J. App. Prac. & Process 1, 83 (2021), here) (bold face supplied  by JAT):

It is difficult to know how the Supreme Court or other federal courts determine whether an agency’s interpretation of an ambiguous statute is “reasonable.” No weighing process appears to be involved. It would probably be too cynical to suggest that the courts are just accepting agency interpretations with which they agree and rejecting those they disfavor, but in some cases that almost seems to be what is happening. Clearly there is no one meaning of “reasonable” in the context of Chevron deference. Perhaps this is simply a context where there is a narrow range of acceptable agency interpretations, on either side of the disputed issue, that courts are willing to uphold, but they are ready to assert the power to reject others that, for stated, or more often unstated, reasons, they deem beyond an amorphous notion of “reasonable.”

I suggest that judges, whose job and instincts are usually to apply the better statutory interpretation, will be naturally attracted to the agency interpretation that is better than the alternatives offered in the case. Thus, they could comfortably find the agency better interpretation reasonable and move on. In short, a lot of what appear to be Chevron deference cases are really Skidmore respect cases in which the better interpretation controls.

With this background, if Chevron and all prior vestiges of real deference were eliminated, there would not be material differences in outcome in the by far the bulk of future cases. See Chevron Deference: Much Ado About Not Much (Federal Tax Procedure Blog 8/15/21), here. Skidmore would still apply because it is not deference and would produce a high agency win rate. What that means is that all the hyperbolic commotion about Chevron as an attack on the Constitution (masking an animus against the administrative state) may be just political rhetoric but not outcome determinative in most cases. 

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