Auer deference has had its day in Court.  The question squarely presented in Kisor v. Wilkie is one the Supreme Court has danced around for nearly a decade: should Auer deference be overruled?  Yet instead of the conclusion that Auer is on the chopping block (five of the Justices previously have expressed reservations either about Auer in particular or administrative deference in general), the post-argument analysis suggests that Kisor may be a missed opportunity.

Auer deference involves the dubious administrative law doctrine created by the Supreme Court whereby Article III courts defer to an agency’s interpretation of its own regulations.  In practice, this means that a federal court may ask only whether an agency interpretation of its own regulation is a permissible one.  The query is not, as one would expect, whether an agency’s interpretation is the correct one.  And under the Chevron doctrine, the regulation itself need only be a permissible interpretation of the federal statute. 

This sort of double deference grants federal agencies broad leeway.  Agencies can promulgate broad, open-ended regulations.  They get deference both as to the regulation and its interpretation of that regulation.  For all intents and purposes, the Auer doctrine means that the head of HHS has more final say so about health policy than Congress.  And because of Auer deference, the agency decision has the force of law. 

Just ask Mr. Kisor.  Mr. Kisor is a Marine who served in the Vietnam War and later filed for benefits for PTSD.  In 2006, the Department of Veterans Affairs agreed that Kisor suffered from PTSD, but refused his request to back-date benefits to 1983 on the grounds that certain information was not “relevant” as required by the operative regulation.  The Federal Circuit eventually upheld the Department’s refusal—because Auer required that it defer to the Department’s interpretation of the word “relevant.”

The attorneys representing Mr. Kisor argued that there are two Administrative Procedure Act (“APA”) problems with Auer deference. 

First, under the APA, when Congress delegates lawmaking authority to an agency, the agency must comply with notice-and-comment procedures which allow for public participation and accountability.  Auer deference provides a backdoor whereby agencies can engage in subregulatory interpretation – without going through the notice and comment procedure – and that interpretation still gets the force of law.  Maybe for this reason, there is rare near-unanimity among the regulated constituencies; legal groups representing groups as diverse as immigration, states, business, and veterans all support the Supreme Court overruling Auer deference.

The second APA problem with Auer involves the courts.  Section 706 of the APA vests courts with the responsibility to “decide all relevant questions of law.”   It also provides that “the reviewing court” “shall … determine the meaning or applicability of the terms of an agency action.”  5 U.S.C. § 706.  An agency action includes an agency rule, and thus as Justice Scalia wrote in his concurrence in Perez v. Mortgage Bankers Association, the APA “contemplates that courts, not agencies, will authoritatively resolve ambiguities in … regulations.”

The government admitted that Auer deference “does not clearly flow from the APA” – an understatement to say the least, and yet argued in support of Auer deference.  Worse yet, the government offered no less than a five-factored test it said would control if and when Auer should apply to a case.  In the Government’s view, the application of Auer should depend upon whether: (1) the regulation is ambiguous; (2) the interpretation is inconsistent with the agency’s prior interpretations; (3) regulated parties were provided fair notice; (4) the interpretation sufficiently grounded in the agency’s expertise; and (5) the interpretation represents the views of the agency itself (not merely low-level employees).

As Justice Gorsuch pointed out during oral argument, it is hard to see how this sort of multiple-factored test could promote any sort of stability in the law.       

The argument also revealed a shocking level of comfort with the current level of interpretive authority given to agencies by Auer and Chevron.  Justice Breyer went so far as to suggest that to require courts to interpret regulations under the APA instead of deferring to the agencies – “people who know about it” – sounded like the “greatest judicial power grab since Marbury versus Madison [the case establishing judicial review].”  But of course those courts are vested with the power to interpret law by the Constitution and by the APA.

The questions at issue in Auer could not be more critical.  The administrative state was designed in order to insulate administrative officials from politics.  But politics – both the good and the ugly – are precisely what keeps our elected officials accountable.  It is not hyperbole to suggest we have a threat to our democracy when unelected bureaucrats are given broad authority to decide important policy questions with little direction from Congress and little oversight from the courts.  And under Auer, the agency who promulgated such regulation also gets to interpret it.