Agencies in Crosshairs With Unlikely Ally: Trump Administration

Dec. 10, 2018, 2:53 PM

The Trump administration has touted its efforts to rein in agency power, but in a case the U.S. Supreme Court agreed to hear Dec. 10 it’s defending a rule that’s often used to uphold agency actions.

The case could have broad implications for federal agencies, which could see their power to informally craft policy curtailed.

The rule, known as Auer or Seminole Rock deference, can be seen as allowing an agency to give power to itself, Jonathan H. Adler, of Case Western Reserve University School of Law, told Bloomberg Law.

The doctrine, along with another known as Chevron deference, have been in the crosshairs of conservative lawyers for a long time.

Both Justices Neil M. Gorsuch and Brett M. Kavanaugh had been vocal critics of agency deference before joining the court. Chief Justice John G. Roberts Jr. and Justice Clarence Thomas have questioned the rule, too, prompting many court watchers to expect that the doctrines would be tested soon.

Still, the regulation-hostile Trump administration’s decision to defend the rule isn’t really surprising, administrative law professor Jeffrey Pojanowski, of the Notre Dame Law School, told Bloomberg Law.

The case is about which entity in the government gets to say what an ambiguous law means—executive agencies or the courts. That’s something that’s important for the administration of government under all presidents, including Donald Trump, Adler said.

What would be remarkable is for the government to unilaterally give up the power to have its agencies say what the law is, Pojanowski said. And it would make the Trump administration’s efforts to undo Obama-era policies even harder, Adler said.

Chipping Away

At issue is the longstanding rule requiring that courts generally defer to an agency’s interpretation of its own regulations.

This particular case involves a Marine veteran, James L. Kisor, who sought disability benefits for his service-related post-traumatic stress disorder. The Department of Veterans Affairs agreed that he suffers from service-related PTSD but it refused to award him retroactive benefits based on its regulatory interpretation.

Citing Auer, the appeals court eventually deferred to the VA’s interpretation.

A Supreme Court ruling overturning that deference could apply across the board to all executive agencies—not just the VA, Pojanowski said.

The court has previously turned away cases seeking to overrule the doctrine outright, opting instead to chip away at its application, he said.

The court, for example, has refused to defer to an interpretation that is a sharp change in policy, Pojanowski said.

First of Many

Dissatisfaction with the doctrine from conservative lawyers has been growing—particularly during the Obama administration, David L. Noll, a law professor at Rutgers Law School, told Bloomberg Law. Noll pointed in particular to discontent with agency actions implementing the Affordable Care Act.

The court’s agreement to hear the case this time around could signal that at least some of the justices are ready to go further, Adler said.

The stakes, therefore, are high, Pojanowski said.

But the case could be the first of many “rethinking the basic structure of federal administrative law,” Noll said.

How the justices deal with the issue could have implications for other agency deference doctrines that the court has adopted, Adler said.

In particular, what the justices say could suggest that Chevron deference—the rule giving deference to agency interpretations of statutes—could itself be in the cross hairs.

A decision overturning Chevron would curtail Congress’s ability to leave it to agency experts to fill out the details in complex statutory schemes. And like the case here, such a ruling would likely apply across the board to all statutes delegating Congressional power to federal agencies.

Thumb on Scale

But overruling Auer—and possibly Chevron—isn’t a done deal, William Funk, of Lewis & Clark Law School, told Bloomberg Law. It only takes four justices to agree to hear a case, but five to overrule, Funk said.

Moreover, even if the court does eventually roll back agency deference, it won’t be the end of the world, he said.

Prior to Auer, courts informally deferred to agency interpretations, Pojanowski said. The agency’s interpretation would be like a thumb on the scale in close cases, he said.

If the court overrules Auer or Chevron, it’s likely we will just go back to that, Funk said.

The case is Kisor v. Wilkie, U.S., 18-15, review granted 12/10/18.

To contact the reporter on this story: Kimberly Strawbridge Robinson in Washington at krobinson@bloomberglaw.com; Jordan S. Rubin in Washington at jrubin@bloomberglaw.com

To contact the editors responsible for this story: John Crawley at jcrawley@bloomberglaw.com; Jessie Kokrda Kamens at jkamens@bloomberglaw.com

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