California Was Decades Ahead of Loper Bright on Agency Deference

One year after the US Supreme Court’s landmark ruling in Loper Bright Enterprises v. Raimondo, federal administrative law doctrine seems to now be aligned with principles that California courts have been applying for nearly 30 years.

Loper Bright reversed 40 years of what was known as Chevron deference, which required federal courts to defer to federal agencies’ reasonable interpretations of ambiguous statutes. However, it reaffirmed the viability of Skidmore deference—that agency interpretations may constitute a body of experience and informed judgment that may be afforded “respect” or “weight” depending on the validity of the agency’s reasoning.

And despite Loper Bright relying heavily on separation of powers precedent, the Supreme Court decided the case on statutory grounds, relying specifically on the Administrative Procedure Act’s instruction for reviewing courts to “decide all relevant questions of law.” As a result, Loper Bright did not decide what level of deference, if any, state courts can or should give to state and local agencies.

California is one of the more than three-dozen states that, in response to Chevron deference, adopted its own policy for deferring to state administrative agencies interpreting state law.

The California Supreme Court in 1998 didn’t adopt Chevron in Yamaha Corp. of America v. State Board of Equalization, and instead cited Skidmore in holding that an agency interpretation’s “power to persuade is both circumstantial and dependent on the presence or absence of factors that support the merit of the interpretation.”

Factors affecting the weight or deference owed to an agency interpretation in California include:

• The extent to which the interpretation question calls upon the agency’s expertise and technical knowledge
• The thoroughness of the agency’s consideration
• The consistency or long-standing nature of the interpretation
• Whether the interpretation was adopted through notice-and-comment rulemaking.

The California Supreme Court applied this framework shortly before Loper Bright was decided in a case that rejected the State Board of Equalization’s interpretation of what constitutes a “stock” under a provision of the Revenue and Taxation Code. It found the interpretation unpersuasive, emphasizing that the “proper interpretation of a statute is ultimately the court’s responsibility.”

Since Loper Bright, lower state courts have continued to follow Yamaha. One state appellate court noted that as “a federal case decided under the federal APA . . . Loper [Bright] has no direct application” to California’s administrative law doctrine.

The Skidmore/Yamaha framework has been referred to as a “weak” form of deference, but empirical analysis suggests it can have a substantial impact. One study of federal appellate decisions applying Skidmore found that courts accepted agency interpretations of ambiguous statutes 60% of the time.

That appears to be a lower agency-success rate than in cases decided under Chevron, but it’s still a meaningful weight on the scale in favor of the government. And while scholars have debated what Skidmore would look like post-Loper Bright, multiple circuit courts have since applied Skidmore deference and adopted an agency’s preferred interpretation.

While there is no comparable analysis of Yamaha deference, California courts have frequently given “great weight” to agency interpretations, stating that “confidence must be reposed in some one” as to the meaning of ambiguous statutory language.

There also may be structural reasons to expect effectively more deference in California state courts compared to federal courts, even if they nominally apply nearly identical standards.

For example, nationwide, the federal judiciary is roughly evenly split between judges appointed by Democratic and Republican presidents. However, individual judicial districts can tend toward ideological homogeneity. That creates a potential opportunity for “judge shopping” in a way that does not necessarily exist within the California state court system.

Perhaps it’s ironic that the Supreme Court has now doctrinally taken federal administrative law to the place California reached long ago. Nonetheless, while federal and California courts are now aligned on their doctrinal approach to the question of agency interpretation of statutes, we may in practice expect to see federal courts give somewhat less weight to agency interpretations under Skidmore than what California courts often provide under Yamaha.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

David Carpenter is a partner at Sidley Austin, heading its West Coast appellate practice and co-leading its regulatory litigation group.

Daniel Hay is a partner at Sidley Austin and a member of its regulatory litigation group.

Scott Lowder is a former associate at Sidley Austin.

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