Wisconsin Supreme Court Ends Agency Deference

Updated June 28, 2018

Supreme Court Eliminates Judicial Deference to Agency Interpretations of Law

On June 26, 2018, the Wisconsin Supreme Court handed down its decision in Tetra Tech. It was one of three cases released on the same day relating to the deference a court may afford an agency when interpreting the law.

In summary, the deference doctrine is dead. The courts will no longer give agencies any deference on their interpretations of law. With the elimination of great weight and due weight deference, the standard of review is de novo when reviewing an administrative agency’s conclusions of law.

This is a major victory for Wisconsin’s regulated community; all businesses big or small. The ability of agencies to define their own power and reach, even when a party to the litigation, was patently unfair.

In July 2017, the Foundation filed an amicus brief on behalf of 11 business associations urging the Court to reject the current practice of deferring to an agency’s interpretation of the law. See list of amici, below. The lead Tetra Tech opinion tracks our brief.

We assert that beyond an abdication of the courts’ constitutional duty to interpret the law, such systematic bias that benefits the state as a party deprives those being regulated of due process. There is no justifiable purpose in providing increasingly powerful administrative agencies such an advantage on issues affecting their power and reach.

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In Tetra Tech, Justice Daniel Kelly wrote the court’s holding on deference:

We have also decided to end our practice of deferring to administrative agencies’ conclusions of law. However, pursuant to Wis. Stat. § 227.57(10), we will give “due weight” to the experience, technical competence, and specialized knowledge of an administrative agency as we consider its arguments.

Giving “due weight” to an agency’s expertise is not deference, and not to be confused with “due weight deference.” The plain meaning of the term defer is “to yield.” Henceforth, the court will no longer yield to any agency’s interpretation of law. On this, the Court notes:

Today, we restore the principle of ‘due weight’ to its original form by removing the patina of ‘deference’ with which our cases have covered it. Kelly at 71.

Quoting from the DOJ/DNR brief, the Court finds:

Instead, [DOJ] said, ‘due weight’ means giving ‘respectful, appropriate consideration to the agency’s views’ while the court exercises its independent judgment in deciding questions of law. We agree. ‘Due weight’ is a matter of persuasion, not deference.” Kelly at ¶ 78.

The court is merely “returning ‘due weight’ to its statutory roots.” Kelly at ¶ 81. That is, before providing an agency’s interpretation due weight consideration, the court must find, as set forth at Wis. Stat. § 227.57(10), requisite “experience, technical competence, and specialized knowledge” relating to the issue before the court.

Considering the same factors used by the Court in its prior deference analysis, “the persuasiveness the agency’s perspective, [the court] will consider the same types of factors that formally informed [its] deference doctrine,” to wit:

1. whether the legislature made the agency responsible for administering the statute in question;
2. the length of time the administrative agency’s interpretation has stood;
3. the extent to which the agency used its experience or specialized knowledge in developing its position; and
4. whether the agency’s perspective would enhance uniformity and consistency of the law.
   Kelly at ¶ 79.

It appears, however, that the Court is tightening up the threshold for persuasiveness. In the Wisconsin Bell v. LIRC decision, also written by Kelly and released June 26, the court, citing the above factors set forth in Tetra Tech, found that the Labor and Industry Review Commission (LIRC) did not meet this requisite expertise test because LIRC’s argument for stability and its long-standing practices were insufficient to trigger due weight consideration. Wis. Bell at ¶ 43. LIRC’s decision was reversed and the employer won this unemployment compensation dispute.

Where are we now? Prior to Tetra Tech, there were three levels of deference – great weight, due weight, and de novo or no deference. With the elimination of great weight and due weight deference, the only residual standard of review is de novo.

Today, the core judicial power ceded by our deference doctrine returns to its constitutionally-assigned residence. Henceforth, we will review an administrative agency’s conclusions of law under the same standard we apply to a circuit court’s conclusions of law – de novo. Kelly at 61.

Kelly’s rationale for elimination of deference – the exclusive role of the courts to interpret the law and harming other litigants’ due process protections – was not supported by the majority the court. But the underlying conclusion that deference no longer exists is the court’ s holding, as that was supported by four justices: Kelly, Rebecca Bradley, Chief Justice Patience Roggensack, and Michael Gablemen.

As in Wisconsin Bell, the elimination of deference, and arguably, the underlying rationales by Kelly, played out in the other deference case handed down that day. In DWD v LIRC, Justice Shirley Abrahamson wrote for an unanimous court and acknowledged Tetra Tech eliminates deference.

The Tetra Tech court decided to end the practice of deferring to administrative agencies conclusions of law. DWD at ¶ 5, ftn. 4.

In using one of the constitutional foundations of Kelly’s Tetra Tech opinion, she notes:

It is the province and duty of the judiciary to say what the law is. Because we determine that LIRC-based its order on an incorrect interpretation of Wis. Stat. § 108.04 (5) (e), we conclude that LIRC acting without or in excess of its powers. At ¶ 12

While there were four overlapping opinions in the case, the Wisconsin Supreme Court’ s Tetra Tech holding is clear – Wisconsin courts will no longer provide deference to agencies’ interpretations of the law.

Tetra Tech v. DOR – Amici

1. Wisconsin Manufacturers & Commerce, Inc.
2. Midwest Food Products Association
3. Metropolitan Milwaukee Association of Commerce
4. Wisconsin Bankers Association
5. Wisconsin Cheese Makers Association
6. Wisconsin Paper Council
7. Dairy Business Association, Inc.
8. Associated Builders and Contractors, Inc. (Wisconsin Chapter)
9. Wisconsin Potato and Vegetable Growers Association
10. Wisconsin Farm Bureau Federation
11. Wisconsin Corn Growers Association

More on the Tetra Tech case.

More on the Wisconsin Bell case.

More on the DWD v. LIRC case.