News & Features

By Joshua C. Ashley, originally published in Arkansas Lawyer, Spring 2021

Last spring, the Arkansas Supreme Court clarified decades of seemingly conflicting precedent on when Arkansas’ judicial branch should defer to the executive branch on the legal meaning of a statute. No longer would an administrative agency’s view of a statute be given “great deference.” No longer would it be judicially embraced unless it was “clearly wrong.” An agency’s interpretation of a statute would now be reviewed afresh, under a de novo standard of review.¹ And when the agency’s view comes into play at all (such as when the statute is ambiguous), it will operate as one of many interpretive tools—a light on the text, but not the sun.

This article briefly sketches the antecedents of the rule announced in Myers v. Yamoto Kogyo Co., and then offers a few thoughts about its implications and where things might go from here. 

First, antecedents. It’s difficult—perhaps impossible—to isolate the seed of agency deference in Arkansas law. By 1926 a lean shoot had appeared, when the Supreme Court said that the federal Land Department’s interpretation of homestead laws was “at least highly persuasive,” though not controlling.² That case, Moore v. Tillman, got picked up by a treatise (Crawford’s Construction of Statutes), and, on that current, blew into a 1942 case called Walnut Grove School District No. 6 v. County Board of Education, which is perhaps the earliest full treatment of deference in a majority opinion:

This administrative interpretation of the legislation is not, of course, conclusive; but it is not to be disregarded. At section 219 of Crawford’s Interpretation of Laws it is said that “As a general rule executive and administrative officers will be called upon to interpret certain statutes long before the courts may have an occasion to construe them. Inasmuch as the interpretation of statutes is a judicial function, naturally the construction placed upon a statute by an executive or administrative official will not be binding upon the court. Yet where a certain contemporaneous construction has been placed upon an ambiguous statute by the executive or administrative officers, who are charged with executing the statute and especially if such construction has been observed and acted upon for a long period of time, and generally or uniformly acquiesced in, it will not be disregarded by the courts, except for the most satisfactory, cogent or impelling reasons. In other words, the administrative construction generally should be clearly wrong before it is overturned. Such a construction, commonly referred to as practical construction, although not controlling, is nevertheless entitled to considerable weight. It is highly persuasive.” Among the numerous cases cited in support of this statement of the law is our own case of Moore v. Tillman, 170 Ark. 895, 282 S.W. 9.³

Our Supreme Court and Court of Appeals have cited the Walnut Grove formulation at least a dozen times in the 70-plus years since it was published. 

Though oft invoked, agency deference has not been universally praised. A full look at the pros and cons is beyond the scope of this article, but a word or two is apt. On the pro side, consider Justice Jackson’s points in Skidmore v. Swift, which came down from the United States Supreme Court just two years after Walnut Grove came down in Arkansas.⁴ As Justice Jackson noted, there is great benefit to considering the views of the agency that administers the statute, owing both to the agency’s expertise and to the reliance interest that grows around the agency’s administration of the statute over time.⁵ This reliance interest, especially in terms of how the agency and the public have gotten along with the statute through the years, is what Walnut Grove meant by a “practical construction.”⁶ There is also the point, expressed in another United States Supreme Court case called Chevron, that perhaps the legislative branch intends for policy judgments to fill any gaps or resolve any ambiguities in a statute, and it makes sense for the administrative agency’s policy judgment (unless it’s unreasonable) to control in that circumstance.⁷ Justice Kagan recently put the theory in plainer terms: “sometimes the law runs out, and policy-laden choice is what is left over.”⁸

On the other hand, deciding how hard to rest on an agency’s interpretation in any given case is a tough line-drawing exercise.⁹ Plus, deference may become an offramp that allows courts to bypass the hard work of puzzling out a difficult statute.¹⁰ Tag it ambiguous, and the work is largely done.¹¹ There is also some risk of uneven application. In a 1939 case, the Arkansas Supreme Court, without addressing deference, landed on an interpretation of certain liquor laws that, according to the dissent, had long been applied differently by the commissioner of revenues, such that the agency’s construction should not have been disturbed by the majority.¹² But the next year, the same court, speaking through the same justice who wrote the 1939 majority opinion, specifically noted that a particular construction of the statute in that case “has been applied by the state land office,” and was therefore entitled to “considerable weight.”¹³

