This morning the Supreme Court decided the much-anticipated Kisor v. Wilkie case. The Court had granted certiorari in Kisor to decide whether to overrule Bowles v. Seminole Rock & Sand Co., 325 U.S. 410 (1945), and Auer v. Robbins, 519 U.S. 452 (1997). Seminole Rock and Auer are often cited for the proposition that when an administrative agency promulgates a regulation and the regulation is ambiguous, a reviewing court must give “controlling weight” to the agency’s interpretation of the regulation unless the interpretation is plainly erroneous or is inconsistent with the regulation. A number of the Court’s members had cast doubt on the soundness of the Seminole Rock/Auer deference doctrine in recent years, and many observers have predicted that the doctrine’s days are numbered.
Karen Harned and Stephen Vaden will join us today to discuss that morning’s highly-fractured decision in Kisor and its potential implications -- including for the Chevron deference doctrine that applies to agency interpretations of statutory provisions (set forth in Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984)).
Karen Harned, Executive Director, NFIB Small Business Legal Center
Stephen Vaden, General Counsel, United States Department of Agriculture
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Operator: Welcome to The Federalist Society's Practice Group Podcast. The following podcast, hosted by The Federalist Society's Administrative Law & Regulation Practice Group and Environmental Law & Property Rights Practice Group, was recorded on Wednesday, June 26, 2019, during a live teleforum conference call held exclusively for Federalist Society members.
Dean Reuter: Welcome to the Practice Group's teleforum conference call, and today we discuss the Supreme Court's decision in the highly anticipated Kisor case. I'm Dean Reuter, Vice President General Counsel and Director of Practice Groups here at The Federalist Society.
I'm very pleased to welcome two return guests to teleforum conference call. Indeed, they were both featured in a post-argument teleforum we had on this very case on the day it was argued. There's a recording of that teleforum, so if you have any questions after listening to today's teleforum, you can go back and revisit the earlier podcast.
But, please, do note that all expressions of opinion are those of the experts on today's call. Also, this call is being recorded for use as a podcast in the future and will very likely be transcribed and posted on our website.
I mentioned two guests, one of them is going to act as our moderator today. He's Stephen Vaden, General Counsel at the United States Department of Agriculture right here in Washington D.C. Welcome, Stephen Vaden, and, with that, the floor is yours.
Stephen Vaden: Well, thank you, Dean, and thank you for that kind introduction. You have accurately relayed my title, but it's important for me to begin by noting that although that is my position, that is not the capacity in which I join as today's moderator. I am here just as a citizen who's interested in the law, and, therefore, any comments that I make during this teleforum represent only my views. They do not represent either the views of the Department of Agriculture or the larger United States government as a whole.
And joining me is Karen Harned. She serves as the Executive Director of the National Federation of Independent Businesses Small Business Legal Center, and she's held that post since 2002. Before she came to the Legal Center, she was an attorney in Washington D.C., where she specialized in food and drug law. And food and drug law got a shout out in today's opinion from Justice Kagan, so maybe we'll ask Karen about natural moiety later on in our discussion today. Karen received her bachelor's degree from the University of Oklahoma, and her law degree from the George Washington University National Law Center. Karen, thanks for joining me again.
Karen Harned: Thanks for doing this with me, Stephen.
Stephen Vaden: I'm going to begin by giving our listeners a little case background to remind them of how we got here. You may recall that on our last call we talked a little bit about James Kisor. James Kisor is the veteran whose claim for veteran's benefits came to the Court and allowed the Court to decide whether it wished to overrule the Auer deference doctrine. Mr. Kisor first filed his claim for veteran's disability benefits, believe it or not, all the way back in 1982. And, sad to say, at the end of today's court ruling, Mr. Kisor, 37 years later, has still not gotten his answer of whether he's going to get retroactive benefits. And that is the question, whether or not courts should defer to the United States Department of Veterans Affairs and its Board of Veteran's Appeals’ determination about the regulation that governs when there is to be retroactive veteran's benefits. That was the official issue before the Court today.
You would not know that if you read today's opinion because it provides Mr. Kisor with what I'll respectfully call a short shrift, particularly from Justice Kagan's lead opinion for the Court. I know the Justice meant no harm to Mr. Kisor, and she is correct that the major issue at play is whether or not our deference is going to survive another day. But it cannot have made Mr. Kisor feel very well to know not only did he not get the final answer to the question about whether he will receive benefits but that he was told by at least the authoring justice of the lead opinion that nothing about his case has really very much bearing on its decision.
And, if nothing else, wherever one stands when it comes to the question of Kisor deference in the administrative state, in reading Section 1 of the opinion of the Court and its treatment of Mr. Kisor, I think that one can pretty easily understand, unfortunately, why many people have come to believe the administrative state is unfair, because in some ways, the administrative process can be seen as dehumanizing and making people feel as just they're another cog in the wheel who, like Mr. Kisor, according to Justice Kagan, the facts of this case didn't really matter too terribly much. But they matter to us, and it's sad to say that Mr. Kisor is going to have to wait even longer than the 37 years he has already waited to get the final answer to his question, because he did not get a final answer today.
