Killing Auer: The Kisor Campaign

By Katherine Montgomery, Former Associate Editor

A spectrum of cases flood the Supreme Court docket, some garnering more attention than others. It’s only natural to be lured by facts involving warrantless blood draws from an unconscious driver or those of an endangered amphibian battling to secure habitat in areas not yet sustainable for its species. [1] But lurking in the shadows of those captivating case captions, lies what is arguably the most important case the Supreme Court will decide in 2019.

On March 27, the Supreme Court will hear oral argument in Kisor v. Wilkie. [2] While the outcome has important implications for Mr. Kisor, the significance lies in its attack on the administrative state. The case arises from a dispute over retroactive benefits for James Kisor, a Marine who served in the Vietnam War, suffering from service-related post-traumatic stress disorder. [3] At issue were Kisor’s service personnel records and whether the records were “relevant” within the meaning of the regulation in determining benefit eligibility. [4] Ultimately, the Board of Veterans Appeals denied retroactive benefits relying on the agency’s interpretation of the term ‘relevant’ in its own regulation. [5] Kisor then appealed unsuccessfully to the U.S. Court of Appeals for the Federal Circuit which affirmed the Board’s decision. [6]

The court of appeals concluded the term ‘relevant’ was ambiguous when it acknowledged that both Kisor and the Board argued reasonable definitions, but deferred to the Board’s interpretation as controlling. [7] Citing both Seminole Rock and Auer for support, the court explained that it “defer[s] to an agency’s interpretation of its own regulation” unless the agency’s interpretation is “plainly erroneous or inconsistent with the regulation.” [8]

The Supreme Court granted certiorari in Kisor to reconsider the risk inherent in Seminole Rock-Auer deference (commonly referred to as “Auer deference”) – a decision that could overturn unwieldly control of the administrative state.

Born out of the 1945 decision in Bowles v. Seminole Rock & Sand Co., the mechanism by which administrative agencies circumvent limits imposed on agency authority gained serious traction in the 1997 decision, Auer v. Robbins. [9] In a unanimous opinion authored by Justice Scalia, Auer demonstrated an open willingness to defer to an agency’s interpretation unless plainly erroneous or inconsistent with the regulation. [10] It wasn’t until 2011 when Justice Scalia in Talk America v. Michigan Bell Telephone Co. would later call this broad application of the Seminole Rock doctrine, a regret in that he “uncritically accepted.” [11]

In many ways, it can be argued that doctrines of administrative deference are practical (and perhaps required) to the function of the federal government’s ability to regulate big businesses, the environment, and immigration. [12] Under the Chevron doctrine, the agency with the requisite expertise is often considered in a better position to interpret the federal law it administers when the law itself is not clear. [13] In this instance, Congress may delegate the task of filling a gap in the statute to the expertise of the agency through the formal rulemaking process, compatible with Section 706 of the Administrative Procedure Act (APA). [14] Whereas, Auer deference provides for the agency (not Congress) to draft broad or vague substantive rules that the agency later fills in using interpretive rules unchecked by notice and comment. [15]

Auer grants agencies authority to bypass APA safeguards enacted by Congress to protect the public from irregular agency lawmaking. [16] These measures include notice and comment rulemaking; requiring notice, public participation, and agency accountability. [17] Auer deference unilaterally enables agencies to adopt binding interpretations without providing the regulated community notice of what is required. [18] That is, until the very same regulated community becomes blindsided by ad hoc agency interpretations or rationalizations of its very own vague regulations.

In SmithKline Beecham Corp., the Court recognized that Auer “creates a risk that agencies will promulgate vague and open-ended regulations that they can later interpret as they see fit, thereby frustrating the notice and predictability purposes of rulemaking.” [19] Justice Thomas previously explained, “[i]t is perfectly understandable * * * for an agency to issue vague regulations, because to do so maximizes agency power and allows the agency greater latitude to make law through adjudication rather than through the more cumbersome rulemaking process.” [20]

