A New Auer: Overview and Analysis of the Supreme Court's Decision in Kisor v. Wilkie.
CONTENTS INTRODUCTION I. THE UNDERLYING PROCEEDINGS II. THE NEW AUER A. The Opinion of the Court B. Gorsuch's Concurrence C. Roberts's Concurrence in Part D. Kavanaugh's Concurrence III. GOING FORWARD IV. CONCLUSION INTRODUCTION
James Kisor is a Vietnam War veteran who served on active duty in the Marine Corps from 1962 to 1966. (1) During his years of service, Mr. Kisor experienced several contacts with snipers, occasional mortar rounds, and enemy attacks while on search operations. (2) As a result of the trauma of combat, Mr. Kisor suffers from post-traumatic stress disorder ("PTSD"), as do eleven percent of male Vietnam War veterans. (3) Although PTSD's symptoms have been described under different names for hundreds of years, Mr. Kisor and his fellow Vietnam veterans were the first American veterans to be diagnosed with this condition. (4) But despite returning home from Vietnam in 1966, Mr. Kisor's PTSD did not qualify him for disability benefits through the Department of Veterans Affairs until 2007, more than forty years after he returned from the war. (5)
As much as Mr. Kisor's story tells of the challenges that veterans face when attempting to secure benefits for PTSD and other psychological conditions, his story also brought to the Supreme Court of the United States a long-awaited challenge to the Court's increasingly deferential treatment of administrative decisions. Specifically, Mr. Kisor's story gave rise to the appropriate context in which the Court could definitively affirm or overrule the long-standing judicial-deference rule under which courts must defer to an agency's interpretation of the agency's own ambiguous regulation unless the interpretation is "plainly erroneous or inconsistent with the regulation" (6)--also known as Seminole Rock or Auer deference. (7) The Supreme Court took up Mr. Kisor's challenge to this rule in Kisor v. Wilkie (8) after the Federal Circuit applied the deference rule in a way that denied Mr. Kisor the earliest possible effective date for his PTSD-related disability benefits. (9)
The extent to which courts defer to agency interpretations of their own regulations bears on our daily lives more than one might expect. Regulations often have a more direct role in defining our legal rights than statutes passed by Congress. (10) Take Mr. Kisor for instance. An agency's interpretation of its own regulation, not a Congressional act, was the dispositive factor in determining whether he was entitled to disability benefits for his PTSD.
The beginning of the twentieth century brought into being the current order of administrative law, known as the "appellate review model." (11) Under the appellate review model, federal courts review an agency's decisions as an appellate court would review a trial court's decisions. (12) By 1945, it was a "'common sense' idea" that an agency occupied a superior position, compared to a court, to determine what it meant when it promulgated a rule, and how it could best effectuate its purposes under a given rule. (13) The Court first expressed that position in Bowles v. Seminole Rock & Co. (14) and confirmed it fifty years later in Auer v. Robbins. (15)
In Seminole Rock, a crushed-stone manufacturer challenged a regulation promulgated by the Administrator of the Office of Price Administration under the Emergency Price Control Act of 1942. (16) The regulation imposed a wartime "price 'freeze,'" restricting the price sellers could charge to the prices that they charged in March 1942. (17) This general regulation was modified by more specific "refinements and modifications." (18) One of these refinements was Maximum Price Regulation No. 188, which covered the crushed stone at issue. (19) The question before the Court was whether the manufacturer was charging higher prices for its stone than it did in March 1942. (20) The Court began its analysis by setting forth the proper standard of review. Because the Court was reviewing a regulation, it "must necessarily look to the administrative construction of the regulation if the meaning of the words used is in doubt." (21) The Court then noted that although congressional intent or constitutional principles may be relevant when choosing between multiple interpretations, "the ultimate criterion is the administrative interpretation, which becomes of controlling weight unless it is plainly erroneous or inconsistent with the regulation." (22) As a result, a court's "only tools" in interpreting a regulation "are the plain words of the regulation and any relevant interpretations of the [agency]." (23) After determining that the regulation at issue was susceptible to three different interpretations, the Court turned to an agency bulletin that the Administrator issued to wholesalers and retailers, which explained how the highest price should be determined. (24) The Court consequently adopted the interpretation most consistent with the Administration's guidance. (25)
