Recent Supreme Court Case Indicates a Shift in Auer Deference may be Imminent
In recent years, Congress has taken to delegating to administrative agencies the responsibility for creating new regulatory regimes, amending existing ones, and otherwise promulgating rules to clarify statutory text. Examples of this large-scale delegation are evident in several recent acts, such as the Patient Protection and Affordable Care Act (PPACA), the Dodd-Frank Wall Street Reform and Consumer Protection Act, and the JOBS Act. As the administrative state grows ever larger, courts have developed a set of rules by which they generally grant deference to agencies' interpretations of statutes (better known as Chevron deference)... and even their interpretations of their own regulations.
Separately filed opinions in the Supreme Court's recent decision in Decker v. Northwest Environmental Defense Center suggest that the Court may be willing to reconsider so-called Auer deference, which gets its name from the Court's 1997 decision in Auer v. Robbins (though the general principle goes as far back as the Court's 1945 decision in Bowles v. Seminole Rock & Sand Co.). Under Auer, a court generally grants deference to an agency's interpretation of its own regulations unless the interpretation is “plainly erroneous or inconsistent with the regulation.” When a court applies Auer deference, as long as the agency's interpretation is a plausible one, the court will grant deference to that interpretation, even if it believes a different interpretation is more reasonable.
As background, the issue in Decker was whether a permit was required under the Clean Water Act for stormwater runoff from logging roads used as part of logging operations. EPA had interpreted its regulations such that a permit was not required in such instances; EPA even amended its regulations to make that absolutely clear after a losing in the lower court. The majority opinion (which was joined by seven justices) applied Auer deference to EPA's interpretation, finding it was “a permissible one.”
Justice Scalia, in an opinion concurring in part and dissenting in part, unequivocally called for the Court's rejection of Auer deference, believing that the case “illustrate[d] Auer's flaws in a particularly vivid way.” Justice Scalia both debunked the most common justifications for Auer deference and argued that such deference is inconsistent with the separation of powers, effectively permitting the agency to act as “judge and jury” on what the law is. He also notes that Auer encourages agencies to issue regulations that are vague and broad, “so as to retain 'flexibility' that will enable 'clarification' [via interpretation] with retroactive effect.”
In a concurring opinion, Chief Justice Roberts and Justice Alito agreed that Justice Scalia raised “serious questions” about Auer deference. However, for various reasons, Decker did not present the opportunity (or even necessarily a good opportunity) to revisit Auer.
As the Chief Justice noted, “the bar is now aware that there is some interest in reconsidering [Auer], and has available to it a concise statement of the arguments for one side of the case.” Someone will inevitably accept the invitation and put the issues raised by Justice Scalia squarely before the Court. It will be interesting to see whether the Court is willing to overrule, or at least amend, its jurisprudence regarding these issues, particularly at a time when they arise with increasing frequency and are of increasing importance.
The information contained herein is not intended as and should not be construed as legal advice. Please consult with legal counsel before taking any action based on this information.