In a splintered 5-4 decision, the U.S. Supreme Court recently declined to overrule its prior precedent in Auer v. Robbins,519 U.S. 452 (1997), in which the Court declared the long-standing doctrine that requires courts interpreting agency rulings and regulations to give substantial deference to an agency’s own interpretation of its pronouncements—otherwise known as Auer deference (sometimes referred to as Seminole Rock deference). Although not overruled, the Court reiterated that Auer deference should be applied relatively narrowly and be reserved for situations in which a court has already exhausted all tools of construction.
In his challenge to Auer deference, the petitioner, a military veteran, sought disability benefits for PTSD from the Department of Veterans Affairs (VA) related to his wartime service. While initially denied benefits by the VA in 1982, he reopened his claim in 2006 and was granted benefits only from the date of his motion to reopen, rather than (as he requested) from the date of his first application. The Board of Veterans’ Appeals (Board) affirmed the denial of retroactive benefits by relying on a VA regulation that provided for retroactive benefits if “relevant” official records were not considered in the original denial. Even though the petitioner presented two additional service records in connection with the motion to reopen his claim in 2006, the Board held that those records were not “relevant” because “they did not go to the reason for the denial—that [the petitioner] did not have PTSD.” The Board determined that, because the petitioner’s service records did not establish that he suffered from PTSD, they were not “relevant” under this standard, and retroactive benefits were thus unavailable. The Court of Appeals for Veterans Claims affirmed the Board’s decision.
The Petitioner appealed the decision to the Court of Appeals for the Federal Circuit. The Federal Circuit found the regulation ambiguous: “[t]he rule . . . does not specifically address whether ‘relevant’ records are those casting doubt on the agency’s prior [rationale or] those relating to the veteran’s claim more broadly.’” As a result, the Federal Circuit deferred to the Board’s interpretation under Auer because the regulation was ambiguous and the agency’s interpretation was not “plainly erroneous or inconsistent with the VA’s regulatory framework.” The Federal Circuit thus affirmed, and the petitioner subsequently sought review in the Supreme Court, which granted certiorari to decide whether Auer should be overruled.
The Supreme Court declined to reverse Auer completely, but the Court imposed stringent limits on its applicability. Significantly, the Court proclaimed that courts should apply Auer deference only if they determine that (i) a regulation is genuinely ambiguous after exhausting all traditional tools of interpretation, (ii) the agency’s interpretation is reasonable, and (iii) the “character and context of the agency interpretation entitles it to controlling weight,” because it reflects the official, expert, considered, and consistent judgment of the agency. The Court’s dissent would have discarded Auer deference altogether, positing that little remains of the rule after the decision: “[Auer is now] maimed and enfeebled—in truth, zombified . . . today’s ruling . . . has transformed Auer into a paper tiger.”
Although the Court’s ruling was fractured on the viability of Auer, the Court unanimously decided to vacate and remand the judgment for the Federal Circuit to address whether the Board’s interpretation at issue merited deference. It reasoned that remand was proper because the Federal Circuit failed to appropriately exhaust all interpretive tools prior to declaring the regulation ambiguous, and likewise failed to fully consider whether, even assuming ambiguity, the Board’s interpretation merited deference under the principles articulated in the majority’s opinion.