The Supreme Court, via what in effect was a 5 to 4 vote, has ruled that the principle of the Auer case, under which judges are required to defer to agencies’ reasonable interpretations of their own ambiguous regs, should be limited but not overturned. Two of the justices noted that the Court’s decision did not affect “Chevron deference.”
Background—judicial deference to administrative agencies. The Supreme Court has defined various levels of deference to administrative agencies.
In Chevron U.S.A. Inc. v. Natural Resources Defense Counsel, Inc., (S Ct 1984) 467 U.S. 837, the Supreme Court set out a two-step analysis, often referred to as Chevron deference, for a court to apply in reviewing an agency’s construction of a statute that it administers: (1) if the intent of Congress is clear, IRS and the courts must give effect to the unambiguously expressed intent of Congress; (2) if the statute is silent or ambiguous as to a specific issue, the question for a court is whether the agency’s answer is based on a permissible construction of the statute. An agency’s regs are given controlling weight unless they are “arbitrary, capricious, and manifestly contrary to the statute.”
A similar deference applies when an agency interprets its own regs. That interpretation, is “controlling unless plainly erroneous or inconsistent with the reg[s].” (Auer v. Robbins, (S Ct 1997) 519 U.S. 452)
Facts. Petitioner James Kisor first sought disability benefits from the Department of Veterans Affairs (VA) in 1982, alleging that he had developed post-traumatic stress disorder from his military service. The agency denied his initial request, but in 2006, Kisor moved to reopen his claim. The VA this time agreed he was eligible for benefits, but it granted those benefits only from the date of his motion to reopen, not (as Kisor had requested) from the date of his first application. The Board of Veterans’ Appeals – a part of the VA – affirmed that retroactivity decision, based on its interpretation of an agency rule governing such claims.
Lower court cases. The Court of Appeals for Veterans Claims affirmed.
The Federal Circuit also affirmed, but it did so by applying Auer. The Federal Circuit concluded that the VA reg at issue was ambiguous, and it therefore deferred to the Board’s interpretation of the rule. Kisor appealed the decision to the Supreme Court.
Supreme Court limits Auer. The Supreme Court unanimously agreed that the case should be reconsidered by a lower court. The Court concluded that the appeals court had not worked hard enough to determine the meaning of the reg itself.
However, the justices split on the applicability of Auer. Kisor had asked the Court to overrule Auer, discarding the deference that decision gave to agencies. However, by a vote of 5 to 4, in which Chief Justice Roberts and Justices Sotomayor, Kagan, Ginsburg and Breyer formed the majority, the Court voted to retain the precedent of Auer.
Writing for the majority, Justice Kagan stressed that courts should not necessarily defer to an agency’s interpretation of its own reg. Instead, deference should be given only if the agency’s reg is genuinely ambiguous. Where that isn’t the case, the “reg then must mean what it means—and the court must give it effect, as the court would any law.” And, courts should try hard to resolve any ambiguities.
Further, she noted, courts should defer to an agency only where that agency’s interpretations are authentically reasonable. “And even then, not every reasonable agency reading of a genuinely ambiguous rule should receive Auer deference. Rather, a court must also make an independent inquiry into whether the character and context of the agency interpretation entitles it to controlling weight.”
Kagan also cited the principle of precedents. “Kisor asks us to overrule not a single case, but a ‘long line of precedents’— each one reaffirming the rest and going back 75 years or more.”
Justice Gorsuch, generally joined by the other justices in the minority, said that Auer should have been overruled.
Roberts and Kavanaugh refer to Chevron deference. Justices Roberts and Kavanaugh wrote that the issues “surrounding judicial deference to agency interpretations of their own regs are distinct from those raised in connection with judicial deference to agency interpretations of statutes enacted by Congress.” And, they said that that they “do not regard the Court’s decision today to touch upon the latter question.”
Observation. These statements by Justices Roberts and Kavanaugh provide that the current case does not affect Chevron deference.