I had a great time last week doing two CLEs with my colleague and foil Richard Hunt in Dallas. Those webinars can be found here and here. We had an absolute blast. I also got some personal time in as well with a really close friend and his family in nearby Fort Worth. So, ready to go for another week. Shortly before we did the first webinar, I got news from Robin Shea, the person behind the Labor And Employment Law Insider blog in my blogroll, that Kisor v. Wilkie came down. It’s timing could not have been better because the case explicitly and implicitly came up in both webinars. As promised last week, the blog entry of the week is on Kisor v. Wilkie. As usual the blog entry is divided into categories and they are: introduction; why Auer deference makes sense; Auer deference from here on out; why Auer deference doesn’t get overruled; stare decisis must be respected; why case must be remanded; Chief Justice Roberts concurring opinion stating that the majority opinion and Justice Gorsuch are not that far apart; Justice Gorsuch concurring opinion setting forth the case why Auer deference should have died; and takeaways. Of course, the reader can focus on any or all of the categories. That said, at a minimum, the reader is going to want to read III, Auer deference from here on out, and IX, takeaways, for sure. For those with a more academic bent, it’s interesting comparing Justice Kagan’s take on why Auer deference had good policy reason behind it (II), with Justice Gorsuch’s take on why Auer deference should be blown up (VIII). Similarly, the stare decisis section (V) is interesting in light of how the Supreme Court is not always following stare decisis of late.
- Unanimous decision. However, unanimous in result only and not in its reasoning.
- The swing vote was clearly Chief Justice Roberts. Of particular significance, he joined the section circumscribing Auer deference, the section talking about how stare decisis mattered, and the section discussing the merits of the case. Otherwise, he pointedly did not join the majority opinion.
- Justice Kavanaugh did write a concurring opinion. That opinion essentially says he agrees with what Chief Justice Roberts said about how there is not much daylight between Justice Gorsuch and Justice Kagan.
- We previously discussed the oral argument in this case here. Just to recap, what happened here was a veteran lost a benefits case because an agency interpretation of its regulations was given Auer deference. He then appealed through the system, and it eventually came before the United States Supreme Court.
- Kenneth Culp Davis, widely recognized as the Dean of administrative law and cited to by Justice Gorsuch in his concurring opinion, actually taught administrative law while I was at the University of San Diego getting my JD degree. He had an absolutely brutal reputation, and I was too scared to take his class. I do remember some who did.
Why Auer Deference Makes Sense (plurality)
- For various reasons, regulations may be genuinely ambiguous. That can happen for a variety of reasons. For example, the subject matter of a rule could be so specialized or varying in nature so as to be impossible to capture it in every detail. Or, it could be a situation where the agency when drafting the regulation could not have reasonably foreseen. Either way, real uncertainties about a regulation’s meaning arise.
- Justice Kagan gives five different examples of how regulations have real uncertainty about their meaning, including: whether the ADA line of sight rule applies to only when people in the stadium are seated or whether it applies when people in a stadium are standing and a person with a mobility impairment needs to see over them; whether a Transportation Security Administration regulation applying to liquids, gels, and aerosols in carry-on baggage would apply to any kind of liquid or just to liquids that the policy is designed to protect against; whether a Mine Safety And Health Administration rule requiring employers to report occupational diseases within two weeks after they are diagnosed would include the results of a chest x-ray; an FDA regulation concerning what an active moiety is; whether a Police Department making disciplinary infractions subject to pay deductions factors in the whether police captains are eligible for overtime under the Fair Labor Standards Act (Auer). The first example pertaining to the ADA is interesting because both the Seattle Mariners and the Baltimore Orioles are engaged in litigation at this time on this very point.
- Auer deference operates on a presumption that Congress generally wants the agency to play a primary role in resolving regulatory ambiguities.
- The Supreme Court has held in the past that the power of an agency to interpret its own regulations is a part of the agency’s delegated lawmaking powers.
- Agencies writing a regulation often have direct insight to what the rule was intended to mean.
- If you want to know what a rule means, ask its author.
