Deference rule may be on the chopping block

Source: Ellen M. Gilmer, E&E News reporter • Posted: Tuesday, December 11, 2018

The Supreme Court yesterday agreed to review an agency deference standard often criticized in conservative legal circles.

The justices will hear Kisor v. O’Rourke, a case that centers on veteran benefits but has broader implications for the degree to which judges yield to agency decisionmaking. It involves an important administrative law principle often arising in environmental litigation.

The petitioner in the case, a Marine who was denied retroactive disability benefits for post-traumatic stress disorder, asked the high court to overturn a legal standard known as Auerdeference, which a lower court had applied in siding with the Department of Veterans Affairs in the dispute.

Named for a 1997 court case, the standard directs judges to defer to an agency’s reasonable interpretation of its own ambiguous regulation. It’s similar to the more widely known Chevronstandard, which addresses interpretations of ambiguous laws.

Like Chevron, the Auerdoctrine crops up frequently in environmental cases, when EPA and other agencies construe various regulations to support policy initiatives or clarify enforcement plans. Conservative scholars and lawmakers have targeted both standards in recent years, saying they contribute to an uncurbed expansion of the administrative state.

“Getting rid of Auerdeference will mean that regulatory meaning will be locked in once and for all once it’s been interpreted,” said Adam White, head of the C. Boyden Gray Center for the Study of the Administrative State at George Mason University.

If the Supreme Court ultimately agrees to scrap the standard, also known as Seminole Rockdeference, judges will apply more scrutiny to an agency’s interpretation of its rules, making it more difficult for administration officials to mold existing regulations to fit their policy plans. The change would also pressure agencies to write more precise rules in the first place and tighten up existing standards that lack clarity, White said.

“That has huge ramifications for the basic dynamics of modern public administration,” he added.

The result might be less aggressive actions by agencies aware of a heightened degree of judicial scrutiny, Ohio State University’s Chris Walker said. Environmental law professor Patrick Parenteau cautioned that the development would cut both ways on the ideological spectrum.

“Deference is always a matter of perspective,” he said. “It’s good when the agency is doing what you like and bad otherwise.”

Scrapping deference standards has nevertheless been championed primarily by conservatives. Business groups, Republican-led states and others have already weighed in on the Kisorcase, urging the Supreme Court to get involved.

Auerdeference harms the business community by encouraging agencies to adopt vague regulations that they can later interpret however they see fit. This practice upsets the expectations of regulated parties without the notice provided through formal rulemaking,” the U.S. Chamber of Commerce told the court in an amicus brief.

While the high court has declined previous petitions seeking to overturn Auer, it’s been divided in doing so. Earlier this year, Justice Clarence Thomas dissented from one of those denials, calling the doctrine “constitutionally suspect” (Greenwire, March 19).

Justice Samuel Alito has also expressed doubts about the standard. The late Justice Antonin Scalia authored the Aueropinion but later moved to reject it.

“Overturning Auerdeference was a long-time goal of Justice Scalia, who detested any intermediate levels of deference between Chevrondeference and no deference,” said Robert Percival, head of the environmental law program at the University of Maryland. “With two new Justices (Gorsuch and Kavanaugh) who are Scalia acolytes added to the Court, the chances of eliminating Auerdeference are better than ever.”

Agency decisionmaking

Experts say the case’s outcome will have swift impacts on administrative agencies.

“In the environmental law context, I think the largest potential impact could become in the enforcement context, as the various environmental agencies wouldn’t get to claim that their interpretations of their own regulations automatically govern,” said Case Western Reserve University law professor Jonathan Adler.

“It would also mean that agencies have to spend more time ensuring that their own regulations are clear,” he added, “and this would be a good thing.”

But it’s unclear exactly what the Supreme Court might use to replace Auer. It could default to the weaker Skidmorestandard, an earlier approach in which judges gave weight to a variety of factors, including expertise and reasoning, when evaluating an agency’s interpretation. Or the Supreme Court could call for “de novo” review, with judges simply weighing all the factors themselves without deference to an agency’s approach.

Either way, judges would have more flexibility and power to reject an agency’s analysis or preferences.

“Getting rid of Auerdeference will make the Trump administration’s judicial appointments even more consequential,” White said. But, he added, “it will ironically afford President Trump’s regulatory programs much less deference in court.”

For example, efforts by Trump officials to revisit the meaning of “ambient air” under the Clean Air Act or the types of pollution covered by the Clean Water Act would face tougher review in the courtroom if agencies don’t receive Auerdeference.

Environmental lawyer Sean Donahue, who often argues at the Supreme Court, said a second look at the deference standard is not necessarily a bad thing but could be a signal of unwelcome administrative law developments to come.

“The idea of extreme deference to an agency that is itself a promulgator of the regulation, I think that’s a doctrine that deserves to be carefully considered,” he said. “I don’t think the health of the administrative state and a viable environmental regime … depends on deference to a regulatory interpretation.”

But, he continued, some level of judicial respect for agency expertise helps ensure that administrations can be nimble in crafting environmental protections, health standards and other measures. Other efforts to reel in the administrative state could go too far, he said.

For now, all eyes are on the Supreme Court’s handling of the new Kisorcase and the ripple effects to come. White argued that scrapping the doctrine would open up a slew of regulatory interpretations to closer judicial review.

“If Auerdeference goes away,” he said, “litigation will change completely.”