On The Case

Everybody hates Auer: Supreme Court challenge to agency deference draws 25 amicus briefs

(Reuters) - It’s not often that the AFL-CIO and the anti-union National Right to Work Legal Defense Foundation find themselves in agreement on an overarching legal issue at the U.S. Supreme Court. Or that immigration advocates find common ground with conservative legal groups. But based on amicus filings this week in Kisor v. Wilkie, skepticism about Supreme Court precedent that requires courts to defer to federal agencies’ interpretations of their own ambiguous regulations is so powerful that it crosses ordinary ideological divides.

Just about everyone, it seems, has a problem with what the Supreme Court said in 1997’s Auer v. Robbins – the precedent at stake in the Kisor case. “This is not a right or left issue,” said Paul Hughes of Mayer Brown, counsel of record for James Kisor, a decorated ex-Marine and Vietnam War veteran who petitioned the Supreme Court to revisit Auer deference after the Veterans Administration denied him disability benefits for post-traumatic stress disorder. “This is a good governance issue.”

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No fewer than 25 amicus briefs, many of them on behalf of multiple parties, hit the Supreme Court docket this week in the Kisor case, following Kisor’s Jan. 24 merits brief. Many of them underscored the central themes of Kisor’s argument: Court deference to agencies’ interpretation of their regulations offends separation of powers doctrine because it gives too much power to the executive branch; and undermines the Administrative Procedure Act by incentivizing executive branch agencies to duck formal rulemaking.

As you’d probably expect, conservative legal groups wary of overreaching administrative agencies filed briefs explaining why Auer deference allows the executive branch too much power to set policy in the guise of interpreting regulations. And amicus briefs by state and local government associations and by Utah and 15 other states argue that Auer deference threatens federalism because it allows the executive branch to ignore states’ interests in policymaking, even though state and local governments frequently have to implement those policies.

But I’m going to focus on the briefs you may not have expected – from the AFL-CIO and immigration rights groups – and on some real-world examples of Auer’s impact in briefs from business groups. As Kisor counsel Hughes told me, those briefs show how the precedent he’s trying to overturn “affects a broad range of individuals and business interests.”

Technically, the AFL-CIO brief supports neither party in the Kisor case, but the labor group nevertheless calls on the Supreme Court to disavow Auer’s “indefensible proposition that an agency’s interpretation of its regulations is virtually unreviewable.” Like some other amici, but not Kisor, the AFL-CIO urged the justices to retreat to the standard of deference the Supreme Court established in Auer’s predecessor, 1945’s Seminole Rock v. Bowles. Seminole Rock, by the AFL-CIO’s reading “appropriately balances respect for the agency’s congressionally-delegated authority to interpret its own regulations with the need for judicial oversight.” Auer, by contrast, allows federal agencies to upend long-settled expectations without notice to regulated parties, like the labor group’s members.

The AFL-CIO brief didn’t offer specific examples of agencies resorting to Auer deference to justify policy changes. The National Immigration Justice Center and the American Immigration Lawyers Association - which contend that Auer deference “creates myriad traps for the unwary across most — if not all — federally regulated contexts, and, as amici have learned from experience, particularly undermines efficiency, fairness, and predictability in immigration law – showed receipts. Family members of soldiers serving in the U.S. armed forces are shielded from deportation under 2013 and 2014 policy memos – but the Trump administration has changed the policy. Similarly, the U.S. Citizenship & Immigration Services abruptly changed its policy on medical reports for visa applicants without warning in 2014, causing delays and additional expenses for people awaiting businesses and, in many instances, businesses employing them. “These examples confirm that Auer deference should be set aside because it is fundamentally at war with basic principles of predictability and public notice,” the immigration groups said.

Briefs from business-friendly groups are filled with particulars on Auer’s impact. The amicus brief from the U.S. Chamber of Commerce, Business Roundtable and Association of American Railroads offered “a litany of ‘greatest misses,’” including a recent en banc ruling from the 9th U.S. Circuit Court of Appeals that, according to the Chamber and its fellow amici, exposes businesses to staggering damages claims by permitting the Department of Labor to remake its regulations for employees who receive tips.

A brief from the National Association of Home Builders, the National Association of Manufacturers and several other trade groups cited a 2015 ruling that granted the FDA Auer deference on control of exclusive rights to a pharmaceutical product, a decision that cost the challenger potentially hundreds of millions of dollars. In another case the brief discussed, a court deferred to the U.S. Fish and Wildlife Service on the designation of a critical North Carolina habitat for piping plovers even though the agency’s designation seemed to violate its own regulation against defining boundaries with ephemeral reference points.

The Washington Legal Foundation found examples of supposedly misguided Auer deference to abrupt regulatory reversals by the Board of Immigration Appeals, the Department of Labor, the Environmental Protection Agency, the Department of Education and the Federal Trade Commission. It argues that Auer has allowed these executive agencies to superimpose new policies, in the guise of regulatory interpretation, in important statutory regimes like Title IX, the Clean Air Act and the Fair Labor Standards Act. “Agencies suddenly and radically change how they interpret rules — and then seek deference for those new interpretations,” the WLF brief said. “Agencies use Auer as cover for highhanded, unpredictable, and nakedly political behavior. Auer, therefore, should go.”

There’s lots more interesting stuff in the amicus briefs, including an argument by the New Civil Liberties Alliance that judges are “flouting” their constitutional duties of independence and non-bias when they apply Auer deference. (“These aspects of judicial duty are so axiomatic that they are seldom if ever mentioned or relied upon in legal argument — because to even suggest that a court might depart from its duty of independent judgment or harbor bias toward a litigant would be a scandalous insinuation,” the brief said.) You could certainly spend a good part of the weekend reading about whether overturning Auer necessarily endangers the Supreme Court’s precedent in 1984’s Chevron v. Natural Resources Defense Council, which requires court deference to agencies' interpretations of ambiguous statutes. (I’ll save you some time: Most of the briefs argue that Chevron deference, unlike Auer deference, is grounded in Congress’ delegation of authority to agencies so it’s less of a separation-of-powers problem.)

The big unanswered question in the Kisor case, as I’ve said, is how robustly the Justice Department will defend Auer deference. DOJ avoided endorsing broad deference to agency policymaking-by-interpretation in its brief opposing Supreme Court review. But it hasn’t formally indicated that it will abandon defense of the Supreme Court precedent by, for instance, asking the justices to appoint someone to oppose Kisor’s arguments.

We’ll find out later this month what the Justice Department has to say and whether amici turn up to support its position. The Kisor case is scheduled to be argued on March 27.