- Resolving genuine regulatory ambiguities often entails the exercise of judgment grounded in policy concerns. For example, what comparable line of sight means is complicated in the sports arena when spectators sometimes stand up. The question arises as to how costly is it to insist that the stadium owner take that sporadic behavior into account and is the viewing value received worth the added expense. That is a policy question rather than a legal question.
- Agencies have unique expertise often of a scientific or technical nature relevant to applying a regulation to complex or changing circumstances.
- Agencies can conduct factual investigations, can consult with affected party, and can consider how their experts have handled similar issues over a long course of administering a regulatory program.
- Agencies have political accountability because they are subject to the supervision of the president who in turn answers to the public.
- Congress frequently has expressed a preference for resolving interpretive issues by uniform administrative decision rather than piecemeal through litigation.
Auer Deference from Here on Out
- For Auer deference to apply, the regulation must be genuinely ambiguous. We mean it we mean it. That is, the regulation must be genuinely ambiguous even after a court has resorted to all the standard tools of interpretation.
- If the reason for the presumption do not apply or there are other reasons outweighing the reason behind the presumption, courts should not give deference to an agency’s reading except to the extent it is persuasive authority.
- Deference is not warranted where court concludes that an interpretation does not reflect an agency’s authoritative, expertise-based, fair, or considered judgment.
- The new version of Auer deference gives agencies the ability to do their job while obligating courts to perform their reviewing and restraining functions.
- If uncertainty in the regulation does not exist, no plausible reason for deference exist either. The regulation just means what it means and the court must go with that. That is, if there is only one reasonable construction of a regulation, then a court has no business deferring to any other reading no matter what the agency says would make more sense. Holding otherwise, would allow the agency to create a new regulation without going through the rulemaking process.
- Only where the legal toolkit is empty and the interpretive question still has no single right answer does the judge get to conclude that Auer deference applies. It isn’t good enough that agency regulations can be difficult understand. Before Auer deference applies, an independent deep dive by the court is in order.
- The deep dive includes carefully considering the text, structure, history, and purpose of the regulation as if the interpretation of the regulation did not exist.
- Even if genuine ambiguity exists, the interpretation of the regulations still have to be reasonable. That is, it has to come within the zone of ambiguity the court has identified after applying all its interpretive tools. Citing to Chevron, Justice Kagan says that it is entirely possible interpretation of a regulation will not be reasonable.
- In deciding whether Auer deference is or is not appropriate, you look to several factors: 1) whether the regulatory interpretation is the agency’s authoritative or official position, rather than an ad hoc statement not reflecting the agency’s views. That is, the interpretation must at least come from those actors using mechanisms understood to make authoritative policy in the relevant context; 2) the agency’s interpretation must implicate some form of its expertise. After all, administrative knowledge and experience largely account for the presumption that Congress delegates interpretive lawmaking power to the agency. This is especially the case when a rule is technical or commonly implicates policy expertise, such as the examples given by justice Kagan in the first part of her opinion. Finally, when the agency has no comparative expertise in resolving regulatory ambiguity, Congress presumably would not grant the agency the authority to do so; and 3) an agency’s reading of a rule must reflect fair and considered judgment. That does not include deferring to a merely convenient litigating position or an after-the-fact rationalization abandoned by the agency to defend the agency action against attack by others. It also does not include deferring to a new interpretation that creates unfair surprise to regulated parties. For that matter, it also generally does not include giving deference to agency interpretations advanced for the first time in legal briefs.
- So, Auer deference from here on out as Justice Kagan put it, “is a deference doctrine not quite so tame as some might hope, but not nearly so menacing that they may fear.”
Why Auer Deference Doesn’t Get Overruled (plurality)
- Auer deference as circumscribed is consistent with the judicial review provisions of the administrative procedure act because: 1) all traditional methods of interpretation must be applied first and plain meaning must be in force; 2) an independent deep dive always must be conducted; 3) the interpretation of the regulation must be reasonable; and 4) the interpretation must be authoritative, expertise-based, considered, and fair to regulated parties.
