Kisor v. Wilkie

Legal Justifications for Auer Deference

Kisor asserts that Auer deference—a rule that requires a court to defer to an agency’s reasonable interpretation of its own ambiguous regulation—is wrong as a legal matter. Kisor argues that Auer deference is inconsistent with the Administrative Procedure Act (“APA”), which implements safeguards governing agency rulemaking. Kisor notes that the APA gives agency rules legally binding effect only if they go through notice-and-comment rulemaking, which requires that an agency give the public both notice of the rule that the agency intends to adopt and the right to participate in the rulemaking process. Kisor contends that Auer deference creates the anomalous result of allowing agencies to make legally binding interpretive decisions without going through notice-and-comment rulemaking.

Kisor also maintains that Section 706 of the APA gives the reviewing court—not the agency—the power to determine the meaning of an agency rule. Kisor argues that this provision contemplates that courts—rather than agencies—will resolve ambiguities in agency regulations. Kisor adds that the traditional standards governing the validity of agency action do not apply when it comes to Auer deference. According to Kisor, unexplained changes in an agency’s regulation interpreting a statute receive no deference, whereas unexplained changes in an agency’s interpretation of its own statute receive Auer deference.

Kisor further argues that Auer deference exceeds the rulemaking authority delegated by Congress to agencies. Kisor states that an agency has lawmaking authority only to the extent that it employs the procedures which Congress has specified. Kisor contends that, in this case, Congress delegated power to the VA to make laws through notice-and-comment rulemaking. Kisor maintains that Auer deference exceeds the authority which Congress delegated to the agency by conferring the force of law on interpretations issued by the agency without notice-and-comment rulemaking. Kisor asserts that Auer deference should be overruled because it makes the procedural safeguards of the APA meaningless.

Respondent Robert L. Wilkie, the Secretary of the Department of Veterans Affairs, argues that Auer deference raises two serious legal concerns: it conflicts with the APA’s distinctions between interpretive and legislative rules, and its pre-APA legal basis is unclear and is difficult to justify based on either agency intent or Congressional delegation. Wilkie asserts that Auer deference creates the anomalous result of giving interpretive rules binding legal effect despite the rule failing to go through notice-and-comment rulemaking. Wilkie maintains that the Seminole Rock decision did not invoke any of the Court’s precedents when it held that an agency’s interpretation of its own regulation should be given controlling weight unless it is plainly erroneous.

Wilkie further contends that a legal justification for Auer deference based on the agency’s intent is tenuous since the Court’s interpretive approach in other contexts is often limited to the statute’s text and agency rules are frequently interpreted long after they were initially enacted. Wilkie goes on to restate the congressional delegation justification for Auer deference, which holds that if a regulation which Congress has authorized an agency to issue is ambiguous, Congress is presumed to have intended the agency’s interpretation of that regulation to govern. Wilkie says this justification carries little weight since the ambiguity in the regulation was created by the agency, not Congress.

In contrast to Kisor, Wilkie argues that Auer deference should be limited rather than overruled to address these problems. According to Wilkie, Auer deference should only be given when the agency has reasonably interpreted the ambiguity after all traditional tools of statutory construction have been exhausted. Wilkie also says that Auer deference should be confined to situations where the interpretation: is consistent with the agency’s prior interpretations, provides regulated parties with fair notice, is based on the agency’s expertise, and represents the views of the agency itself. Wilkie states that the agency’s interpretation only has persuasive rather than controlling effect if any of these requirements are violated. Wilkie further notes that these limitations on Auer deference would make it consistent with the APA by effectively requiring significant policy changes to go through notice-and-comment rulemaking rather than interpretations of existing agency regulations. Wilkie therefore urges the Court to limit Auer deference rather than overrule it.

STRUCTURAL Justifications for Auer Deference

Kisor argues that Auer deference violates the APA’s policy goals of predictability and public notice. Kisor contends that Auer deference gives agencies an incentive to create vague regulations which the agency can then interpret as it sees fit, which hampers both predictability and notice. Kisor adds that Auer deference allows agencies to change course quickly by issuing interpretive rules without going through notice-and-comment rulemaking. Kisor emphasizes that the lack of predictability and notice is most harmful to government fairness and impartiality when agencies interpret their regulations according to their own self-interest.

