JUDICIAL DEFERENCE TO MUNICIPAL INTERPRETATION.

• Author: Diedrich, Joseph S.

Conclusion 807 I. Judicial Deference to Agency Interpretation 808 II. Judicial Deference to Municipal Interpretation 814 III. Tetra Tech's Effect on Municipal Deference 816 IV. Other States 821 Conclusion 824 INTRODUCTION

Municipal governments exercise great power over the lives of their constituents. In "a number of policy areas," municipalities "have long exercised significant regulatory authority." (1) They are, for example, "the most important and powerful regulator of land uses and thus of housing supply." (2) As the COVID-19 pandemic has highlighted, they have broad authority over matters of public health. (3) And to name just a few more examples, municipalities extensively regulate the local economy, provide public services, and distribute public benefits. (4) Municipalities regulate all these areas primarily by enacting and enforcing ordinances. How ordinances are interpreted thus matters a lot, both for municipal governments and regulated parties.

Even so, scant attention has been paid to how courts interpret municipal ordinances. That is especially true compared to the constant focus on how courts interpret federal and state administrative rules, statutes, and constitutional provisions. In particular, jurists and scholars have spilled much ink about judicial deference to administrative agency interpretation of law. Arguments about Chevron deference, Auer deference, and their state analogues are all the rage. (5)

Wisconsin presents an ideal case study on the relationship between agency-deference principles and municipal-ordinance interpretation. As recounted below, Wisconsin courts once deferred to agency interpretations of statutes and rules under certain circumstances. But, in 2018, in Tetra Tech EC, Inc. v. Wisconsin Department of Revenue, (6) the Wisconsin Supreme Court ended that practice. For several years, Wisconsin courts have also deferred to municipalities' interpretations of their ordinances under certain circumstances. In many ways, this practice resembles preTetra Tech agency deference. Indeed, both deference doctrines instruct courts to defer to a non-judicial actor's interpretation of ambiguous law so long as it is reasonable.

This Essay explores judicial deference to municipal interpretation of ordinances and Tetra Tech's effect on that deference. Part I briefly describes Wisconsin's pre-Tetra Tech agency deference doctrine. It then reviews the multiple grounds on which the Tetra Tech court relied to end that deference. Part II details Wisconsin's doctrine of deference to municipal interpretations of ordinances. Part III considers whether Tetra Tech's reasoning and holding extend to municipal deference. Finally, Part IV briefly remarks on states other than Wisconsin, noting that Wisconsin's experience is shared elsewhere and has potentially broad application. This Essay ultimately concludes that all of Tetra Tech's bases for assailing agency deference--constitutional structure, due process, and prudential concerns--also apply to municipal deference. Based on Tetra Tech, then, municipal deference must fall--or already has fallen.

1. JUDICIAL DEFERENCE TO AGENCY INTERPRETATION

   Before June 2018, Wisconsin courts adhered to a framework of binding deference to administrative agency interpretations of law. While acknowledging that "statutory interpretation is a question of law which courts decide de novo" courts simultaneously declared they would "defer to an administrative agency's interpretation of a statute in certain situations." (7) Starting with roots in the late 1800s, (8) Wisconsin's deference framework evolved over time to eventually become a "three-level test." (9) The three levels were "great weight" deference, "due weight" deference, and no deference. (10)

   Great weight deference was triggered when statutory language was ambiguous and four additional factors were satisfied: (1) the legislature had "charged" the agency "with the duty of administering the statute;" (2) the agency's interpretation was "one of long-standing;" (3) the agency "employed its expertise or specialized knowledge in forming [its] interpretation;" and (4) "the agency's interpretation will provide uniformity and consistency in the application of the statute." (11) When these preconditions were met, a reviewing court had to adopt the agency's interpretation "so long as it [was] reasonable." (12) A "reasonable" interpretation was one that did not "directly contravene[] the words of the statute" and was not "clearly contrary to legislative intent" or "without rational basis." (13) The court had to defer even if, in its own view, "another interpretation was more reasonable" than the agency's interpretation. (14)

