Notice & Comment

Chevron in the States:  Wisconsin Update

The cause of overruling Chevron continues to gather momentum.  (This post will appear nestled among several that parse the views of potential nominees to the United States Supreme Court regarding judicial deference.)  It is notable, then, that the day before Justice Kennedy announced his retirement, the Wisconsin Supreme Court issued a spirited anti-Chevron manifesto, written by Justice Daniel Kelly.  The case is Tetra Tech EC v. Wisc. Dept. of Revenue, No. 2015AP2019, filed June 26, 2018.

Wisconsin courts had developed two sorts of deference to agencies.  The first, called “great weight” deference, corresponded to Chevron:  A court would defer to a reasonable statutory interpretation promulgated by an agency, even when the court identified what it considered to be a better, but incompatible, interpretation.  The second, called “due weight” deference, required affirmance of agency interpretations that a court found to be no less reasonable than its own preferred interpretation.  Wisconsin courts and commentators described this second rule as one under which a “tie goes to the agency.”

The majority in Tetra Tech abolishes “great weight” deference.  Justice Kelly insists that this is a necessary consequence of the judicial vesting clause of the Wisconsin Constitution.  Deference, he argues, is an abdication of the judicial duty to “say what the law is.”  For that reason, his opinion also rereads “due weight” deference — the phrase is from the Wisconsin Administrative Procedure Act — as a duty to be open to agency persuasion but emphatically not as a variety of actual deference.  Even awarding “ties” to the agency, says the opinion, impermissibly transfers judicial power to agencies.  (The opinion’s rereading of “due weight” tracks Justice Scalia’s approach to Skidmore v. Swift.) 

The opinion is notable in restricting its arguments to those that apply with equal force in the federal context.  It liberally intersperses citations to federal and to Wisconsin sources.  It cites the critiques of Chevron that have been issued by Justices Thomas and Gorsuch approvingly, with particularity, and at length.  It adopts Philip Hamburger’s argument that to defer to an agency in a lawsuit where that agency is a party is to deprive the counterparty of a “fair and impartial decisionmaker.”  It even (quite misleadingly) enlists Justice Scalia for the anti-deference cause, glossing over his support for Chevron and citing instead his arguments in Auer. 

What the opinion does not do is note any of the many ways in which its case might differ from cases governed by Chevron.  Most obviously, the state’s administrative procedure act differs from its federal counterpart, including the explicit statutory obligation to give “due weight” to agencies’ expert determinations.  The deference question in Wisconsin is therefore a first a matter of statutory, not constitutional interpretation.  Departing from the view of a plurality of his colleagues, Justice Kelly treats the statute as secondary evidence in favor of his core, constitutional argument.

All the opinions slight the many reasons why deference might be different matter for the courts of Wisconsin than for those of the United States.  All assume without comment that there is to be no tax exceptionalism in Wisconsin.  (The underlying dispute involves an interpretation by the Wisconsin Department of Revenue of the term “processing” in the state tax code.)  Nor do any of the Tetra Tech opinions discuss the many relevant differences between Wisconsin’s institutional context and that of the federal government.  Wisconsin judges are elected, making their posture relative to state agencies very different that which life tenured federal judges have relative to federal ones.  Furthermore, the state’s executive is plural.  Six executive offices are subject to statewide election, including one, the Superintendent of Public Instruction, who is without a doubt the head of a state “agency.”  This affects the political legitimacy of rulemaking, with which Chevron is deeply concerned.

Wisconsin also provides not only for gubernatorial but also for legislative review of rules.  The first has a federal counterpart, but the second emphatically does not.  Unlike some other states, Wisconsin does not require legislative approval before rules become effective.  Nevertheless, the existence of formal legislative mechanisms to review rules again affects the political legitimacy of those rules in ways relevant to deference.

Instead, the court focuses on the theory of separation of powers, where Wisconsin law and federal law are roughly coterminous.   Especially because all the justices wind up agreeing that the Department of Revenue adopted the correct interpretation of the term “processing,” it is hard not to conclude that Wisconsin justices have their eye on the federal debate.

[edited 5 July 2018 for style and to clarify that only a minority of the court endorsed the constitutional reasoning of Justice Kelly.]

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