Karen, with that case background, we've got two main parties in this case. We've got Mr. Kisor, who's the petitioner, and we've got the Solicitor General, representing the Department of Veterans Affairs on behalf of the United States. What were their positions at oral argument?
Karen Harned: Right. Well, so the reason, as you referenced, Mr. Kisor did not get retroactive benefits was because the Federal Circuit Court of Appeals invoked what is known as Auer or Seminole Rock deference which means that when an agent -- that courts are to defer to agencies when trying to determine what the meaning of any of their ambiguous rules or regulations are. And so Mr. Kisor said -- and so the Supreme Court took the case specifically to say whether or not they were going to overrule Auer Rock and Seminole -- I mean, Auer and Seminole Rock deference.
And so Mr. Kisor made the arguments for why Auer deference needs to be overruled, and, among other things, he said that it's inconsistent with the Administrative Procedures Act which, as we all know, governs how agencies enact their regulations. He said that if an agency -- under that Act, if an agency puts forward an ambiguous regulation, it's really up to the courts to decide, through the judicial review provision’s that are noted in the Act, rather than the agencies themselves.
And then more broadly, he went on to talk about the constitutional problem, or what he views as the constitutional problems of the Auer deference, namely that by giving it to the ultimate -- by putting the thumb on the scale of the agencies in determining what is and is not ambiguous or what an ambiguous regulation might mean, that really what the doctrine does is deny all of us that might be bringing a claim against the government due process -- our fundamental due process rights. It makes it hard for -- I represent small business owners. We made this point in our brief, too, that it makes us hard to know what is actually required of us if you can't trust that a regulation issued is really, basically, the fox guarding the hen house with the agency charged with enforcing it is also in charge of interpreting it.
And then he goes on and says another constitutional problem [is] with the separation of powers, and that goes to this whole if an agency is writing the rules that it enforces and then has interpretive power, where is the accountability under our separation of powers doctrines?
And then on the other side, it was interesting. We talked a lot about this in our last call that the government didn't completely defend Auer, but it did ask the Court to not overturn it. It put together a test that it thought should be put in its place that would cabin or limit Auer to some degree. And I think as we get into the opinion, I would argue that for the most part the Solicitor got his wish here. It wasn't necessarily exactly what they proposed -- the government proposed, but it was awful lot like it in that rather than getting rid of Auer altogether, they're now trying to limit it and put some new bells and whistles on it so that -- I think the hope is is that lower courts won't use it as much as they have in the past.
Stephen Vaden: Well, that's an excellent summary of the parties' positions, Karen, and so why don't we dive in to where we left off. Where we left off was, we had the question what is the Supreme Court going to give us? Is it going to give us Auer deference, no deference, or new Auer? And the Solicitor General's position might be categorized as new Auer. As you noted, he had five or six limitations that he wanted to put on the deference before it could be utilized. So what was the judgment of the Court? What did we get? Did we get new Auer?
Karen Harned: I think we did, in fact, get new Auer. And it's interesting because one of the reasons -- well, I guess, I would just say more bigger picture looking at the opinion of Justice Kagan versus the opinion of Justice Gorsuch who offered the dissent. And this was a 5-4 decision with Robert is going with the more traditionally liberal ring of the party and the majority in this case. It really is a tale of two, again, views of the state of affairs, really, because it's clear throughout Justice Kagan's opinion that she's comfortable with the administrative state. She trusts the government and really thinks that -- she's more inclined to rely on them than I would be, for sure, and then definitely Justice Gorsuch.
And so then when you read Justice Gorsuch's opinion, it's very much one of the opposite view of we need -- going back to fundamental principles and that -- and really diving more into where did this doctrine come in -- come from in the first place. And so I would just say that is the big picture commentary on the two justices, and that's not necessarily a surprise for anybody that's been following the Court and knows them. But I would say, Kagan did a good job, I thought, of trying to show why Auer deference is important. As you mentioned with the moieties and that's my PD -- PSTD, or PD -- what is that? Well, anyway, post-traumatic stress disorder --
Stephen Vaden: PTSD.
Karen Harned: -- yes, PTSD from my FDA days. She's spends a lot of time, as was in the argument with Breyer on the expertise agencies have and for FDA, what is the moiety and that sort of thing and really tried to make it more about that, I would say, and arguing that Auer really isn't going to apply that often because so often it's going to be just these times where agency expertise truly comes into play. Though, she does broaden it and talks about the fact that don't we want to hear from the author of the regulation and what their intention was when we're trying to determine an ambiguity, and so I would say that's broadening us out a little bit there from just the expertise.
