USA Trends and Developments Contributed by: Sean Lyons, Nicholas Wilkins, Kevin Spencer and Kim Marie Boylan, White & Case LLP
The Eighth Circuit denied the government’s request for the case to be reheard en banc ( 3M Co v Comm’r , No 23-3772 (8th Cir 19 February 2026). The Eighth Circuit’s 3M decision became final on 26 February 2026, although as of the time of writing (April 2026) the government may still request review by the US Supreme Court. Consequences of Loper Bright and 3M Following Loper Bright and 3M , additional challenges to Treasury Regulations, including the regulations under Section 482 of the Code, seem certain. Giv - en the less deferential standard that now applies, it seems likely that such challenges will succeed more often, as demonstrated by the 3M case. However, such challenges are far from guaranteed to prevail, and other taxpayers have already seen Treasury Regu - lations upheld despite the Loper Bright ruling (see, for instance, Lissack v Comm’ r, 125 F4th 245 (DC Cir 2025)). Loper Bright’s acknowledgement that Con - gress may grant agencies discretion in issuing rules and regulations will likely be an important feature and deciding factor of any decision. In this regard, a particularly interesting feature of the Eighth Circuit’s 3M opinion is its focus on First Secu- rity , which predates Treasury Regulation 1.482-1 (h) (2) by decades. Before Loper Bright , federal agen - cies could promulgate so-called “fighting regulations”, which (attempt to) override a prior judicial interpreta - tion of a statute. Previously, such regulations were still entitled to Chevron deference, provided that the prior court decision being overridden had not concluded that the relevant statute was unambiguous (see Nat’l Cable & Telecommuns Ass’n v Brand X Internet Servs , 545 US 967 (2005)). Fighting regulations may be the battleground for determining the contours of grants of agency discretion in the future.
In any event, it will be interesting to see how the law continues to develop. The Eighth Circuit’s opinion was fairly narrow, and did not answer the question of whether Section 482 gave Treasury at least some discretion to issue rules and regulations. Technically, the 3M decision is only binding on taxpay - ers located within the Eighth Circuit. However, another challenge to Treasury Regulation Section 1.482-1 (h) (2) is currently pending before the US Circuit Court of Appeals for the Eleventh Circuit (the “Eleventh Circuit”) (see Coca-Cola Co v Comm’r , No 24-13470 (11th Cir)), and a taxpayer win in that case could lead the Treas - ury to revise or withdraw the regulation (or leave the regulation as effectively invalidated). How the Eleventh Circuit approaches the analysis will provide more clar - ity regarding the consequences for US transfer pricing regulations more generally. On the other hand, a tax - payer loss in the Eleventh Circuit could lead to review by the US Supreme Court, which would answer the question conclusively. Regardless, companies with transfer pricing issues should remain aware of the possibility of challenging Treasury Regulations as overreaching. Loper Bright and 3M provide a potential road to success for tax - payers who see their transfer pricing challenged by the IRS.
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