- Auer deference as circumscribed is consistent with the administrative procedure act’s rulemaking requirements because: 1) interpretive rules do not have the force of law and never forms the basis for an enforcement action; 2) the courts get the ultimate say on Auer deference; and 3) no evidence exists that any regulation in American history was designed poorly because an agency can fall back on Auer deference.
- Auer deference does not violate separation of powers principles because courts retain a firm grip on the interpretive function.
Why Auer Deference Should Continue as a Matter of Stare Decisis (majority).
- Inherent to precedent is a fundamental principle of the rule of law because it promotes the evenhanded, predictable, inconsistent development of legal principles. It also fosters reliance on judicial decision and contribute to the actual and perceived integrity of the judicial process. To move away from that, requires special justification, which, outside of an argument that it was wrongly decided in the first place, is not the case here.
- Auer deference goes back more than 75 years or more with the Supreme Court deciding dozens of cases on that point and the lower Court doing it thousands of times. In fact, Auer deference is all over administrative law.
- Abandoning Auer deference would cast doubt on many settled constructions of rules.
- Congress has refused to take up the question of whether Auer deference should continue. By statute, it could have gotten rid of Auer deference if it wanted to, but it never did.
- The parties made no claim that Auer deference is unworkable, which is a traditional basis for overruling the case.
- Auer deference is not a doctrinal dinosaur.
- Absolutely true that agencies have far reaching influence, which is why Auer deference gets severely circumscribed by this case.
Why the Case Must Get Remanded (majority)
- The Federal Circuit acted too fast in declaring the regulation ambiguous. That is, they didn’t do the deep dive before applying Auer deference. As mentioned above, that deep dive involves looking at a variety of indicators, such as the text, structure, history, and purpose as well as whether the regulation really has more than one reasonable meaning.
- The Federal Circuit acted too fast in saying that Auer deference applied even if the regulation was genuinely ambiguous. That is, what the interpretation of the regulation of the sort that Congress would want to receive deference? Did the board member’s ruling reflect the considered judgment of the agency as a whole?
Chief Justice Roberts Concurring Opinion Stating That There Isn’t Much Daylight between Justice Gorsuch and the Majority Opinion of Justice Kagan.
- Under the majority opinion for Auer deference to apply, the following factors have to be considered: 1) the underlying regulation must be genuinely ambiguous; 2) the agency’s interpretation must be reasonable and must reflect its authoritative, expertise-based, and fair and considered judgment; and 3) the agency must take account of reliance interest and avoid unfair surprise.
- On the other hand, Justice Gorsuch says that the situations a court might be persuaded by the interpretation of the regulation would include a court finding: 1) the agency considered the problem; 2) the agency offered a valid rationale; 3) the agency brought if expertise to bear; and 4) the agency interpreted the regulation in a manner consistent with earlier and later pronouncements.
- Comparing ¶ 1 with ¶ 2 of this section of the blog reveals that the two are very close once style differences are accounted for.
- Different question as to whether the court should give deference to an agency’s regulation (Chevron deference). That is, Chevron deference saved for another day, if ever.
Justice Gorsuch Concurring Opinion on Why Auer Deference Should Die
- The majority opinion can’t get five votes to say that Auer deference is lawful or wise. Instead, it survives on the basis of stare decisis.
- There are so many new restrictions and limitations put on Auer deference that Chief Justice Roberts claimed to see little practical difference between keeping it on life support and overruling it entirely.
- Justice Gorsuch would stop the business of making up a new system for judges to abdicate their job of interpreting the law and allow the Court of Appeals to apply its independent judgment of the law’s meaning.
- The scheme put forward by the majority is so complicated that it will no doubt come before the court again. At that time, hopefully the Supreme Court would just get rid of Auer deference entirely.
- Auer deference originally began as dicta in a decision about emergency price controls at the height of the second world war. Only in the last few decades of the 20th century lawyers in court dusted Auer deference off and shaped it into a reflexive rule of deference to regulatory agencies. They did that without even considering whether a rule like that could be legally justified or even made sense.
- Auer deference first got his start in the Seminole Rock case, here, and there the statement had no authority to back it up. In fact, Professor Davis said that particular language was an unexplained aside and made no difference to the case’s outcome.