   Due weight deference was triggered when (1) statutory language was ambiguous; (2) the legislature had charged the agency with the duty of administering the statute; and (3) "the agency [had] some experience in an area, but [had] not developed the expertise which necessarily places it in a better position to make judgments regarding the interpretation of the statute than a court." (15) When these preconditions were met, a reviewing court had to defer to an agency's reasonable interpretation--except "[i]f [the] court [found] an alternative interpretation more reasonable." (16) Faced with a tie between two equally reasonable interpretations, a court had to favor the agency's interpretation. (17)

   No deference was applied when statutory language was unambiguous or "when the issue [was] one of first impression for the agency and the agency lack[ed] special expertise or experience in determining the question presented." (18) Under those circumstances, courts simply undertook their traditional role of interpreting and applying the law.

   In addition to statutes, courts also deferred to agency interpretations of their own administrative rules. (19) Only two levels of deference were applied: great weight and no deference. Great weight deference for rules was "similar to the great weight standard applied to statutory interpretations" and "turn[ed] on whether the agency's interpretation [was] reasonable and consistent with the meaning or purpose of the regulation or statute." (20) In other words, when an agency offered a reasonable interpretation of its own administrative rule, a court had to accept that interpretation.

   In Tetra Tech, the Wisconsin Supreme Court "end[ed] [the] practice of deferring to administrative agencies' conclusions of law." (21) Although five of seven justices agreed with that outcome, the reasoning was fractured. The lead opinion, which announced the court's judgment, was authored by Justice Daniel Kelly and joined by Justice Rebecca Grassl Bradley. (22) Multiple concurring opinions were also filed. (23)

   The lead opinion reasoned that agency deference violated state constitutional structure and due process. Starting with the former, the Wisconsin Constitution creates three separate branches of state government and vests each with a distinct power. (24) This structural separation bars any branch from encroaching onto another's core power or from abdicating its own core and transferring it elsewhere. (25)

   Specifically, the Wisconsin Constitution provides that "[t]he judicial power of this state shall be vested in [the courts]." (26) At its core, "judicial power" means the power and duty (1) to apply law to adjudicate disputes; (27) (2) in the course of adjudicating disputes, to interpret the law and ascertain its meaning; and (3) to decide in accord with higher-order law when multiple sources of law conflict. (28) Given the separation of powers and the vesting of "judicial power" in the courts, the lead opinion reasoned that "only the judiciary may authoritatively interpret and apply the law in cases before our courts." (29) "[B]ecause that power belongs to the judiciary--and the judiciary alone--[courts] may not allow an administrative agency to exercise it." (30) Yet when they apply deference, courts "cede to the agency" the "core judicial power" to "authoritatively interpret the law . . . and apply the law to the case." (31) Constitutional structure, therefore, forbids courts from deferring to agency interpretations of law.

   The Tetra Tech lead opinion also concluded that agency deference was incompatible with the due-process right to a "fair trial in a fair tribunal." (32) Deference was often, if not always, applied in cases where "[the] agency appealed] in. . . court[] as a party." (33) Once deference was triggered, courts effectively "receive[d] instruction from the [agency] on how to interpret and apply the rule of decision." (34) "This systematic favor," in the lead opinion's view, "deprive[d] the non-governmental party of an independent and impartial tribunal." (35) In no small way, the agency "interpret[ed] and applie[d] the law in a case to which it [was] a party," thereby unlawfully "acting as judge of its own cause." (36)

   For the lead opinion, great weight and due weight deference both raised the same constitutional concerns; any difference was a matter of degree. (37) Systematic, binding deference in any form could not stand. At the same time, the lead opinion noted that an agency's views on interpretation deserved respect "as matter of persuasion, not deference." (38) The agency, to that end, must "explain how its experience, technical competence, and specialized knowledge give its view of the law a significance or perspective unique amongst the parties, and why that background should make [its] view of the law more persuasive than others." (39) An agency that regularly administers a statute might indeed have persuasive points to offer. But just like any other party, the agency must demonstrate that to the court by explanation and persuasion. No longer does an agency get a benefit simply because it is an agency.

   Justice Annette Ziegler, joined in part by Chief Justice Patience Roggensack, filed a concurring opinion. She favored ending deference on non-constitutional...