{"id":6476,"date":"2023-01-06T17:51:00","date_gmt":"2023-01-06T17:51:00","guid":{"rendered":"https:\/\/www.dinsmore.com\/?post_type=publications&p=6476"},"modified":"2025-11-24T20:51:19","modified_gmt":"2025-11-24T20:51:19","slug":"ohio-supreme-court-takes-on-chevron-deference-is-it-a-lump-of-coal-in-the-stockings-of-state-administrative-agencies","status":"publish","type":"publications","link":"https:\/\/www.dinsmore.com\/publications\/ohio-supreme-court-takes-on-chevron-deference-is-it-a-lump-of-coal-in-the-stockings-of-state-administrative-agencies\/","title":{"rendered":"Ohio Supreme Court Takes On Chevron Deference: Is It A Lump Of Coal In The Stockings Of State Administrative Agencies?"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

Whether a court must defer to an administrative agency\u2019s interpretation of a statute has recently become a hot-button topic in a wide variety of legal circles ranging from political campaigns to cases heard before the United States Supreme Court.  The Supreme Court of Ohio has now joined with its recent decision in TWISM Ents., L.L.C. v. State Bd. of Registration for Professional Engineers & Surveyors<\/em>,[1]<\/a> which appears to be similar to to a lump of coal in the stockings of state administrative agencies that have long enjoyed judicial deference to matters involving statutory interpretation.<\/p>\n\n\n\n

The TWISM<\/em> decision arose from the Ohio Board of Registration for Professional Engineers and Surveyors\u2019 (\u201cthe Board\u201d) denial of TWISM\u2019s application for a certificate of authorization to provide engineering services.  In accordance with R.C. 4733.16(D), engineering firms that wish to do business in Ohio \u201cshall 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.\u201d  TWISM, a small start-up firm, applied to the Board for a certificate of authorization and designated a full-time engineer as its manager.  However, the proposed manager was employed by TWISM on a per-project basis and the firm reported his income to the IRS as an independent contractor on a form 1099, rather than withholding and reporting his income as an employee under a W-2 tax form.<\/p>\n\n\n\n

The Board denied TWISM\u2019s application on the basis that TWISM \u201cfailed to designate one or more full-time partners, managers, members, officers, or directors as being responsible for and in charge of professional engineering activities and decisions for the firm.\u201d  In the Board\u2019s view, a manager had to be a W-2 employee rather than a form-1099 independent contractor. <\/p>\n\n\n\n

TWISM appealed the Board\u2019s denial and the case eventually was heard by Ohio\u2019s First District Court of Appeals, which upheld the Board\u2019s denial of TWISM\u2019s application.  In rendering its decision, the First District relied on the United States Supreme Court\u2019s decision in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc.,[2]<\/strong><\/a><\/em> which held that a court must defer to the interpretation of a statute by an administrative agency only if the court first finds the statute to be ambiguous.  Consequently, the First District determined that R.C. 4733.16(D) was ambiguous since the statute \u201ccould\u201d be read as requiring the manager to be \u201cdirectly affiliated with the entity\u201d or alternatively \u201ccould\u201d be read as allowing the manager to be an independent contractor.  The First District then concluded that \u201c[b]ecause there are different, reasonable readings of \u2018full-time manager,\u2019 we find that the term is ambiguous. As such, this court must defer to the Board\u2019s interpretation.\u201d<\/p>\n\n\n\n

The Supreme Court of Ohio accepted TWISM\u2019s appeal and used the matter as an attempt clarify the Court\u2019s \u201c(admittedly muddled) precedent on deference.\u201d  In doing so, the Court relied on centuries-old standards, such as the Ohio Constitution and The Federalist Papers, to outline a separation-of-powers rationale that resulted in the Court concluding that the ultimate authority to render definitive interpretations of the law has long been understood as resting exclusively in the judicial branch.  As stated by the Court: \u201c[w]hen a court defers to an agency\u2019s interpretation of the law, it hands to the executive branch the judicial authority \u2018to say what the law is[.]\u2019\u201d<\/p>\n\n\n\n

As a result, the Court specifically rejected all forms of so-called \u201cmandatory deference\u201d that require courts to automatically defer to the judgment of administrative agencies in regards to statutory interpretation.  Instead, courts may consider an administrative agency\u2019s construction of a statute or regulation only in those situations where the text is \u201ctruly ambiguous.\u201d  Even then, judges should consider \u201cthe persuasive power of the agency\u2019s interpretation\u201d and not rely \u201con the mere fact that [the interpretation] is being offered by an administrative agency.\u201d<\/p>\n\n\n\n

Using this logic, the Court conducted its own independent review of the record and found there was nothing in the plain language of R.C. 4733.16(D)\u2019s definition of \u201cmanager\u201d that requires an individual to be classified as a W-2 employee instead of an independent contractor.  As a result, TWISM was entitled to a certificate of authorization to practice engineering in the State of Ohio.<\/p>\n\n\n\n

Ohio is not alone as numerous other states such as Wisconsin, Arkansas, Delaware, Kansas, Michigan, and Mississippi have revisited the topic of agency deference and similarly imposed standards that do not require deference to an agency\u2019s statutory interpretation.  Moving forward, licensees and prospective licensees whose practices or business are regulated by any administrative agency in the State of Ohio should be aware of the varying implications of the TWISM <\/em>decision and whether such agencies have changed any investigative or disciplinary strategies in light of TWISM\u2019s<\/em> new precedent.<\/p>\n\n\n\n

For more information regarding the possible ramifications of the TWISM<\/em> decision and its effects on your license or certification, please contact a Dinsmore health care attorney.<\/p>\n\n\n\n

\n\n\n\n

[1]<\/a> Slip Opinion No. 2022-Ohio-4677.<\/p>\n\n\n\n

[2]<\/a> 467 U.S. 837, 842-843, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984).<\/p>\n","protected":false},"excerpt":{"rendered":"

Whether a court must defer to an administrative agency\u2019s interpretation of a statute has recently become a hot-button topic in a wide variety of legal circles ranging from political campaigns to cases heard before the United States Supreme Court.  The Supreme Court of Ohio has now joined with its recent decision in TWISM Ents., L.L.C.\u2026<\/p>\n","protected":false},"author":8,"featured_media":0,"menu_order":0,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"tags":[],"publication-type":[12],"class_list":["post-6476","publications","type-publications","status-publish","format-standard","hentry","publication-type-legal-alerts"],"acf":[],"yoast_head":"\nOhio Supreme Court Takes On Chevron Deference: Is It A Lump Of Coal In The Stockings Of State Administrative Agencies? - Dinsmore & Shohl<\/title>\n<meta name=\"description\" content=\"Ohio Supreme Court Takes On Chevron Deference: Is It A Lump Of Coal In The Stockings Of State Administrative Agencies? 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