Supreme Court Doubles Down on Auer Deference: Implications for Future Environmental Regulation

By Greg Hibbard, Energy Law Fellow

One June 26, the U.S. Supreme Court issued an opinion in Kisor v. Wilkie, written by Justice Kagan, upholding a doctrine that provides significant judicial discretion to federal agency decision-making. This doctrine is commonly referred to as Auer or Seminole Rock deference. With a potential dramatic change in administration in the next election, the Court’s decision begs the question of how Auer deference may play a key role in reversing the effects of four years of agency decisions and policies from the Trump Administration. This question is particularly poignant as it relates to the realm of environmental policy, as federal agency discretion plays a key role across the field of environmental law.   

Although judicial deference to federal agency interpretations of their own regulations has roots as far back as 1945, the 1997 Supreme Court decision in Auer is often credited with solidifying the doctrine. Auer deference is similar to that of the more well-known judicial doctrine of Chevron deference. Chevron deference provides that courts will defer to federal agency interpretations of ambiguous statutes, provided that the agency is charged with effectuating the statute and that the agency’s interpretation of the statute is reasonable. In a similar manner, Auer deference allows federal agencies to fill in the gaps of their own regulations—if the regulations are ambiguous (meaning the regulatory text is open to more than one reasonable interpretation)—with their own reasonable interpretations. While the Kisor decision does not directly implicate the future of Chevron deference, it may provide a signal for how the justices will vote if that issue is brought before the current Court.

In Kisor, the Court considered whether to put an end to Auer deference. The Court reviewed the doctrine in the context of a Department of Veteran Affairs (VA) decision to deny a Vietnam War veteran certain benefits associated with post-traumatic stress disorder. In this specific case, plaintiff Kisor was initially denied benefits in his 1982 application to the VA based on a psychiatric report that found he was not suffering from PTSD. In 2006, Kisor reopened his claim. This time, the VA agreed to provide benefits, in part, because of a new psychiatric report that concluded he was suffering from PTSD. However, the VA interpreted its regulations as only requiring the agency to provide benefits from the date of his reopened claim rather than his initial claim, as the plaintiff had requested.  The lower courts employed Auer deference to uphold the VA decision. All nine Supreme Court Justices agreed with the ultimate judgment to remand the case to the lower court to determine if Kisor should have been granted the benefits in question. However, the justices split along ideological lines when deciding whether to overrule Auer deference. With Chief Justice Roberts providing the swing vote, the doctrine survived with a 5-4 decision. Chief Justice Roberts, Justice Gorsuch, and Justice Kavanaugh each wrote separate concurrences to address the continued use of Auer deference.

Opponents of the Auer doctrine, including Kisor, argue that the doctrine provides an incentive to agencies to issue ambiguous regulations and then later impose interpretations on parties without satisfying the requisite notice and comment procedures. Additionally, Kisor also argued that Auer deference violates the separation of powers protected under the Constitution by granting an inappropriate degree of legislative and judicial function to the executive branch. Justice Gorsuch, appearing to side with Kisor, penned an impassioned concurrence and argued that “[i]t should have been easy for the Court to say goodbye to Auer.” However, Justice Kagan and the majority shot down each argument by emphasizing that certain limitations to the doctrine’s applicability will keep the agency discretion appropriately in check. Some scholars claim that Justice Kagan’s articulation of the doctrine will substantially restrict its application, while others maintain that Justice Kagan merely acknowledged limitations that were previously recognized by the Supreme Court.

While Justice Kagan highlighted multiple limitations of Auer deference, two are particularly noteworthy. First, the majority stressed that in order for an agency to receive deference, its interpretation must represent “fair and considered judgement.” This limitation prohibits courts from providing deference to agencies for convenient litigation positions or post hoc rationalizations. Second, Auer deference must also be applied in a manner that ensures that regulated parties are not met with the unfair surprise of a new interpretation. The majority explicitly noted that the Court has “only rarely given Auer deference to an agency construction conflicting with a prior one.” Therefore, if a new democratic administration retakes the White House in the next election, it will likely be limited in how drastically it can reinterpret regulations in place from the Trump Administration. A new administration would instead likely have to revise Trump Administration regulations through the lengthy notice and comment process.

This dynamic is especially important in the context of the environment. The Trump Administration has made a concerted effort to weaken environmental regulations. If a more environmentally conscious administration takes the reigns after the election, it will remain an uphill battle to re-establish a proper environmental regulatory scheme. Because Auer deference does not necessarily support abrupt changes in regulatory interpretations, a potential democratic administration may have to work with Trump Administration regulations longer than desired until they are replaced.

Discretion can, in many ways, be a double-edged sword depending on whether you agree with the party wielding it. If President Trump wins reelection, continued discretion will likely provide more risk to the environment. However, if a democrat wins the next election, the Kisor decision could turn out to be a big win for the environment. Once President Trump’s regulations are replaced, a new administration would be able to take advantage of Auer deference to fill regulatory gaps without always referring to more lengthy administrative processes. Further, the Kisor ruling appears to signal that Chevron deference will remain available to federal agencies.  While it may be difficult at first, the Supreme Court’s ruling in Kisor should be a key factor in agency efforts to heal and protect our environment in the years to come.