Arguments Bare High Court Divide in Case on Federal Rules

Implications could extend to Ed. Dept.

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The U.S. Supreme Court was sharply divided during oral arguments over when courts should defer to a federal agency's interpretation of its own ambiguous regulations—an issue that has arisen in education over such issues as transgender-student rights and racial disparities in student discipline.

The justices, who heard the arguments late last month, are weighing whether they should overrule two long-standing precedents that require courts to defer to agencies' reasonable rules interpretations.

The case has potentially wide impact as agencies including the U.S. Department of Education have increasingly exerted administrative power through informal guidance documents, which don't require cumbersome notice-and-comment periods as regulations promulgated under the Administrative Procedure Act do.

The National School Boards Association joined a friend-of-the-court brief along with other local government groups that call on the high court to overrule a 1997 decision known as Auer v. Robbins, which built on a 1945 decision, Bowles v. Seminole Rock & Sand Co. Both stand for the idea that courts should defer to agencies' interpretation of their own ambiguous regulations as long as the interpretation is reasonable.

Auer "invites dramatic shifts in federal policy with each new administration - and tends to result in policies that lack the clarity and wisdom that public participation can engender," says the NSBA brief.

The NSBA brief in the case, which involves a military veterans' issue, cites two of the more controversial interpretations put forth by the Education Department under President Barack Obama's administration.

The Obama administration issued informal guidance in 2016 that asserted that discrimination and harassment based on gender identity and sex stereotypes were covered by Title IX of the Education Amendments of 1972, which bars discrimination "based on sex" in federally funded schools.

A federal appeals court ruled that the interpretation merited deference under Auer in the high-profile case of Gavin Grimm, a transgender high school student whose Virginia school board had enacted rules requiring students to use restrooms that corresponded to their birth gender.

The Supreme Court granted review of that decision, but when the newly elected administration of President Donald Trump withdrew the guidance in 2017, the high court sent the Grimm case back to lower courts.

The NSBA brief also cites the Obama administration's 2014 guidance stating that the Education Department would investigate racial disparities in school discipline, as well as the Trump administration's 2018 decision to rescind that guidance.

"It is not clear whether any states or localities were consulted before either the 2014 or 2018 guidance was issued," the NSBA brief says.

"Auer allows the federal government to run roughshod over states and localities, forcing them to fall in line or else lose vital federal funds," the brief says. "Worse still, it allows federal agencies—unelected and unaccountable—to do so without so much as consulting the impacted parties."

Veterans' Benefits

The case now before the justices, Kisor v. Wilkie (No. 18-15), involves a military veteran's challenge to a Department of Veterans Affairs interpretation of its regulations on benefits. James L. Kisor, who served as a Marine in the Vietnam War, sought benefits for post-traumatic stress disorder going back to 1983. The VA denied his claim based on its interpretation of the term "relevant" in one regulations, and a federal appeals court held that the interpretation deserved deference under Auer.

The Education Department guidance examples did not come up during the March 27 oral arguments.

Several justices disagreed on whether it was more democratic to have an unelected bureaucratic agency or a federal judge interpret a federal regulation.

Justice Stephen G. Breyer cited a case in which a lower court granted Auer deference to the Food and Drug Administration for its interpretation of a particularly complex regulation involving chemical compounds.

"Do you know how much I know about that?" Breyer said to Paul W. Hughes, the lawyer representing the veteran. "What you're doing is saying, instead of paying attention to people who know about that, but rejecting it if it's unreasonable, the judges should decide."

Breyer said federal agencies "aren't very democratic, but there is some responsibility and there [is] one group of people who are still less democratic, and they're called judges."

Justice Neil M. Gorsuch cited the array of friend-of-the-court briefs from business and other groups calling for Auer to be overruled.

"The benefits of notice and comment are, among other things, people will know prospectively what rules govern them and not be sideswiped later by a bureaucracy," Gorsuch added. And experienced federal judges "have the most expertise on what relevant evidence is," he said, "not an agency."

Gorsuch last year joined a procedural opinion written by Justice Clarence Thomas that said deference under Seminole Rock and Auer was "constitutionally suspect" and "on its last gasp." Chief Justice John G. Roberts Jr. and Justice Samuel A. Alito Jr. have also cast some doubt on Auer deference.

Hughes, the lawyer for the veteran, said federal agencies "have a very substantial role to play in policymaking, but Congress made the judgment that the way that is done in a democratic way accountable to the population is through notice-and-comment rulemaking, such that the regulated public can provide their views."

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U.S. Solicitor General Noel J. Francisco, defending the VA's decision before the court, argued for a nuanced position that Seminole Rock and Auer should not be overruled but their scope narrowed.

"Seminole Rock deference raises some problems in some applications, but it's been on the books for decades," Francisco said. "It has significant practical benefits, [and] its practical problems can be addressed by reinforcing reasonable limitations on the doctrine."

A decision in the case is expected by late June.

Vol. 38, Issue 28, Page 24

Published in Print: April 10, 2019, as Arguments Bare High Court Divide in Case on Federal Rules
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