In a recent opinion by Justice Patrick DeWine, the Ohio Supreme Court unanimously reaffirmed that “it is the role of the judiciary, not administrative agencies, to make the ultimate determination about what the law means.”1 The court made clear that “the judicial branch is never required to defer to an agency’s interpretation of the law,” but that an agency’s interpretation is “simply one consideration a court may sometimes take into account in rendering the court’s own independent judgment as to what the law is.”2
The dispute in this case came about when TWISM Enterprises, a start-up engineering firm based in Ohio, hired James Cooper as an independent contractor to be its manager. The Ohio Board of Registration for Professional Engineers and Surveyors regulates the engineering profession in Ohio and provides the necessary authorization for engineering firms to do business in the state.3
As a prerequisite to receiving the Board’s authorization, the Ohio law in question states that a firm “shall designate one or more full-time partners, managers, members, officers, or directors as being responsible for and in responsible charge of the professional engineering or professional surveying activities and decisions” of the firm.4 This person must be a state-registered engineer, and the Board also adopted an administrative rule defining the “responsible charge” and “full-time” requirements.5 Neither the statute nor the rule addresses whether the person fulfilling these responsibilities must be an employee or an independent contractor.
Here, the Board denied TWISM’s application based on Cooper’s status as an independent contractor, saying that he could not satisfy the full-time manager requirement for the firm to receive a certificate of authorization. Under the Board’s view, only an employee of the firm could satisfy that requirement.6
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When TWISM appealed the Board’s determination to an Ohio Court of Common Pleas, that court afforded the Board’s interpretation of the relevant statute no deference and reversed its decision, saying that the Board’s determination is “not mandated by the plain text of the statute.”7
But Ohio’s First District Court of Appeals disagreed. It gave Chevron-like deference to the Board’s decision.8 It held “that a court must defer to an administrative interpretation only if the court first has found the statute to be ambiguous.”9 But the court of appeals then defined ambiguity very broadly, stating that a “statute is ambiguous when its language is subject to more than one reasonable interpretation.”10 And because it found the term “full-time manager” to be subject to more than one reasonable interpretation, it deferred to the Board’s interpretation and ruled in its favor.
The Ohio Supreme Court agreed to hear the case to determine whether TWISM should be awarded a certificate of authorization and, more importantly, to resolve the Ohio courts’ “admittedly muddled” approach to administrative deference. The court said that there had “never been a case to systematically explain the contours of our deference doctrine, its theoretical justification, and its application in particular cases.”111 The need to do so was particularly pronounced because, as the court explained, “if one parses our caselaw, one can find at least three different—and irreconcilable—formulations by this court of deference standards.”12
The court said that because of the “confused state of our caselaw and our failure to articulate any justification or consistent standard for agency deference,” it wanted to “take a step back and examine the matter in light of first principles.”13
And looking at those first principles—such as separation of powers concerns—the court concluded that “Ohio’s system of separation of powers precludes any sort of mandatory deference to agency interpretations.”14 It said that the Ohio legislature had not delegated any policymaking responsibility to administrative agencies and that while “the other branches of government must follow and apply the law [in carrying out their day-to-day obligations]—a task that entails some level of interpretation, . . . the ultimate authority to render definitive interpretations of the law has long been understood as resting exclusively in the judicial power.”15 When a court defers to an agency’s interpretation of the law, it hands to the executive branch the judicial authority to ‘say what the law is.’”16
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The court said that if “the text is unambiguous, the court should stop right there.”17 An agency’s interpretation cannot make an unambiguous statute ambiguous. Furthermore:
The weight, if any, the court assigns to the administrative interpretation should depend on the persuasive power of the agency’s interpretation and not on the mere fact that it is being offered by an administrative agency. A court may find agency input informative; or the court may find the agency position unconvincing. What a court may not do is outsource the interpretive project to a coordinate branch of government.18
The Ohio Supreme Court said that deference, under Ohio law, “bears similarities to the rule announced by the United State Supreme Court” in its pre-Chevron ruling of Skidmore v. Swift & Co. where a court may look to an agency’s interpretation and give it appropriate weight based on “the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.”19
Using this clarified standard of deference, the court rejected the Board’s interpretation. It said, “once the idea that we should defer to the Board’s interpretation is stripped away, there is little to support the result reached by the Board in its administrative proceeding and by the court of appeals.” Thus, the Ohio Supreme Court found that an “independent contractor like Cooper can be a full-time manager.”20
As a result, it reversed the court of appeals’ decision and remanded to the Board “for proceedings consistent with this opinion.”21
[1] TWISM Ents., L.L.C. v. State Bd. of Registration for Professional Engineers & Surveyors, No. 2022-Ohio-4677, slip op. at 2.
[2] Id.
[3] Id.; see also Ohio Rev. Code Ann. § 4733.16(B).
[4] Ohio Rev. Code Ann. § 4733.16(D).
[5] Ohio Adm. Code 4733-39-02(A),(B).
[6] TWISM Ents., No. 2022-Ohio-4677 at 4-5.
[7] Id. at 5.
[8] Id. at 6 (citing Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984)).
[9] Id.
[10] Id.
[11] Id. at 9.
[12] Id.
[13] Id. at 10.
[14] Id.
[15] Id. at 11.
[16] Id. at 12 (citation omitted).
[17] Id. at 15.
[18] Id.
[19] Id. (citing Skidmore v. Swift & Co., 323 U.S. 134 (1944)).
[20] Id. at 19.
[21] Id. at 21.
This piece originally appeared in The Federalist Society
