Scope of Judicial Deference: Ohio Deference Goes Back to the Future

By Griffin Reyelts Esq. | Associate Attorney, Faruki PLL | greyelts@ficlaw.com

AlthoughMarty McFly doesn't sit on the Supreme Court of Ohio, one might be forgiven in thinking so based on the Court's December 2022 ruling in TWISM Enterprises v. State Board of Registration for Prof'l Eng'rs & Surverors. That decision, which reaffirmed that judicial power rests with the courts, represents Ohio's trip back to old precedent to determine its judicial deference future.

In 1984, the Supreme Court of the United States re-shaped the federal landscape of judicial deference in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., finding that where a "statute is silent or ambiguous with respect to [a] specific issue" the Court decides whether an agency interpretation is "based on a permissible construction of the statute." 467 U.S. 837, 843, 104 S. Ct. 2778 (1984). In such instances, "legislative regulations are given controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute" and "a court may not substitute its own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency." Id. at 844.

Prior to Chevron, the prevailing federal rule on judicial deference was sculpted by Skidmore v. Swift, which found administrative interpretations and opinions helpful, but "not controlling upon the courts by reason of their authority." Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S. Ct. 161, (1944). Although Chevron has prevailed at the Federal level, several states have returned to an approach more akin to Skidmore. As noted by Ohio Supreme Court Justice DeWine, "[h]igh courts in Arkansas, Delaware, Kansas, Michigan, and Mississippi have [] revamped their deference doctrines," following those already made in Wisconsin and Utah. TWISM Enters., L.L.C. v. State Bd. of Registration for Prof'l Eng'rs & Surveyors, Slip Opinion No. 2022-Ohio-4677, ¶ 48.

While the Federal system has maintained a judicial deference doctrine, Ohio, historically, has not. Instead, Ohio courts have used one of three judicial deference approaches: mandatory deference, ambiguity-triggered deference, or permissive deference. Id. at ¶ 24-27. Mandatory deference meant following "an agency's interpretation of a statute … so long as the interpretation [was] reasonable," regardless of ambiguity. Id. at ¶ 25 (citations omitted). Ambiguity-triggered deference required following an agency's reasonable interpretation if the statute was ambiguous. Id. at ¶ 26. Lastly, permissive deference held that a court "may rely on the expertise of a state agency." Id. at ¶ 27 (citing Ohio Partners. for Affordable Energy v. PUC, 115 Ohio St.3d 208, 2007-Ohio-4790, 874 N.E.2d 764, ¶ 11).

Thirty-eight years after Chevron, the Supreme Court of Ohio has cemented its place among a growing number of states returning to the Skidmore doctrine of judicial deference. In so doing, the Supreme Court of Ohio noted the judicial branch is "never required to defer to an agency's interpretation of the law." TWISM at ¶ 3 (emphasis in original). Instead, the courts may utilize agency interpretation in their analysis, but only if the statutory language is ambiguous. TWISM at ¶ 44. Writing for the Court, Justice DeWine cited the Ohio Constitution, which mirrors the Federal Constitution, as its rationale, noting the Constitution created a separation of power, delegating judicial review to the courts.

Despite the Supreme Court of Ohio articulating a judicial deference doctrine, the TWISM decision may offer more questions than answers. Namely, how does the TWISM decision impact Ohio agencies? Under the new judicial ruling, any interpretation provided by an administrative agency will stand on fragile footing. Only when the administrative agency's reading is the best one—that is to say, if challenged, the same as the Court's—will that interpretation be implemented. While courts cannot "outsource the interpretive project," an agency's interpretation can still be used as a persuasive measure. TWISM at ¶ 45. How will state agencies adjust to this new reality and will the impact be as large as the initial sentiment anticipates?

This all leads to a broader governance discussion for Ohio. The Supreme Court of Ohio views the TWISM decision as a course correction to better align with the State Constitution. While the Court affirmed its position as judicial reviewer, it also affirmed the General Assembly's dominion over legislative powers. Because judicial review only occurs where statutory language is ambiguous, it puts the onus on Ohio legislators to articulate clear and concise statutory language that can be read only in the way that the Legislature intends. Will the General Assembly reevaluate how statutes are written and use more precise language? Will the Legislature aim to write more precisely, or will it lean on the courts to provide interpretation where none can be reached in the Statehouse? Will the General Assembly leverage the insight and opinions of state agencies during the drafting process or keep them out altogether?

Nationally, does this recent Ohio decision, adding to the growing number of states revisiting the scope of judicial deference, signal a looming change on the Federal level? Under the right scenario, will the U.S. Supreme Court, given its current make-up, take a fresh look at the Federal judicial deference landscape and depart from the standard announced in Chevron? One need only consider the recent hue and cry over the Federal Trade Commission's announcement of a proposed rule outlawing non-compete agreements to see that a challenge to Chevron deference may soon be on the high court's docket. If Chevron should fall, what impact will it have on the continuing COVID-19 response, renewable energy initiatives, economics, and many other issues?

While the future of Ohio state agencies' impact on statutory interpretation has been cauterized, the return to Skidmore provides an opportunity to re-evaluate the legislative process and how each branch of government can interact with one another.