The biggest criticism of agency deference, though, relates to separation of powers. Arkansas’ Constitution prohibits each governmental department from exercising a power belonging to another, unless the Constitution separately requires it.¹⁴ Judicial recitations of Arkansas’ deference standard routinely paid pen service to the court’s responsibility to decide a statute’s meaning, but there was often an immediate pivot to deference that left separation of powers—at least as a practical matter—in doubt.¹⁵ The result was a judicial canvas that looked, in the words of Chief Justice Roberts, “like one that Jackson Pollock got to first.”¹⁶

Enter Myers. In April 2020, without a request by either party, the Supreme Court quietly but decisively “clarified” its agency-deference doctrine.¹⁷ It was clarification by elimination. No longer would the Court speak in terms of deference. An agency’s interpretation of a statute, the Court said, is only and always to be reviewed de novo.¹⁸ “After all, it is the province and duty of this Court to determine what a statute means.”¹⁹ And the statute’s meaning, at least when the text is unambiguous, lies in its words.²⁰ The agency’s interpretation is not entirely out in the cold, though. Where ambiguity exists, “the agency’s interpretation will be one of our many tools used to provide guidance.”²¹ No justice in Myers dissented from this view.²² 

Arkansas was not the first state to part with deference by judicial action. Other states were moving away from deference as early as 2008.²³ Wisconsin, for one, made the break in 2018.²⁴ So did Mississippi.²⁵ Florida did too, but by constitutional amendment rather than judicial action.²⁶ The Arkansas General Assembly, for its part, had ended deference in tax cases back in 2009.²⁷ 

But Myers marked a clear line in Arkansas that, so far, is holding firm. A few months after Myers, the Supreme Court decided a case in which the parties fully briefed a challenge to agency deference in an appeal from the Oil and Gas Commission.²⁸ The Court reiterated the standard from Myers, and left it at that.²⁹ Toward the end of 2020, in a tax appeal under the Tax Procedure Act, the Court held that the Myers standard applied there too.³⁰ (As noted above, the Tax Procedure Act had rejected deference in 2009.³¹) 

That brings us current. But what’s next? Near the top is the question whether courts should defer to an agency’s interpretation of its own regulation, as opposed to a statute—what federal courts call Auer deference.³² The Supreme Court went a long way toward answering that question—at least by implication—in American Honda, the late 2020 tax appeal noted above. Honda had argued that an agency regulation interpreting a statute was void as applied because it varied from the statute.³³ The Supreme Court declined to consider the regulation, citing Myers.³⁴ This indicates that an agency regulation merely interpreting a statute is unlikely to receive consideration by the Court when the subject statute is unambiguous. A tougher question is what happens when the regulation falls more on the implementing side of the interpreting/implementing line.³⁵ 

And what, if anything, does Myers say to an administrative law judge or agency head in a regulatory adjudication under the Administrative Procedures Act? Myers’ separation-of-powers rationale would seem not to reach the agency operating within itself, which could create inefficiencies in judicial review under the APA. Maybe the agency head defers to the agency’s view of the statute, but the reviewing circuit court cannot do likewise. And then the appellate court looks past the circuit court to the agency’s decision, but reviews issues of statutory interpretation de novo.³⁶ What’s to hold the agency to the same interpretative framework as the reviewing courts? 

