Unearthing the Lost History of Seminole Rock

• Jurisdiction: United States,Federal
• Publication year: 2015
• Citation: Vol. 65 No. 1

Unearthing the Lost History of Seminole Rock

Sanne Knudsen

Amy Wildermuth

UNEARTHING THE LOST HISTORY OF SEMINOLE ROCK

Sanne H. Knudsen^* Amy J. Wildermuth^**

In 1945, the Supreme Court blessed a lesser-known type of agency deference in Bowles v. Seminole Rock. Also known as Auer deference, it affords deference to agency interpretations of their own regulations. Courts regularly defer to agencies under this doctrine, regardless of where the interpretations first appear or how long-standing they are.

Recently, members of the Supreme Court have signaled a willingness to reconsider, and perhaps jettison, Seminole Rock. Our work supports this kind of reconsideration. Seminole Rock has been widely accepted but surprisingly disconnected from any analysis of its origins and justifications. This Article—the first historical explication of Seminole Rock deference—argues that Seminole Rock cannot support the theoretical weight that subsequent courts and evolving administrative law doctrines have complacently put upon it. Seminole Rock was the product of its time—the 1940s, an era of war-time price controls and a new age of administrative law. Later cases wrongly divorced Seminole Rock from that context.

This Article documents the untethering of Seminole Rock. It shows how, in the 1960s and 1970s, alongside an expanding administrative state, the doctrine transformed into a more mechanical and highly deferential form of agency deference. It further shows that this transformation is marked by a consistent lack of scholarly or judicial reflection on its underpinnings. In doing so, this Article provides new depth to the emerging critiques of Seminole Rock deference and lends critical support for reexamination of the doctrine.

[Page 48]

INTRODUCTION

Citing the 1945 decision of Bowles v. Seminole Rock & Sand Co.,¹ modern courts afford great deference to an agency's interpretation of its own regulations. In describing the basic doctrine, scholars and courts routinely explain, "strong deference is to be paid to an agency's interpretation of its own regulations even if that interpretation was not binding and was not the exercise of law-making powers."² Compared to other forms of deference, some argue, "an agency's interpretation of its own regulations may receive stronger deference than its interpretation of a statutory provision."³

Despite the obvious self-interest of the agency in interpreting its own regulations, modern decisions do not require that these agency interpretations be the result of any particular process for input or for providing notice.⁴ They do not need to have appeared in the Federal Register or even to have been articulated in any publicly available document prior to litigation. In fact, when the Court reaffirmed its view of Seminole Rock deference in the 1997 case

[Page 49]

Auer v. Robbins,⁵ it accepted an agency interpretation that was put forth for the first time in the agency's amicus brief in that litigation.⁶ The doctrine has even been applied to interpretations of an entire regulatory scheme rather than being limited to a particular regulation.⁷ There are, in short, few limits on this doctrine.⁸

All of that may be about to change. In recent terms, the Supreme Court has shown increasing discomfort with Seminole Rock deference. That discomfort has even manifested as express calls for wholesale reexamination of this deference doctrine that has been hornbook law for decades.

Angst over Seminole Rock deference was most visible two years ago in Decker v. Northwest Environmental Defense Center,⁹ when Chief Justice Roberts, joined by Justice Alito, openly invited scholars to take up the question of whether Seminole Rock (Auer) deference should be reconsidered.¹⁰ In his opinion in Decker, Justice Scalia went further, calling for its elimination: "Our cases have not put forward a persuasive justification for Auer deference. The first case to apply it, Seminole Rock, offered no justification whatever—just the ipse dixit that 'the administrative interpretation . . . becomes of controlling weight unless it is plainly erroneous or inconsistent with the regulation.'"¹¹ He also cautioned that the practical benefits of deference in this context are not enough to justify it: "In any case, however great may be the efficiency gains derived from Auer deference, beneficial effect cannot justify a rule that not

[Page 50]

only has no principled basis but contravenes one of the great rules of separation of powers: He who writes a law must not adjudge its violation."¹²

