Will This Term of Wisconsin’s Supreme Court Be the Last for Agency Deference in Wisconsin?

11 September 2017 Wisconsin Appellate Law Blog
Authors: Philip C. Babler

Justice Neil Gorsuch’s confirmation process earlier this year brought attention to the issue of agency deference, given a concurring opinion that he had written in Gutierrez-Brizuela v. Lynch, 834 F.3d 1142, 1149 (10th Cir. 2016). That was an immigration appeal where he argued that Chevron ought to be revisited because it “permit[s] executive bureaucracies to swallow huge amounts of core judicial and legislative power and concentrate federal power in a way that seems more than a little difficult to square with the Constitution of the framers’ design.” Those who regularly watch the Supreme Court’s docket are waiting with bated breath to see if Justice Gorsuch can convince his colleagues that the issue merits the Court’s review.

But Wisconsin’s supreme court might beat Justice Gorsuch to the punch. In April, in an order granting a petition for review in Tetra Tech EC, Inc. v. Wis. Dep’t of Revenue, No. 2015AP2019 (Wis. Apr. 24, 2017), an appeal from the Wisconsin Tax Commission, the court asked the parties to brief a similar issue:

IT IS FURTHER ORDERED that in addition to the issue identified in the petition for review, the parties are directed to brief an additional issue: Does the practice of deferring to agency interpretations of statutes comport with Article VII, Section 2 of the Wisconsin Constitution, which vests the judicial power in the unified court system?

Tetra Tech concerned the meaning of “processing” in Wisconsin’s sales-and-use-tax statute. The court of appeals had applied “great weight deference” to the commission’s interpretation of the statute.

When the supreme court issued its order in Tetra Tech, only 16 days after Justice Gorsuch took the bench, we suspected that this was more than mere coincidence.

The court all but confirmed our suspicion the following week. On May 4, the court released its decision in Operton v. LIRC, 2017 WI 46, an unemployment-benefits appeal. Chief Justice Roggensack’s majority opinion drew three concurring opinions, each of which addressed the proper level of judicial deference for the agency’s (LIRC’s) decision. Justices Shirley Abrahamson and Ann Walsh Bradley argued that de novo review was appropriate because Operton involved application of “a new statute to a new concept.” Justices Rebecca Bradley, Michael Gableman, and Daniel Kelly questioned whether deferring to agency interpretations of statutes was constitutional in the first place. Their opinion cited then-Judge Gorsuch’s concurring opinion in Gutierrez-Brizuela specifically. Those three justices in Operton appeared ready to decide the issue in that case (though it had not been briefed), but Justice Annette Ziegler preferred to wait for briefing on the “hot button” issue of agency deference before the court took up the question of its constitutionality. Tetra Tech appears to be the court’s chosen vehicle for that briefing.

Much is potentially at stake in Tetra Tech. Wisconsin courts have long deferred to legal interpretations by state agencies, and probably defer to agencies more than federal courts do. Now, in Wisconsin at least, that deference might go away altogether. In its brief, the State actually agreed that one level of agency deference—great-weight deference—is unconstitutional. Justice Gorsuch was careful to note in his confirmation hearings that federal courts deferred to federal agencies for decades before Chevron and that federal courts would continue to defer to federal agencies even if Chevron were overruled. But, if Wisconsin’s supreme court determines that deference to state agencies violates Article VII, Section 2 of the Wisconsin Constitution (“The judicial power of this state shall be vested in a unified court system . . . .”), the institutional litigants that appear before Wisconsin’s agencies with frequency might find that they are about to face, as Justice Ziegler put it, a “sea change” in the law.

Argument has not been scheduled, but it likely will take place in November or December, with a decision before June 2018.

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