Reviving National Muffler: Analyzing the Effect of Mayo Foundation on Judicial Deference as Applied to General Tax Authority Guidance

Matthew H. Friedman*

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Introduction

The topic of judicial deference arises each time a court reviews the legitimacy of an opinion or regulation by an administrative agency to which Congress has delegated some rulemaking authority. Determining the appropriate deference standard is important because it sets limits on an agency’s quasi-legislative power and informs taxpayers and practitioners on the likelihood of challenging seemingly invalid administrative rulings. Noting the importance of the deference issue, Professor Kristin E. Hickman,[1] one of the foremost authorities on administrative law in the federal income tax context, wrote that "[d]rawing fine distinctions among deference standards may seem a purely academic exercise . . . [but] deference standards matter."[2]

For thirty-five years, the 1944 case of Skidmore v. Swift & Co. presented the primary method for judicial review of administrative guidance created under Congress's general grant of rulemaking authority.[3] In 1979, a new standard was created in what became known as the tax-specific deference standard of National Muffler Dealers Association v. United States.[4] Five years later, the Supreme Court held in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc. that a separate and much more deferential standard should apply to final regulations drafted pursuant to a general grant of authority.[5] The Chevron decision cast doubt upon the viability of both Skidmore and National Muffler since it was unclear whether the decision applied to all regulations promulgated pursuant to general grants of authority and whether it applied to tax-related guidance. This confusion persisted until the Court decided two cases in 2000 and 2001 that distinguished between Skidmore and Chevron deference.[6] Unfortunately, the Court's distinction did not provide specific or uniform direction for the treatment of all general authority guidance and to this day the Court has failed to give clearer instruction.

A Tort Statute, with Aliens and Pirates

Eugene Kontorovich*

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The pirates of the Caribbean are back—not in another fantastical film, but in the litigation over the reach of the Alien Tort Statute (ATS). For the first time since a wave of maritime predation in the Caribbean in the early nineteenth century, Supreme Court justices are seriously discussing the legal issues surrounding piracy. The crime has emerged as the test case for evaluating the major controversies about the reach of the ATS—namely, extraterritorial application and the existence of corporate liability. At oral argument in Kiobel v. Royal Dutch Petroleum Co., justices of all persuasions invoked piracy as a paradigm or precedent,[1] as had the lower courts before them.[2] When the Court surprisingly delayed its decision, and instead called for new briefing and argument on the extraterritorial scope of the statute, it became even clearer that the battle over the ATS would be a naval engagement;[3] indeed, the briefs of the plaintiffs and numerous amici repeatedly refer to piracy as a paradigm.[4]

This Article examines the questions before the Court in Kiobel: the relevance of “piracies”—in the Constitution and at sea—to extraterritoriality and corporate liability under the ATS. Much of the discussion of piracy law in ATS cases has been inaccurate or incomplete.[5] Furthermore, the new attention to piracy should—but as yet has not—direct attention to pirates’ very own constitutional provision, the Define and Punish Clause,[6] which contains implicit limits on extraterritorial and, in particular, universal jurisdiction over international offenses.