While criticism came to a head in Decker, skepticism of Seminole Rock deference has been building over several Supreme Court cases.¹³ In Talk America v. Michigan Bell Telephone, Justice Scalia, the author of Auer, announced, "while I have in the past uncritically accepted [the Auer] rule, I have become increasingly doubtful of its validity."¹⁴ Justice Scalia then echoed the concern raised by Professor John Manning: "[D]eferring to an agency's interpretation of its own rule encourages the agency to enact vague rules which give it the power, in future adjudications, to do what it pleases."¹⁵ In particular, Justice Scalia expressed concern with applying Auer deference in situations where "an agency . . . has repeatedly been rebuked in its attempts to expand the statute beyond its text, and has repeatedly sought new means to the same ends."¹⁶

Shortly after Justice Scalia raised his concerns, the Court in Christopher v. SmithKline Beecham Corp. refused to afford Seminole Rock deference to the Department of Labor when it changed a long-standing interpretation of whether pharmaceutical sales representatives were exempt from Fair Labor Standards Act wage and hour requirements.¹⁷ The Court held that deference should not be accorded when "there is reason to suspect that the agency's interpretation 'does not reflect the agency's fair and considered judgment on the matter in question.'"¹⁸ In reaching this conclusion, the Court in Christopher explained that Auer deference "creates a risk that agencies will promulgate vague and open-ended regulations that they can later interpret as they see fit."¹⁹ This, the Court observed, created fair notice concerns: "[T]o require regulated

[Page 51]

parties to divine the agency's interpretations in advance or else be held liable when the agency announces its interpretations for the first time in an enforcement proceeding and demands deference" would be unfair.²⁰

Scholars criticizing Seminole Rock have raised similar concerns.²¹ Most notably, Manning has warned that "Seminole Rock leaves an agency free both to write a law and then to 'say what the law is' through its authoritative interpretation of its own regulations."²² He has urged the Court to "replace Seminole Rock with a standard that imposes an independent judicial check on the agency's determination of regulatory meaning."²³ Similarly, Professor Robert Anthony has argued that Seminole Rock deference should be abandoned because "[the] prospect [of deference] generates incentives to be vague in framing regulations, with the plan of issuing 'interpretations' to create the intended new law without observance of notice and comment procedures."²⁴

Most recently, the Court's decision in Perez v. Mortgage Bankers Ass'n²⁵ leaves little doubt that the Court stands poised to reconsider Seminole Rock deference. In that case, where the Court held that an agency's interpretive rules were not required to undergo notice and comment rulemaking, issues of Seminole Rock deference were not squarely presented. Still, four Justices have now expressed their readiness to reconsider Seminole Rock (Auer) deference in

[Page 52]

an appropriate case: Chief Justice Roberts, Justice Alito, Justice Scalia, and Justice Thomas.²⁶ The full Court also appeared concerned. Footnote 4 of the majority opinion by Justice Sotomayor expressed clear reservations about Seminole Rock (Auer) deference: "Even in cases where an agency's interpretation receives Auer deference, however, it is the court that ultimately decides whether a given regulation means what the agency says. Moreover, Auer deference is not an inexorable command in all cases."²⁷

While the moment is ripe for reconsidering Seminole Rock deference, courts and scholars continue to lack the historical context necessary for that reconsideration. The modern debate as to whether and how to reform Seminole Rock deference remains untethered from its roots and evolution.²⁸ In particular, scholars have yet to carefully consider how Seminole Rock came to take on a life of its own in the lower courts when it was, as Justice Scalia has observed, backed by little theory at its birth.²⁹

This Article provides the Court with the information that it will need to reconsider Seminole Rock deference. To that end, this Article engages in detailed historical analysis of the evolution of Seminole Rock deference from its inception in 1946 to its acceptance as "axiom of judicial review" in the 1970s.³⁰ Through this historical analysis, this Article shows that the confidence with which courts reflexively apply Seminole Rock deference—a confidence that seems to presume the doctrine has been deliberately developed and carefully examined—is misplaced. Far from being a product of robust debate and deeply theorized roots, Seminole Rock deference is best described as a doctrine that has become untethered from its roots.

As we explain, Seminole Rock began as a doctrine with significant constraints, at a vastly different moment in administrative law. In particular, the doctrine was born in highly specific circumstances of the post-war era of the 1940s. It was applied only in the price control context and only to official

[Page 53]

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.

Over the course of thirty years, Seminole Rock became...