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SCOTUS to hear oral arguments over power of government agencies to interpret regulations

By John Breslin | Mar 11, 2019

WASHINGTON (Legal Newsline) - Oral arguments over how much power government agencies can wield when interpreting their own regulations will be made before the U.S. Supreme Court before the end of the month.

At issue is whether courts should defer to a government agency's interpretation of a rule "unless plainly erroneous or inconsistent with the regulation." Arguments are due to be heard March 27.

If the court ultimately strikes down the long-standing doctrine, first stated in the 1945 Seminole Rock case and applied as the Auer deference in 1997, it could have a far-reaching impact on both the crafting of regulations and the ability of government agencies to interpret them.

Conservatives have long questioned the doctrine, arguing that it allows government agencies to draw up, or take advantage of, ambiguously written rules, then bend them to policy positions.

Supporters argue that it allows the government to act more nimbly, and that overturning Auer is part of a larger strategy to "disable public interest regulation," according to Sen. Sheldon Whitehouse (D-RI), who last week filed a friend-of-the-court brief with the Supreme Court.

In the underlying case Kisor v. Wilkie, James Kisor, a Vietnam War veteran, asked for disability benefits dating back to 1983. He claimed the Department of Veteran Affairs mislaid his service records. 

A lower court deferred to the VA on its interpretation of what was relevant information, dismissing Kisor's argument that it should follow the Federal Rules of Evidence and make a decision based on facts that are "more or less probable."

The Administrative Procedure Act of 1946, enacted after Seminole, lays out when the parameters of court review of government agency actions.

Under the Act, the "reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of an agency action.”

Crucially, while the APA states that agencies must carry out notice-and-comment procedures before introducing a rule, it exempts “interpretative rules.” 

In his brief filed with the Supreme Court, Robert Wilkie, the secretary of Veteran Affairs, though the respondent in this case, argued the Auer deference should be "clarified and narrowed."

"The doctrine raises significant concerns," according to the brief authored by Noel J. Francisco, the solicitor general. "First, its basis is unclear. It is not well-grounded historically."

Seminole Rock deference is in tension with the APA's distinction between legislative and interpretive rules, the brief continued.

"Interpretive rules, unlike legislative rules, do not carry the force and effect of law and are exempt from notice-and-comment procedures," Francisco wrote as counsel of record.

"When a reviewing court gives controlling weight to an interpretive rule under Seminole Rock, it arguably treats the interpretive rule as though it were a legislative rule. Seminole Rock deference can also cause practical hardship to regulated parties."

The brief argued for significant limits on deference being given to government agencies, stating that it is inappropriate if the "court determines that the agency's interpretation is unreasonable—i.e., not within the range of reasonable readings left open by a genuine ambiguity in the regulation."

Further, the solicitor general argued, a court should defer "only if the interpretation was issued with fair notice to regulated parties; is not inconsistent with the agency's prior views; rests on the agency's expertise; and represents the agency's considered view, as distinct from the views of mere field officials or other low-level employees."

Whitehouse, in his brief to the court, claimed overturning Auer would upset the "decades-old balance to the advantage of those forces of influence."

"They may prosper by incrementally moving the arena of decision to an overwhelmed, technically inexpert and politically malleable Congress, or to equally inexpert courtrooms, but the public would pay the price," Whitehouse argued.

"This case comes before the court as part of a larger strategy to disable public interest regulation," Whitehouse said, adding the attack on the Auer deference "can be seen in the larger context of the age-old contest between powerful influencers who seek to bend government to their will, and a general public that counts on government to protect it from the influencers."

In its brief the court, National Right to Work Legal Defense Foundation argued that Auer deference "undermines APA-granted administrative due process by causing instability in the law and allowing excessive agency legal and policy oscillation."

The organization added, "Indeed, Auer deference allows an agency to amend a rule without going through notice-and comment rule making and thus lessens the APA’s safeguards. It does this by allowing the agency to draft gap-filled rules and then receive judicial deference when it fills in those gaps in the future."

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