U.S. Court of Appeals for the Second Circuit.

On Feb. 26, 2018, the U.S. Court of Appeals for the Second Circuit held for the first time in Zarda v. Altitude Express, 883 F.3d 100 (2d Cir. 2018), that Title VII of the 1964 Civil Rights Act protects against workplace sexual orientation discrimination. Although this landmark ruling rightfully garnered national attention as a historic civil rights victory, its unique procedural posture also raised questions in a different legal context: administrative law.

Courts have wrestled with the level of deference they should give to administrative agency interpretations of federal law. While it is settled law under Chevron, U.S.A. v. Nat'l Res. Def. Council, 467 U.S. 837, 843-44 (1984), that agency interpretations of ambiguous statutes merit “controlling weight,” courts have not resolved how to address competing interpretations by different agencies in the same case. This is precisely the circumstance that arose at the en banc oral argument in Zarda.

The central issue in Zarda was, itself, momentous. In a 69-page opinion by Chief Judge Katzmann, the court held that Title VII's prohibition against discrimination “because of … sex” includes workplace discrimination on the basis of sexual orientation. 883 F.3d at 112. That holding followed two conflicting decisions by other Courts of Appeals: Hively v. Ivy Tech. Cmty. Coll. of Ind., 853 F.3d 339, 341 (7th Cir. 2017) (en banc), which held that “discrimination on the basis of sexual orientation is a form of sex discrimination” under Title VII, and Evans v. Ga. Reg'l Hosp., 850 F.3d 1248, 1255 (11th Cir. 2017), which held that discrimination based on sexual orientation is not actionable under Title VII. As there is a circuit court split on this issue, the U.S. Supreme Court is likely to address the statute's reach soon.

The Zarda case is also notable, however, for the administrative law questions it implicates. On Sept. 26, 2017, during en banc oral argument, in an unexpected turn of events, the court heard opposing amicus curiae arguments from two different federal agencies: the Equal Employment Opportunity Commission (EEOC), an independent agency, and the Department of Justice, a federal executive department. In support of Zarda, who was terminated as a skydiving instructor after revealing he was gay, the EEOC argued that Title VII protects against sexual orientation discrimination as one form of legally prohibited gender discrimination. In support of Altitude Express—the company that fired Zarda—the DOJ argued that neither the plain language nor the intent of Title VII support that view. Yet, the DOJ's involvement came as something of a surprise.

After deciding to hear the case en banc, the court specifically invited the EEOC to participate as amicus curiae. That was expected, both because the EEOC is responsible for enforcing Title VII, and because it had recently decided the very question under review, in Baldwin v. Foxx, E.E.O.C. Decision No. 0120133080, 2015 WL 4397641, at *5 (July 15, 2015). In Baldwin, the EEOC reversed its position on the issue, and held for the first time that Title VII prohibits sexual orientation discrimination. Although that decision is not binding on federal courts, those courts routinely defer to agency interpretations of laws within their purview. See Michigan v. E.P.A., 135 S. Ct. 2699, 2718 (2015) (Kagan, J., dissenting) (citing Chevron, 467 U.S. at 863).

Twelve different amici curiae (including the EEOC) filed briefs supporting Zarda. Four amici filed briefs supporting Altitude Express. In particular, the DOJ nabbed national headlines by filing a brief supporting Altitude Express. There had been no warning the DOJ would take any view in the case, let alone one contrary to the EEOC. Some saw the move by the DOJ under the new Trump administration, as an “unusual example of top officials in Washington intervening in court in what is an important but essentially private dispute between a worker and his boss over gay rights issues.” Alan Feuer, “Justice Department Says Rights Law Doesn't Protect Gays,” The New York Times (July 27, 2017).

At oral argument, the judges began to press the DOJ attorney about how the DOJ came to appear in the case. One judge wondered: “Doesn't DOJ ordinarily defer to the EEOC on Title VII questions?” The DOJ attorney responded that while the “EEOC has control over private party litigation[,] … [t]he DOJ has primary control over public litigation.” When a judge noted that the case affected only private parties, the DOJ attorney stated that “the government has an interest … in its regulatory capacity on the public sector side.” The court also asked why the DOJ had not filed an amicus brief in the Hively case previously before the Seventh Circuit. Its attorney replied that he was “not sure.” But judges noted that the Hively briefing preceded the 2016 presidential election's political change in administration. The DOJ agreed that this “might” have affected its sudden decision to intervene. In fact, by the fall of 2017, the DOJ under Attorney General Jeff Sessions had opposed other agency views in three major cases, changing its position to do so in two such cases. Pema Levy, “Trump's Justice Department is Taking On Other Federal Agencies in Court,” Mother Jones (Oct. 2, 2017).

