Jun 27, 2019

Kisor and the Future of Agency Deference

Yesterday, the Supreme Court in Kisor v. Wilkie declined to overrule the doctrine of Auer deference in a narrow 5-4 decision. Still, the decision and concurring opinions clarify the limits of agency deference. What does the decision to retain Auer mean for the future of administrative law and its effect on technology policy?

Under Auer deference, courts typically accept agencies’ interpretations of their own regulations unless they were plainly erroneous. Yet this allows agencies to interpret their rules in such a way that leaves little legal recourse for affected parties.

The Supreme Court’s opinion, delivered by Justice Elena Kagan, does clarify that Auer deference should not always be invoked, that “the possibility of deference can arise only if a regulation is genuinely ambiguous,” and that “not all agency constructions of those truly ambiguous rules are entitled to deference.”

This will likely narrow the application of Auer deference, particularly when coupled with the other clarifications and requirements in the opinion. The majority found that deference to agencies under Auer should not be merely reflexive. Additionally, the ruling emphasized that all “‘traditional tools’ of construction” should be utilized before concluding that an ambiguity truly exists, and that beyond a standard of mere “reasonableness,” courts should “make an independent inquiry into whether the character and context of the agency interpretation entitles it to controlling weight.”

This deference should only be given to “the agency’s ‘authoritative’ or ‘official position,’” not lesser statements, and must implicate the agency’s substantive expertise. Furthermore, in order to receive deference, the reading must be a “fair and considered judgment” and not an after-the-fact rationalization to defend its actions against attack. The Court seems to feel that Auer should apply on a more limited basis, and that its scope should be more cabined than it has been.

Yet Justice Neil Gorsuch, in his concurring opinion joined by Justice Clarence Thomas and in parts by Justices Brett Kavanaugh and Samuel Alito, voices the sentiment of many deference critics that the existing system continues to allow judicial bias to agencies even when an agency’s interpretation is not “the best and fairest reading.” This is particularly problematic as these agencies make a wide range of powerful decisions that can impact everyday life and individual freedoms. Auer deference has been applied to everything from the veterans’ benefits at stake in Kisor to which employees qualify as exempt from overtime regulations to preventing flight sharing.

Gorsuch’s concurrence correctly points out that much of the decision to retain Auer in this case relies on stare decisis, which is the principle of applying the legal principles of earlier cases. He writes that stare decisis is maintaining the doctrine, and that additional requirements do not provide clarity and guidance for the lower court judges who must now apply it.

Additionally, this concurrence offers a powerful argument that Auer deference is incompatible with constitutional separation of powers. Gorsuch states that “Auer represents no trivial threat to these foundational principles” by telling “the judge that he must interpret these binding laws to mean not what he thinks they mean, but what an executive agency says they mean.” He further points out that these officials do not have the impartiality of the judicial system, and that this requirement forces judges to abdicate the responsibility to affirmatively decide what the law is.

Such criticisms are not isolated to this concurrence. Other critics point out that current deference doctrines incentivize agencies to purposefully draft regulations broadly, which can undermine the benefits brought by the separation of powers.

It may surprise some, but this decision could be particularly important for the future of technology policy. As technology outpaces traditional policy making tools, “soft law” approaches like agency interpretations can be useful tools to help solve the policy gap for disruptive technologies such as autonomous vehicles. In other cases, this same soft law approach can devolve into a creeping swamp of regulatory dark matter that is difficult to contain.

Often these interpretations concern matters like whether pâté is a liquid or solid for TSA purposes, as Justice Kagan referenced. Technology is similar because it can fall into an ambiguous gray area within an existing rule. As Justice Kavanaugh discusses in his concurrence, Auer deference can allow agencies to start with their “thumb on the scale” if there is no rigorous consideration to determine if an ambiguity truly exists for deference to apply.

While Kisor retains the principles of Auer deference, it still changes the way the courts will consider administrative actions by putting new emphasis on determining if and when such deference is appropriate. Whether this change truly impacts the way courts consider such decisions by the administrative state remains to be seen.

Photo credit: Nicholas Kamm/AFP/Getty Images

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