And, in addition, I would say she talks a lot about -- I'm sorry, I lost my thought there. Yeah, just the agencies are better suited than the courts to really resolve a lot of these questions. And, well, then goes in and she systematically talks about how this really isn't a constitutional problem, it's separation of powers, that it's always been envisioned that agencies would have more than just executive functions. They're going to do some rule writing and that sort of thing or some interpreting and that sort of thing. She goes along on how this really doesn't offend the APA and, again, really spends a lot of her time just going through when -- how they're going to cabin it. So definitely agency expertise, unfair --
Stephen Vaden: Well, let's -- let's stop right there and provide a little structure. You've given us a lot to unpack already, and I don't want our audience to get lost, so let's provide a -- let's stop right there and expound a little more on what you've already hit upon.
First, you've noted that this is not a unanimous opinion by any means. It's a very fractured opinion, so for the lead opinion of the Court, as you noted, Justice Kagan was the author and the three other traditionally thought of as more liberal members of the Court joined her opinion in full, those being Justices Ginsburg, Breyer, and Sotomayor. Chief Justice Roberts joined her opinion in pertinent parts, but if you actually go through and take a look at the portions of the opinion that he joined and compare those to the portions of the opinion that he did not join, what you will find is is that when Justice Kagan is talking about the problems with Auer and how it needs to be cabined, as you so aptly put it, Karen, Chief Justice Roberts is along for that ride. But when Justice Kagan is talking about why Auer is good, why it may be needed, and is giving her explanation of different practical problems that she feels saves agencies, if you look up at the top of the page, you'll note that it only says opinion of Kagan, J. because Chief Justice Roberts did not join those -- that portion of the opinion so it does not form a majority opinion but only a plurality where she's talking about why Auer is such a good thing.
I found that dynamic particularly interesting. Justice Roberts was all there for the cabining, but he definitely wasn't there for the “this is why it's necessary.” And the other thing that you noted, Karen, is even if you aren't an administrative law expert, these are a series of opinions which, particularly for such a technical legal topic, are imminently approachable. Both of our major authors, Justice Gorsuch and Justice Kagan, wrote their opinions in a way where those who are untrained as lawyers can pretty easily understand the points that they're trying to get across. I hesitate to call it casual because that wouldn't completely be fair, but they have definitely written their opinions in a way that is very approachable for the non-practitioner to understand the points about which they are arguing. And that will make these opinions, I think, fodder for case books to come and very well read.
But, getting back to where you left off, Karen, most of Justice Kagan's opinion, and certainly the portion that Chief Justice Roberts joined to make it the opinion of the Court, is not talking about when Auer will apply but rather is telling us when Auer will not apply or assuring us of the fact that deference will "often" not apply as she says on page 20 of her opinion. And I counted going through that she gave at least five conditions under which a court is going to have to analyze the agency's interpretation to determine whether Auer deference applies. So I'm going to go through some of those, Karen, and I'm going to ask for your thoughts about whether or not you think it's a real test and a real point of contention as lawyers find themselves in cases now in having to apply the Kisor precedent.
So according the Supreme Court majority, if Kisor -- if Auer deference is going to apply rather, we're going to have to see the following: Number one, it has to be genuinely ambiguous. It can't just be that both parties posit a reasonable interpretation. Instead, according to the Court today, Auer's only going to apply if after exhausting all the traditional tools of statutory construction, we are still left with ambiguity.
And that was actually a point on which the Court faulted the Federal Circuit in Kisor's case. They remanded to the Federal Circuit to determine whether or not the regulation at issue here was actually genuinely ambiguous. What are your thoughts on that particular limiting principle? Do you see it as a real limiting principle? Do you think that now, Karen, when a court goes into regulatory analysis under Auer, it's going to have to engage in a lot of almost statutory-like construction—we'll call it regulatory construction—in order to show its work to prove that Auer should apply?
Karen Harned: Well, that is where, if there's a silver lining, I hope that's the case. I hope that the lower court judges are going to take this decision in earnest and see that so much of the energy was focused on when Auer doesn't apply and that they really have to do the business of being judges and determine ambiguity. As we have heard from Justice Kavanaugh in his past work, prior to joining the bench, he says sometime -- for what is 60-40 ambiguous for one judge may be 40-60 for another, and I think this decision, if it does anything -- well, it does some things positive[ly], but one of the positives would be that I really do think it sends a message loud and clear to the judges below that they want to see meaningful analysis.
And to your point, by pointing out that the Federal Circuit didn't even do it in this case, that's a good example, but I am hopeful, and would like to think, that those that are truly textualists and following the Constitution and the rule of law, judges that are -- many of them that are out there, are going to take this in earnest and we're going to see Auer rear its head less and less as a result. Although there are, and we can talk about that more later, there are some off-ramps when we get to some of these conditions she puts on it.
Stephen Vaden: And in Justice Kagan's formulation -- and I think her formulation struck me. There are many wonderful turns of phrase here, and I think this one is particularly telling with regard to the majority's view of what's going on when we talk about writing regulations and regulatory interpretation. Justice Kagan says that a regulation is generally ambiguous when, and this is a quote, "The law runs out, and policy-laden choice is what is left over," close quote.
So is Justice Kagan referring to this as a lawless exercise when the law runs out? Is that what it is we do in federal agencies?
