February 4, 2019 9:52AM

Courts Must Reassert Control Over Administrative Agencies

Those who hold the reins of political power will not always be benevolent, self‐​restrained public servants—and the procedural safeguards that seem frustrating and counterproductive in one instance may very well be necessary bulwarks in another. Those safeguards are undermined by the Supreme Court’s requirement that courts give deference to a regulatory agency’s interpretation of its own rules. Under this principle, most recently enunciated in Auer v. Robbins (1997), agencies can change their minds on how to enforce the law without so much as giving the public notice.

Consider James Kisor, a Vietnam veteran whose claim for disability benefits hinged on the interpretation of the term “relevant” in the Board of Veterans Appeals rules of procedure. The Department of Veterans Affairs last amended its rules in a more formal notice‐​and‐​comment proceeding in the mid‐​2000s. During such a process, agencies seek input from the public on proposed rules. During that rulemaking, the VA could have defined evidentiary “relevance,” but it declined to do so. Only when the board denied Kisor’s full claim—eight years later—did the agency announce its interpretation unprompted and without having been briefed on the matter. Obviously, Kisor was given no advance notice of the new “rule”—which was really just a new semantic wrinkle—much less the opportunity to participate in the formulation of regulations that ultimately would curtail his rights.

Mr. Kisor appealed the denial of his claim to the Veterans Court, which sided with the government. He then sought review in the U.S. Court of Appeals for the Federal Circuit, which again sided with the government. The three‐​judge panel determined that the term “relevant” was ambiguous, and that both parties had advanced reasonable interpretations, but applying Auer deference, the agency wins.

In December 2018, the Supreme Court agreed to hear this case, specifically on the question of whether to overrule Auer and presumably go back to granting deference to agency interpretations only to the extent they’re well‐​reasoned an based on special expertise. Cato, joined by Professors Jonathan Adler, Richard Epstein, and Michael McConnell, as well as the Cause of Action Institute, has filed an amicus brief supporting the overruling of Auer. We argue that the judiciary should no longer blindly accept self‐​serving agency interpretations. Instead, judges should make their own independent determinations of regulatory meaning based on a searching and reasoned reading of the regulations at issue.

We argue that Auer, by concentrating lawmaking and law‐​interpretation in regulatory agencies, both offends separation of powers principles and facilitates procedural shortcuts. It deprives regulated entities of fair notice, which is fundamental to the integrity of the law, and also robs administrative policymaking of legitimacy by allowing agencies to avoid public participation in the formulation of their rules. Finally, despite some predictions that overturning Auer will wreak havoc in administrative agencies, we point out that independent judicial assessment will only change the outcome in a small minority of cases.

Overturning Auer is an important step towards reining in the administrative state, so Kisor v. Wilkie may end up being the most important case of the term. The Supreme Court will hear argument on March 27, with a decision expected at the end of June.