Kisor also asserts that there is little merit to the two major policy justifications of Auer deference: that the agency has special insight into the intent of the rule since the agency drafted it, and that the agency has special expertise in administering its regulatory program. Kisor maintains that agencies do not have any better insight than courts in judging the intent of a particular regulation, since the interpretation of the regulation always turns on sources available to the public and the interpretation is frequently performed years or even decades after the regulation was first enacted. Kisor also asserts that agency expertise is irrelevant since the interpretive question is not what the best policy choice is, but what the regulation actually means. Kisor argues that judges are equally qualified to determine that meaning as regulatory agencies.

Wilkie contends that there are practical benefits to Auer deference which counsel against overruling it. Wilkie says that Auer deference creates stability and predictability. According to Wilkie, Auer deference enables parties to make informed predictions about the interpretation of a regulation by reading the agency’s guidance, rather than predicting how a court will interpret a regulation in every judicial proceeding. Wilkie goes on to say that Auer deference promotes national uniformity in federal law since an agency regulation is given only one interpretation around the country—that is, the agency’s interpretation—whereas overruling Auer deference would result in different courts giving the same regulation different interpretations.

Wilkie further argues that Auer deference serves important reliance interests of agencies. . Wilkie notes that agencies will have difficulty enacting binding interpretations in the absence of Auer deference, since doing so would require notice-and-comment rulemaking which typically takes years and tens of thousands of person hours to complete. Wilkie also asserts that Auer deference enables agencies to utilize their technical and scientific knowledge to administer their complex regulatory schemes. Wilkie further maintains that Auer deference promotes political accountability by giving agencies rather than judges the ability to make policy-driven interpretive decisions.

Stare Decisis and Separation of Powers

Kisor asserts that stare decisis does not require that the Court refrain from overruling Auer and Seminole Rock and carries less weight given the unique circumstances of this case. Kisor emphasizes that special justifications support overruling Auer and Seminole Rock. Kisor points out that Auer deference is a judge-made rule governing judicial decision-making, which has traditionally enjoyed less stare decisis protection then constitutional or statutory interpretation rules. Kisor adds that significant developments in administrative law since Auer and Seminole Rock were decided make stare decisis less binding in this case. According to Kisor, Seminole Rock was decided before the enactment of the Administrative Procedure Act in 1946, and that the Court has never reconciled Seminole Rock with the APA. Kisor also notes that the administrative state is much larger and much more powerful today than it was when Seminole Rock was decided, which justifies a reexamination of Auer and Seminole Rock.

Kisor further maintains that there are no significant reliance interests preventing the Court from overruling Auer deference. Kisor states that private parties probably do not rely on Auer deference since it does not require any particular result for any particular rule. Kisor instead argues that the Auer doctrine is unreliable since it allows agencies to give binding interpretations of their rules after a lawsuit begins, even if that interpretation is contrary to the agency’s previous interpretations. Kisor claims that private parties frequently structure their conduct around the best interpretation of an agency regulation, but Auer deference gives the force of law to any reasonable agency interpretation, regardless of whether it is the best one. Kisor also contends that overruling Auer and Seminole Rock will not upset agencies’ reliance interests since agencies can still give their interpretations of agency regulations the effect of law if the agencies use notice-and-comment procedures. Kisor adds that Auer deference violates the separation-of-powers principle because it gives an agency the legislative power to write a law and the judicial power to interpret that law.

Wilkie argues that stare decisis counsels against overruling Auer and Seminole Rock. Wilkie notes that Congress can change the Auer and Seminole Rock decisions through legislation, which counsels against the Court overruling these cases. According to Wilkie, the question of whether Auer deference makes agency regulations more unpredictable is an empirical question which Congress can analyze and fix through legislative action. Wilkie goes on to claim that stare decisis is less significant for procedural rules, but only because those rules do not affect the primary conduct of parties. Wilkie claims that stare decisis nevertheless counsels against the Court overruling Auer deference since the rule affects the meaning of regulations which affect primary conduct.

Wilkie also maintains that overruling Auer deference would upset significant reliance interests. Wilkie states that private parties have conformed their behavior based on Auer deference, and that overruling it would result in many parties challenging interpretations that had previously received Auer deference on the grounds that such interpretations are not the most persuasive to a particular court. Wilkie claims that his proposed narrowed construction of Auer deference would not upset reliance concerns as much as a complete overruling of Auer and Seminole Rock. Wilkie adds that Auer deference does not violate separation-of-powers principles because it is an exercise of solely an executive power, even though it may take legislative and judicial forms.