Ohio Supreme Court Rejects Judicial Deference to State Agencies
The Chevron doctrine, under which courts are required to defer to reasonable agency interpretations of ambiguous statutory language, has been a mainstay of federal administrative law for nearly 40 years. It has been controversial since the U.S. Supreme Court articulated it in Chevron U.S.A., Inc. v. Natural Resources Defense Council in 1984. In recent years, however, the criticisms have grown, leading some conservative justices and commentators to call upon the Court to overrule it. To its critics, Chevron facilitates the aggrandizement of executive power and diminishes the judiciary’s responsibility to “say what the law is.”
Chevron has held sway in federal courts since the 1980s. The same cannot be said of state courts, however. The idea behind Chevron is that when Congress enacts statutes that delegate regulatory authority to federal agencies, it implicitly confers authority to agencies to resolve ambiguities or fill gaps that arise when implementing the statute. While some state courts have followed the U.S. Supreme Court’s lead and embraced deference to state agency interpretations of ambiguous state statutes, others have not, and the current trend appears to be in favor of reviewing statutory meaning from scratch.
One of the most recent state high courts to reject a Chevron-type framework for state law is the Ohio Supreme Court. This past December, in TWISM Enterprises., L.L.C. v. State Board of Registration for Professional Engineers & Surveyors, the court held that “it is the role of the judiciary, not administrative agencies, to make the ultimate determination about what the law means,” and therefore, “the judicial branch is never required to defer to an agency’s interpretation of the law.” This opinion, by Justice Patrick DeWine, was joined by three of his colleagues, while the three other justices merely concurred in the judgment without joining his opinion. Interestingly enough, this split did not divide the Ohio Supreme Court along partisan or ideological lines.
The precise question in TWISM Enterprises was whether an independent contractor could satisfy a statutory requirement that firms providing engineering services “designate one or more full-time partners, managers, members, officers, or directors” as in “responsible charge” of the firm’s engineering activities. The manager of TWISM’s engineering activities was paid as an independent contractor, and the State Board of Registration for Professional Engineers and Surveyors concluded that did not satisfy the statutory requirement. Further, the state board argued (and a lower court agreed) that its interpretation of the statutory language was binding insofar as it was reasonable.
Before rejecting the board’s interpretation on the merits, the Ohio Supreme Court had to determine what deference, if any, the board’s interpretation was due. Prior precedent on this question was, in the court’s words, “muddled” and “confused.” Some cases seemed to suggest courts had to defer to any reasonable statutory interpretation offered by an implementing agency (the board’s view). Other cases suggested deference was required, but only when a court first concluded the language was ambiguous (the Chevron approach). And still others suggested that long-standing agency interpretations may carry some weight, but ultimate responsibility for determining the meaning of statutory language rested with the judiciary. None of these cases, however, explored the question in any detail. As the Ohio court noted, “there is no Chevron moment in this court’s history.”
Without a clear guide in court precedent, the court looked to Ohio’s system of separation of powers and the practice of the state legislature to determine what, if any, deference state agency statutory interpretations should get, concluding that state courts are never required to defer to state agencies on the meaning of statutory text. The court based this conclusion not just on a discussion of the separation of powers among the three branches of government, but also on the practice and understanding demonstrated by the Ohio legislature. While federal courts often presume that Congress expects agencies to fill gaps and smooth the rough edges of regulatory statutes, the state high court found no basis for such a presumption under Ohio law. The Ohio Administrative Procedures Act requires courts to determine whether agency actions are “in accordance with law,” a standard that precludes deferring to the agency whose actions are under review.
Further, Ohio statutes expressly provide that “if a statute is ambiguous, the court in determining the intention of the legislature, may consider among other matters . . . the administrative construction of the statute.” Whether or not the legislature may dictate to state courts how to interpret statutory language, the existence of this instruction at least demonstrates the legislature’s expectation that courts may defer but are not required to do so. As the Ohio high court explained, “the legislature envisioned that a court might defer to an administrative agency only when a statute is ambiguous. And even then, deference is permissive, not mandatory.”
The result of TWISM Enterprises is that Ohio law allows state courts to defer to state agency interpretations when a statute is ambiguous, but never requires it. Further, the court instructed lower courts to consider the “persuasive power of the agency’s interpretation and not on the mere fact that it is being offered by an agency.” This analysis is much more like what is often called Skidmore deference than Chevron, a regime under which courts should consider an agency’s opinion where statutory language is unclear, but must ultimately interpret the statutory language for themselves.
A particularly noteworthy feature of the opinion is its recognition that whether state courts should defer to state agencies must ultimately be a matter of state law and should not be unduly influenced by federal practice. Accordingly, the opinion grounds the result in Ohio law, specifically the separation of powers created under the Ohio Constitution and the practice and enactments of the Ohio legislature. At the same time, the opinion was clearly influenced by recent academic literature exploring the premises upon which Chevron and other mandatory deference rules are premised.
There has been significant speculation in recent years that the U.S. Supreme Court may overturn or significantly limit Chevron in federal courts. As TWISM Enterprises illustrates, state courts are not waiting for the U.S. Supreme Court to resolve this question for purposes of state law, and an increasing number of them are concluding that, at least as far as state law is concerned, mandatory deference to state administrative agencies should not be required.
Jonathan H. Adler is the inaugural Johan Verheij Memorial Professor of Law and director of the Coleman P. Burke Center for Environmental Law at the Case Western Reserve University School of Law. He writes regularly for the Volokh Conspiracy.