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.