Chevron, Loper Bright, and Statutory Ambiguity (1/8/26)

I start with two opposing statements:

“Chevron requires a federal court to accept the agency's construction of the statute, even if the agency's reading differs from what the court believes is the best statutory interpretation.” National Cable & Telecommunications Assn. v. Brand X Internet Services, 545 U.S. 967, 980 (2005) (Thomas, J. for the Court).

ChatGPT’s response to the following question: “Can you find me a United States case where the court determined the best interpretation of a statute but nevertheless applied Chevron to defer to a not best agency interpretation?”:

No United States case is identified in the provided search results where a court explicitly determined the best interpretation of a statute but nevertheless applied Chevron deference to a non-best agency interpretation. * * * * The results highlight Chevron's requirement for courts to defer to reasonable agency views of ambiguous statutes but provide no instance where a court labeled its own view "best" yet deferred anyway, likely because such language would contradict Step One's mandate to enforce unambiguous meanings.”

[JAT Note in support of ChatGPT’s response: I have read many Chevron cases and do not recall that a court ever said it had determined than interpretation other than the agency's was best but deferred to the agency interpretation. At an anecdotal level, I read cases identified by other scholars as Chevron cases and found that not one of the cases said the court determined the best interpretation was other than the agency interpretation and nevertheless deferred to the agency interpretation. See Is Chevron on Life Support; Does It Matter? (Federal Tax Procedure Blog 4/2/22; 4/3/22), here (focus on Category 5); and  Chevron Step Two Reasonableness and Agency Best Interpretations in Courts of Appeals (Federal Tax Procedure Blog 2/9/23), here (again focus on category 5). In not of those cases did a court state or fairly imply that it had determined a best interpretation and was deferring to the agency interpretation instead. Not one.]

I propose that (i) Chevron deference, properly applied, was a tie-breaker rule when a court found statutory text ambiguous as required to get past Step One (meaning that the court could not determine the best interpretation) and (ii) that Loper Bright’s rejection of Chevron deference leaves courts without guidance to resolve ambiguous statutory text. Of course, the phenomenon of statutory interpretive ambiguity is not unique to agency interpretations of statutes they administer, but at least Chevron offered a consistent and, in a sense, principled way to resolve ambiguity to reach a decision in the case at hand.

Logic alone supports my proposal (i). Let’s start at the beginning—Chevron. Chevron says in formulating its famous test said (p. 843 n. 11, bold-face supplied): “The court need not conclude that the agency construction was the only one it permissibly could have adopted to uphold the construction, or even the reading the court would have reached if the question initially had arisen in a judicial proceeding.” Of course, the first part of that quote is true, taking Chevron literally: the agency interpretation and the other interpretation under consideration must both be within the zone of statutory ambiguity (both are permissible interpretations in Chevron lingo). The second part of the quote is true also. Parse the language: There is no claim that Chevron could apply if the court reached the best interpretation (whether the agency’s or the opposing interpretation). The only claim is that Chevron might reach a result that, absent Chevron deference, the court may not have reached in the required state of ambiguity; without Chevron, the court would have to apply some interpretation to resolve the dispute and that interpretation may not be the same as Chevron produces. Well, duh, of course.  That does not mean that, in the face of two competing interpretations within the scope of the ambiguity, the statute is not ambiguous. It just means that, without Chevron, the court would have had to apply one of the interpretations to decide the case, but that does not make either interpretation the best interpretation.

Loper Bright’s reference to Chevron’s footnote 11 is misguided (pp. 398-399)

It requires a court to ignore, not follow, “the reading the court would have reached” had it exercised its independent judgment as required by  the APA.

To repeat, if the court determined the best interpretation, it should have applied that interpretation at Step One (whether it is the agency interpretation or an opposing interpretation). Of course, that conclusion is logical based on Chevron’s clear Steps.

So, this raises the question of how a court resolves a case involving statutory ambiguity after Chevron. Loper Bright did not answer that question, but the logical answer to the question is that, without a tie-breaker, the court would have to find some other way to break the impasse of ambiguity. Logically, breaking the impasse of ambiguity without a tie-breaker is arbitrary. Examples courts might deploy are: (i) flip a coin, (ii) consult a ouija board, (iii) consult the judge’s gut, or (iv) go with the judge’s belief as to the preferred outcome, whether that belief is political or the judge’s best guess based on life experience or projecting what the judge feels is best for society in general. There are other modes or preferences for resolving ambiguity but all are necessarily unprincipled if the goal is to reach the best interpretation.