Another question is what to do with a federal agency’s interpretation of federal law in a state-court case pressing a federal standard of care. What, for instance, about Ms. Franco’s case against Bunyard Supply for selling a secondhand pistol to an escaped convict in violation of federal gun-sale regulations?³⁷ Or what about a state-court suit pressing federal employment claims that a defendant neglects or decides not to remove to federal court? Skidmore, after all, was a Fair Labor Standards Act case.³⁸

A final question (at least for this article) is how—and why—the agency’s interpretation should function as a “tool” used by the court. As one judge has observed, the agency and the court are not sitting down to the same task when they approach the governing text:

[I]t seems to me that the agency is not trying to answer the same question that we are. The court tries to find the best objective interpretation of the statute, based on the statutory text. The agency instead asks if there is a colorable interpretation that will support the policy result that the agency wants to reach.³⁹

There is nothing inherently wrong with an agency pursuing a policy agenda—that’s the prerogative of the executive branch. But the judicial branch is doing different work: determining what the lawmaking branch meant by its laws at the time they were passed. The functions of agency and court may continue to collide, and the idea of using administrative interpretation as a tool will have to be developed and refined in later cases. 

No doubt there are other open issues that in time will surface for resolution. For now, we have all benefitted from the Court’s clarification of agency deference, and must be on the lookout for further points of application. 

Click here to view the article in Arkansas Lawyer, Spring 2021 

Joshua C. Ashley is a partner in the firm who concentrates his practice in appellate advocacy, commercial litigation, oil-and-gas litigation, and railroad litigation.

Disclaimer: The information included here is provided for general informational purposes only and should not be a substitute for legal advice nor is it intended to be a substitute for legal counsel. For more information or if you have further questions, please contact one of our Attorneys.

Endnotes:

