Supreme Court Decides Kisor v. Wilkie

On June 26, 2019, the U.S. Supreme Court decided Kisor v. Wilkie, No. 18-15, holding that courts should defer to administrative agencies’ interpretations of their own ambiguous regulations, but only when several constraining conditions are met.

The case arose out of a partial denial of benefits to James Kisor by the Department of Veterans Affairs (VA). On a motion to reopen his application, Kisor submitted new records confirming his military activities. The administrative judge, however, found those new records not to be “relevant,” interpreting a VA regulation on the point. The Court of Appeals for the Federal Circuit affirmed. It concluded that the VA regulation was “ambiguous” as to “whether ‘relevant’ records are those casting doubt on the agency’s prior rationale or those relating to the veteran’s claim more broadly.” As a result, the Court of Appeals applied what is known as Auer or Seminole Rock deference, enforcing the interpretation of the regulation that the agency had articulated through the administrative judge.

Kisor sought and obtained review in the Supreme Court, arguing that Auer and Seminole Rock should be overturned and that courts should interpret ambiguous agency regulations de novo.

By a 5-4 vote, the Supreme Court declined to overturn Auer and Seminole Rock, based on considerations of stare decisis. It noted that Auer deference “pervades the whole corpus of administrative law” and commented that eliminating it would “overrule not a single case, but a long line of precedents” and “cast doubt on many settled constructions of rules.” Moreover, although Congress could accomplish this result by legislation, it has consistently declined to do so.

But the Court reinforced and expanded the prerequisites for a court to apply Auer deference:

• The court must find that “the regulation is genuinely ambiguous” after applying “all the traditional tools of construction,” in the same way that courts do in testing for Chevron deference.
• The agency’s interpretation “must come within the zone of ambiguity the court has identified after employing all its interpretive tools,” also similar to the Chevron inquiry.
• The interpretation “must be the agency’s authoritative or official position.”
• The particular issue “must in some way implicate” the agency’s “substantive experience” so that the agency is a better decision-maker than the courts.
• The interpretation “must reflect fair and considered judgment,” not a “post hoc rationalization,” and must not create “unfair surprise to regulated parties.”

If these prerequisites are not met, “courts should not give deference to an agency’s reading, except to the extent it has the power to persuade” under the Supreme Court’s 1944 decision in Skidmore v. Swift & Co.

The Court remanded Kisor’s case for the Court of Appeals to apply these rules. The Court stressed that the Federal Circuit “must make a conscientious effort to determine, based on indicia like text, structure, history, and purpose, whether the regulation really has more than one reasonable meaning,” and that the Court of Appeals had “assumed too fast” that the administrative judge’s ruling really “reflects the considered judgment of the agency as a whole.”

Justice Kagan authored the opinion of the Court. Portions of Justice Kagan’s opinion were joined by only a plurality of Justices. The Chief Justice authored a concurring opinion. Justice Gorsuch authored an opinion concurring in the judgment, which was joined by Justice Thomas and in part by Justices Kavanaugh and Alito.