Karen Harned: Well, and that was the part that I would not see as a bright spot in this opinion, right? That's one of those off-ramps that if you're a judge that wants to defer, you can take that out because what is -- when is it just a policy decision, or a policy decision that we're just trying to reconstruct what the agency was trying to do here. She used an example of TSA and somebody trying to determine whether or not their pâté was a clear liquid or a gel that needs to go through the screening process separately. And reading the examples she gave, there was also one on the ADA, American's Disability Act, and sight line for stadium seating of the disabled when you're at an event where people are going to stand a lot. Those were nice examples, but if I'm a lower court judge and I want to side with the agency, I can just -- you can tie policy to a lot of things. That is not the FDA moiety standard, if you will.
Stephen Vaden: Well, and course that was just the first way she sought to cabin Auer and assure the reader that Auer did not have as big of a bite as has been built up in the discussion of this case prior to today's decision. She also put additional caveats on when Auer should and should not apply. And among those include, she said Auer is only going to apply when an agency is speaking its authoritative voice or giving an official position. Now, what is that? According to Justice Kagan, that's when an agency's position “emanate[s] from those actors, using those vehicles, understood to make authoritative policy in the relevant context.” That's the standard from Justice Kagan.
And there's more to come. She also said that we're not going to defer unless the topic that we're examining is a topic that's fit for agency expertise. If it's not a topic that's fit for agency expertise, it doesn't matter whether or not there's an ambiguity or whether the agency is speaking in its authoritative or official position, there's still not going to be any deference. She gave a couple of examples there, namely, if an agency is interpreting the judicial review provision, for example. Furthermore, there's going to be no post-hoc rationalizations accepted. It must be the fair considered judgment, in her words, of the agency.
And finally, you're going to have to take into account reliance interests with these agency interpretations. In other words, if what you're doing is going to have retroactive effect, it's going to be very hard to get Auer deference.
But there was a lot there and I'd like to unpack some of it with you in those five. Particularly interesting to me, Karen, was -- and I'd like to get your take on this, is some work that was done in footnote number five. So going back to the test, is this a topic fit for agency expertise? She put it in a footnote, but I'm wondering if you think this could be quite powerful for some who wish to challenge agency regulations. She noted that if all an agency regulation did was parrot the statutory text, that's not a fit subject for deference because the agency is not bringing to bear any of its expertise, all it's doing is saying what's already in the statute. And if what we're doing is statutory interpretation, that's the realm of the courts.
Karen Harned: Right, and I -- honestly, Stephen, I actually was unimpressed by that. But maybe it's just because of my personal experience, because I just don't see that as something that we run into that much on these types of issues. So I just don't know -- and maybe you have a better understanding of when that might apply and maybe that's broader than I'm thinking it is. But I view that as not -- I did not view that as that limiting, I guess is what I'd say.
Stephen Vaden: Well, I guess it stuck out to me because I'm amazed at how frequently agency regulations do parrot the statutory text. My thought has always been if it's in the statute, why do you need to put it in the regulation? But maybe that's just an “ag” thing and maybe other agencies don't parrot the text as much, but I'm going to be particularly curious to see how much that plays out.
Perhaps more to your liking, Karen, is page 23 of Justice Kagan's opinion, and here she is speaking with her authoritative voice for the Court. And she says something very interesting. She says an interpretive rule, and that is, of course, what we are talking about here when we're talking about Auer deference, "An interpretive rule itself never forms the basis for an enforcement action," close quote. Enforcement actions must be based on legislative rules. Now, earlier in this administration, The Department of Justice, when Rachel Brand was the Associate Attorney General, put out a memorandum that said effectively just that. The Department of Justice would not be filing any affirmative enforcement actions that were based solely on interpretive rules. Has Justice Kagan said as part of her defense of Auer that the Brand memorandum is now a matter of Supreme Court precedents?
Karen Harned: Well, I hope so. I think, again, these are -- what's frustrating about this opinion in my view is that, yes, you can see it that way and so you can see many judges taking it that way and that's what I hope they do. But I guess -- I also just feel like there's still a lot of -- in many respects this decision, by introducing all of these new, quote/unquote, "limitations," is not giving the clarity that lower courts need, which is what Justice Gorsuch said in his very opening to his dissent. And so I guess on so much of this, Stephen, I feel like it's to be determined: who's the judge, and also just seeing how it gets culturized, I guess, or for lack of a better word, in the courts below. Are they going to take this and say, look, they spent a lot of time telling me not to use it, you know? So maybe I need to do the work or at least pretend that I'm doing the work and show that I'm doing the work in my opinion before siding with an agency. And maybe some -- and so I just, I feel like on, again, that, it's more in the eye of the beholder, and I don't know what in practice that's going to mean.
While we're talking about that, one of the things that I found was on page 15, she's trying to explain what reasonable means and because she's -- she said that one of the agency's reading of its rule must be reasonable for such deference to apply. And she gives -- she says on the middle of 15, “The inquiry on this dimension” -- after going through, and, quite frankly, I even have a note on one of the -- at the beginning of 15 saying what does this even mean when I'm reading part of this paragraph. At the very end of that same paragraph, she goes, "The inquiry on this dimension”—the reasonableness dimension—“does not reduce to any exhaustive test." And I was like, no kidding.
