Challenging Deference: An Analysis of Kisor v. Wilkie before the Supreme Court

By David Forman

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An obscure veteran’s appeal that has reached the Supreme Court of the United States may have a profound affect on administrative law.  Kisor v. Wilkie, on appeal from the United States Court of Appeals Federal Circuit, challenges the way courts treat a federal agency’s interpretations of its own rules.

Although Congress makes the laws, there are always gaps in administering the laws that agencies fill using regulations.  Under precedent of Auer v. Robbins, 519 U.S. 452 (1997), courts accept (“defer to”) an agency’s interpretation of its own regulations as long as the interpretation is based on a permissible construction of the statute.  Another closely related and widely applied deference rule that addresses a government agency’s interpretation of statutes is based on Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).  Under Chevron deference, if the statute is silent or ambiguous with respect to a specific issue, a court will defer to the agency interpretation as long as it is based on a permissible construction of the statute.  Chevron is not at issue in Kisor, but the arguments by both sides are similar to those in Auer.  There is also speculation that whatever the Court decides in Kisor may be applied by the Court to Chevron.

Turning to the facts in Kisor, James Kisor served in the United States Marine Corps during the Vietnam War and later filed for benefits for post-traumatic-stress disorder (“PTSD”).  The Department of Veterans Affairs agreed that he suffers from PTSD but, based on its interpretation of its regulations, refused to grant him benefits covering the full period that he requested.  After the Federal Circuit applied Auer to deny his appeal, Kisor appealed to the Supreme Court.  The Supreme Court took his case to consider the question “[w]hether the Supreme Court should overrule Auer v. Robbins . . ., which direct courts to defer to an agency’s reasonable interpretation of its own ambiguous regulation.”

There are several rationales supporting Chevron and Auer deference.  Sometimes Congress has left gaps in the law which it expects agencies to fill in.  Agencies may have technical expertise that courts lack.  In the case of Auer deference, an agency that wrote its regulation may be in the best position to understand it.  Auer and Chevron deference eliminate uncertainty that might be produced by divergent views of district courts and courts of appeals before a definitive interpretation is provided by the Supreme Court.

There are also arguments against court deference to agency interpretation.  One is that such deference is a transfer of judicial power to an executive agency. Bestowing judicial power in this manner raises constitutional concerns as this transfer may contravene an important principle of separation of powers—he who writes a law should not adjudge its violation.  Agency deference permits executive bureaucracies to swallow huge amounts of judicial and legislative power that should belong to the legislatures or courts.

It is widely noted that differences in the makeup of Supreme Court suggest that a change is likely.  Justice Scalia, who wrote the Auer decision, and Justice Kennedy, who voted for it, are no longer on the Court.  Their replacements, Justices Gorsuch and Kavanaugh, have both been openly critical of deference to agency interpretations in decisions and speeches.  For example, in a lecture by Justice Kavanaugh before he was nominated for the Supreme Court, he said, “[T]he Chevron doctrine encourages agency aggressiveness on a large scale.  Under the guise of ambiguity, agencies can stretch the meaning of statutes enacted by Congress to accommodate their preferred policy outcomes.”  Thus, many commentators expect that the Supreme Court will use Kisor to eliminate Auer deference, and to abolish Chevron deference in a follow-on case.

Abolishing deference to agency interpretations could have a major impact on patent law.  The USPTO is an administrative agency that often must interpret questions raised by the patent statute and its own regulations, and courts have often accepted its interpretations.  For example, a recent Supreme Court case where the decision was expressly based on Chevron deference was a patent case.  Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016).  If the Supreme Court abolishes deference to agency interpretation of statutes and regulations, then USPTO interpretations of the patent statute and its own regulations may become vulnerable to new challenges in court.