- The same term the court came down with Seminole rock, it came down with Skidmore, which talks about persuasive authority.
- In the name of Auer deference, courts have invariably, though not always, mechanically applied and reflexively treated Auer deference as a constraint upon the careful inquiry one ordinarily expects of courts.
- In the real world, a judge uses his or her traditional interpretive toolkit to reach a decision about the best and fairest reading of the law. They do that in just about every area of the law. However, when it comes to interpreting federal regulations, Auer deference displaces that process by requiring judges to defer to the agency’s interpretation of the regulation as controlling regardless of what a considered analysis reveals.
- Squaring Auer deference with §706 of the Administrative Procedure Act simply doesn’t hold up. That section requires a reviewing court to resolve for itself any dispute over the proper interpretation of an agency regulation.
- Auer deference is also incompatible with §553 of the Administrative Procedure Act.. That section requires agency to follow notice and comment procedure when issuing or amending legally binding regulations (substantive rules), but not when offering mere interpretations of those regulations. Auer deference for all practical purposes means that any new interpretation of the regulation might as well be a new regulation.
- Justice Kagan’s statement about how an agency’s interpretation lacks the force of law doesn’t add up because it rests on a too narrow understanding of what it means for an agency action to bear the force of law.
- Auer deference allows for hidden legislative intentions to overrule express statutory directives.
- Auer deference doesn’t work with the Constitution either as the judicial power of the United States vests exclusively in the Supreme Court and in the lower courts. A core component of that power is the duty of interpreting the laws and applying them in cases properly brought before it.
- The founding fathers were very jealous of ensuring a fair hearing before a neutral judge so that the rule of law reigns supreme and does not merge into the rule of men.
- Auer deference tells a judge that he or she has to interpret agency interpretation of regulations in a way that says what the executive agency says they mean. Problem with that if that executive officials are not nor are they supposed to be entirely impartial. That is, they have their own interest, constituency, and their own policy goals when interpreting a regulation.
- Whether purposeful or not, the failure of an agency to write a clear regulation winds up increasing its power by allowing it to both write and interpret rules bearing the force of law. Such a system unites powers the Constitution deliberately separates and denies the people the right to an independent judicial determination of the law’s meaning.
- The author knows best position of the majority makes little sense in light of the reality of administrative agencies. That is, agency personnel changes over time and agency policy priorities can shift dramatically from one presidential administration to another. Auer deference says that courts have to defer to the current view of those regulations when those current views may or may not correspond to the views of those who actually wrote the regulation in the first place.
- In Justice Gorsuch’s opinion, technical expertise isn’t a reason to keep Auer deference either as courts can consider that technical expertise in the context of persuasive authority.
- While stare decisis is used as the vehicle for keeping Auer deference, the new Auer deference system reshapes Auer deference in new and experimental ways. Further, preserving Auer deference through stare decisis on the basis of a heightened standard standard given to statutory decisions is not deserved as it was dicta from a decision of the Court..
- Auer deference undermine judicial independence.
- No persuasive rationale supports Auer deference.
- Auer deference has not proved to be a workable standard and the new paradigm will make things even more confused and unworkable.
- Auer deference is out of step with how courts normally interpret written laws.
- Auer deference potential for mischief has grown exponentially with the explosive growth of the administrative state over the last half-century. In fact, the administrative state produces so many reams of regulation that it dwarfs the statutes enacted by Congress. In 2018 the Code of Federal Regulations total 242 volumes and 185,000 pages. So, the cost of continuing to deny citizens an impartial judicial hearing on the meaning of disputed regulations has increased dramatically since the beginnings of Auer deference.
- The majority opinion raises the question of the continuing validity of decisions applying Auer deference just as if the majority had overturned Auer deference entirely.
- The better approach is to allow court to decide cases based upon independent judgment and to follow the agency’s view only to the extent it is persuasive.
- If Auer deference still gets applied quite a bit after this decision, then the Supreme Court should overrule it when the time comes.
