A Story of Homecoming: Kisor Helps Auer Find Its Way Back To Seminole Rock

Posted on January 28, 2020 by Sanne Knudsen

Shortly before the new year, when the holidays were in full swing, Kisor v. Wilkie celebrated its half-birthday.  That was quick.  Just six months ago – when short winter days were long summer nights, when peppermint mochas were cold beers served in frosted mugs – the U.S. Supreme Court decided by the narrowest of margins to spare the life of Auer deference, the strong form of deference that for decades had been routinely given to federal agencies for interpretations of their own ambiguous regulations.  In a splintered decision, Justice Kagan penned a decision in Kisor in which Justices Ginsburg, Breyer, and Sotomayor joined. Those four agreed that Auer deference is theoretically justified, that it does not undermine the APA or the Constitution, and that principles of stare decisis counsel for judicial restraint.

Notably, Justice Kagan failed to capture a majority on her justifications for Auer deference. This is important.  Before Kisor, the Supreme Court had never really provided a firm theoretical rationale for Auer deference.  After Kisor, the justifications for Auer deference are even more suspect given that only four Justices even agreed that the doctrine was a theoretically defensible idea.  Given those shaky foundations, it is not surprising that in order to save Auer, in order to earn the critical fifth vote from Chief Justice Roberts, Justice Kagan had to weaken it. She had to articulate a version of Auer that is more cabined in its scope and restrained in its application than has been common practice over the past few decades. In particular, she admonished lower courts to engage in a rigorous and independent review of an allegedly ambiguous agency regulation to determine if it is genuinely as advertised. She describes a framework for review that looks very much like the Chevron doctrine, only with more bite and with a warning label: this is a test that an agency can fail.

After six months, in a time of reflection and resolutions, we can pause from the heft of eggnog and the specter of twinkle lights to ask whether Kisor has made a discernible impact on the landscape of administrative law.  In doing so, we might observe two things: First, there has been an impact. Second, the new Auer is not really new at all.  In order to save Auer, Justice Kagan was not weakening it.  Rather, she was simply helping Auer return to its roots, reminding courts to engage in the rigorous, independent-style review that was commonplace at the time of its creation.  If we are prone to the sentimentality of the season, we might say that Kisor is a story of homecoming.

A bit of history might help us gain some perspective: Auer deference originated not with the 1997 case of Auer v. Robbins, but a half-century earlier with the 1946 case of Bowles v. Seminole Rock & Sand Co.  It began as a doctrine with significant constraints, at a vastly different moment in administrative law under in highly specific circumstances of the post-war era. To that end, it was applied only in the price control context and only to official agency interpretations. And notably, courts applying the doctrine took a heavy hand in examining the text of the regulation—often deferring only after engaging in an independent review of the regulatory text. In other words, the rigorous review that Kisor articulates follows closely the pattern of how courts approached Seminole Rock deference in the early years.

Over the course of thirty years, Seminole Rock became completely divorced from these modest and restrained origins. By the 1970s, it was transformed; it was mechanically applied and reflexively treated as a constraint upon the careful inquiry that one might ordinarily expect of courts engaged in textual analysis. With the transformation of both the doctrine and the administrative state, discomfort with the doctrine grew – first among scholars like John Manning in the mid-1990s and then in the Supreme Court jurisprudence about a decade ago. Eventually, we arrived at the doorstep of Kisor and now appear to have returned nearly full circle to Seminole Rock.

Early signs indicate that Kisor has been more than lip service. Ordinarily, six months is hardly enough time for a change like this to take root in the jurisprudence.  Kisor, however, has already been cited in over 80 judicial opinions.  Influential jurisdictions like the U.S. District Court for the District of Columbia have taken Kisor to heart and are engaging in rigorous textual review of agency regulations before deciding whether deference is warranted.  See, e.g., Stand Up for California! v. DOI  (emphasizing the courts obligation under Kisor to “exhaust[] all the traditional tools of construction to determine the meaning of the regulation”); cf. Am. Tunaboat Ass'n v. Ross (deferring only after engaging in rigorous review). The D.C. Circuit has even cited Kisor for the proposition that Chevron deference should not be “reflexively” given to agency interpretations. Mozilla Corp. v. FCC, (“[W]e do not apply Chevron reflexively, and we find ambiguity only after exhausting ordinary tools of the judicial craft.”).