So, again, I feel like this may give you some examples that if your regulation’s right in that framework, you can run to the Court and say Auer doesn't apply. But I also feel like a lot of these tests are going to have to be teased out by the lower courts, and it's just, at this point, too soon to determine if Auer -- how much limitations really will ultimately be placed on Auer in practice.
Stephen Vaden: Well, Karen, as you well know, sometimes when you're not quite sure of what the scope of the majority of the opinion -- wait, what the majority opinion is, it's good to look at the dissent. And, although, Justice Gorsuch's opinion is technically styled concurring in the judgment because he too believes the Federal Circuit's opinion should be reversed, his reasoning is much different. And he certainly came out of the blocks at a high rate of speed, in his opinion. In only the first couple of paragraphs, he accuses the Court of flinching at its opportunity to overrule Auer, but yet he says that Justice Kagan has effectively maimed and enfeebled Auer, and refers to Auer as quote, "zombified." So we got zombies in a Supreme Court opinion. I don't know when that's ever happened before.
He also tells the Court, in quite frank language, that it's time to stop making excuses for judges to abdicate their job of interpreting the law, which is what he sees Auer as. And one wonders, based on the strength of that language, if he limits that feeling to Auer or has designs on something else like Chevron. And then he concludes, and again, this is only his opening paragraphs, he concludes by telling the world not to worry. We're going to have to come down this same road again, and he hopes that next time the Court has the nerve to do what it didn't do here, and that is to inter Auer. But in the meantime, we shouldn't worry because Auer is left quote, "only a paper tiger," close quote, paper tiger.
So Justice Gorsuch is by fits upset with the Court's lack of action. On the other hand, he tells us not to worry. What do you think, Karen? Is it all based on, as you suggested, what the lower courts do, if they now feel that if you're going to have a case involving Auer deference, it's going to have to be a lot longer opinion than it used to be if you're going to apply it.
Karen Harned: Absolutely, I think at a minimum they see that. And so that actually may be a good thing too, right? So I came into this with a half glass full, and, now, I don't know if it's just my mood today, but I'm more of a glass half empty because I just feel like it's raising again more questions than it answers. But that said, I felt like Gorsuch did give, in addition to that discussion which I truthfully enjoyed, I felt like he gave a lot of good fodder to those that are going to want to put the test onto Auer moving forward by really doing a nice job of talking about how it's not based in the Constitution, that it is actually contrary to the APA and its doctrine, and, really, just did a nice job systematically going against all of, as any good dissent would do, the points the majority made.
So then I feel like you have something to grab hold onto as you're trying to further cabin this doctrine moving forward. I really feel like, at this point, it's just hard to predict what's going to happen. I can assume -- I can predict -- I can assume how certain judges are going to follow this, and those -- we've already seen it in the lower courts, quite frankly, before even on Chevron where there's just been a lot more skepticism about the utility of that doctrine and how often it should be applied. I would like to think that this decision only puts more kerosene on that fire, and that for most judges, they're going to read it, even the majority opinion, and say, you know what, like you said, if this is a paper tiger, we got to paper this thing up if we're going to use Auer before putting it forward. And that is a good thing, if nothing else, that is -- I do think the state of law is better today than it was yesterday. It's just not as great as I'd hoped it would be.
Stephen Vaden: Well, Chief Justice Roberts is left in the middle, and he wrote a short, two-page opinion informing the reader of what he joined and didn't join with regard to Justice Kagan's opinion. But, perhaps most interestingly for the future of Auer, he sought to tell the reader that even though there's appears to be a great chasm between Justice Kagan and Justice Gorsuch, he doesn't see that void as is great as it may initially appear. Instead, he suggests that the limitations that Justice Kagan has put on Auer, taking a page from the Solicitor General's brief, can be favorably compared with how Justice Gorsuch thinks an analysis ought to go and that maybe they're really somewhat of the same thing.
Now, Justice Gorsuch had a response to that in the opening lines of his dissent, well, his effective dissent, where he says, “One can hope that the Chief Justice is right, and that whether we formally overrule Auer or merely neuter it, the results in most cases will prove the same. But means, not just ends, matter, and retaining even this debilitated version of Auer threatens to force litigants and lower courts to jump through needless and perplexing new hoops and in the process deny the people the independent judicial decisions they deserve. All to what end? So that we may pretend to abide by stare decisis.”
And so that's a question that I'm going to kick over to you, Karen. There has been a lot of talk, particularly in the popular press, as we have headed toward the end of this Supreme Court term about stare decisis. Earlier in this term, Justice Kagan asked a rhetorical question in one of her dissenting opinions, "Well, what precedent is the Court going to strike down next?" Well, did they strike down Auer? Is what we have -- can we still call it Auer? Or should we start calling it Kisor?
