March 19, 2018 / 2:05 PM / 8 months ago

U.S. top court will not hear challenge to federal agency power

WASHINGTON (Reuters) - The U.S. Supreme Court on Monday declined to consider rolling back the wide latitude federal agencies are given to interpret their own regulations in a case that could have bolstered President Donald Trump’s push toward deregulation and curbing agency power.

The court turned away an appeal by Garco Construction Inc of a lower court ruling that deferred to the interpretation of officials at Malmstrom Air Force Base, a nuclear weapons facility in Great Falls, Montana, of its contractor policy. Conservative Justices Clarence Thomas and Neil Gorsuch, who was appointed by Trump last year, dissented from the court’s action, saying they would have heard the case.

The Spokane, Washington-based company, which had a contract to building housing at the base, objected after officials refused to admit workers with criminal records who a subcontractor had hired for the job.

Although the case could have boosted the Trump administration’s plan for broad deregulation, the U.S. Justice Department urged the Supreme Court not to hear it because, although Garco’s criticism has “merits in other contexts,” the Air Force’s reading of its rules was correct.

The case involves a legal doctrine known as “Auer deference” that lets courts defer to an agency’s interpretation of its own rules unless the interpretation is plainly wrong or inconsistent or incompatible with the regulation. Garco said the base did not follow its own rules in violation of the construction contract, and thus were owed no deference in their interpretation.

The dispute had attracted the attention of various states and business groups as it could have undermined the power of federal agencies and departments to write and enforce their own regulations. Conservative justices, including John Roberts and Samuel Alito, have questioned such deference in the past.

Noting the prior skepticism, Thomas wrote in his dissent, joined by Gorsuch, that the court should have reviewed whether its precedents allowing for deference should be overruled, calling such deference “constitutionally suspect.”

Malmstrom Air Force Base is one of three bases that operate Minuteman III intercontinental ballistic nuclear missiles. The August 2006 contract allowed for the use of employees with criminal records, according to court papers. But a subcontractor found some of its workers were barred entry.

Garco said this exclusion amounted to an abrupt change that added full background checks well before a new, written policy on such checks was implemented in October 2007.

The Air Force disagreed and said there was no change in policy over that time because its prior policy encompassed full background checks. It denied Garco’s request for additional payments of more than $450,000 to account for locating, hiring and training personnel to replace the workers with prior criminal convictions.

Conservative and business groups say administrative agencies have accumulated tremendous power, and judicial deference is part of the reason why. Judges should not cede their jobs to these agencies, they argue.

Reporting by Andrew Chung; Editing by Will Dunham

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