Symposium: Government agencies shouldn’t get to put a thumb on the scales
on Jan 31, 2019 at 2:36 pm
Jonathan H. Adler is the Johan Verheij Memorial Professor of Law and Director of the Center for Business Law and Regulation at the Case Western Reserve University School of Law. He joined an amicus brief with the Cato Institute, Professors Richard Epstein and Michael McConnell, and Cause of Action Institute in support of the petitioner in Kisor v. Wilkie. He is the author of “Auer Evasions,” 16 Georgetown Journal of Law & Public Policy 1 (2018), on which portions of this essay are based.
All James Kisor may want is for the Department of Veterans Affairs to alter the effective date of his veteran disability benefits, but his legal challenge to the VA’s denial of his claims has given the Supreme Court an opportunity to revisit one of the more problematic doctrines in administrative law: Auer deference, under which federal courts are obligated to defer to permissible agency interpretations of their own regulations.
One aspect of Kisor’s dispute with the VA turns on the meaning of the word “relevant” in 38 C.F.R. § 3.156. This matters because the VA allegedly overlooked some of Kisor’s service records when evaluating his disability claims. If these records were “relevant” within the meaning of the regulations, then Kisor has a stronger case for an earlier effective date for his benefits.
In reviewing Kisor’s case, the U.S. Court of Appeals for the Federal Circuit concluded that the term “relevant” as used in the applicable regulations is ambiguous because its scope is vague. Due to this ambiguity, the court felt compelled to accept the VA’s interpretation under Auer v. Robbins, which provides that a federal agency’s interpretation of its own ambiguous regulation is “controlling” unless it is “plainly erroneous or inconsistent with the regulation.”
Auer built upon, and arguably expanded, the Supreme Court’s long-standing practice of deferring to agency interpretations of their own regulations born in 1945’s Bowles v. Seminole Rock. Although initially uncontroversial, the doctrine has come under fire from legal commentators and prominent jurists – and for good reason. Several justices, including Auer’s author, the late Justice Antonin Scalia, have recognized that Auer unduly aggrandizes agency authority without legislative warrant. Among other things, Auer deference enables agencies to evade a wide range of legal constraints that are otherwise imposed upon agency behavior, particularly on the ability of agencies to take action with the force of law.
In order for an agency to obtain deference under Chevron U.S.A. v. Natural Res. Def. Council for its interpretation of a statutory provision it administers, for example, the agency is required to have gone through sufficient administrative process to give its action the force of law. Such processes, such as notice-and-comment rulemaking, help hold agencies accountable for their interpretations by exposing them to public comment and critique and forcing the agency to defend its interpretive choices. Under Auer, however, agencies face no such constraints. Indeed, in Auer v. Robbins itself the Supreme Court deferred to an agency interpretation offered in an amicus brief that was drafted long after the underlying dispute had begun. Insofar as agencies may offer regulatory interpretations without going through any formalized process, they are freed from having to take account of the concerns of the regulated community and are able to evade accountability for their interpretive choices.
Auer facilitates the evasion of notice as well, because it enables agencies to adopt binding interpretations without advance warning to the regulated community. As Justice Clarence Thomas warned in his dissent in Thomas Jefferson University v. Shalala, deferring to the agency’s previously unarticulated interpretation undermines the principle that agency rules binding private conduct should be “clear and definite so that affected parties will have adequate notice concerning the agency’s understanding of the law.” This is of particular concern because Auer deference applies when a regulation is ambiguous — that is, when the requirements an agency is imposing are not clear. In other words, Auer deference applies when the regulated community lacks notice of what is required unless and until the agency issues its interpretation.
Auer deference also encourages agencies to evade their responsibility to provide detailed guidance and explication of legal requirements when developing and promulgating regulations. At the same time, Auer deference encourages agencies to avoid rulemakings and administrative processes in favor of informal guidance documents and opinion letters that are not final agency actions for purposes of judicial review, but that may nonetheless receive deference in court and bind regulated parties.
Some fear that eliminating Auer deference could lay the foundation for undoing much of contemporary administrative law. Overturning Auer, in such accounts, is the first step toward overturning Chevron and ending the deference federal courts have traditionally shown to administrative agencies. Such concerns are misplaced. Whatever the faults of Chevron or other administrative law doctrines, Auer can stand or fall on its own.
Although often characterized as a close relative of Chevron, Auer is (at best) the more well-known deference doctrine’s illegitimate stepchild. Both doctrines require deference to permissible agency interpretations of ambiguous text, but the relationship is purely superficial.
Chevron deference is grounded in a theory of delegation – that any authority agencies have to adopt binding interpretations of ambiguous statutes has been conferred by Congress. As Chief Justice John Roberts explained in King v. Burwell, Chevron “is premised on the theory that a statute’s ambiguity constitutes an implicit delegation from Congress to the agency to fill in the statutory gaps.” From this theory of delegation spring a range of subsidiary doctrines that both define and constrain Chevron’s proper domain.
Whereas Congress can be said to have delegated the interpretive authority that underlies Chevron deference, neither Auer nor Seminole Rock even purports to provide an equivalent foundation for a doctrine of deference to agency interpretations of their own regulations. Nor could they, as the interpretive authority at issue in Auer cases comes not from ambiguities left by Congress but from ambiguities left by the agencies themselves, and it is nonsensical to say that agencies have delegated interpretive authority to themselves.
Neither the Administrative Procedure Act nor any other cross-cutting statute indicates that Congress intended to give agencies the power to bind courts to the agency’s views about how the agency’s rules should be interpreted. To the contrary, the text of the APA would suggest the opposite. If anything, Congress’ expectation that agencies would go through various administrative processes, such as notice-and-comment rulemaking or formal adjudication, before setting down legislative rules or imposing binding orders suggests Congress did not intend to give agencies power to bind courts merely by offering a regulatory interpretation.
If an agency interpretation is based upon the agency’s intention at the time the regulation was promulgated or its understanding of how a given regulation will operate in practice, nothing prevents the agency from making this case to a reviewing court. The effect of Auer, however, is to relieve agencies of the obligation of making any such argument — of being able to point to any plausible interpretation, adopted at any time and for any reason. Such broad deference can be justified neither under the umbrella of Chevron’s domain nor by an appeal to the agency’s superior knowledge.
In opposing certiorari in Kisor v. Wilkie, the U.S. solicitor general acknowledged that there are reasons for the Supreme Court to reconsider Auer deference, but argued that Kisor is a poor vehicle for reconsidering the doctrine because the VA adopted the best interpretation of the regulatory language at issue and would prevail with or without the added layer of deference. The latter claim may well be true, but that’s not a reason to leave Auer undisturbed. If the government is to prevail over James Kisor, it should be without the thumb on the scales that Auer deference affords.
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Past cases linked to in this post:
Auer v. Robbins, 519 U.S. 452 (1997)
Bowles v. Seminole Rock Co., 325 U.S. 410 (1945)
Chevron U.S.A. v. Natural Res. Def. Council, 467 U.S. 837 (1984)
King v. Burwell, 135 S. Ct. 2480 (2015)
Thomas Jefferson University v. Shalala, 512 U.S. 504 (1994)