Karen Harned: Right, and I think that's a very good point. And that's a point, also, that Justice Gorsuch made in his dissent that in the name of stare decisis, they've created a whole new standard which, really, doesn't even follow if you're saying that the whole -- you're hanging your hat on stare decisis, right? If you're changing the standard by putting these new bells and whistles on, then is it really stare decisis after all? And that discussion was very interesting on those sides because Kagan really was quite broad, I thought, in her opinion on talking about the value of stare decisis and trying to get all of her views on “let's do that as much as possible” in there. And I thought it was interesting that Roberts agreed with that, right?
But at the same point, to your question, is it really stare decisis? I honestly think you call it the Kisor standard from now on. I just think you have a new standard that you're going to analyze these cases by, so I don't know that it is still Auer. I think it's Auer plus, at a minimum and, maybe it -- you call it Kisor, but all that to say I thought stare decisis meant you keep it the same and this is -- this definitely is not the same which is why I say we are definitely better today than we were yesterday, for those of us that want to see more meaningful review of regulations that are issued by the agencies.
Stephen Vaden: Well, the other interesting thing to note from Chief Justice Robert's opinion is how he concludes it. And there has been a lot of talk in academic circles, in practitioner circles about the link between Auer and Chevron deference. Auer deference being the deference we showed agency interpretations of their own regulations. Chevron deference being the deference that we show to agency interpretations of statutes passed by Congress. And many people thought that maybe Auer would be the easier one to strike down, although that's not officially what happened today, because it involves, kind of, a one-sided affair for the separation of powers. An agency gets the benefit of the doubt that it itself created.
But Chief Justice Roberts, in closing out his brief two-paged concurring opinion, said that “Issues surrounding judicial deference to agency interpretations of their own regulations are distinct from those raised in connection with judicial deference to agency interpretations of statutes enacted by Congress. I do not regard the Court's decision today to touch upon the later question.”
And in his separate opinion, Justice Kavanaugh, joined by Justice Alito, parroted Justice -- Chief Justice Roberts' comments about the any linkage between Auer and Chevron. Karen, any thoughts about what that may pretend for Chevron, one way or the other?
Karen Harned: Right, well, as you mentioned, there's been a lot of skepticism about Chevron as well. I am like you, I thought Auer was the lower hanging fruit here. So I am not reading too much into that right now other than I definitely think there would be a separate type of analysis when that case inevitably comes up. Will they do the same thing they're doing now and just cabin that doctrine? Or is there going to be a way for them to overturn that altogether that's going to be able to garner five votes. And I just don't -- it's going to depend on the case. It's going to depend on many things. I'm very glad, though, that they did not close the door to that and make it clear that those wanting to see Chevron overturned need not apply. And so I really think they leave the door open, but what will they ultimately do? I do not know. Though, I would be shocked if they don't take a case at least reviewing that doctrine within the next very near future.
Stephen Vaden: Well, Karen, Justice Kagan has cabined Auer. Chief Justice Roberts has chose[n] to synthesize it. And Justice Gorsuch has called it a paper tiger. But, we've got a lot of people on the phone who are legal practitioners and are currently now suing federal agencies about their interpretations of their regulations. And they have got to figure out what to do with this opinion. You are the Executive Director of the Small Business Legal Center for the National Federation of Independent Businesses. You filed an amicus brief, which I failed to mention, but you mentioned earlier, in this case expressing the views of your organization and its members. I'm going to conclude before we open up to questions with the most practical of questions. What is a lawyer to do with this opinion if he's seeking to challenge an agency regulation?
Karen Harned: Well, I think the key is that you're starting off the statute -- or the regulation is clear. There's no dispute here, right? And trying to make that case as strong as possible that the agent -- also you're going to try to find any way to show that the agency's interpretation or reinterpretation of it is unreasonable, that it's bringing in significant due process concerns to the extent you have something saying that -- showing that there wasn't fair notice or unfair surprise. I feel like those are going to be your strongest arguments after this and that just quoting this case, if you will, to show that Auer is only applicable in the most limited of circumstances.
That, I think is your best bet. Anything that you can do as a litigator to make that judge realize that they're going to need -- if they're going to go down the Auer road, they're going to need to explain why this isn't outside of our deference going in. And so just thinking of those things and some of it is going to be, again, I feel like, the due process and unfair surprise is always a winner on these types of things if you've got that case to be made. And, again, just saying there's no ambiguity here, anything you can do to make that case moving forward is also going to be extremely helpful.
And if I could, before we go to questions, I would be remiss if I did not give a shout out to The Federalist Society members that really had a big role to play in this case, and they're quoted -- or they're cited in Justice Gorsuch's dissent, namely Paul Larkin and Elizabeth Slattery. Their article is cited at least twice. Jonathan Adler has an article cited. Kristin Hickman has an article cited. So The Federalist Society is alive and well in getting their voices heard by this Court and at least by Justice Gorsuch, and I thought that was refreshing to see.
Stephen Vaden: Well, it's always good to see your friend cited even if it's in a dissent, --
Karen Harned: -- Right.
