TED D e COSMO v. BLUE TARP REDEVELOPMENT,LLC A RICHARD SCHUSTER AND ANOTHER v. WYNN RESORTS HOLDINGS,LLC,AND OTHERS SJC-13031 SJC-13060 Supreme Judicial Court,Boston,Massachusetts April 7,2021–June 3,2021

A. Regulation's text plain or ambiguous

If the regulation is plain and unambiguous, it should be interpreted according to its terms. See, e.g., Kisor v. Wilkie, 139 S. Ct. 2400, 2415 (2019); Fine Wines, 482 Mass. at 687 (“First, we look to the text of the regulation, and will apply the clear meaning of unambiguous words unless doing so would lead to an absurd result”); Carey, 479 Mass. at 369–370 (interpretation must be consistent with plain text); Goldberg v. Board of Health of Granby, 444 Mass. 627, 636 (2005), citing Christensen v. Harris County, 529 U.S. 576, 588 (2000) (deference to agency interpretation not appropriate where meaning of regulation unambiguous). Courts can perform this function without the assistance of, or deference to, the agency. Indeed, the Supreme Court will not even consider the issue of deference unless the regulation is what the Court describes as “genuinely ambiguous,” “[a]nd before concluding that a rule is genuinely ambiguous, a court must exhaust all the traditional tools of construction” (quotation and citation omitted). Kisor, supra at 2414–2415. ²²

As explained supra, the regulatory regime at issue in these cases is ambiguous, thereby implicating the issue of administrative deference. We have attempted to interpret the rules, but we have concluded that it is difficult to entirely harmonize the apparent conflict in the provisions. Thus, we decide that rule 7(d) is ambiguous, requiring consideration of administrative interpretation and deference.

B. Reasonableness

When a regulation is ambiguous, we are prepared to give what we have described as “considerable,” “substantial,” or “generous” deference to an agency's interpretation of the regulation so long as the interpretation is reasonable. Fine Wines, 482 Mass. at 687 (“generous” deference required for reasonable interpretation of regulation [citation omitted]). J.M. Hollister, LLC v. Architectural Access Bd., 469 Mass. 49, 55 (2014) (describing “considerable deference to the board's interpretation of … its own regulation” [citation omitted]). Franklin Office Park Realty Corp. v. Commissioner of the Dep't of Envtl. Protection, 466 Mass. 454, 460 (2013) (court grants “substantial deference” to “agency's particular expertise” unless “unreasonable” [citations omitted]). We have emphasized that a party opposing the agency's interpretation bears a “formidable burden” to show that the interpretation is not reasonable (citation omitted). Ten Local Citizen Group v. New England Wind, LLC, 457 Mass. 222, 228 (2010). See J.M. Hollister, LLC, supra. That being said, such deference is not “unlimited.” Craft Beer Guild, LLC, 481 Mass. at 527.

The commission concludes, based on its interpretation, that rule 7(d) should be given effect as authorizing 6:5 payout blackjack. This interpretation is consistent, rather than inconsistent, with the plain meaning of the language of rule 7(d) itself, which references the use of 6:5 payouts without using the 6:5 variation so long as the rules are displayed. See Boss, 484 Mass. at 557 (language should be given plain meaning); Fine Wines, 482 Mass. at 687; Carey, 479 Mass. at 369–370 (interpretation must be consistent with plain text). The interpretation also lends meaning and purpose to rule 7(d), rather than rendering it largely superfluous, as the plaintiffs' interpretation would. See, e.g., Wheatley, 456 Mass. at 601; Vega, 449 Mass. at 231. Although the commission's failure to explain why 6:5 payout blackjack is not discussed expressly elsewhere in the rules or how the permissive language in rule 7(d) should interact with the blackjack requirements in the rest of the rules is troublesome, and reflective of the inherent ambiguity of the rule, it is not dispositive. Cf. Biogen, 454 Mass. at 187 (when interpreting statute, agency's interpretation must be “the product of reasoned rule making” to receive deference). As evidenced by our attempt to harmonize the apparent conflict in the rules, the commission's conclusion is reasonable and consistent with the text of the rules and does not lead to an absurd result. See, e.g., Fine Wines, 482 Mass. at 687; Carey, 479 Mass. at 369–370. The interpretation is therefore ordinarily entitled to considerable or generous deference. See Carey, supra; J.M. Hollister, LLC, 469 Mass. at 55. ²³ Other factors that we have considered in evaluating whether deference is appropriate also confirm this determination.

C. Agency's authoritative, official position

In evaluating deference, we also consider whether the agency's decision is an official statement made by those authorized to speak for the agency. See Kisor, 139 S. Ct. at 2416. Cf. Sullivan v. Sleepy's LLC, 482 Mass. 227, 232 n.11 (2019) (deferring to “agency's interpretation [of statute] contained in an opinion letter”), citing Swift v. AutoZone, Inc., 441 Mass. 443, 450 (2004) (explaining deference with respect to opinion letter). There is little doubt that the commission's amicus brief represents its “authoritative” or “official” position. Kisor, supra. In the past, both the Supreme Court and this court have accepted an agency's amicus brief as authoritative. See Auer, 519 U.S. at 463–464 (deferring to interpretation advanced in Secretary of Labor's amicus brief); Costa v. Fall

River Hous. Auth., 453 Mass. 614, 620 n.9 (2009) (accepting amicus brief's “present explicit statement about the intended meaning of this regulation” over agency's past statements). The amicus brief here details the commission's formal decision and is easily distinguishable from interpretations cited as nonauthoritative. See Kisor, supra at 2416–2417 (“speech of a mid-level official,” “informal memorandum,” and explicitly nonauthoritative guides are not official interpretations).

