By Anne Sherry, J.D.
The Supreme Court granted certiorari to decide whether to overrule two decisions directing courts to defer to an agency’s reasonable interpretation of its own regulation. The Auer and Seminole Rock cases are cousins to Chevron, which applies to agency interpretations of a statute. Although the petitioner in the case before the Court challenges an adverse ruling by the Department of Veterans Affairs, the Supreme Court’s ultimate decision could affect federal regulators more broadly, including the SEC and CFTC (Kisor v. Wilkie, December 10, 2018).
The Court’s grant of certiorari is limited to the first question presented: “Whether the Court should overrule Auer and Seminole Rock.” The Court will not take up the second question: whether, in the alternative, Auer deference should yield to a substantive canon of construction.
The petitioner is a military veteran who in 1982 filed a claim with the VA for disability benefits. The VA denied the claim, and in 2006 the petitioner sought review of this denial, identifying materials that existed at the time of the denial but had not been associated with his file. Of the two principal mechanisms by which a previously denied claim can be reviewed, the VA granted relief under the provision that does not provide for retroactive benefits, finding that the materials the petitioner had identified did not qualify as “relevant” within the meaning of the other provision.
When the case came before the Federal Circuit, it concluded that both parties offered reasonable constructions of the term “relevant,” indicating that the VA’s regulation was ambiguous on its face. Therefore, it applied Auer deference and affirmed the VA’s application of the regulation because its interpretation was not “plainly erroneous or inconsistent” with the agency’s regulatory framework.
The petitioner urges the Court to overrule Auer because criticism of the doctrine by Supreme Court Justices has caused confusion in the lower courts. Furthermore, he argues, Auer deference is incompatible with due process because it allows agencies a way around the Administrative Procedure Act’s notice-and-comment procedures, and with separation of powers because it transfers judicial power to the Executive Branch. The Chamber of Commerce agreed in its brief as amicus curiae. In opposing certiorari, the Secretary of Veterans Affairs argued that the case would be an unsuitable vehicle on which to consider overruling Auer and Seminole Rock because the outcome of the case would be the same whether or not the agency’s decision was entitled to deference; that determination reflected the best reading of the regulation’s text and purpose.
The case is No. 18-15.