Caseflicks

Supreme Court of the United States • 2019

Kisor v. Wilkie

588 U.S. 558 | 139 S. Ct. 2400 | 204 L. Ed. 2d 841 | 2019 U.S. LEXIS 4397

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Takeaway

In short, this case preserved Auer deference but made it a last resort: courts must first use every ordinary interpretive tool, and may defer only to a reasonable, authoritative, expertise-based, fair, and considered agency interpretation.

Background

James Kisor, a Vietnam War veteran, first sought VA disability benefits for post-traumatic stress disorder in 1982. Although agency records confirmed his participation in Operation Harvest Moon, a VA psychiatrist concluded that he did not have PTSD, and the VA denied his claim.

In 2006, Kisor moved to reopen the claim with a new psychiatric report diagnosing PTSD and additional service records confirming his combat participation. The VA granted benefits, but only as of the 2006 reopening. Kisor sought benefits dating back to 1982 under a VA regulation allowing reconsideration when the agency later receives “relevant official service department records” that were not previously considered.

The Board of Veterans’ Appeals held that the new records were not “relevant” because they did not address the ground for the original denial: the absence of a PTSD diagnosis. The Federal Circuit found the regulation ambiguous and, applying Auer deference, upheld the Board’s interpretation as not plainly erroneous or inconsistent with the regulation. The Supreme Court granted review to decide whether to overrule Auer and Seminole Rock deference.

Issues

Issue #1

Whether the Court should overrule Auer and Seminole Rock deference to an agency’s reasonable interpretation of its own genuinely ambiguous regulation.

Holding

No. The Court retained Auer deference, but sharply restated and reinforced the doctrine’s limits.

Reasoning

Auer deference rests on a rebuttable presumption about congressional intent. When Congress delegates authority to an agency to issue regulations, it generally expects the agency to resolve genuine ambiguities in those regulations. Agencies may possess special knowledge of the rulemaking scheme, technical expertise, policymaking competence, political accountability, and the ability to promote nationally uniform interpretations.

The Court rejected the claim that Auer conflicts with the Administrative Procedure Act’s command that courts decide questions of law and determine the meaning of agency action. Courts still independently interpret the regulation using all ordinary tools of construction, decide whether genuine ambiguity remains, test whether the agency’s view is reasonable, and determine whether the interpretation deserves deference. When those conditions are met, deferring is itself a permissible way to determine the meaning of an ambiguous rule.

The Court also rejected the argument that Auer lets agencies evade the APA’s notice-and-comment requirements. An interpretive rule does not itself bind the public or furnish the basis for enforcement; enforcement must rest on a valid legislative regulation adopted through notice and comment. Moreover, a court may reject an interpretation that is merely ad hoc, post hoc, unfair, or surprising to regulated parties.

The Court found no sufficient policy or constitutional basis for discarding Auer. It saw little evidence that agencies deliberately draft vague regulations to gain later interpretive freedom, while agencies and regulated parties have substantial incentives to seek clarity. Nor does the doctrine improperly transfer judicial power to agencies, because courts retain responsibility for determining whether deference is available and for enforcing the regulation’s permissible bounds.

Stare decisis supplied an additional, powerful reason not to overrule the doctrine. Auer and Seminole Rock had been applied for decades by the Supreme Court and thousands of lower-court decisions, and abandoning them could unsettle many established regulatory interpretations. Congress remains free to alter the deference rule through legislation, but had not done so.

Issue #2

When may a court give Auer deference to an agency’s interpretation of its own regulation?

Holding

Only after a court finds the regulation genuinely ambiguous, determines that the agency’s reading is reasonable, and concludes that the interpretation is authoritative, expertise-based, fair, and considered.

Reasoning

A court must first exhaust every traditional tool of interpretation—including text, structure, history, and purpose. Difficulty or initial uncertainty is not enough. If those tools yield one best permissible construction, the court must enforce that meaning rather than defer to the agency.

Even if genuine ambiguity remains, the agency’s interpretation must be reasonable. It must fall within the zone of ambiguity identified through the court’s independent interpretive analysis; Auer does not permit an agency to adopt a reading outside the regulation’s text, structure, and purpose.

The agency’s view must be its authoritative or official position, expressed by actors and through channels that are understood to make policy in the relevant context. An informal statement by a lower-level employee, for example, ordinarily cannot receive controlling weight.

