In a case that has broad implications, including in the labor and employment arena, the Supreme Court declined to overturn the Auer doctrine, which gives deference to an agency’s reasonable reading of its own genuinely ambiguously regulations.
A unanimous Supreme Court vacated a circuit court decision finding that a ruling of the Board of Veterans’ Appeals was entitled to Auer deference. While declining to overturn Auer, the High Court determined that on remand, the appeals court must reconsider whether Auer deference is warranted. The Court observed that for nearly a century, Congress has let this deference regime work side-by-side with both the Administrative Procedure Act and the many statutes delegating rulemaking power to agencies. Thus, the Court concluded that it would need a particularly “special justification” to reverse Auer. In this instance, the Court concluded that the plaintiff offered nothing to persuade it that courts should take over agencies’ expertise-based, policymaking functions. Chief Justice Roberts, Justice Gorsuch, and Justice Kavanaugh each filed separate concurring opinions (Kisor v. Wilkie, June 26, 2018, Kagan, E.).
In 1982, a Vietnam War veteran sought disability benefits, alleging that he had developed post-traumatic stress disorder (PTSD) from his military service. The Department of Veterans Affairs (VA) denied that request, but in 2006, the plaintiff moved to reopen his claim. This time, the agency agreed that he was eligible for benefits, but it granted benefits only from the date of his motion to reopen, not from the date of his first application. The Board of Veterans’ Appeals affirmed the retroactivity decision based on its interpretation of an agency rule governing such claims.
Applying the Auer doctrine (Auer v. Robbins, 519 U.S. 452 (1997)), the Federal Circuit affirmed the agency ruling. Under that doctrine, the Supreme Court has long deferred to an agency’s reasonable reading of its own genuinely ambiguously regulations. The appeals court concluded that the VA regulation at issue was ambiguous, and it therefore deferred to the Board’s interpretation of the rule.
The plaintiff asked the Supreme Court to overrule Auer, as well as its predecessor Bowles v. Seminole Rock & Sand, 325 U.S. 410 (1945), discarding the deference that those decisions give agencies.
The Supreme Court noted that a court should not afford Auer deference unless, after exhausting all the “traditional tools” of construction, the regulation is genuinely ambiguous. If genuine ambiguity remains, the agency’s reading must still fall “within the bounds of reasonable interpretation.” The court must also make an independent inquiry into whether the character and context of the agency interpretation entitles it to controlling weight. The agency interpretation must in some way implicate its substantive expertise. Finally, an agency’s reading of a rule must reflect its “fair and considered judgment.”
Still, the Court determined that a remand was necessary in this case for two reasons. First, the appeals court jumped the gun in declaring the VA’s regulation ambiguous before bringing all its interpretative tools to bear on the question. Second, the appeals court assumed too quickly that Auer deference should apply in the event of genuine ambiguity, rather than assessing whether the interpretation is of the sort that Congress would want to receive deference.
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