TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, September 29, 2005

Tax Impact of Shifting Chevron Doctrine on Judicial Deference to Regulations

Interesting article in today's The Legal Intelligencer about a recent administrative law decision applying the Chevron doctrine that has important tax implications : Federal Judge Affirms EEOC Proposed Regulation in Wake of High Court Decision:

Finding that a June decision by the U.S. Supreme Court has "dramatically altered" the way courts must analyze the validity of regulations issued by federal agencies, a federal judge has reversed herself and upheld a proposed regulation by the Equal Employment Opportunity Commission that would allow employers to reduce health care benefits for retirees as soon as they become eligible for Medicare.

In Tuesday's 41-page decision in AARP v. EEOC, U.S. District Judge Anita B. Brody vacated a decision she handed down in March in which she struck down the proposed regulation on the grounds that it directly conflicted with a 2000 decision by the 3rd U.S. Circuit Court of Appeals that explicitly barred such a practice.

The EEOC had appealed Brody's decision but returned to her court in June just two days after the U.S. Supreme Court handed down its decision in National Cable and Telecommunications Association v. Brand X Internet Services.

For TaxProf Blog coverage of the impact of Chevron in tax, see:

In her March ruling, Brody concluded that the EEOC regulation was not entitled to "deference" under the Supreme Court's 1984 decision in Chevron U.S.A. Inc. v. Natural Resources Defense Council because it directly conflicted with the 3rd Circuit's decision in Erie County Retiree Association v. County of Erie.

In Erie County, the 3rd Circuit held that allowing employers to give retirees who are 65 or older health benefits that are inferior to the health benefits given to younger retirees violates the Age Discrimination in Employment Act. ...

Brody has now concluded that the Supreme Court's decision in Brand X "cast grave doubts upon the basis for my ruling."

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