Stephen Vaden: -- and the only thing that I will add is that if you find yourself on the wrong end, from your client's perspective of an enforcement action by an agency, I think Justice Kagan's opinion makes it very clear that you should force that agency to show the legislative rule, not just some handbook provision, that forms the basis for its enforcement action against you.
Karen Harned: Absolutely.
Stephen Vaden: I think that particular provision could end up having some pinch particularly for those agencies that like to amend handbooks but not regulations that have to go through notice and comment. And with no further comment on my part, I'll turn it over to you, Dean, to see what our listeners think.
Dean Reuter: Terrific. Well, thank you. We are off to a great start. I know we have a hard stop at 4:30, so let's go right to questions from the audience. Let's take our first call today.
Caller 1: Yes. Good afternoon, great program. The Federal Circuit very recently in another case from the VA I think did a much better job of what the Supreme Court's now saying they ought to do. In Procopio v. Wilkie 913 F.3d 1371, that the Federal Circuit said that the VA's interpretation of the Agent Orange Act was not reasonable. You don't even have to get to the question of ambiguity because the Agent Orange Act, enacted in 1991, provided that anybody in the U.S. Military that served in the Republic of Vietnam during the war was entitled to the two Agent Orange presumptions. And that included a person like Procopio who had served within the 12-mile territorial sea of the former South Vietnam, and so, therefore, there was no ambiguity. Maybe the Federal Circuit should have done something like that in this case, and we all might have been saved a lot of problems. [In the] Procopio case, the Solicitor General asked for a 30-day extension on applying for cert but then decided not to apply for cert so it's now final.
Karen Harned: Interesting. No, that's great. That's an example, again, on the half glass full, this gives a lot of ammunition for judges going forward to -- and, honestly, it also forces the question. They are going to have to do more work as Stephen has said, as I’ve said, moving forward, if they want to rely on Auer deference. So Auer deference is not the Auer deference that it was yesterday in that you don't get away -- you're not off the hook by just waving the Auer deference flag. You're going to have to show why it applies in this case, and so maybe that is going to make it ultimately, as Justice Gorsuch said, a paper tiger going forward. Again, it's all to be determined as we see these courts apply it moving forward.
Dean Reuter: Once again, if you have a question, push the star button then the pound button on your telephone. We've got a couple questions pending but let me try and get my own question in here for both Karen and Stephen Vaden, if you're inclined to answer. There's a lot of discussion in the legal community, at least in my circles, about incrementalism on the part of the Court in getting to finally overturn a precedent that one case there might be a signal and a footnote, that there's a doctrine that's up for grabs that may be a stronger signal in the next case even stronger signal and, ultimately, the Court gets around to overruling a precedent. I'm wondering from the perspective of both a general counsel at that agency and as a practitioner, somebody trying to protect people's rights, is that a useful and helpful approach? Does that seem less shocking to the system? Or does it just create even more uncertainty because it's talked about as a way of sort of conditioning the environment and getting people almost ready for this inevitability so that when it happens, it's not a surprise to anybody.
Karen Harned: Stephen, do you want to go first, or do you want me to?
Stephen Vader: Well, I'm happy to say a few words about it. This opinion gives us a couple of rules, that if you're an agency and you're writing regulations that you should pay attention to. First, don't parrot the statute, just bring some value to what you're doing. Don't just repeat what Congress has already written.
Number two, if you're going to take an enforcement action, you better be doing it on the basis of a legislative rule or a statute and not something that an agency in your department slapped up on a website somewhere and expected someone to make themselves aware of. I think those are some pretty straight forward rules that if we're going to fairly read Kisor and assume, as we should, that the Court means what it says it means, those are rules that are expected to be enforced by the courts as they apply this new precedent.
But, one thing that it's in the back of my mind is this: one of Justice Kagan's, perhaps, strongest points in the stare decisis analysis, which she spent an awful lot of time and Chief Justice Roberts joined this portion of her opinion, and it was a reason why he did not go for overruling Auer at this point, was the stare decisis portion. And in that analysis, she said look, Auer has not proven to be unworkable, and that is one of the most important, from her perspective, requirements for a court to overrule a prior precedent. That prior precedent proves to be unworkable. And she cited many cases where the Supreme Court had applied it. Maybe it didn't apply it with the same rigorous analysis that she would now require, but she didn’t feel that it was unworkable.
When I look at these five factors, at least five factors, whether you want to call them a balancing test or whether you want to call them five requirements, or whatever terminology you want to use for that list of five items that we went through earlier in this call, I can't help but wonder if at some point in the future, as lower courts try to wrestle with whether an agency is speaking from an -- its authoritative voice, did it emanate from the right place, from the right person, in the right form, if some future supreme court might find that these five factors are unworkable.
Karen Harned: Right, and the only thing -- I would honestly agree with everything Stephen said, and the only other thing I would say, and I can't find exactly where it was in the opinion but I know it's in there, is there was a little bit of a discussion on if we went ahead and overruled Auer, this could be really difficult because even the solicitor in the argument noted that if somebody lost on Auer before, they might be able to re-bring their case again. So to your point, Dean, maybe this -- by reconditioning the system or culturizing these judges to realize they can't just wave the Auer flag as readily as they could before, you're kind of correcting that problem so that it makes it easier and less of a, quote/unquote, "shock to the system" to the extent it would've been when they finally do officially overturn it if they do.
