Rule of Law

The Administrative State on Trial

A Supreme Court case offers a chance to rein in the rule of unelected regulators.

Last week, the Supreme Court heard arguments in Kisor v. Wilkie, a case that began as a run-of-the-mill dispute between James Kisor, a Vietnam veteran, and the Department of Veterans Affairs over disability benefits but is now seen as a bellwether of the Court’s willingness to rein in the administrative state. A growing chorus of liberal professors and politicians are warning of dire consequences if the Court rules in favor of Kisor because doing so would require the Court to abandon its longstanding practice of deferring to administrative agencies’ interpretations of their own ambiguous rules—a doctrine known as “Auer deference,” after a 1997 Supreme Court decision. Columbia University law professor Gillian Metzger warns that overturning Auer “would call into question the core legal foundations of the administrative state.” It is true that Kisor may spell the end of Auer deference—but that’s a reason to cheer, not mourn.

Auer deference grew out of an earlier Supreme Court case, Bowles v. Seminole Rock & Sand (1945), involving emergency wartime price controls. But over the years—and now enshrined in Auer—courts have applied this doctrine to informal agency interpretations across the regulatory landscape. In practice, Auer deference means that a court is bound to accept an administrative agency’s interpretation of its own regulations as long as it is a “plausible” reading of the text, even if the court does not believe it is the fairest reading. Thus, what began as a rather limited doctrine in Seminole Rock has now become a wholesale abdication of the judicial function: rather than grappling with the disputed texts, courts have preemptively sided with the agencies, unless their interpretations are manifestly implausible. Such abdication is not merely imprudent; it is a clear violation of the Constitution, which vests in the judiciary the ultimate authority to “say what the law is,” as Chief Justice Marshall observed in Marbury v.Madison (1803).

The flip side of judicial abdication is the empowerment of unelected bureaucrats—another phenomenon that violates separation of powers principles. Under the Constitution, executive agencies can promulgate rules only to the extent Congress has delegated them authority to do so. Even then, federal law prescribes a detailed notice-and-comment procedure for administrative rulemaking designed to give the regulated community advance notice of, and an opportunity to help shape, proposed rules. But under Auer, agencies can evade the constitutional structure by drafting vague rules and then incrementally “interpreting” those rules—via informal guidance or adjudications—to arrive at the bureaucracy’s favored policy goal.

One example of the bureaucratic overreach encouraged by Auer was the Obama administration’s rewriting of the rules governing sex discrimination under Title IX of the Education Amendments of 1972 to cover discrimination based on “gender identity.” The sole authority for this drastic change in law was an unpublished, nonbinding letter written by the Acting Deputy Assistant Secretary for Policy for the Department of Education’s Office of Civil Rights. And yet—citing Auer—the Fourth Circuit Court of Appeals upheld the new “interpretation,” which in turn emboldened the administration to impose the gender-identity policy nationwide via a “Dear Colleague” letter to schools and universities. More recently, in Garco Construction v. Secretary of the Army, the Federal Circuit relied on Auer to enforce an Army interpretation of its rules that retroactively imposed significant costs on certain government contractors.

The most common rationale for Auer is that only agencies have the technical expertise to understand their own regulations. During oral argument in Kisor, Justice Stephen Breyer quoted an FDA regulation “that a particular compound should be treated as a single new active moiety, which consists of a previously approved moiety, joined by a non-ester covalent bond to a lysine group.” And then he added, to much laughter from the audience, “Do you know how much I know about that?”

But what Breyer surely does know is that part of being a judge is applying the law to unfamiliar and complex facts. Medical malpractice, engineering defect, patent infringement, securities fraud, and countless other types of litigation involve highly technical facts. Is Breyer suggesting that judges shrink from these cases as well? No: the complexity of contemporary governance may justify the practice of having experts draft regulations, but it does not usurp the judiciary’s job to interpret those regulations. Besides, many regulatory disputes, including Kisor, involve nontechnical terms such as “relevant.”

The real issue, it seems, is not the relative merits of James Kisor’s case but the fear that his victory presages “a broader attack on the administrative state,” in the words of Brianne Gorod of the Constitutional Accountability Center. Gorod, Metzger, and others worry that if the high court jettisons Auer, it will also overturn so-called Chevron deference, under which the courts defer to an agency’s interpretation of its governing statute. (In fact, Chevron rests on a distinct rationale of implied congressional delegation—a theory not relevant to Auer.) Meantime, Rhode Island Democratic Senator Sheldon Whitehouse calls Kisor a “contest between powerful influencers who seek to bend government to their will, and a general public that counts on government to protect it from the influencers.” Whitehouse’s description, which comes from a friend-of-the-court brief he submitted in the case, is noteworthy in that the senator evidently regards James Kisor—a vet fighting for his benefits—as an emissary of the “influencer class.” 

The Left’s doomsday warnings are difficult to fathom. In a world without Auer, administrative agencies would still be free to issue informal guidance and to advance novel interpretations of regulations via enforcement actions. But when challenged in court, those agencies will need to defend their interpretations on the merits, just like any other litigant. What, one wonders, is the Left afraid of?

The answer lies in raw politics. Ideologically, the courts and Congress are constantly up for grabs. The permanent bureaucracy, on the other hand, is reliably liberal—95 percent of all federal employees who contributed money in the last presidential election gave to Hillary Clinton. Doctrines like Auer that shield bureaucratic agencies from oversight is a reliable way to advance a progressive agenda. The other—much harder—is winning elections.