UNITED STATES v. MEAD CORP.

• Citation: 533 U.S. 218
• Decision Date: 18 June 2001
• Court: United States Supreme Court

OCTOBER TERM, 2000

Syllabus

UNITED STATES v. MEAD CORP.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

No. 99-1434. Argued November 8, 2000-Decided June 18,2001

The Harmonized Tariff Schedule of the United States authorizes the United States Customs Service to classify and fix the rate of duty on imports, under rules and regulations issued by the Secretary of the Treasury. As relevant here, the Secretary provides for tariff rulings before the entry of goods by regulations authorizing "ruling letters" setting tariff classifications for particular imports. Any of the 46 portof-entry Customs offices and the Customs Headquarters Office may issue such letters. Respondent imports "day planners," three-ring binders with pages for daily schedules, phone numbers and addresses, a calendar, and suchlike. Mter classifying the planners as duty free for several years, Customs Headquarters issued a ruling letter classifying them as bound diaries subject to tariff. Mead filed suit in the Court of International Trade, which granted the Government summary judgment. In reversing, the Federal Circuit found that ruling letters should not be treated like Customs regulations, which receive the highest level of deference under Chevron US. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, because they are not preceded by notice and comment as under the Administrative Procedure Act (APA), do not carry the force of law, and are not intended to clarify importers's rights and obligations beyond the specific case. The court gave no deference at all to the ruling letter at issue.

Held: Administrative implementation of a particular statutory provision qualifies for Chevron deference when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of such authority. Such delegation may be shown in a variety of ways, as by an agency's power to engage in adjudication or notice-and-comment rulemaking, or by some other indication of comparable congressional intent. A Customs ruling letter has no claim to Chevron deference, but, under Skidmore v. Swift & Co., 323 U. S. 134, it is eligible to claim respect according to its persuasiveness. Pp. 227-239.

(a) When Congress has explicitly left a gap for an agency to fill, there has been an express delegation of authority to the agency to elucidate a

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specific statutory prOVISIon by regulation, and any ensuing regulation is binding unless procedurally defective, arbitrary or capricious in substance, or manifestly contrary to the statute. Even in the absence of an express delegation of authority on a particular question, agencies charged with applying a statute necessarily make all sorts of interpretive choices, and while not all of those choices bind judges to follow them, they may influence courts facing questions the agencies have already answered. The weight accorded to an administrative judgment "will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control." Skidmore, supra, at 140. In Chevron, this Court identified a category of interpretive choices distinguished by an additional reason for judicial deference, recognizing that Congress engages not only in express, but also in implicit, delegation of specific interpretive authority. It can be apparent from the agency's generally conferred authority and other statutory circumstances that Congress would expect the agency to be able to speak with the force of law when addressing ambiguity in the statute or fills in a space in the enacted law, even one about which Congress did not have intent as to a particular result. When circumstances implying such an expectation exist, a reviewing court must accept the agency's position if Congress has not previously spoken to the point at issue and the agency's interpretation is reasonable. A very good indicator of delegation meriting Chevron treatment is express congressional authorizations to engage in the rulemaking or adjudication process that produces the regulations or rulings for which deference is claimed. Thus, the overwhelming number of cases applying Chevron deference have reviewed the fruits of notice-and-comment rulemaking or formal adjudication. Although the fact that the tariff classification at issue was not a product of such formal process does not alone bar Chevron's application, cf., e. g., NationsBank of N. c., N. A. v. Variable Annuity Life Ins. Co., 513 U. S. 251, 256-257, 263, there are ample reasons to deny Chevron deference here. Pp. 227-231.

(b) There is no indication on the statute's face that Congress meant to delegate authority to Customs to issue classification rulings with the force of law. Also, it is difficult to see in agency practice any indication that Customs set out with a lawmaking pretense in mind, for it does not generally engage in notice-and-comment practice and a letter's binding character as a ruling stops short of third parties. Indeed, any suggestion that rulings intended to have the force of law are being churned out at a rate of 10,000 a year at 46 offices is self-refuting. Nor

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Syllabus

do statutory amendments effective after this case arose reveal a new congressional objective of treating classification decisions generally as rulemaking with force of law or suggest any intent to create a Chevron patchwork of classification rules, some with force of law, some without. In sum, classification rulings are best treated like "interpretations contained in policy statements, agency manuals, and enforcement guidelines," Christensen v. Harris County, 529 U. S. 576, 587, and thus beyond the Chevron pale. Pp.231-234.