The interpretation must implicate the agency’s substantive expertise. Deference is most appropriate where resolving an ambiguity requires technical knowledge, programmatic experience, or policy judgment that agencies are better situated than courts to exercise. It is less appropriate for questions that fall within ordinary judicial competence or another agency’s domain.

Finally, the interpretation must reflect the agency’s fair and considered judgment. Courts should not defer to convenient litigating positions, post hoc rationalizations, abrupt reversals that upset reliance interests, or novel interpretations that create unfair surprise for regulated parties. An interpretation that fails these requirements may receive only whatever persuasive force it earns under Skidmore.

Issue #3

Whether the Federal Circuit properly deferred to the VA Board’s interpretation of “relevant” service records in Kisor’s benefits case.

Holding

No. The Court vacated and remanded because the Federal Circuit found ambiguity and granted deference too quickly.

Reasoning

The Federal Circuit treated the regulation as ambiguous largely because both Kisor’s and the VA’s readings seemed reasonable. That was insufficient. Before considering deference, the court had to conduct a serious analysis of the regulation’s text, structure, history, and purpose to decide whether the VA’s reading—or Kisor’s—was the only permissible construction.

The Federal Circuit also assumed that, if ambiguity existed, the Board’s interpretation automatically qualified for Auer deference. But the VA Board’s individual decisions may not represent the agency’s authoritative, considered judgment: Board members act individually, their decisions are nonprecedential, and they issue decisions at a high volume. On remand, the court had to determine whether this particular interpretation met Auer’s requirements for authoritative agency action.

Concurrences

Chief Justice Roberts

Reasoning

Chief Justice Roberts joined the parts of the Court’s opinion that preserved Auer on stare decisis grounds and established the doctrine’s limits. He emphasized that the practical distance between the Court and Justice Gorsuch was narrower than it appeared. The Court’s prerequisites for deference—genuine ambiguity, reasonableness, an authoritative and expertise-based interpretation, fair and considered judgment, and protection against unfair surprise—substantially overlap with the factors that make an agency’s view persuasive under Skidmore.

He nonetheless maintained that there remains a conceptual difference between concluding that a court should be persuaded by an agency’s interpretation and concluding that the court should defer to it. He also stressed that the decision concerned agency interpretations of their own regulations, not Chevron deference to agency interpretations of statutes.

Justice Gorsuch

Reasoning

Justice Gorsuch agreed with the judgment vacating the Federal Circuit’s decision, but would have formally overruled Auer. In his view, Auer requires judges to accept an agency’s interpretation even when it is not the best and fairest reading of the regulation, creating a systematic advantage for the government as litigant and denying private parties an independent judicial determination of law.

He argued that the Administrative Procedure Act requires reviewing courts to decide all relevant questions of law and determine a regulation’s meaning themselves. In his view, treating a reasonable agency interpretation as controlling abdicates that statutory judicial duty. He also contended that Auer effectively lets agencies change binding rules through interpretations that have not undergone the APA’s required notice-and-comment process.

Justice Gorsuch further argued that Auer threatens the constitutional separation of powers by combining rulemaking, enforcement, and authoritative legal interpretation in the executive branch. Courts should consider an agency’s expertise under Skidmore, but should follow the agency only to the extent its analysis actually persuades the court.

He found stare decisis inadequate to preserve Auer because the doctrine arose from thinly reasoned precedent, has proven unworkable, conflicts with ordinary interpretive practice, and generates no legitimate reliance interest strong enough to outweigh the public’s interest in an impartial judicial forum. He regarded the Court’s new limitations as likely to reduce Auer to a weak doctrine, but criticized the Court for retaining its label and imposing a complicated new threshold inquiry instead of returning directly to independent judgment under Skidmore.

Justice Kavanaugh

Reasoning

Justice Kavanaugh agreed that Auer should be formally retired, but concurred in the judgment because the Court’s narrowed approach would often produce much the same practical result. A court that genuinely exhausts the traditional tools of construction will ordinarily identify the best interpretation of a regulation and thus have no basis to defer to a contrary agency view.

He distinguished true interpretive ambiguity from regulations that deliberately use broad terms such as “reasonable,” “appropriate,” “feasible,” or “practicable.” Those terms can leave agencies policy discretion within the bounds of the regulatory text, but judicial review of that exercise of discretion is better understood under ordinary arbitrary-and-capricious review, rather than Auer deference.

Like Chief Justice Roberts, Justice Kavanaugh stressed that the case did not resolve questions about Chevron deference to agency interpretations of statutes.