March 27, 2019 / 3:57 PM / 2 months ago

U.S. Supreme Court leans toward limiting federal agency power

WASHINGTON (Reuters) - Conservative U.S. Supreme Court justices on Wednesday expressed skepticism toward the wide latitude courts give federal agencies to interpret their own regulations in a case that could bolster President Donald Trump’s push toward curbing agency power.

FILE PHOTO: The U.S. Supreme Court building is pictured in Washington, U.S., March 20, 2019. REUTERS/Leah Millis/File Photo

The case, involving a Vietnam War veteran’s fight with the Department of Veterans Affairs over retroactive disability benefits, focuses on whether the high court should overrule its own precedents dating back to 1945 that call for judges to defer to administrative agencies’ views on what their own regulations mean.

Ridding judges of a duty to defer could undercut agencies’ ability to issue certain informal policies and rules.

During an hour of arguments, the court’s 5-4 conservative majority seemed more willing to limit such judicial deference - as suggested by U.S. Solicitor General Noel Francisco, the Trump administration’s top Supreme Court lawyer - rather than eliminate it entirely.

Conservative Justice Brett Kavanaugh told Francisco that under the legal doctrine known as “Auer deference,” judges must sometimes side with an agency even when they feel it has made the wrong call on a regulation.

“Doesn’t that trouble you?” Kavanaugh asked.

Liberal justices said judicial deference is important because agencies often have technical expertise that judges do not possess.

Retired U.S. Marine James Kisor, 75, challenged a lower court’s ruling that deferred to an interpretation by the Department of Veterans Affairs, or VA, of its regulations in denying his disability benefits arising from battle-related post-traumatic stress disorder (PTSD).

In his appeal, Kisor said the justices should get rid of Auer deference as courts are best equipped to resolve the meaning of regulations.

Paring back the authority of federal agencies - which can control regulation in many critical areas including energy, climate change and the workplace - has been a key goal of many business and conservative groups, which complain about what they call the “administrative state.”

These critics have said judicial deference has allowed agencies to accumulate power by enabling them to issue vague or burdensome regulations and then enforce them according to the policy preferences of unelected administrators.

The Trump administration has pursued an aggressive policy of scaling back government regulations including on environmental protections, financial services and other industries.

‘IMPORTANT SAFEGUARDS’

Liberal Justice Stephen Breyer questioned Kisor’s lawyer, Paul Hughes, on whether the “possibly millions” of interpretations involving intricate matters that agencies make would have to go through a long, complex process of rulemaking that involves notifying and accepting public comment.

That process “provides important safeguards for the regulated public,” Hughes replied.

Conservative Justice Neil Gorsuch, a fierce critic of agency deference, said people affected by regulations, including veterans and immigrants subject to deportation proceedings, deserve an independent judge to decide what the law means in their cases.

“That seems to me a significant promise, especially to the least and most vulnerable among us, like the immigrant, like the veteran, who may not be the most popular or able to capture an agency the way many regulated entities can today,” Gorsuch said.

Auer deference refers to a 1997 Supreme Court ruling in the case Auer v. Robbins, which extended a 1945 precedent in the case Bowles v. Seminole Rock & Sand Co that had accepted an agency’s take unless it was plainly wrong or inconsistent with the regulation.

Kisor, who served during the Vietnam War installing field telephone networks, participated in a 1965 battle in which several of his fellow soldiers were killed. The VA granted him disability benefits for PTSD in 2006, but refused to pay Kisor retroactively going back to 1983, when he was first denied benefits. At that time, he had not been diagnosed with PTSD.

The case hinges on the VA’s interpretation of records of an individual’s military service it considers “relevant” in order to reconsider a denied claim. The Washington-based U.S. Court of Appeals for the Federal Circuit in 2017 applied Auer deference to side with the VA over Kisor.

Reporting by Andrew Chung; Editing by Will Dunham

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