(c) This does not mean, however, that the letters are due no deference. Chevron did not eliminate Skidmore's holding that an agency's interpretation may merit some deference whatever its form, given the "specialized experience and broader investigations and information" available to the agency, 323 U. S., at 139, and given the value of uniformity in its administrative and judicial understandings of what a national law requires, id., at 140. There is room at least to raise a Skidmore claim here, where the regulatory scheme is highly detailed, and Customs can bring the benefit of specialized experience to bear on this case's questions. The classification ruling may at least seek a respect proportional to its "power to persuade," ibid., and may claim the merit of its writer's thoroughness, logic and expertness, its fit with prior interpretations, and any other sources of weight. Underlying this Court's position is a choice about the best way to deal with the great variety of ways in which the laws invest the Government's administrative arms with discretion, and with procedures for exercising it, in giving meaning to Acts of Congress. The Court said nothing in Chevron to eliminate Skidmore's recognition of various justifications for deference depending on statutory circumstances and agency action. Judicial responses to such action must continue to differentiate between the two cases. Any Skidmore assessment here ought to be made in the first instance by the lower courts. Pp. 234-239.

185 F. 3d 1304, vacated and remanded.

SOUTER, J., delivered the opinion of the Court, in which REHNQUIST, C. J., and STEVENS, O'CONNOR, KENNEDY, THOMAS, GINSBURG, and BREYER, JJ., joined. SCALIA, J., filed a dissenting opinion, post, p. 239.

Kent L. Jones argued the cause for the United States.

With him on the briefs were Solicitor General Waxman, Acting Assistant Attorney General Ogden, Deputy Solicitor

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General Wallace, William Kanter, Bruce G. Forrest, and Neal S. Wolin.

J. Peter Coll, Jr., argued the cause for respondent. With him on the brief were Kristen Bancroft and Sidney H. Kuflik.*

JUSTICE SOUTER delivered the opinion of the Court.

The question is whether a tariff classification ruling by the United States Customs Service deserves judicial deference. The Federal Circuit rejected Customs's invocation of Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984), in support of such a ruling, to which it gave no deference. We agree that a tariff classification has no claim to judicial deference under Chevron, there being no indication that Congress intended such a ruling to carry the force of law, but we hold that under Skidmore v. Swift & Co., 323 U. S. 134 (1944), the ruling is eligible to claim respect according to its persuasiveness.

I A

Imports are taxed under the Harmonized Tariff Schedule of the United States (HTSUS), 19 U. S. C. § 1202. Title 19 U. S. C. § 1500(b) provides that Customs "shall, under rules

*Briefs of amici curiae urging affirmance were filed for the American Association of Exporters and Importers by Peter Buck Feller, Daniel G. Jarcho, and Michael J. Haungs; for Cargill, Inc., et al. by John M. Peterson, Michael K. Tomenga, George W Thompson, and Curtis W Knauss; for the Customs and International Trade Bar Association by Sidney N. Weiss and David Serko; for Filofax Inc. by Charles H. Bayar; for the Joint Industry Group et al. by William D. Outman II and Bruce N. Shulman; and for the Tax Executives Institute, Inc., by Timothy J. McCormally and Mary L. Fahey.

Briefs of amici curiae were filed for the United States Association of Importers of Textiles and Apparel et al. by Walter E. Dellinger and Ronald W Gerdes; and for Professor Thomas W. Merrill, pro se.

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and regulations prescribed by the Secretary [of the Treasury,] ... fix the final classification and rate of duty applicable to ... merchandise" under the HTSDS. Section 1502(a) provides that

"[t]he Secretary of the Treasury shall establish and promulgate such rules and regulations not inconsistent with the law (including regulations...