On June 26, 2019, the US Supreme Court handed down a long-awaited decision in Kisor v. Wilkie, a case that challenged Auer deference, a long-standing doctrine of administrative agency law that requires courts interpreting agency rulings and regulations to give substantial deference to an agency’s own interpretation of its pronouncements. The Court’s decision ultimately left Auer deference undisturbed, although the Court reiterated that Auer deference should be applied relatively narrowly and be limited to circumstances in which a court has already exhausted other canons of construction.
The Auer doctrine has its roots in a 1945 US Supreme Court decision, Seminole Rock, in which the Court declared that when “the meaning of [an agency’s regulation] is in doubt,” the agency’s interpretation “becomes of controlling weight unless it is plainly erroneous or inconsistent with the regulation.” Auer, a 1997 US Supreme Court decision, built on and reaffirmed these principles. Justice Kagan, writing for the majority in Kisor, explained that Auer was “rooted in a presumption about congressional intent—a presumption that Congress would generally want the agency to play the primary role in resolving regulatory ambiguities.” With the explosion of regulatory pronouncements since Seminole Rock—and the subsequent explosion of legal challenges that those pronouncements have spawned—numerous courts have relied on Seminole Rock and Auer deference to uphold agency interpretations of their own regulations.1
Many suspected that the Court, with a newly solidified conservative majority of justices, would visit the possibility of overruling Seminole Rock and Auer to rein in the perceived lax judicial oversight of agency interpretations. Indeed, this was the precise issue that Kisor presented—whether or not Seminole Rock and Auer should be overruled. Kisor originally arose as a lawsuit brought by James Kisor, a Vietnam veteran, whose claim for retroactive PTSD disability benefits going back to 1982 was denied by the Board of Veterans’ Appeals. The Board based its denial on its interpretation of various evidentiary regulations issued by the Department of Veterans Affairs. The Court of Appeals for the Federal Circuit affirmed the denial, citing Auer doctrine as the basis for deferring to the Board’s interpretation of the VA’s regulations.
Although the Supreme Court stopped well short of discarding Seminole Rock and Auer, the Court was clear that there are limiting factors on the judicial deference that is owed to agencies. The Court requires that the regulation be “genuinely ambiguous” after the reviewing court has exhausted “the traditional tools of construction.” The Court also instructed that if a genuine ambiguity remains, “the agency’s reading must still be reasonable.” Finally, the Court explained that the agency’s interpretation must be actually issued by the agency, reflect the agency’s “fair and considered judgment,” and be in a matter that implicates the agency’s “substantive expertise.”
After Kisor, Seminole Rock and Auer remain ensconced in American jurisprudence, albeit with clearer limits than in the past. As district and appellate courts begin to interpret ambiguous agency regulations following Kisor, it remains to be seen whether Kisor will have any substantial impact on curtailing the wide latitude afforded to agencies.
This decision was widely watched by heavily regulated industries—i.e., energy, financial services, manufacturing, space and transportation sectors—which have historically raised questions about potential regulatory agency overreach permitted by Auer deference. The Court’s decision leaves open a window for those industries to argue that the scope and extent of Auer deference has been limited.