California Court of Appeal, California Fair Plan Association v. Lara, as Insurance Commissioner, Docket No. B336043

Agency’s Interpretation of a Statute

 

Deference

 

California Law

 

 

 

Yamaha, 19 Cal.4th at pp. 7–8 [“Where the meaning and legal effect of a statute is the issue, an agency’s interpretation is one among several tools available to the court. Depending on the context, it may be helpful, enlightening, even convincing. It may sometimes be of little worth.”].)

 

 

In Yamaha, our Supreme Court clarified the standard courts must apply when considering what deference should be afforded to an agency’s interpretation of a statute. (Yamaha, supra,19 Cal.4th at p. 6.) Unlike “quasi-legislative rules” that represent “an authentic form of substantive lawmaking,” the court explained an administrative act “interpreting a statute. . . does not implicate the exercise of a delegated lawmaking power,” but instead “represents the agency’s view of the statute’s legal meaning and effect, questions lying within the constitutional domain of the courts.” (Id. at pp. 10–11.) Nevertheless, “because the agency will often be interpreting a statute within its administrative jurisdiction, it may possess special familiarity with satellite legal and regulatory issues,” and it “is this ‘expertise,’ expressed as an interpretation . . . that is the source of the presumptive value of the agency’s views.” (Id. at p. 11.) However, because “an interpretation is an agency’s legal opinion, however ‘expert,’ rather than the exercise of a delegated legislative power to make law, it commands a commensurably lesser degree of judicial deference.” (Ibid.)

 

 

In view of these principles, the Yamaha court held the question of whether “judicial deference to an agency’s interpretation is appropriate and, if so, its extent—the ‘weight’ it should be given—is thus fundamentally situational.” (Yamaha, supra,19 Cal.4th at p. 12.) Courts therefore must consider a constellation of factors relevant to the legal issue, the agency’s expertise, and the reliability of the interpretation in determining what deference should be afforded to the agency’s interpretation. (Ibid.) These factors, the Yamaha court explained, fall into two broad categories: (1) those suggesting the agency has “‘a comparative interpretive advantage over the courts,’” and (2) those suggesting the agency’s interpretation “‘is probably correct.’” (Ibid.) The first category—concerning the agency’s comparative advantage over the courts—includes considerations such as the technical complexity of the statute, the agency’s familiarity with its own regulations, and the practical implications of competing interpretations. (Yamaha, supra,19 Cal.4th at p. 12.) These factors “‘assume the agency has expertise and technical knowledge, especially where the legal text to be interpreted is technical, obscure, complex, open-ended, or entwined with issues of fact, policy, and discretion.’” (Ibid.) With respect to this category, deference is more likely to be warranted “‘to an agency’s interpretation of its own regulation than to its interpretation of a statute, since the agency is likely to be intimately familiar with regulations it authored and sensitive to the practical implications of one interpretation over another.’” (Ibid.) The second category—concerning the likelihood that the agency’s interpretation is correct—requires the court to assess whether the interpretation was carefully considered by senior officials, whether it has been “‘consistently maintained’” over time, and whether it was “contemporaneous with legislative enactment of the statute being interpreted.” (Yamaha, supra,19 Cal.4th at pp. 12–13.) “‘An interpretation of a statute contained in a regulation adopted after public notice and comment is more deserving of deference,’” while “‘a vacillating position ... is entitled to no deference’” at all. (Id. at p. 13.) In short, the “deference due an agency interpretation . . . turns on a legally informed, commonsense assessment of their contextual merit.” (Id. at p. 14.) “‘The weight of such a judgment in a particular case,’ . . . ‘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.’” (Id. at pp. 14–15.)

 

 

The trial court’s reasoning has the prescribed analysis backwards. Yamaha teaches that deference to a long-standing agency interpretation may be warranted when the “interpretation was contemporaneous with legislative enactment of the statute being interpreted” and the agency “‘has consistently maintained the interpretation in question.’” (Yamaha, supra, 19 Cal.4th at p. 13.) Neither is true of the new interpretation that DOI adopted to approve the BOP in 1994. Because our fundamental task in construing a statute is to ascertain the Legislature’s intent when it enacted the law, it is the “contemporaneous construction of a new enactment by the administrative agency charged with its enforcement” that commands respect—not an interpretation formulated a quarter of a century later. (Dyna-Med, supra, 43 Cal.3d at pp.1388–1389, [rejecting agency interpretation offered “more than 20 years after the Act’s enactment”]; see also Asimow, The Scope of Judicial Review of Decisions of California Administrative Agencies (1995) 42 UCLA L. Rev. 1157, 1197 (hereafter Asimow) [deference may be afforded to a “contemporaneous” interpretation on the theory that “agency personnel were probably instrumental in working with legislative committees responsible for passing the statute and so were familiar with legislative intent and the compromises embodied in the law”].)

 

 

Secondary sources: Asimow, The Scope of Judicial Review of Decisions of California Administrative Agencies (1995) 42 UCLA L. Rev. 1157, 1197.

 

 

 

 

(California Court of Appeal, Dec. 5, 2025, California Fair Plan Association v. Lara, as Insurance Commissioner, Docket No. B336043, Certified for Publication)