By Jeffrey H. Brochin, J.D.
Supreme Court reinforces the limits of Auer deference and emphasizes the critical role courts retain in interpreting rules, while declining to overrule Auer and take over agencies’ expertise-based policymaking functions.
In an appeal involving interpretation of an administrative agency regulation in which the federal court applied the Auer doctrine in deferring to the agency’s decision, the U.S. Supreme Court declined to reverse the long-standing doctrine which arose in Auer v. Robbins, 519 U. S. 452. However, the Supreme Court nevertheless vacated and remanded the case after finding that the federal court declared a Veteran’s Administration regulation "ambiguous" before applying all traditional interpretive tools to bear on that question. The federal court was too quick to assume that Auer deference should apply in the event of genuine ambiguity rather than assessing whether the interpretation was of the sort that Congress would want to receive deference (Kisor v. Wilkie, June 26, 2019, Kagan, J.).
Interpreting an agency rule. In 1982 a Vietnam War era veteran applied for disability benefits from the Department of Veterans Affairs (VA), alleging that he had developed post-traumatic stress disorder (PTSD) as a result of his participation in a military operation. The report of the agency’s evaluating psychiatrist noted the veteran’s involvement in a particular battle, but found that he did not suffer from PTSD, and he was denied benefits. In 2006 after he reopened his claim, the VA agreed that based on a new psychiatric report, he suffered from PTSD, however, the agency granted him benefits only from the date of his motion to reopen, rather than from the date of his first application as he requested. That decision was affirmed by a single administrative judge of the Board of Veterans’ Appeals based on its interpretation of an agency rule that his newly submitted service records were not "relevant" because they did not go to the reason for the initial denial. Subsequent appeals yielded the same ruling.
Application of the Auer doctrine. The court of appeals for the federal circuit also affirmed, but did so based on deference to the Board’s interpretation of the VA rule. The federal court found that the regulation was "ambiguous" as between the two readings after determining that the rule did not specifically address whether "relevant" records were those casting doubt on the agency’s prior rationale, or those relating to the veteran’s claim more broadly. In choosing between the two views, the court decided that neither party’s position struck them as unreasonable, and therefore believed Auer deference was appropriate: The agency’s construction of its own regulation would govern unless plainly erroneous or inconsistent with the VA’s regulatory framework. Applying that standard, the court upheld the Board’s reading and denied retroactive benefits.
Congress’ presumption. The Supreme Court reaffirmed that Auer deference is rooted in a presumption that Congress would generally want the agency to play the primary role in resolving regulatory ambiguities, and that the presumption arises because the agency that promulgated a rule is in the better position to reconstruct its original meaning. Furthermore, the presumption stems from an awareness that resolving genuine regulatory ambiguities often entails the exercise of judgment grounded in policy concerns, an area where agencies have a comparative advantage over courts.
Upholding Auer. In its opinion, the Supreme Court reiterated that it has often deferred to agencies’ reasonable readings of genuinely ambiguous regulations, applying Auer deference (sometimes referred to as Seminole Rock deference, after the companion case, Bowles v. Seminole Rock & Sand Co., 325 U. S. 410 (1945)). The only question presented in the instant case was whether they should overrule the Auer and Seminole Rock decisions, discarding the deference they give to agencies. The Supreme Court answered that question with a "no," declaring that Auer deference retains an important role in construing agency regulations. However, even as the court upheld the doctrine, the court reinforced its limits, ruling that Auer deference is sometimes appropriate and sometimes not, and whether to apply it depends on a range of considerations.
Rationale for remand. Despite rejecting the veteran’s argument that the Auer doctrine is wrong or poorly reasoned, and that it should be overruled on the basis that the administrative state has evolved substantially since Seminole Rock was decided in 1945, the Supreme Court nevertheless vacated the appeals court’s decision and remanded the case for two reasons: first, the federal circuit jumped the gun in declaring the VA’s regulation ambiguous before bringing all of its interpretive tools to bear on the question, and, second, the federal circuit assumed too fast that Auer deference should apply in the event of genuine ambiguity rather than assessing whether the interpretation was of the sort that Congress would want to receive deference. On remand, the court of appeals was instructed to reconsider whether Auer deference was warranted, bearing in mind the principles outlined in the opinion
The case is No. 18-15.
Attorneys: Paul Whitfield Hughes (Mayer Brown LLP) for James L. Kisor. Noel J. Francisco, U.S. Department of Justice, for Robert Wilkie.
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