The Administrative State Dodges A Bullet in Kisor But Faces A New Challenge To Chevron

 In a decision surprising to many, the Supreme Court saved Auer deference this week in Kisor v. Wilkie.  But the doctrine that emerges is Auer deference in name only. 

Auer deference requires federal judges to treat an agency’s interpretation of its own regulation as controlling even when that interpretation is not the best one. 

A bare majority of the Court saved this sort of deference from the scrapheap, but the Auer that emerges from the ashes is virtually unrecognizable.  The Court employs one of its disfavored multi-factor tests to determine whether Auer applies.  First, the regulation must be genuinely ambiguous—after the reviewing court employs all of the usual tools of statutory construction—and the interpretation must be reasonable.  And even then, not every reasonable interpretation warrants deference.  A reviewing court is supposed to consider the “character and context” of the interpretation (whatever that means); the interpretation must be an official interpretation (not a litigating position); the regulation must be within the agency’s substantive area of expertise; and finally, the interpretation must reflect the “fair and considered judgment” by the agency.

This sort of deference is really no deference at all and leaves to lower federal courts the discretion to apply or not apply Auer deference as they see fit.  As Justice Gorsuch wrote in dissent, the Auer doctrine upheld by the Court “emerges maimed and enfeebled—in truth, zombified.

Kisor’s multi-factor test, in other words, is an invitation to judicial uncertainty.  It is up to a reviewing court to determine whether the “character” of an administrative interpretation deserves deference—and of course the “character” of an administrative action is hardly an undebatable proposition. 

Worse, Kisor leaves in place a judicially made-up doctrine that the Court barely tried to justify—the fifth vote necessary to uphold Auer deference (that of Chief Justice Roberts) rested only on stare decisis principles—the idea that it is better that the law be settled than it be right. 

Only four justices found that Auer deference could be reconciled with the APA—and for good reason.  As Justice Gorsuch points out in dissent, the APA is hardly ambiguous: that statute requires reviewing courts to “decide all relevant questions of law” and to “determine the meaning” of any relevant “agency action,” text which would seem to include a regulation issued by an agency.

And the majority failed to address the fact that Auer deference sits uneasily with the Constitution.  Article III provides that the “judicial Power of the United States” is vested in the federal courts.  As Justice Gorsuch pointed out in dissent, a core component of judicial power is the duty to interpret laws.  But under Auer, federal courts share this judicial power with the Executive Branch—a practice in tension with fundamental separation of powers principles.

Even more interesting than the transmogrified Auer doctrine, is that a majority of justices have now signaled that they are open to overruling Chevron deference.  The Chief Justice, and Justices Kavanaugh and Alito all pointed out that the issues raised in Kiser were “distinct” from issues raised by Chevron deference.  And, of course, both Justices Thomas and Gorsuch are firm Chevron skeptics.

At the end of the day, Kisor leaves more open than it decides.  Auer survives, but barely, and it appears that there are five votes on the Court willing to take on Chevron.