Myers v. Yamato Kogyo Co.

Docket Watch 2020

By Nicholas Bronni

When should courts defer to an agency’s interpretation of a statute? At the federal level, the law is clear: When reviewing an agency’s interpretation of a statute that it is charged with administering, courts apply the two-step test from Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc.[1] Under that test, “If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.”[2] If the statute is silent or ambiguous, “the question for the court is whether the agency’s answer is based on a permissible construction of the statute.”[3] And where the agency’s interpretation is reasonable, the court must defer to that interpretation.[4]

But at the state level, the rule isn’t always clear. Some states reject Chevron outright. The Michigan Supreme Court, for example, has rejected Chevron deference on the grounds that it is both “very difficult to apply” and inconsistent with separation of powers principles.[5] Other courts, like the Maine Supreme Judicial Court, reject those concerns and apply “the same two-step analysis adopted by the United States Supreme Court in Chevron.”[6] And still others apply something in between or more akin to the Supreme Court’s approach in Skidmore v. Swift & Co.[7]

Arkansas courts have at various times applied all three different approaches. But a few months ago, in Myers v. Yamato Kogyo Co., the Arkansas Supreme Court adopted a standard more akin to Skidmore than Chevron.[8] Indeed, though neither the majority nor the dissent mentioned Skidmore, Chevron, or any of the other various deference doctrines, the decision places Arkansas firmly among the states that consider an agency’s interpretation of an ambiguous statute just “one of . . . many tools used to provide guidance.”[9]

Myers concerned a workers’ compensation decision. After Michael Myers was killed in an industrial accident in 2014, his employer, Arkansas Steel Associates, never contested his widow’s workers’ compensation benefits claim.[10]  Myers’s widow, however, was dissatisfied with the award she received, and she “filed a wrongful death suit against . . . Arkansas Steel Associates’ parent companies.”[11] The trial court sent her case to the Arkansas Workers’ Compensation Commission.[12]

Interpreting Arkansas law, the Workers’ Compensation Commission held that the parent companies were shielded from civil liability as “principals and stockholders” of an employer subject to the exclusive remedy set forth in the Arkansas Workers’ Compensation Act.[13] The Arkansas Court of Appeals subsequently affirmed that conclusion on the grounds that “while not binding on this court,” an agency’s interpretation of a statute is “highly persuasive” and is “not [to] be overturned unless it is clearly wrong.”[14]

The Arkansas Supreme Court ultimately agreed with the Commission’s interpretation of Arkansas law, but it rejected the court of appeals’ deferential standard. Instead, the court began by “acknowledg[ing] confusion in prior cases regarding the standard of review for agency interpretations of a statute.”[15]Indeed, the court conceded that its own cases had employed both more and less deferential standards.[16] And as a result, the Arkansas Supreme Court concluded that it needed to resolve that discrepancy.[17]

It then held that in “determin[ing] what a constitutional or statutory provision means,” Arkansas courts should “not afford deference to [an agency’s] interpretation.”[18] Instead, “where ambiguity exists,” the Arkansas Supreme Court explained, an agency’s interpretation will be considered only to the extent it is persuasive.[19] In other words, Arkansas courts give Skidmore-likedeference to agency interpretations, nothing more. And as other courts have done in adopting that same approach, the Arkansas Supreme Court explained that only that standard was consistent with basic separation of powers principles and the judiciary’s “duty . . . to determine what a statute means.”[20]

The dissent, moreover, did not dispute the majority’s formulation of the relevant standard, its arguments about the separation of powers, or the proper role of the courts. Far from it, the lone dissent simply disagreed with the majority’s—and by extension the Arkansas Workers’ Compensation Commission’s—interpretation of the relevant statute.[21] As a result, Arkansas can now be counted among those states that apply something akin to Skidmore deference when reviewing agency statutory interpretations.

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[1] 467 U.S. 837 (1984).

[2] Id. at 842-43.

[3] Id. at 843.

[4] Id. at 844-45.

[5] In re Complaint of Rovas Against SBC Michigan, 754 N.W.2d 259, 271 (Mich. 2008).

[6] Cobb v. Bd. of Counseling Prof’ls Licensure, 896 A.2d 271, 275 (Me. 2006).

[7] 323 U.S. 134 (1944). See, e.g., Nw. Youth Servs., Inc. v. Commonwealth Dep’t of Pub. Welfare, 66 A.3d 301 (Pa. 2013).

[8] 597 S.W.3d 613 (Ark. 2020).

[9] Id. at 617.

[10] Id. at 615.

[11] Id.

[12] Id.

[13] Id. at 616.

[14] Myers v. Yamato Kogyo Co., 578 S.W.3d 296, 301 (Ark. Ct. App. 2019).

[15] Myers, 597 S.W.3d at 616.

[16] See id. at 616-17 (citing Ark. Dep’t of Hum. Servs. v. Pierce, 435 S.W.3d 469 (Ark. 2014), and Brookshire v. Adcock, 307 S.W.3d 22 (Ark. 2009)).

[17] See Myers, 597 S.W.3d at 616-17.

[18] Id.; accord id. at 617.

[19] Id.

[20] Id.

[21] Id. at 620-22 (Hart, J., dissenting).

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