During colloquy with EEOC counsel in Zarda, Judge Pooler noted, “[w]e love to hear from the federal government. But it's a little awkward for us to have the federal government on both sides of this case.” “Indeed, your honor,” the EEOC attorney replied, receiving muted chuckles from the courtroom audience.

These exchanges demonstrate how uncomfortable it can be for courts to referee government turf wars while deciding legal issues. But such skirmishes are not unprecedented. See, e.g., Gulf Restoration Network v. U.S. DOT, 452 F.3d 362, 366 (5th Cir. 2006) (describing the National Oceanic and Atmospheric Administration's concern about action taken by the Secretary of Transportation); Hinson v. Nat'l Transp. Safety Bd., 57 F.3d 1144, 1151-52 (D.C. Cir 1995) (adjudicating a Federal Aviation Administration petition for review of a National Transportation Safety Board order); Nuclear Regulatory Comm'n v. Fed. Labor Relations Auth., 859 F.2d 302, 312 (4th Cir. 1988) (ruling on NRC petition for review of bargaining order by Federal Labor Relations Authority), vacated sub nom. Nat'l Treasury Emps. Union v. Nuclear Regulatory Comm'n, 496 U.S. 901 (1990).

Even the EEOC has clashed with other agencies as a party in litigation. For example, in EEOC v. Peabody Western Coal, No. 12-1770, 773 F.3d 977 (9th Cir. 2014), the EEOC sued a company for complying with Department of Interior lease provisions that required the company to give preference to hiring Navajo tribe members. As scholars have noted, because “the vast bureaucracy reaches in all directions, it has diverse views on litigation policy.” James R. Harvey III, “Loyalty in Government Litigation: Department of Justice Representation of Agency Clients,” 37 Wm. & Mary L. Rev. 1569, 1569 (1996). Courts have therefore struggled to resolve the level of deference that they owe different agencies whose views conflict.

In Zarda, the court noted that the EEOC's position on whether Title VII prohibits sexual orientation discrimination had changed over time. It inquired about “the deference that we owe your position now as opposed to the deference we owed your position then[.]” The EEOC's attorney explained that “under Skidmore we are entitled to deference based on the persuasive value of our arguments.” In Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944), the Supreme Court held that courts should defer to agency interpretations depending on the thoroughness and soundness of the agency's analysis, and its consistency with earlier interpretations. In accordance with that holding, Chief Judge Katzmann noted during oral argument in Zarda that the EEOC is: “simply entitled to deference to the extent the argument is persuasive, and that takes into account[,] under doctrines of administrative law[,] changing conceptions that administrative agencies may have over time as to particular legal questions.”

In fact, the court's opinion explained that “legal doctrine evolves,” noting that after Baldwin, courts had begun to revisit whether Title VII recognizes sexual orientation claims. 883 F.3d at 107-08. The court did not, however, afford greater deference to the EEOC versus the DOJ. That is, although these issues received attention during oral argument, ultimately the Second Circuit decision did not explicitly address deference. The court did, however take note “of the potential persuasive force” of decisions like Baldwin to reevaluate its prior precedent. Id. at 108. Accordingly, it appears that while the court did not give one agency a higher level of deference than another, it applied Skidmore deference to each agency's arguments.

Although the Zarda decision did not explicitly address the administrative law questions that arose during oral argument, it is rare to see dueling agency interpretations arise squarely in a case drawing so much attention. For this reason, the court's decision, in which it implicitly treated both agencies' views with a type of Skidmore deference, has resonance, not only as a matter of civil rights law, but as a matter of administrative law as well.

Amanda B. Protess is an associate and Frederick H. Rein is a partner at Goodwin Procter. The authors assisted The Legal Aid Society in filing an amicus brief on behalf of the plaintiff-appellants in the 'Zarda' case.