Kisor v. Wilkie upholds Auer deference to agency interpretations Dan Nagan

On June 26, 2019, the U.S. Supreme Court decided Kisor v. Wilkie, reaffirming the Court’s adherence to stare decisis and the application of Auer deference to agency interpretations of ambiguous regulations but reinforcing the limitations on its application.

In writing the majority, Justice Kagan cautioned against overapplication of Auer deference and instructed that it should not be afforded in every situation. In Kisor, the Court concluded that the lower court prematurely applied Auer deference to the agency’s interpretation of a Department of Veterans Affairs (VA) regulation.

Challenging the Auer deference for disability benefits

The instant case arose because James Kisor, a Vietnam War veteran, had applied for disability benefits for post-traumatic stress disorder from the Department of Veterans Affairs in 1982. His application was denied, but in 2006 he reopened his claim and submitted new supporting documentation.

He was granted benefits for this claim, but the VA, in applying 28 CFR 3.156, only granted these from the date of his motion to reopen. The Federal Circuit applied the Auer doctrine in affirming the decision, concluding that the regulation was ambiguous and deferring to the Board’s interpretation. Kisor then appealed the decision to the U.S. Supreme Court, requesting that the Court overrule Auer.

The legislative intent for deference to agencies

Auer deference developed from the decision in Auer v. Robbins, but was preceded by Seminole Rock deference, and stands for the proposition that when the meaning of a regulation is ambiguous, the promulgating agency’s interpretation controls unless it is plainly erroneous or inconsistent.

Justice Kagan discusses that this doctrine is rooted in a presumption of congressional intent; that Congress would want the agency that promulgated the rules in question to resolve any ambiguities instead of the courts. The Court has held, time and time again, that the drafting agency is typically in the best position to have direct insight into the intended meaning of a rule and thus should be afforded deference by the courts.

However, Justice Kagan warns that Auer deference is not all-encompassing and that not all agency interpretations are owed deference. When the regulation in question is not actually ambiguous, there is no reason to apply Auer deference. Before a court can conclude a regulation is genuinely ambiguous, it must exhaust the “traditional tools” of construction.

This exhaustion entails carefully considering the text, structure, history, and purpose of a regulation as if there were no agency to rely upon. Even when a court determines a genuine ambiguity exists, the agency interpretation must still be reasonable. The interpretation in question must be an official position, rather than an informal statement. It must also emanate from the agency’s substantive expertise; if the agency has no expertise in resolving the ambiguity, then deference would not logically follow.

Finally, Justice Kagan explains that the interpretation must reflect fair and considered judgment to be entitled to Auer deference. While Auer deference is considered to grant agencies significant leeway, it is not frequently applied.

Distinction between Auer and Chevron deference

Justices Gorsuch, Thomas, Kavanaugh, and Chief Justice Roberts concurred in the judgment, primarily taking fault with the majority continuing to uphold Auer deference. Chief Justice Roberts wrote separately to try and bridge the divide between the positions in the majority and Justice Gorsuch’s concurrence. He also emphasized that the decision in no way lent support toward Chevron deference, which is a court’s deference to an agency interpretation of a statute.

Justice Gorsuch’s concurrence argues for the Court to discard Auer deference, and that the limitations imposed by the majority have effectively neutered the doctrine. Justice Kavanaugh wrote in concurrence to agree with Justice Gorsuch on eliminating Auer deference, but also to emphasize two points:

• That a judge can rigorously scrutinize an agency’s interpretation of a regulation and still be deferential
• That the decision does not lend itself toward Chevron deference

While the concurring Justices disagree with upholding Auer deference, it continues to be precedent and the law of the land. As Justice Gorsuch points out, though, this decision may have just set up another occasion for the Court to reexamine the doctrine in the near-future.