Will Supreme Court Abolish Deference to “reasonable interpretation” in Kisor v Wilkie?

The U.S. Supreme Court recently agreed to hear Kisor v Wilkie, which has the potential to be a blockbuster in the area of administrative law. The question before the Court is whether it should overruleAuer v. Robbins, which hold that courts must defer to an agency’s “reasonable interpretation” of its own ambiguous regulations.

Standard Under Auer v. Robbins

In Bowles v. Seminole Rock & Sand Co., 325 U.S. 410 (1945), the Supreme Court held that, in the face of an ambiguous regulation, “the ultimate criterion” is “the administrative interpretation, which becomes of controlling weight unless it is plainly erroneous or inconsistent with the regulation.” Subsequently, in Auer v. Robbins, 519 U.S. 452 (1997), the Court confirmed the broad deference due an agency’s interpretation of its own ambiguous regulation.

In recent years, Auer has been the subject of frequent criticism, even by members of the Supreme Court. The Court has also chipped away at its application, though never expressly overturning it. Lower courts have also raised concerns, but ultimately continue to apply it because it remains the “law of the land.”

Critics of Auer deference argue that it allows agencies to draft vague and broad regulations and then later clarify them through interpretive rules. This allows federal regulators to get around the notice-and-comment procedures required by the Administrative Procedure Act (APA).

Facts of Kisor v Wilkie

The Petitioner, a Marine veteran, seeks disability benefits for his service-related post-traumatic stress disorder (PTSD). While the Department of Veterans Affairs (VA) agrees that the Petitioner suffers from service-related PTSD, it has refused to award him retroactive benefits. The VA’s decision turns on the meaning of the term “relevant” as used in 38 C.F.R. § 3.156(c)(1).

The Federal Circuit Court of Appeals found that both the Petitioner and the VA both offered reasonable constructions of that term. On that basis alone, the court held that the regulation is ambiguous, and—invoking Auer— deferred to the VA’s interpretation of its own ambiguous regulation.

In his petition for certiorari, the Petitioner argued:

Not only is the question of Auer deference important in its own right, but the frequent criticism of Auer deference by Members of this Court has caused substantial confusion in the lower courts. Ultimately, the Court should abandon Auer. And this case is a suitable vehicle for doing so.

Arguments Before the Supreme Court

The Supreme Court has agreed to consider the following question: “Whether the Supreme Court should overruleAuer v. RobbinsandBowles v. Seminole Rock & Sand Co., which direct courts to defer to an agency’s reasonable interpretation of its own ambiguous regulation.”

If the Court decides to overturn Auer, it would significantly diminish federal agencies’ regulatory power. Business groups view this as a positive step. “Auer deference harms the business community by encouraging agencies to adopt vague regulations that they can later interpret however they see fit,” the Chamber of Commerce wrote in an amicus brief. “This practice upsets the expectations of regulated parties without the notice provided through formal rulemaking.”

While U.S. Solicitor General Noel Francisco argued that the VA made the correct interpretation in this case, he also acknowledged that everyone would benefit from the Court addressing the Auer standard. According to Francisco, the Petitioner’s request to overturnAueris “an important one that may warrant this court’s review in an appropriate case.”