Stephen Vader: Justice Kagan sided to the Solicitor General's representation in oral argument. Indeed, I think she quoted him that if Auer were overruled, it would have the effect, in the Solicitor General's opinion, of making every court case upholding an agency interpretation of its own regulations new ground on which to trod, and every past court case would be open for reconsideration. She cited that it's one of the reasons why she didn't want to overrule it.
Karen Harned: Right.
Dean Reuter: Interesting, interesting. Three questions pending, we'll get to as many as possible. Turn to our next caller.
John Hays: Yes, this is John Hays from Austin, Texas, and to reference back to a statement that was made earlier where on page 13, Justice Kagan wrote that “The core theory of Auer deference is that sometimes the law runs out, and the policy-laden choice is what is left over.” And my questions is -- for the panel is, does that largely corroborate or validate Professor Hamburger's argument that administrative law is fundamentally unlawful?
Dean Reuter: Is there a delegation problem there, Karen?
Karen Harned: Well, I -- see, I'm going to argue there is because I just think that I'm still just very troubled by the same branch of government really getting to write, and enforce, and interpret the rules. And Kagan's opinion may have limited how often that can happen, but she still endorsed the practice, and, in fact, said it was outrageous to think that there was a constitutional problem with that. I just disagree. I think there is.
Dean Reuter: Stephen Vaden, anything on this point?
Stephen Vaden: Well, earlier in the call I said that I think Justice Kagan turns the phrase when she referred to Mr. Kisor were unintentional but may not be read in a way that she would like. I think that her comment here may be of the same variety. To say the law runs out is not necessarily something that's going to bring comfort to the regulating community. It makes it seem as though the exercise in which we're engaged is not a legal exercise but almost a king-like exercise in what the Executive Branch is doing.
I can understand from the practical point of view of you can't put every potential situation down on paper in a regulation or in a statute. All of us can understand that. To say that the result of that when you have a situation that hasn't been expressly contemplated in the written text, the law runs out, is troubling to me. And I must say, that in my role at an agency, if I thought that what I was doing was something where the law truly ran out, I would have to give quite a lot of consideration to whether it was something I wanted to continue to be associated with just because of my view on the limitations of government power.
Dean Reuter: Very good. Let's see if we can sneak in one more question.
Caller 3: Thanks. I'm sorry I got here a little bit late, but if you haven't already talked about potential dynamics with Chevron, maybe you could. Thanks.
Karen Harned: Right, well, we did -- we have talked about a little bit. They were very clear in, both Roberts and Kavanaugh in particular, but that they were not making [an] assessment in this case on Chevron, so they left the door open on that. As I mentioned earlier, it did not give the impression that if you're trying to pull back on Chevron, much less overturn it, this Court’s not interested. In fact, I think that's still very much open for business and that they will consider it. But what they'll ultimately do and what the tea leaves mean, I, again, and Stephen said too, thought this was low-hanging fruit. So the fact that they didn't overturn Auer, what does that mean for Chevron moving forward? And in reconsideration, will it just be a -- will it be a similar exercise where they just try to further limit it and that would be an improvement but probably not what all of us are looking for.
Dean Reuter: Any final thoughts? We got 30 seconds left, maybe. Karen Harned, final thought?
Karen Harned: Yeah, I do think, despite my negativity overall, I do think that we are better today as a regulating community than we were yesterday. And I really am hoping that this opinion gives tools to lower court judges to really force them to understand that they really are expected to look at these challenges with fresh eyes and not just immediately run to the Auer deference flag. If they do that, they could risk getting overruled.
Dean Reuter: Stephen Vaden, a final thought.
Stephen Vaden: I would just say that, perhaps, Kisor has raised the bar for agencies in an important way. We went through five factors that the Court says that courts are going to have to grapple with before they apply Auer deference. Assuming that courts follow that and they engage in that extensive analysis, agencies going forward in defending interpretations their own regulations are going to have to answer a critical question. That question is, why? Why did you do this? And why should we defer to you?
For far too frequently before this case, they haven't had to answer that question. They've, instead, just been able to show that this is a -- an almost rogue form, we're interpreting our own regulation, and we're reasonable. And Justice Kagan has made clear today that that's not good enough. You're going to have to show us more than if there's an ambiguity and that your resolution of it is reasonable. You're going to have to tell us why we should defer to you, and I'm going to be curious to see how that plays out in the cases ahead.
Dean Reuter: Well, we're in wait and see mode, so thank you very much. My thanks personally and on behalf of The Federalist Society to our two guests, Karen Harned, Stephen Vaden. This has been a fascinating discussion. I'm going to thank the audience for dialing in as well, as for your thoughtful questions, but for now, until that next call, we are adjourned. Thank you very much everyone.
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