In a recent Law360 article, I provided insight on the Supreme Court’s decision in Loper Bright Enterprises v. Raimondo, which overruled the long-standing deference afforded to administrative agencies’ interpretations of ambiguous statutes. Although the Loper decision does not directly address government contracts, I noted that it will almost certainly be read to resolve a circuit split under which some circuits have deferred to agencies’ interpretations of ambiguous terms in their own contracts.
The government contract circuit split came before the Supreme Court in petition for writ of certiorari in 2017 in Scenic America, Inc. v. Dep’t of Transportation. At that time, I wrote about Justice Gorsuch’s somewhat unusual step of providing a written statement on the case. I noted that Justice Gorsuch was openly critical of Chevron deference, and his written statement strongly suggested that deference had no place in contract interpretation questions. Still, Justice Gorsuch (joined by Chief Justice Roberts and Justice Alito) agreed with the denial of certiorari because thorny procedural issues would complicate the Court’s analysis of the Chevron deference questions.
Now that the Court’s Loper Bright decision has overruled Chevron, I predicted that Justice Gorsuch’s written statement in Scenic America will support the conclusion that courts should not defer to agency interpretations of their own contracts. I noted that the last paragraph of Justice Gorsuch’s statement “essentially says that ‘this is an issue we should take up.’” “I don’t think [Justice Gorsuch] was shy about making that invitation,” I explained. In other words, courts are likely to view Loper Bright as requiring them to apply the same contract interpretation principles to government contracts as are commonly applied to ambiguous commercial contracts including, for example, contra proferentem (or construction against the drafter).
The full article, “Chevron Reversal May Shift Contract Dispute Outcomes,” was published by Law360 on July 3 and is available online.