1. Myers v. Yamoto Kogyo Co., Ltd., 2020 Ark. 135, at 4–6, 597 S.W.3d 613, 616–17. 
2. Moore v. Tillman, 170 Ark. 895, 899, 282 S.W. 9, 11 (1926).
3. Walnut Grove Sch. Dist. No. 6 of Boone Cnty. v. Cnty. Bd. of Ed., 204 Ark. 354, 358–59, 162 S.W.2d 64, 66 (1942). (The Court in Walnut Grove referred to the treatise as “Crawford’s Interpretation of Laws.” Id. at 358, 162 S.W.2d at 66. As best the author can tell, however, the treatise is called “The Construction of Statutes.” Section 219 from that treatise matches, verbatim, the language quoted in Walnut Grove. Special thanks to Carol Hampton at the Supreme Court Library for supplying the relevant excerpt.) To be fair, a 1940 case had mentioned in a footnote that “considerable weight, in arriving at [the] meaning of [a] doubtful statute, must be given to practical construction placed upon it by executive officers of state, especially when such construction has been unchallenged over [a] long period of years.” Ware v. Dazey, 201 Ark. 116, 120, 144 S.W.2d 463, 465 n.3 (1940). And a 1939 dissent set out a thorough argument for deference as well. McKeown v. State, 197 Ark. 454, 471–72, 124 S.W.2d 19, 28 (1939) (McHaney, J., dissenting). But Walnut Grove appears to stand as the earliest complete treatment in a majority opinion. 
4. Skidmore v. Swift & Co., 323 U.S. 134, 139–40 (1944). 
5. See, e.g., Skidmore, 323 U.S. at 139–40.
6. Walnut Grove Sch. Dist. No. 6., 204 Ark. at 359, 162 S.W.2d at 66.
7. Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, 467 U.S. 837, 843–44 (1984). 
8. Kisor v. Wilkie, 139 S. Ct. 2400, 2415 (2019). 
9. Skidmore, 323 U.S. at 140 (weight of agency’s judgment will vary in each case depending on several factors). 
10. Hon. Raymond M. Kethledge, Ambiguities and Agency Cases: Reflections After (Almost) Ten Years on the Bench, 70 Vand. L. Rev. En Banc 315, 319–20 (2017) (“And I would suggest that the persistence and willingness of judges to work hard before declaring statutes ambiguous is an important but perhaps overlooked difference between judges.”). 
11. Id. at 324 (“[I]n agency cases it often seems that the court pauses only briefly at step one, without much effort to hack through the undergrowth, before proceeding straightaway down the cleared path of step two.”). Cf. Kisor, 139 S. Ct. at 2415 (“a court cannot wave the ambiguity flag just because it found the regulation impenetrable on first read. Agency regulations can sometimes make the eyes glaze over. But hard interpretive conundrums, even relating to complex rules, can often be solved.”). 
12. McKeown v. State, 197 Ark. 454, 471, 124 S.W.2d 19, 28 (1939) (McHaney, J., dissenting). 
13. Ware v. Dazey, 201 Ark. 116, 120, 144 S.W.2d 463, 465 & n.3 (1940).
14. Ark. Const. art. 4, § 2. 
15. Myers, 2020 Ark. 135 at 4–5, 597 S.W.3d at 616–17. 
16. Gunn v. Minton, 568 U.S. 251, 258 (2013). 
17. Myers, 2020 Ark. 135, at 4–5, 596 S.W.3d at 616. 
18. Id. at 5, 597 S.W.3d at 617.
19. d. 
20. Id. 
21. Id. at 5–6, 597 S.W.3d at 617.
22. See generally Myers, 2020 Ark. 135, 597 S.W.3d 613.
23. In re Determination of Existence of Significantly Excessive Earnings for 2017 Under Electric Security Plan of Ohio Edison Co., —N.E.3d—, 2020 WL 7033864, at *14 (Ohio Dec. 1, 2020) (DeWine, J., concurring). 
24. Tetra Tech EC, Inc. v. Wis. Dept. of Revenue, 914 N.W.2d 21, 63 (Wis. 2018). 
25. King v. Miss. Military Dept., 245 So. 3d 404, 408 (Miss. 2018). See also HWCC-Tunica, Inc. v. Miss. Dept. of Revenue, 296 So. 3d 668, 681 (Miss. 2020) (Mississippi statute requiring trial court to give deference to Department of Revenue’s interpretation of statutes was unconstitutional). 
26. Frank Shepherd, et al., The Demise of Agency Deference: Florida Takes the Lead, 94 Fla. Bar J. 1, 18 (Jan. 2020), available at https://www.floridabar.org/the-florida-bar-journal/the-demise-of-agency-deference-florida-takes-the-lead/. 
27. See Act 755 of 2009, § 2. 
28. Hurd v. Ark. Oil & Gas Comm’n, 2020 Ark. 210, at 8, 601 S.W.3d 100, 104. The author notes that he was counsel in Hurd. 
29. Id. 
30. Am. Honda Motor Co. v. Walther, 2020 Ark. 349, at 6, 610 S.W.3d 633, 636. The author notes that he was counsel for amicus curiae in Honda. 
31. Ark. Code Ann. § 26-18-406(c)(3). 
32. Kisor v. Wilkie, 139 S. Ct. 2400, 2411 (2019). 
33. Am. Honda Motor Co. v. Walther, 2020 Ark. 349, at 10, 610 S.W.3d at 638.
34. Id. at 10, 610 S.W.3d at 638–39.
35. See Ark. Code Ann. § 25-15-202(9)(A) (defining “rule” under the Administrative Procedures Act as “an agency statement of general applicability and future effect that implements, interprets, or prescribes law or policy, or describes the organization, procedure, or practice of an agency and includes, but is not limited to, the amendment or repeal of a prior rule”) (emphasis added). See also Ark. Code Ann. § 20-19-511(b) (authorizing Arkansas Game and Fish Commission to adopt “rules and regulations to implement and enforce” statutory restrictions on the possession of large carnivores). 
36. Ark. St. Hwy. & Transp. Dept. v. Lamar Advantage Holding Co., 2011 Ark. 195, at 4, 381 S.W.3d 787, 790.
37. Franco v. Bunyard, 261 Ark. 144, 145–147, 547 S.W.2d 91, 92–93 (1977).
38. Skidmore, 323 U.S. at 139–40.
39. Kethledge, supra n.10 at 323.