- From reading the majority opinion, it seems that Justice Breyer’s concern in oral argument about a judicial power grab may have affected Chief Justice Roberts in some way. Also, how getting rid of Auer deference would fundamentally reshape administrative law (stare decisis), most probably played a role as well since Chief Justice Robert joined the stare decisis part of the opinion..
- A real she said he said situation between Justice Kagan and Justice Gorsuch regarding the policies behind Auer deference. Justice Kagan believes Auer deference has many things to commend it. On the other hand, Justice Gorsuch does not agree with that. To Justice Gorsuch’s mind, Auer deference results in administrative agencies going out of their lane. Whenever any branch of the US government goes out of its lane, to Justice Gorsuch that is a bridge too far.
- Very interesting that of the examples Justice Kagan uses to explain her opinion, one of them is the site line dispute going on in stadiums at this very moment. I don’t know about the other examples, but I do find it curious an example was chosen where litigation is very much ongoing on that very point.
- It makes sense to me that there are situations where an agency has unique expertise to bring to a matter where the regulations are unclear.
- Justice Scalia must be smiling as his focus on plain meaning has now come to administrative law. That is, if a regulation is clear, then the courts are supposed to do a full stop right there.
- Auer deference as reconfigured requires courts to engage in a deep dive, independent analysis, if there is a doubt as to what the regulation means. Pretty clear from the decision, that Auer deference is meant to be the exception rather than the rule.
- The new paradigm is incredibly complicated. For example, just when is the agency’s expertise really brought to bear? Is that expertise only for technical matters, such as moiety’s, or does it extend to other situations? If so, what? At a minimum, whenever Auer deference comes up, a court is going to have to go through a lot of hoops before it allows Auer deference to proceed.
- I’m not sure what to make of the fact that a few of the Justices talked about how Chevron deference is not at issue in this case. That seems a bit strange because the arguments in favor of Chevron deference are much stronger than the arguments for Auer deference.
- Mechanical and reflexive application of agency interpretations is dead.
- The Fair Housing Act circular on service dogs and emotional support animals is now very much up in the air because the Fair Housing Act does not talk about service animals and emotional support animals. For that matter, the Fair Housing Act doesn’t even have any regulations on the subject. One wonders how landlords are going to react to this. Some of that reaction may depend upon how the Department of Housing and Urban Development reacts to this decision.
- In the education field, Office of Civil Rights letters frequently get thrown around in the same way as precedent. Unclear, how this decision impacts the persuasive authority of those letters.
- One wonders about how Justice Gorsuch’s talking about the rule of law needing to reign supreme rather than the rule of men will impact some of the larger issues going on now with respect to the administration’s response to congressional subpoenas and to executive privilege. I don’t view Justice Gorsuch’s statement about this as anything surprising. As we discussed here, Justice Gorsuch is a very much every branch of government needs to stay in their lane type of guy.
- Having worked for the Joint Committee on Administrative Rules in the State of Illinois, Justice Gorsuch’s view on the author knows best made a great deal of sense to me. However, Justice Kagan’s view on agency expertise also made sense to me for the same reasons.
- In Illinois, there is a separate agency called the Joint Committee on Administrative Rules, a division of the legislature. JCAR’s job is to proofread all regulations and then more importantly ensure that the regulations meet legislative intent. If the regulations did not meet legislative intent, then a committee of the legislature could state as much and tell the agency to walk back to regulations. As a practical matter, when regulations went beyond legislative intent, the agency generally didn’t want to pick that fight and would walk it back once told as much by JCAR staff. One wonders if under this decision the JCAR’s of the respective States that have them will not get even more power than they currently have, which may not be a bad thing.
- Enforcement guidances, technical assistance memorandums, circulars and anything not a regulation having gone through the notice and comment process are now up for individual assessment as to whether the courts are going to buy off on it. The problem with this approach is that there are many many District Court judges out there not to mention 12 different Courts of Appeals. It’s possible we will get an awful lot of conflicting decisions when it comes to giving deference to agency interpretation of the regulations.
In short, Auer deference very well may go too far, the new Auer deference paradigm may be too complicated, but persuasive authority may be chaos. It will be very interesting to see how all this works out.