Federal administrative law is largely about policing delegations of power from Congress to Executive Branch agencies, and the administrative law concept of “deference” is about delegation of interpretative power over ambiguous law.  That is, courts need to decide what it means when lawmakers leave ambiguity in a statute or regulation.

To illustrate, imagine a simple rule like “no vehicles in the park.”  See H.L.A. Hart, Positivism and the Separation of Law and Morals, 71 Harv. L. Rev. 593, 607 (1958).  A rule like this could appear in a statute passed by a legislature; it could also appear in an agency regulation.

For now, imagine the rule appears in an organic statute that creates a Parks Department and authorizes it to implement the statute via rules and regulations.  The Parks Department clearly could promulgate a rule specifically banning cars in the park.  But what about baby strollers, which might or might not count as “vehicles?”

Under the overturned Chevron doctrine, courts presumed that Congress used statutory ambiguity intentionally as an affirmative delegation of interpretative authority to agencies.  Smiley v. Citibank (South Dakota), N. A., 517 U.S. 735, 740-41 (1996) (“We accord deference to agencies under Chevron . . . because of a presumption that Congress, when it left ambiguity in a statute meant for implementation by an agency . . . desired the agency (rather than the courts) to possess whatever degree of discretion the ambiguity allows.”) (emphasis added).  Under this presumption, courts might uphold a rule classifying baby strollers as “vehicles” because baby strollers are (at least arguably) “a means of carrying or transporting something.”  Vehicle, Merriam-Webster.com Dictionary, https://www.merriam-webster.com/dictionary/vehicle. Accessed 13 Aug. 2024.

In overturning Chevron, Loper Bright instead presumes that statutory ambiguities reflect “the inability on the part of Congress to squarely answer the question at hand[,]”  “a failure to even consider the question[,]” or that the ambiguity is just “unintentional.”  Loper Bright Enters. v. Raimondo, 144 S. Ct. 2244, 2265-66 (2024).  In other words, under Loper Bright, either insufficient votes to legislate, unintentional oversight, or drafting errors are the presumed sources of statutory ambiguity.  Under this presumption, “no vehicles in the park” most likely means that baby strollers are simply allowed because the legislature either lacked the votes to ban them, did not even consider banning them, or simply erred in using the word “vehicle” when it really meant to address cars, trucks, buses, boats, and motorcycles.

Like congressional statutes, agency regulations can be ambiguous, and just as agencies use regulations to implement ambiguous statutes (though no longer under the blanket of Chevron deference), agencies often use “guidance” documents—consisting of various memoranda, circulars, pamphlets, white papers, and policy manuals—to interpret ambiguous regulations.  To illustrate this issue, imagine that “no vehicles in the park” appears in a Parks Department regulation, and the Parks Department issues guidance classifying baby strollers as “vehicles.”

Under current law, expressed most recently in Kisor v. Wilkie, 588 U.S. 558 (2019), the Supreme Court continues to afford deference to agency interpretations of ambiguous regulations, with certain limits.  In determining whether an agency’s guidance interpreting its regulations is enforceable, Kisor directs courts to consider the following:

• Is the regulation “genuinely ambiguous” after applying standard tools of legal interpretation, including analysis of dictionary definitions, the structure and purpose of the regulation, and the regulation’s history? If the dictionary makes clear that a baby stroller is not a “vehicle,” there is no need to consider an agency’s contrary interpretation.
• Is the agency’s interpretation limited to the zone of ambiguity in the regulation? For example, even if the word “vehicle” is ambiguous, that ambiguity alone does not authorize a toll on baby strollers in the park.
• Does the agency’s interpretation reflect its “fair and considered judgment?” Formal guidance published by an agency’s highest-ranking officials carries more weight than ad hoc decisions by staff reviewers or legal arguments advanced in court by agency lawyers.  Likewise, well-explained interpretations based on rigorous data receive more deference than poorly reasoned ipse dixit (a legal Latinism meaning “he himself said it” or “because I said so”).
• Does the agency’s interpretation actually implicate its subject-matter expertise? Even if the Parks Department has expertise in regulating park traffic, courts will not defer to Parks Department guidance requiring baby strollers to have wheels made from sustainable materials (especially if a separate pollution-control agency already exists).
• Does the agency’s interpretation create “unfair surprise?” Where an agency had always allowed baby strollers in the park, a sudden reversal expressed in guidance materials without fresh notice-and-comment rulemaking is suspect, especially if the reversal would create retroactive liability.

In sum, while courts still defer to agency guidance interpreting ambiguous regulations, that deference has limits.  Courts do not presume that every statement by staff represents the views of the agency itself.  Courts do not presume that an agency’s expertise supports every regulation it promulgates.  And courts do not presume that an agency’s current interpretation is faithful to a regulation’s original meaning.  These limits create real opportunities for regulated parties to resist unfavorable outcomes based on guidance when the underlying regulations are satisfied.

Moreover, although Loper Bright’s holding is limited—it applies only when agencies interpret ambiguous statutes—its reasoning applies equally to interpretations of ambiguous regulations.  For this reason, Kisor likely is ripe for overruling.

The Supreme Court decided Kisor before Justice Barrett joined the court, and even then, Justice Gorsuch’s concurrence received four votes for the proposition that “today’s decision is more a stay of execution than a pardon” for deference to agency interpretations of ambiguous regulations.  More specifically, the Kisor Court rejected arguments that deference to agencies is not grounded in the Constitution or any statute; the Administrative Procedure Act’s text requires courts to “decide all relevant questions of law[;]” and the Constitution’s grant of “the judicial power of the United States” to federal courts empowers only the judiciary to interpret the law authoritatively.  The very same arguments, however, carried the day in Loper Bright.  Therefore, we predict that the Supreme Court very likely will end the practice of deference to agency interpretations of ambiguous regulations at the next suitable opportunity.