The Brand X legal doctrine is unfair because, “if you ever find yourself in federal court suing a federal agency or being sued,” it requires deference to the federal agency interpreting the law if there is any ambiguity in the statute, Mark Chenoweth, executive director and general counsel of the New Civil Liberties Alliance, told The Epoch Times.

“Most people assume they will have a fair hearing in which the judge hears both sides but with Brand X even if the judge thinks one side has a better interpretation the judge has to defer to the agency if its interpretation is reasonable, so even if you have a better argument about the meaning of the law,” you lose the case, he said.

NCLA describes itself as a civil rights organization founded by legal scholar Philip Hamburger “to defend constitutional freedoms—primarily against the Administrative State.” Its “public-interest litigation and other pro bono advocacy strive to tame the administrative power.”

Executive agencies are sometimes referred to as the “fourth branch” of the federal government in the United States. Critics say officials in the administrative state are unaccountable to voters and allow unelected bureaucrats to usurp the functions of the executive, legislative, and judicial branches. Congress, they say, is supposed to make the laws of the land, but lawmakers have steadily ceded that body’s constitutional powers to the administrative state, to the overall detriment of society.

The leading precedent on judicial deference to executive agencies that has fed the growth of the administrative state is Chevron v. NRDC (1984), in which the Supreme Court found that an executive agency’s interpretation of a statute it administers is entitled to deference unless Congress has said otherwise.

The court appeared ready to overturn or modify a related ruling, Auer v. Robbins (1997), in a case earlier this year known as Kisor v. Wilkie, but, in a splintered decision, decided to leave Auer deference intact. Auer stands for the idea that an agency’s interpretation of its own regulation prevails unless it is inconsistent with the regulation or erroneous.

Conservative justices dissented from the opinion. “Auer requires judges to accept an executive agency’s interpretation of its own regulations even when that interpretation doesn’t represent the best and fairest reading,” Justice Neil Gorsuch wrote. Quoting from a legal journal, Gorsuch added Auer deference “creates a ‘systematic judicial bias in favor of the federal government, the most powerful of parties, and against everyone else.’”

Under the Brand X ruling, federal courts are required to defer to federal agencies’ reasonable statutory interpretations even when those interpretations contradict a previous court ruling interpreting the same statute.

Brand X “is like Chevron on steroids,” Chenoweth told The Epoch Times.

Lower federal courts have found this rule to be unworkable, NCLA argues, and federal agencies have taken advantage of Brand X deference in ways that deny due process and fair notice to litigants.

NCLA clients Howard and Karen Baldwin are producers of several movies, including the Oscar-winning “Ray” (2004), about the life of the late singer Ray Charles. The Baldwins overpaid their income taxes by $167,663 and, four months before the October 2011 refiling deadline, used regular mail to send their refund claim to the IRS.

The tax agency claims it didn’t receive the documents and refused to pay. The IRS cited a new regulation it issued in August 2011 that ended the common-law mailbox rule for refund claims. That longstanding rule allowed a legal party to rely on extrinsic evidence to provide proof that an item was mailed but its disallowance by the new rule doomed the Baldwins’ claim.

The Baldwins had to sue the IRS to get their money back, and they won at trial in the U.S. District Court for the Central District of California, which upheld the common-law mailbox rule. But on appeal, the 9th Circuit Court of Appeals invoked the Brand X doctrine and deferred to the IRS’s new regulation, even though it contradicted court-made precedent.

The Supreme Court opens a new term hearing cases on Oct. 7.

Written by Matthew Vadum

Originally published in The Epoch Times