Retroactivity Analysis After Brand XPDF Download
Under Brand X, federal courts must reverse their own prior precedent in deference to an intervening agency decision if that agency decision is based on a reasonable interpretation of the statute. Thus, if the first-in-time court sets the law at A, and if a second-in-time agency later finds that B is a superior interpretation of the statute, then the third-in-time court must defer to the agency and move the law from A to B. But can law B be retroactively applied to a litigant who reasonably relied on the first-in-time court’s opinion that the law was A? The answer to that question depends on which retroactivity standard applies to the Brand X problem, which in turn depends on the answers to two threshold legal questions. First, does the decision to move the law from A to B “change” the law, or does it merely “clarify” what the law has always been? Second, if the law has been changed, should that change be attributed to the second-in-time agency, which offered the “authoritative” interpretation of the statute, or to the third-in-time court, which decided whether to ratify that interpretation? Recent decisions have created circuit splits on both questions, and the Supreme Court has offered little guidance. This Note argues that a move from A to B does “change” the law, and that the third-in-time court, rather than the agency, is legally responsible for the change. In hopes of protecting reasonable litigants from the specter of retroactivity, this Note then proposes and defends a default rule for federal courts faced with the Brand X problem. In effect, this proposal would establish a rebuttable presumption that a small subset of administrative rules–all those which overrule first-in-time court precedents–should not become operational unless and until they are ratified by third-in-time federal courts.