Other circuits have similarly indicated that Auer deference is to be earned, not afforded as a matter of course. The Ninth Circuit, for example, declined to defer to the Department of Energy in a case alleging a violation of the Energy Policy and Conservation Act's error-correction rule. NRDC v. Perry (engaging in rigorous review of the regulatory language and declining to defer because “the absence of genuine ambiguity in the rule’s meaning precludes us from deferring to DOE’s contrary interpretation.”).  See also Romero v. Barr (citing Kisor to describe the demanding Auer framework, engaging in independent textual analysis, and declining to defer to the agency after finding the regulation unambiguous).

Of course, as with the application of other deference doctrines, the outcomes of cases involving Kisor review will vary greatly.  As the body of cases available for analysis grows, empiricists will undoubtedly have ample data to begin exploring the particular contours of Kisor’s impacts on judicial deference.  For now, however, a bird’s eye view of the early cases indicates that Auer is homeward bound.

The historical analysis provided in this post is based on the work of Sanne H. Knudsen & Amy J. Wildermuth, Unearthing the Lost History of Seminole Rock, 65 Emory L.J. 47 (2015). 

Sanne Knudsen is the Stimson Bullitt Endowed Professor of Environmental Law at the University of Washington.

Never Mind the Road to the Final Four. How About the Road to the Right Case for Revisiting Auer Deference?

Posted on March 17, 2015 by Andrea Field

In its March 9, 2015 decision in Perez v. Mortgage Bankers Association, the Supreme Court held that the Administrative Procedure Act’s notice-and-comment requirement “does not apply . . . to interpretative rules.”  The decision was unanimous, but the concurring opinions of Justices Alito, Scalia, and Thomas express concern with the consequences of the Court’s opinion.   As set out well in the temperate concurrence of Justice Scalia (yes, it really is temperate), in giving the category of interpretive rules Auer deference: 

we do more than allow the agency to make binding regulations without notice and comment.  Because the agency (not Congress) drafts the substantive rules that are the object of those interpretations, giving them deference allows the agency to control the extent of its notice-and-comment-free domain.  To expand this domain, the agency need only write substantive rules more broadly and vaguely, leaving plenty of gaps to be filled in later, using interpretive rules unchecked by notice and comment.

While the three concurring justices are looking down the road for the right case for revisiting what is generally known as Auer deference (i.e., judicial deference to an agency’s interpretation of its own regulations), Seth Jaffe’s next-day blog posting suggests that the road to the right case might be a long one.           

I agree that the Court is unlikely to revisit Auer during the current Administration.  But what happens if those in the next Administration disagree with choices made by the current Administration?  What if they choose to address those disagreements by issuing a tsunami of interpretative rules that reverse both longstanding interpretive rules on which people have relied and/or the newer interpretive rules of the current Administration?  What happens, for example, if the next Secretary of the Department of Labor reverses the interpretive rule upheld by Perez?  Will those adversely affected by such a new interpretive rule stand by without protest?  Will they be satisfied with Justice Sotomayor’s suggestions for recourse (e.g., by trying to persuade courts that the reinterpretations are arbitrary and capricious)? 

I think not.  I think that just a short jog down the road, we will see some particularly bold (or outrageous) re-interpretative rules flowing from agencies unimpeded by fears of the judicial review process.  That will prompt challenges from those supportive of the previous interpretive rules.  And that might well prompt the Chief Justice and one or more other justices to join Justices Alito, Scalia, and Thomas in revisiting Auer deference.  I, for one, would welcome that revisit.    

News Flash: Courts Still Defer to an Agency’s Interpretation of Its Own Rules

Posted on March 10, 2015 by Seth Jaffe

The Supreme Court on Tuesday ruled that, when an agency revises its interpretive rules, it need not go through notice-and-comment rulemaking.  Although the decision, in Perez v. Mortgage Bankers Association, required the court to reverse a long-held line of D.C. Circuit cases, the decision was not difficult; it was, in fact, unanimous.  In short, the Administrative Procedures Act:

states that unless “notice or hearing is required by statute,” the Act’s notice-and-comment requirement “does not apply … to interpretative rules.”

