When should courts defer to agency interpretations of statutes, and what measure of deference should agencies receive? Administrative law recognizes two main deference doctrines-the generous Chevron standard and the stingier Skidmore standard-but Supreme Court case law has not offered a bright-line rule for when each standard applies.
Many observers have concluded that courts' deference practice is an unpredictable muddle. This Article argues that it is really a lottery, in the sense the term is used in expected utility theory. Agencies cannot predict which deference standard a court will apply or with what effect, but they have a sense for how probable the different possible outcomes are. This Article presents empirical support for the "deference lottery" hypothesis, and then conducts a simple game theory analysis to understand how judicial review bears on agency behavior in statutory interpretation under deference lottery conditions.
The Article concludes that, in fact, the deference lottery can function as a flexible tool for managing agency behavior. The lottery can curb agency opportunism by imposing a risk that agencies' interpretations of statutes will face elevated scrutiny rather than Chevron deference. This analysis offers a new perspective on deference doctrine, and in particular on the Supreme Court's Mead decision, which sets out the standard for when Chevron applies. Mead's vagueness, widely derived as a bug, may in fact be a feature. Still, the deference lottery can backfire badly if Skidmore is applied too stringently, as the Article shows.
When should courts defer to agency interpretations of statutes and what measure of deference should agencies receive? Administrative law recognizes two main deference doctrines-the generous Chevron1 standard and the stingier Skidmore2 standard3-but Supreme Court case law has not offered a bright-line rule for which standard applies when.4 Further, even when a court purports to operate within a given deference regime, it is not clear that the standards are applied consistently from case to case.5 Empirical work has confirmed that courts often fail to apply deference standards in circumstances where their own doctrine indicates they should.6 Moreover, courts continue to apply other deference doctrines in special contexts, driving the predictability of judicial practice further down.7 Taken together, all this means that agencies seeking to defend statutory interpretations in court can anticipate with confidence neither what standard will be applied nor how the court will apply it.
The confused state of deference doctrine has attracted its share of critical commentary.8 The Supreme Court's 2001 United States v. Mead Corp.9 decision, which declined to mark offthe border between Chevron's domain and Skidmore's with a bright-line rule, has been a focal point for criticism.10 To be sure, a lack of clarity over the scope of deference an agency interpretation will receive-an unpredictability in the law generally-imposes costs.11 Here, the costs of an unpredictable deference regime might include increased litigation,12 more agency reversals in court,13 "defensive rulemaking" on the part of agencies,14 or perhaps a move away from rulemaking entirely.15 A fuller accounting of our deference practice, however, should consider whether unpredictability might yield benefits as well as costs. This Article begins that work.
The key to this Article's unique contributions is the insight that agencies face a "deference lottery" when they advance a statutory interpretation in a notice-and-comment rulemaking or formal adjudication.16 The Article uses the term "lottery" in the sense it is used in expected utility theory. A person faces a lottery any time he or she does not know what the outcome of a process will be, but does know what the different possible outcomes are and what the probability of each is.17 In more formal terms, a lottery refers to any discrete probability distribution over outcomes. …