Deference to Agency Statutory Interpretations First Advanced in Litigation? The Chevron Two-Step and the Skidmore Shuffle

Imagine the Internal Revenue Service (IRS) commences suit against you and alleges that, in contravention of the Internal Revenue Code, you failed to report all of your taxable income. The statute in question is ambiguous—under the IRS’s interpretation, you are liable; under yours, you are not. The IRS argues that the court should defer to its interpretation. This position is unsurprising, given that courts often defer to agency interpretations by according either controlling Chevron deference when an agency’s interpretation is promulgated with the force of law, or persuasive Skidmore deference when it is promulgated informally. But two things about this situation are surprising: not only is this suit the first time that the IRS has advanced this particular interpretation, but the IRS—even though it is appearing as a litigant, just like you—nonetheless is arguing for deference. You are quick to remind the court that “[d]eference to what appears to be nothing more than an agency’s convenient litigating position would be entirely inappropriate,” citing Bowen v Georgetown University Hospital. The IRS responds that it is not seeking Chevron deference, which is what Bowen addressed, but Skidmore deference. Relying on United States v Mead Corp, the IRS argues that informal agency interpretations—like amicus briefs or administrators’ rulings—are entitled to Skidmore deference because “Chevron did nothing to eliminate Skidmore’s holding that an agency’s interpretation may merit some deference whatever its form.”

As the above hypothetical suggests, the Supreme Court has deferred to agency litigation interpretations where the agency appears as amicus, but has not yet addressed whether deference is appropriate when the agency appears as a litigant. This gap in the Court’s administrative law jurisprudence has led to a split among the circuit courts. Five circuits have read Bowen as precluding a grant of both Chevron and Skidmore deference to agency statutory interpretations first advanced during litigation. Five circuits have taken the opposite view, according such interpretations Skidmore deference.

This Comment addresses this circuit split, which no court has recognized, and argues that Skidmore deference is appropriate for three reasons. First, every circuit that flatly denies deference—by either explicitly rejecting Skidmore or failing to consider it altogether—does so in reliance on Bowen. However, this reliance is misplaced because Bowen is about Chevron, rather than Skidmore, deference. Second, all circuit courts that have explicitly addressed whether Skidmore deference should be accorded to an agency’s litigation interpretation when the agency appears as amicus agree that it should. Third, post-Mead, all circuit courts defer, under either Chevron or Skidmore, to agency litigation interpretations when the agency is part of a dualagency regime. The latter two reasons are germane because the concerns that generally caution against deferring to agency litigation interpretations are not marginally heightened when the agency appears as a litigant in a single-agency regime. As such, given the unanimous deference when an agency appears as amicus or when the agency is a litigant in a dual-agency regime, there is no reason why such deference should be flatly denied when the agency appears as a litigant in a single-agency regime.