Prior to his passing in February 2016, Justice Scalia offered a solution to the exploitation of Auer that would “restore the balance originally struck by the APA with respect to the agency’s interpretation of its own regulations.” [21] In his view, the solution would be to overrule Seminole Rock – a doctrine relied upon even though it was decided before the APA was enacted. [22] Built upon the doctrine of Seminole Rock, the tremendous impact of Auer and it’s authority to bypass the APA results in a direct conflict with the separation of powers – a principle necessary to protect individual liberty. “Because Auer’s practical effect is to vest in a single branch the law-making and law-interpreting functions, Auer is incompatible with the separation-of-powers principles that animate the Constitution.” [23]

In Decker, Justice Scalia concludes that “however great may be the efficiency gains derived from Auer deference, beneficial effect cannot justify a rule that not only has no principled basis but contravenes one of the great rules of separation of powers: He who writes a law must not adjudge its violation.” [24] Kisor could very well be the decision in restoring the balance Justice Scalia had hoped for.

[1] Mitchell v. Wisconsin, No.18-6210, 2019 U.S. LEXIS 576 (U.S., Jan. 11, 2019) (set for argument Apr. 23, 2019); Weyerhaeuser Co. v. U.S. Fish & Wildlife Serv., 139 S. Ct. 361 (2018).

[2] Kisor v. Wilkie, No. 18-15, 139 S. Ct. 657 (Dec. 10, 2018) (certiorari granted, in part).

[3] Kisor v. Shulkin, 869 F.3d 1360 (Fed. Cir., Sept. 7, 2017).

[4] Brief for Petitioner at *34-36, Kisor v. Wilke, No. 18-15 (U.S., Jan. 24, 2019); The Dept. of Veterans Affairs’ New & Material Evidence regulation, 38 C.F.R. § 3.156(c).

[5] Brief for Petitioner, supra note 4, at *30-36.

[6] Kisor v. Shulkin, 869 F.3d 1360 (Fed. Cir., Sept. 7, 2017).

[7] Id. at 1367-68.

[8] Id. at 1367 (internal quotation marks omitted), (citing Bowles v. Seminole Rock & Sand Co., 325 U.S. 410 (1945), Auer v. Robbins, 519 U.S. 452 (1997)).

[9] Brief for Petitioner, supra note 4, at *12-14; Auer v. Robbins, 519 U.S. 452 (1997).

[10] Kevin O. Leske, A Rock Unturned: Justice Scalia’s (Unfinished) Crusade against the Seminole Rock Deference Doctrine, 69 Admin. L. Rev. 1, *20 (Winter 2017).

[11] Id. at *22; Talk America, Inc. v. Michigan Bell Tel. Co., 564 U.S. 50, 67-68 (2011) (Scalia, J., concurring).

[12] Brianne Gorod, Symposium: Why Kisor is a case to watch, Scotusblog (Jan. 31, 2019, 11:14 AM), https://www.scotusblog.com/2019/01/symposium-why-kisor-is-a-case-to-watch/

[13] Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984).

[14] Administrative Procedure Act, 5 U.S.C. § 706.

[15] Brief for Petitioner, supra note 4, at *62; Perez v. Mortgage Bankers Ass’n, 135 S. Ct. 1199, 1212 (Scalia, J., concurring in the judgment).

[16] Brief for Petitioner, supra note 4, at *52.

[17] Id. at *38-39, 48-49.

[18] Jonathan Adler, Symposium: Government agencies shouldn’t get to put a thumb on the scales, Scotusblog (Jan. 31, 2019, 2:36 PM), https://www.scotusblog.com/2019/01/symposium-government-agencies-shouldnt-get-to-put-a-thumb-on-the-scales/

[19] Brief for Petitioner, supra note 4, at *61-62 (citing Christopher v. SmithKline Beecham Corp., 567 U.S. 142, 158 (2012) (quoting Talk Am., Inc., 564 U.S. 50, 69 (2011) (Scalia, J., concurring)).

[20] Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 525 (1994) (Thomas, J., dissenting).

[21] Perez, 135 S. Ct. at 1213; see also Leske, supra note 10, at *31.

[22] Id. at 1211, 1213; see also Leske, supra note 10, at *31.

[23] Talk America, Inc., 564 U.S. at 68 (2011) (Scalia, J., concurring).

[24] Decker v. Northwest Envtl. Def. Ctr., 568 U.S. 597, 622 (2013) (Scalia, J., concurring in part and dissenting in part).