Altera Corp. v. Commissioner of Internal Revenue

Issues: (1) Whether the Treasury Department’s regulation requiring related companies (such as parents and subsidiaries) to share the cost of stock-based employee compensation is arbitrary and capricious and thus invalid under the Administrative Procedure Act; (2) whether, under Securities and Exchange Commission v. Chenery Corp., the regulation may be upheld on a rationale that the agency never advanced during rulemaking; and (3) whether a procedurally defective regulation may be upheld under Chevron, U.S.A., Inc. v. Natural Resources Defense Council Inc. on the ground that the agency has offered a “permissible” interpretation of the statute in litigation.