New Bill, Supreme Court Case Challenges Administrative Deference

Financial Services Law

In the latest attack on administrative deference, Sen. Ben Sasse (R-Neb.) opted for a frontal challenge to Chevron deference by introducing the Separation of Powers Restoration Act.

The proposed legislation is just one of the many battles being waged over various doctrines on deference, including a case currently pending before the Supreme Court considering the validity of Auer deference.

What happened

In 1984, the Supreme Court decided Chevron USA v. Natural Resources Defense Council. Since then, the opinion has been cited countless times for the proposition that courts should generally defer to a federal agency’s interpretation of its own regulations.

Sen. Sasse hopes to change that standard with his proposed legislation, which would override Chevron and permit judges to decide de novo all relevant questions of law—including the interpretation of constitutional and statutory provisions—and rules made by agencies.

Under proposed Senate Bill 909, “[i]f the reviewing court determines that a statutory or regulatory provision relevant to its decision contains a gap or ambiguity, the court shall not interpret that gap or ambiguity as an implicit delegation to the agency of legislative rulemaking authority and shall not rely on the gap or ambiguity as a justification for interpreting agency authority expansively or for deferring to the agency’s interpretation on the question of law.”

“Congress writes the law, the executive branch enforces them and the courts resolve cases and controversies,” Sen. Sasse said in a statement. “That basic system has been turned upside down: unelected bureaucrats that nobody can fire write an avalanche of regulations and the courts just trust them to interpret the limits of the law and even their own regulations.”

Similar bills passed the House of Representatives under former President Obama only to be rejected in the Senate. While the proposed measure has the backing of Republican lawmakers, it faces opposition from Democrats, who argue the loss of Chevron would lead to a patchwork of judicial opinions on a single statute.

The legislation is just one attempt to do away with administrative deference. The same day Sen. Sasse introduced the bill, the justices heard oral argument in Kisor v. Wilkie, a case involving a Marine who served in the Vietnam War seeking benefits from the Department of Veterans Affairs (VA) for his posttraumatic stress disorder.

When the VA denied the benefits, Kisor appealed. The First Circuit Court of Appeals upheld the denial, applying deference to the VA’s interpretation of the term “relevant” in one of its regulations, derived from the 1997 decision in Auer v. Robbins.

Kisor is asking the Supreme Court to overrule Auer, arguing that it raises fundamental constitutional concerns, failing to provide those affected by the regulation fair notice of what they can or cannot do. Such deference also triggers separation of powers problems, he argues, because by deferring to an agency’s interpretation of its own regulations, courts are not doing their own job of interpreting the law.

The Court appeared divided during the oral argument, with some of the justices (such as Justice Sonia Sotomayor) uncertain whether it was necessary to even reach the question of Auer’s validity, while Justice Stephen Breyer expressed his belief that federal agencies have expertise in their subject matter that allows them to better interpret highly technical regulations than federal court judges can.

On the other end of the spectrum, Justice Neil Gorsuch (a frequent critic of Chevron), disagreed that administrative deference creates stability or predictability in the law, noting that “every private party” filing an amicus brief in the case “says their interests in stability would be better served by eliminating this rule altogether.”

Justice Brett Kavanaugh suggested that the lack of public participation could be solved by the use of notice-and-comment rulemaking for all regulations. “You said it takes a long time, and that may be a problem with some lower court impediments to notice and comment. I share that concern, but if notice and comment were more efficient, why not just do notice and comment?” he asked.

To read S.B. 909, click here.

To read the transcript of oral argument in Kisor v. Wilkie, click here.

Why it matters

While the challenge to administrative deference is being fought on multiple fronts, it remains to be seen if Chevron will be thrown out. Laws do not pass without both houses of Congress, and even if the Separation of Powers Restoration Act can survive the Senate, it has little chance of success in a Democratic-controlled House of Representatives. The closely watched Kisor case has the potential to chip away at agency deference by repudiating Auer, although the justices appeared divided at oral argument. A decision from the Court is expected later this term.