On June 26, 2019, in Kisor v. Wilkie, the US Supreme Court decided an important issue in administrative agency law: that so-called Auer deference should not be overturned, and that the doctrine instead will retain an important role in construing agency regulations. Under this doctrine, when an agency's own regulations are ambiguous, a court generally must defer to the agency’s interpretation—subject to important limitations, now clarified in Kisor.
Justice Kagan, writing for the Court, explained that Auer deference is rooted in a presumption that Congress generally prefers that agencies play the primary role in resolving ambiguities in their own regulations. This preference reflects the perceived comparative advantage of agencies over courts—because of the unique expertise of agencies, among other reasons—in making policy judgments.
While upholding the Auer doctrine, Justice Kagan dedicated much of the opinion to circumscribing it, emphasizing the critical role courts retain in interpreting agency rules. Specifically, Auer deference applies only if all of the following conditions are present:
- The regulation at issue is “genuinely ambiguous;”
- The court has exhausted all of the traditional tools of construction (before concluding that the regulation is genuinely ambiguous);
- The agency’s reading is “reasonable”;
- The agency interpretation is its authoritative or official position;
- The agency’s interpretation implicates its substantive expertise—rather than just interpreting a rule that merely parrots the statutory text, for example; and
- The agency’s interpretation reflects the agency’s “fair and considered judgment.”
So cabined, Auer deference is “not quite so tame as some might hope, but not nearly so menacing as they might fear,” wrote Justice Kagan. Thus, the Court underscored that when it applies, “Auer deference gives an agency significant leeway to say what its own rules mean.”
The Court rejected various arguments against the continued viability of Auer—importantly, the claim that Auer incentivizes agencies to write ambiguous regulations, knowing that courts will defer. The Court rejected this claim as lacking any empirical evidence.
Nor could petitioner Kisor overcome stare decisis. Overturning precedent demands “special justification”—more than just an argument that the precedent is wrong. That showing could not be made, given the Court’s long line of precedents underlying the Auer doctrine. (The doctrine is actually based on the 1945 case of Bowles v. Seminole Rock & Sand Co., and thus is also known as Seminole Rock deference.) Further, Congress remains free to override Auer deference by statute.
Although reaffirming the doctrine, the Court remanded for a “redo” by the US Court of Appeals for the Federal Circuit. The underlying case involved an interpretation by the Department of Veterans Affairs (VA), specifically, the Board of Veterans’ Appeals, of the word “relevant,” as it appears in a VA regulation concerning disability claims. Remand was necessary for the Federal Circuit to comply with the Court’s preconditions for Auer deference, before applying the doctrine. Specifically, the Federal Circuit needed to (1) exhaust all of its interpretative tools before declaring the regulation ambiguous, and (2) assess whether the Board’s interpretation reflects “the considered judgment of the agency as a whole” (in the event the regulation is genuinely ambiguous).
Kisor was a close case. Justice Gorsuch, joined by Justice Thomas, Kavanaugh and Alito, concurred in the judgment but lamented the Court’s failure to “say goodbye” to Auer. Chief Justice Roberts wrote a brief concurrence agreeing that Auer should not be overruled—but noting that, in practice, in those limited situations where Auer applies, “it would be unreasonable for a court not to be persuaded by an agency’s interpretation of its own regulation.”