Another Good Reason Why the I.R.S. Deserves No Deference from the Federal Courts

In its 1984 decision in
Chevron U.S.A., Inc. v. Natural Resources Defense
Council, the U.S. Supreme Court held that when the
judiciary is tasked with determining the meaning of an “ambiguous”
statute, the default approach is to defer to the statutory
interpretation advanced by the government agency charged with
enforcing that statute. Lawyers call this approach
“Chevron deference.”

As I noted last week, Chevron deference is playing a

central role in the unfolding legal battle over the propriety
of an I.R.S. rule which provides tax credits to individuals who
purchased health insurance from federally run health exchanges
under the Patient Protection and Affordable Care Act. Although the
text of the ACA limits such tax credits only to those who purchased
health insurance on an exchange “established by the State,” the
U.S. Court of Appeals for the 4th Circuit held that exchanges
established by the federal government should also qualify. Why?
Because “the relevant statutory sections appear to conflict with
one another,” the 4th Circuit held in King
v. Burwell. Therefore “we must defer to the IRS Rule.”
That decision is now up for
possible review by the Supreme Court.

Writing at the Library of Law & Liberty, Columbia
University law professor Philip Hamburger says the time has come
for Chevron to go extinct. Not only does Chevron
deference grant far too much leeway to unelected bureaucrats,
Hamburger argues, it violates the Constitution in two different
ways.
He writes:

Under the Constitution, the judges have an office or duty to
exercise their own independent judgment about what the law is, and
it therefore must be asked how the judges can defer to the
interpretation or judgment of executive and other agencies. In
respecting or otherwise deferring to the judgment of agencies, the
judges are abandoning their duty–indeed, their very office–of
independent judgment.

The second question about the judges concerns systematic bias.
Under the Fifth Amendment, Americans have a right to the due
process of law, and it therefore must be asked whether judicial
deference is systematic bias for one party and against others. The
judges defer to agencies’ interpretations of statutes, and they
thereby typically are favoring the interpretation or legal position
of one of the parties in their cases. They thus are engaging in
systematic bias in favor of the government and against other
parties in violation of the due process of law.

These constitutional questions about the role of the judges
should worry all Americans but especially the judges. No amount of
statutory authority can put these constitutional questions to rest.
A mere statute may allow an agency to interpret for its purposes,
but it cannot excuse the judges from their constitutional duty to
exercise their own independent judgment about the law. Nor can it
brush aside the constitutional right of parties not to be subjected
to systematic bias.

These are very powerful objections to the Supreme Court’s
deferential Chevron regime. Expect to hear much more about
them if (when?) the high court agrees to take up the latest
Obamacare challenge.