D. Implication of substantive expertise

We accord “due weight to the experience, technical competence, and specialized knowledge of the agency” (citation omitted). Ten Local Citizen Group, 457 Mass. at 228. Thus, in evaluating whether deference is appropriate, we have also considered it important that an interpretation be based in some way on this expertise or specialized knowledge. ²⁴ The commission's expertise is clearly implicated here, as its brief interprets specialized rules of blackjack that are written by the commission and implemented by licensees under the commission's regulation. See G. L. c. 23K, § 4.

E. Fair and considered judgment

Finally, we evaluate whether an agency's interpretation reflects a “fair and considered judgment” to receive deference (citation omitted). Kisor, 139 S. Ct. at 2417. See Mullally v. Waste Mgt. of Mass., Inc., 452 Mass. 526, 533 & n.13 (2008) (discussing weight of interpretation made in shadow of litigation); Goldberg, 444 Mass. at 636 (“arbitrary, whimsical, or capricious” interpretations not due deference [citation omitted]).

To this end, “[a]dministrative interpretation developed during, or shortly before, the litigation in question is entitled to less weight than that of a long-standing administrative interpretation of administrative rules” (citation omitted). Mullally, 452 Mass. at 533 n.13. See Beverly Port Marina, Inc. v. Commissioner of the Dep't of Envtl. Protection, 84 Mass. App. Ct. 612, 620–621 (2013), quoting United States Gypsum Co. v. Executive Office of Envtl. Affairs, 69 Mass. App. Ct. 243, 249 n.16 (2007) (“our judicial deference ‘may be tempered’ when … the agency interpretation at issue is not one of long-standing or consistent application”); Crawford v.

Cambridge, 25 Mass. App. Ct. 47, 49 (1987) (reasonable interpretation that is “consistently applied” entitled to deference). See also Dinkins v. Massachusetts Parole Bd., 486 Mass. 605, 611 n.7 (2021) (in context of agency applying statute, “consistent, long continued administrative application” may merit “[s]ignificance in interpretation” [citation omitted]). We distinguish considered and consistent interpretations from a “merely convenient litigating position or post hoc rationalization” (quotations, citation, and alteration omitted). Kisor, 139 S. Ct. at 2417.

The interpretation advanced by the commission here is consistent with a past decision by the commission's IEB. Just three days after the first complaint filed in these cases, the IEB “preliminarily found Encore to be in compliance with the [c]ommission's rules and regulations,” and decided not to pursue an enforcement action. In a later executive session, the commission determined that it did not take issue with the IEB's analysis and conclusions. Admittedly, the IEB memorandum, like the amicus brief, fails to explain some of the apparent conflict in the rules and the nature of rule 7(d) as an outlier. The agency's interpretation of this question was not put forward until July 2019, when this litigation had already been initiated, and so it is not necessarily a “long-standing administrative interpretation.” Mullally, 452 Mass. at 533 n.13. Nonetheless, it is significant that various bodies of the commission have consistently come to the same conclusion since the first time the commission was notified of the difficulties in interpreting the rules. See id.

Further, in these cases, the fact that the commission is not a party to the litigation supports the notion that its interpretation is fair and considered, as the commission is less likely to offer a self-interested interpretation. See Kisor, 139 S. Ct. 2417 n.6, quoting Auer, 519 U.S. at 462 (where agency not party to litigation and expressed its views only in response to court's request, “no reason to suspect that the interpretation [did] not reflect the agency's fair and considered judgment on the matter”); Mullally, 452 Mass. at 533 n.13 (addressing weight of interpretation made in shadow of litigation). Even if, as one amicus brief suggests, the commission has a financial interest in the tax revenue generated by the casinos, that interest is not relevant here, where the commission is interpreting rules and regulations that are no longer operative. The commission was approached about submitting an amicus brief by defense counsel, but initially declined to do so to avoid the appearance “that it was anything but neutral when it came to its oversight of the industry.” The commission submitted the amicus brief only following this court's solicitation. See Kisor, supra (agency submitting interpretation in response to court's request likely reflects fair and considered judgment). There is nothing to suggest that the commission's interpretation is the product of unfairness, lacks consideration, is “arbitrary, whimsical, or capricious,” Goldberg, 444 Mass. at 636, or was developed in the shadow of litigation, see Kisor, supra at 2417 & n.6; Mullally, supra.

In sum, all of the relevant considerations weigh in favor of deference here. As demonstrated by our attempt to harmonize the rules and regulations governing blackjack, rule 7(d) is ambiguous. The commission's official interpretation is consistent with the text, is “reasonable,” and “does not lead to an absurd result.” Fine Wines, 482 Mass. at 687. See Kisor, 139 S. Ct. 2415–2416 (interpretation must be “reasonable” or “within the zone of ambiguity the court has identified after employing all its interpretive tools” to receive deference); Carey, 479 Mass. at 369–370 (interpretation must be consistent with text of rules to receive deference). The interpretation is also the commission's official position, implicates its substantive expertise, and reflects its fair and considered judgment. See Kisor, 139 S. Ct. 2416–2418; Rivas v. Chelsea Hous. Auth., 464 Mass. 329, 335 (2013); Costa, 453 Mass. at 620 n.9; Mullally, 452 Mass. at 533 n.13. Thus, we conclude that, per the commission's interpretation, rule 7(d) allows the licensees to offer 6:5 payout blackjack.