On June 26, 2019, the United States Supreme Court declined to overturn the Auer doctrine, leaving in place, for now, judicial deference to an agency’s interpretation of its own regulations. Kisor v. Wilkie, 2019 WL 2605554, 588 U.S. --- (June 26, 2019) (“Kisor”)

Under Auer, an ambiguous regulation is left to the interpretation of the agency, unless that interpretation is plainly inconsistent with the regulatory text.

In a splintered 5-4 decision, the Court held in Kisor that stare decisis, or “adherence to precedent” largely guided its decision to uphold Auer; at the same time, however, the Court provided new guidance limiting Auer .

Kisor involved James Kisor, a Vietnam War veteran, who sought disability benefits for PTSD from The Department of Veterans Affairs (“VA”) in 1982. The VA denied his initial claim, so in 2006, Kisor reapplied for benefits. This time, the VA agreed that Kisor was eligible for disability benefits, but only from the date of his reapplication (2006) not the original date (1982) that Kisor sought. The decision about which date the Board should grant benefits from turned on whether records the VA had relating to Kisor’s combat service were “relevant” under the particular VA regulation. The VA administrative law judge decision, later affirmed by The Board of Veterans Appeals, determined that the records were not relevant. Subsequently, the Federal Circuit affirmed, holding that the regulation was ambiguous and under Auer, deferred to the VA’s interpretation of its own ambiguous regulation. Kisor asked the Supreme Court to overrule Auer and abandon the deference that courts grant agencies when interpreting their own rules.

While the Supreme Court declined to overrule Auer, the majority opinion considerably limits judicial deference to an agency’s interpretation of its own rules. After Kisor, courts can defer to an agency’s interpretation of its own ambiguous rules only if five conditions are met:

1. A regulation must be “genuinely ambiguous”, determined after a court exhausts “all traditional tools of construction.”
2. An agency’s interpretation must be “reasonable”; more specifically, the interpretation “must come within the zone of ambiguity the court has identified after employing all its interpretive tools.”
3. The agency’s interpretation must be the agency’s “authoritative” or “official” position. Interpretation must come from actors who can make “authoritative policy in the relevant context.”
4. Deference must be limited to situations that involve an application of an agency’s “substantive expertise”; decisions on issues that traditionally fall within a judge’s knowledge base would not be given deference.
5. The agency’s interpretation must “reflect fair and considered judgment” and not create “unfair surprise” to the regulated parties.Justice Gorsuch’s concurring judgment, which was joined by Justices Thomas, Alito and Kavanaugh argued that the Court should have done away with Auer completely. Nevertheless, Justice Gorsuch concluded that the limitations placed on the Auer doctrine after the majority’s opinion left its applicability “maimed…enfeebled [and] in truth zombified.”

Chief Justice Roberts cast the crucial fifth vote for the majority. In his concurring opinion, he maintained that the distance between the majority and Justice Gorsuch’s concurring judgment “was not as great as may initially appear.” The Chief Justice argued that “the cases in which Auer deference is warranted largely overlap with the cases in which it would be unreasonable for a court not to be persuaded by an agency’s interpretation of its own regulation.” In other words, whether Auer was overturned or not, the Court would arrive at the same place. In the end, stare decisis guided his decision to vote with the majority.

The Court ultimately remanded Kisor to the Court of Appeals to apply the standards outlined in the opinion. While considerable doubt remains about whether opinions issued  by anyone other than an agency’s head, such as those issued by an administrative law judge, are entitled to deference under Kisor’s “authoritative” position test,  the majority opinion, by substantially limited traditional  Auer deference, provides a broad roadmap for private parties to challenge agency regulations.

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