Earlier this month, the Maine Law Court issued its decision in Cassidy Holdings, LLC v. Aroostook County Commissioners, holding that, in a municipality without a board of assessment review, a taxpayer whose nonresidential property is valued at $1 million or more has the option to appeal an assessment either to the county commissioners or to the State Board of Property Tax Review. The decision has been described by my excellent colleagues, Jon Block and Olga Goldberg. For purposes of this blog, it is noteworthy that that Cassidy Holdings took up an issue of broad application: the extent of deference owed to changing agency interpretations of a state law.
In Cassidy Holdings, the county commissioners cited a Tax Bulletin issued by Maine Revenue Services as support for their statutory interpretation argument. The interpretive guidance provided by the Maine Revenue Services, however, had changed over time. Initially, the agency had taken the position that appeals could go either to the county commissioners or the state board; later, without explanation, the agency changed its guidance to state that appeals should be taken to the state board. This change raised the question whether the agency’s statutory interpretation should be granted judicial deference.
The Law Court did not have to resolve this issue, because it reached its conclusion based on the plain and unambiguous meaning of the statutory language. Nevertheless, the Court found this issue to be of sufficient importance to address in a lengthy footnote. While acknowledging that an “agency is free to change its mind in its interpretation of a statute,” Justice Connors, writing for the Court, made clear that Maine courts should not give deference to an agency interpretation when the agency has taken a new position without reasoned explanation. For deference to be owed,
the agency must acknowledge that it is making a change, explain why, and give due consideration to the serious reliance interests on the old policy.
The Court cited numerous federal authorities in support of its conclusion that an agency must explain its change in position.
This footnote is notable on several levels. First, although this issue had been addressed by federal courts, the Law Court had not previously opined on this particular limitation to Chevron-style judicial deference to agency interpretations of state law. This limitation promises to have application in a wide variety of cases. Second, the Law Court’s articulation of this limitation on Chevron-style deference is a reminder of the unusual standing of that doctrine under Maine law. As previously discussed on this blog, the Law Court has never addressed how the federal Chevron doctrine of judicial deference to agency interpretations of state law relates to Maine’s strict separation of powers doctrine. That issue promises to come into stark relief early next year, when the Supreme Court will consider a pair of cases challenging the Chevron doctrine. Given the Law Court’s recent emphasis on the primacy doctrine, together with any potential changes to the Chevron doctrine at the federal level, the Court may well confront additional issues relating to the application of Chevron deference in the near future.