Perhaps one seemingly principled way to reach a result when statutory ambiguity is encountered is to rely on the rule that resolves factual ambiguity—the party bearing the burden of persuasion loses. Lawfinding is like factfinding, so that a party bearing the burden of persuasion must persuade as to both the facts and the law and, failing to do so, loses. (Some have argued this similarity of factfinding and lawfinding; I provide at the end of this blog with citations to some of the authorities.) But such a notion does not seem satisfying with regard to agency interpretations because, depending upon how litigation arises, the regulated party or the agency may bear the burden of persuasion, requiring that the court find the law (the statutory interpretation resolving the case) based on which party bears the burden of persuasion.

Loper Bright leaves courts to make such arbitrary decisions because cannot wish away or deny ex cathedra statutory ambiguity where a court cannot honestly find that one interpretation is the best and any other interpretation is not best. Indeed, Loper Bright admitted (p. 400) that statutory ambiguity exists routinely. So, I ask, what is a court to do when faced with statutory ambiguity? All I can say is that Loper Bright offers nothing but trivialisms because it is oblivious to the problem, seeming to think that courts can always interpret out ambiguity and reach the best interpretation. That’s nonsense.

In looking for a principled way to resolve ambiguity, I am not saying necessarily that Chevron’s justifications for deference were principled. I am saying that the Chevron, when applicable, offered a consistent and principled way to resolve interpretive ambiguity when considering an agency interpretation and a competing interpretation, both within the zone of interpretive ambiguity. Specifically, it avoided courts making arbitrary interpretations. (I am not suggesting that agencies in identifying ambiguous statutory text made arbitrary choices; agencies made choices but were required to explain their choices in adopting the interpretations as Chevron-entitled regulations.)

Of course, Chevron had its own ambiguities. The most obvious is the question of just how much confidence in its best interpretation a court needed to stop at Step One. I analyze that issue graphically by presenting it in probabilistic zones of ambiguity. Assuming two competing interpretations, A and B and a probability spectrum of 1 to 100, with 1 being a certain determination that Interpretation A is correct and 100 being a certain determination that Interpretation B is correct. The probability spectrum is illustrated:

If a court was at 50-50 on that spectrum, we can all agree that the two interpretations are within the zone of ambiguity where there is no principled way to decide the dispute on the basis of the best interpretation. Interpretive realists will say that there is a zone outside 50-50 where a court cannot determine probabilistically that one interpretation is the best and the other not best. For example, the more likely than not standard in factual determination theoretically permits a factfinder to resolve the dispute if the zone of ambiguity is 51-49. Tax lawyers surely recognize that type of issue in lawfinding where, for example, some tax shelters were tested to see whether the legal support was more likely than not. I have often thought, and argued, that there is no meaningful distinction  in lawfinding in a zone of ambiguity between 51 and 49. Moreover, in reality, the probabilistic zone of ambiguity will often be 54-45, 60-40, or 67-33. Justice Kavanaugh said while on the D.C. Circuit (Brett M. Kavanaugh, Book Review, Fixing Statutory Interpretation, 129 Harv L Rev 2118, 2137-38 (2016)):

          In practice, I probably apply something approaching a 65-35 rule. In other words, if the interpretation is at least 65-35 clear, then I will call it clear and reject reliance on ambiguity-dependent canons. I think a few of my colleagues apply more of a 90-10 rule, at least in certain cases. Only if the proffered interpretation is at least 90-10 clear will they call it clear. By contrast, I have other colleagues who appear to apply a 55-45 rule. If the statute is at least 55-45 clear, that's good enough to call it clear

Whatever the zone of ambiguity, within the zone, a court cannot meaningfully determine the best interpretation. As in factfinding, some tie-breaker is required to resolve the dispute to avoid arbitrary interpretation.

JAT Expansions:

1. Use of Burden of Proof Concepts in Lawfinding: Gary Lawson, Evidence of the Law (Univ. of Chicago Press 2017); and its predicate article, Gary Lawson, Proving the Law, 86 Nw. U. L. Rev. 859 (1992); and Charles F. Capps, Does the Law Ever Run Out? 27-32 (July 29, 2024), SSRN https://ssrn.com/abstract=4908863 (discussing equipoise in legal interpretation and assigning a burden of persuasion on the law to a party in order to prevail)

2. Statutory Law as Fact; Probabilism in Legal Interpretation: Alex Stein, Probabilism in Legal Interpretation, 107 Iowa L. Rev. 1389 (2022) (arguing that, whatever the mode of statutory interpretation, the meaning of a statute is the communication the statute makes and that the communication is a fact that courts should discern and apply and use probabilistic reasoning in discerning the communication to apply).