It carves out no exception for revisions to interpretive rules.  Game over.

The truly interesting part of the case was in the concurring opinions.  Both Justices Scalia and Thomas, effectively joined by Justice Alito, argued that Supreme Court decisions giving deference to agencies’ interpretation of their own rules have no constitutional foundation and should be overruled.

This is not the first time that they have made these arguments.  As I noted previously, in Decker v. Northwest Environmental Defense Center, Chief Justice Roberts also suggested that it might be time to revisit what is generally known as Auer deference.  It is notable in Perez that the Chief Justice joined the Court’s opinion.  Absent a change in the make-up of the Court, I don’t see it revisiting Auer any time soon.

Otherwise, the most notable part of the case is a statement from Justice Thomas that, to me, already wins the metaphor of the year prize.  Justice Thomas’s argument against Auer deference, while couched in constitutional terms, is really a screed (parts of which I sympathize with) against the growth of rulemaking and the modern administrative state.  He laments the use of interpretive rules and the decline of formal notice-and-comment rulemaking, and the protections that are required:

Yeti-590x330

Today, however, formal rulemaking is the Yeti of administrative law. There are isolated sightings of it in the ratemaking context, but elsewhere it proves elusive.

True dat. It just doesn't justify abandoning Auer deference in my book.

 


Logging Road Runoff Does Not Require an NPDES Permit: The Supreme Court (For Now) Defers to EPA’s Interpretation of Its Own Regulations

Posted on March 22, 2013 by Seth Jaffe

On Wednesday, in Decker v. Northwest Environmental Defense Center, the Supreme Court ruled that runoff from logging roads does not constitute a discharge from a point source that requires an NPDES permit.  The decision upholds EPA’s interpretation of its own regulations and overturns – what a surprise! – a 9th Circuit decision which had held that permits were necessary for logging runoff.

While EPA got the result that it wanted here, the decision may come back to haunt it in the long run.  The decision was largely based on what is commonly known as Auer deference, the rule that courts will defer to an agency’s interpretation of its own regulations unless that interpretation is “plainly erroneous or inconsistent with the regulation.” After a thorough review of the various relevant regulations and a dip or two into the Oxford American Dictionary, and after noting that the agency’s interpretation need not be “the best one”, the Court found EPA’s interpretation “permissible.”

So, why should EPA be concerned?  Justice Scalia, at his most curmudgeonly, dissented on the ground that Auer should be overturned because it grants too much authority to agencies.  Justice Scalia rejected out of hand what I would have thought would be the simplest and most obvious defense of Auer:  that if courts defer to agency interpretation of statutes under Chevron, shouldn’t they, a fortiori, defer to agency interpretation of the agency’s own rules?  Apparently not.  To Justice Scalia, Chevron deference merely allocates to agencies, rather than courts, the primary duty of interpreting statutes, but allowing agencies to interpret their own regulations has the dangerous result of concentrating both the writing and interpretation function in one branch of government.

I don’t buy it, but it’s important to note that, while Justice Scalia was the sole dissenter, Justice Roberts wrote a concurring opinion, joined by Justice Alito, stating that, while Decker was not the proper case to reassess Auer (a cynic might say that Justice Roberts reached that conclusion because EPA was aligned with industrial interests, rather than the environmental NGOs, in Decker), they were both open to reviewing Auer in the proper case.

Sounds like three votes to me.  Somewhat surprisingly, Justice Thomas joined neither the concurrence nor the dissent.  Justice Kennedy wrote the majority opinion, so he clearly still believes in Auer.  Without Kennedy and with Thomas a cypher at this point, the votes to revisit Auer may not be there.  In any case, it is worth noting that Justice Breyer, who is Justice Scalia’s frequent sparring partner on administrative law issues, took no part in the decision.  I look forward to his spirited defense of Auer when the time comes.