Half a decade later, in Auer v. Robbins, (26) Justice Scalia wrote the opinion for a unanimous Court re-affirming the rule of Seminole Rock. The Auer Court deferred to the Secretary of Labor's interpretation of his own regulations regarding whether employees were entitled to overtime pay under the Fair Labor Standards Act of 1938 (FLSA). Because the Secretary interpreted his own regulation, the Court focused its analysis on whether the interpretation was "plainly erroneous or inconsistent with the regulation." (27) Directly at issue was whether the employees were paid on a "salary basis" or were considered '"bona fide executive, administrative, or professional' employees" within the meaning of the regulation. (28) Satisfying these requirements would disentitle the employees to overtime pay under the FLSA. Under the FLSA and the Secretary's regulations, however, employees who were otherwise paid on a salary basis were still entitled to overtime pay if their compensation was subject to a reduction based on the quality or quantity of their work. (29) But pay deductions for disciplinary reasons was an exception to this exception. The respondent-employees argued that the Secretary's application of this disciplinary exception was an "unreasonable interpretation of the statutory exemption" because public-sector employees have fewer alternatives for discipline. (30) The Secretary, on the other hand, argued that employees subject to pay adjustments for disciplinary reasons "do not deserve exempt status" because they are not "true 'executive, administrative, or professional' employees." (31) According to the Secretary, true executive, administrative, and professional employees are not disciplined by "piecemeal deductions" in pay. (32)
The Court began its analysis by first citing to Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., (33) in which the Court had recently held that courts must defer to an agency's permissible interpretation of an ambiguous statute. (34) Specifically, the Court stated, "[b]ecause Congress has not 'directly spoken to the precise question at issue,' we must sustain the Secretary's approach so long as it is 'based on a permissible construction of the statute.'" (35) Although the respondent-employees advanced an interpretation different from that of the Secretary, the Court concluded that the language of the regulation did not compel the respondent-employees' interpretation. (36) The Court deferred to the Secretary's interpretation because the salary-basis test was "a creature of the Secretary's own regulations," and consequently, the Secretary's interpretation was "controlling unless 'plainly erroneous or inconsistent with the regulation."' (37) The Secretary's interpretation "easily met" the "plainly erroneous" standard because the regulation comfortably bore the meaning the Secretary assigned to it. (38)
The respondent-employees made one last attempt to strike down the Secretary's interpretation, arguing that it was not subject to deference because it was advanced in a legal brief. (39) The Court swiftly rejected this argument, however, emphasizing that "[t]he Secretary's interpretation is in no sense a 'post hoc rationalizatio[n]' advanced by an agency seeking to defend past agency action against attack." (40) There was "no reason to suspect that the interpretation [did] not reflect the agency's fair and considered judgment." (41) And lastly, the Court rejected the respondents' argument that the Secretary's regulation should be construed narrowly against the employer. According to the Court, that rule of construction governed only judicial interpretations of statutes and regulations, and should not be applied as a "limitation on the Secretary's power to resolve ambiguities in his own regulations." (42) Because the Secretary is subject only to the limits prescribed by statute, he can write regulations "as broadly as he wishes," and "[a] rule requiring the Secretary to construe his own regulations narrowly would make little sense." (43)
After delivering the unanimous Auer opinion, however, Scalia himself sought to limit the breadth of discretion this rule granted to agencies. (44) And over the coming years, the criticisms continued to accumulate, pushing against the increased discretion agencies gained under federal courts' application of Auer. (45) Indeed, legislators, commentators, and Supreme Court justices have mounted a number of challenges to Auer deference. (46) One of those challenges is that the doctrine creates the opportunity for agencies to expand their own authority by intentionally promulgating ambiguous regulations, granting themselves greater leeway in the permissible range of meanings the language of the regulation can bear. (47) Others suggest that deferring to an agency's interpretation that it advances for the first time during litigation implicates due-process concerns because litigants do not have a fair warning of the agency's position. (48) And even still, some argue that Auer permits...
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