at *53 (Gorsuch, J., concurring in judgment).3Id. at *16 (citing Bowles v. Seminole Rock & Sand Co., 325 US 410, 414 (1945)).4Id. at *75 (Gorsuch, J., concurring in judgment) (citing Marbury v. Madison, 5 US 137, 177 (1803)).5Id.
Careful attention to all aspects of the regulatory process is thus necessary.  Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 414 (1945). This formulation was followed in Auer v. Robbins, 519 U.S. 452, 461 (1997) (which itself quoted the same language in Robertson v. Methow Valley Citizens Council, 490 U. S. 332, 359 (1989)).
Last month, the Supreme Court in Kisor v. Wilkie, 139 S.Ct. 2400 (2019) upheld what is known in administrative law as Auer deference: the age-old principle that a court should defer to an agency when the agency is interpreting its own ambiguous language in a regulation. SeeAuer v. Robbins, 519 U.S. 452 (1997); see also Bowles v. Seminole Rock & Sand Co., 325 U.S. 410 (1945). Deference to an agency’s regulatory interpretation has long been a challenge to industry and the broader regulated community.
When judicial deference applies, a court will treat an agency’s interpretation of an ambiguous regulatory provision as controlling so long as it is reasonable or at times even just plausible, even if another interpretation is better in the court’s view. The Supreme Court first established the judicial deference doctrine for agency interpretations of their own regulations in the 1945 decision Bowles v. Seminole Rock & Sand Co., 325 U. S. 410 (1945), which was expanded and extended in the 1997 decision Auer v. Robbins, 519 U.S. 452. This doctrine is now known as “Auer deference.”
The specific question considered was whether the Court should overrule Auer v. Robbins, 519 U.S. 452 (1997) and Bowles v. Seminole Rock & Sand Co., 325 U.S. 410 (1945). In context, the specific question being considered was: what deference, if any, should courts give to an executive agency’s interpretation of its own regulation, an interpretation that has not gone through Administrative Procedure Act (APA) notice and comment rulemaking?We have blogged frequently on Auer deference and its impact on case law, precedent, and regulatory and agency authority — and ultimately on business and employers.
State tax agencies exist to collect revenue for the state, and it would be farfetched to assume that they are impartial in their interpretations of taxing statutes and regulations. While the Kisor Court’s limitation of Auer deference is a welcome development, concerns still remain regarding deference to state tax agency interpretations of state tax laws, whether those interpretations are in the form of regulations, administrative determinations, policy notices, or otherwise.Some states have recognized the due process and separation of powers concerns created by this state of affairs and have affirmatively abandoned the practice of deference across the board.9___________________________1 No. 18-15, 588 U.S. ___ (2019).2 519 U.S. 452 (1997).3 325 U.S. 410 (1945).4 For more background on the Kisor case, as well as a discussion of the impact of deference in state tax controversies, see Maria Todorova et al., "Tax Perspectives on Kisor v. Wilkie: Part l," Law360, Mar. 29, 2019; Todorova et al., "Tax Perspectives on Kisor v. Wilkie: Part 2," Law360, Apr. 1, 2019.5 All of the Justices concurred with respect to the judgment, although 4 did not join any part of Justice Kagan’s majority opinion.6SeeSewon America, Inc. v. Riley, No. 1627180 (Ga. Tax Tribunal Jan. 24, 2017) (granting deference to an unknown interpretation despite the taxpayer’s argument that such deference amounted to an unpublished regulation).7Chevron U.S.A. Inc. v. Natural Resources Defense Council Inc., 467 U.S. 837 (1984) (establishing the principle of deference to administrative agencies’ interpretations of ambiguous statutes which the agency is tasked with administering).8Skidmore v. Swift & Co., 323 U.S. 134 (1944).9 In 2018, Arizona, Florida, Mississippi, and Wisconsin acted t
The reasoning was based on a VA interpretation of their own regulation that evidence produced at a later date is not “relevant” unless they go to the reason for the denial of benefits.Auer deference, occasionally known as Seminole Rock deference, originates in the two cases lending their name to the practice. Auer v. Robbins, 519 U.S. 452 (1997); Bowles v. Seminole Rock & Sand Co., 325 U.S. 410 (1945). A basic explanation for Auer deference is that a court will defer to an individual agency's interpretation of their own regulation if the regulation is ambiguous.
The Federal Circuit likewise affirmed, applying Auer deference (also called Seminole Rock deference), under which a court defers to what it deems to be the agency’s reasonable interpretation of a genuinely ambiguous regulation. Today, the Court held that Auer v. Robbins, 519 U.S. 452 (1997) and Bowles v. Seminole Rock & Sand Co., 325 U.S. 410 (1945) are not overruled, yet vacated and remanded, holding that a “redo is necessary” because “the Federal Circuit jumped the gun in declaring the regulation ambiguous,” and “assumed too fast that Auer deference should apply in the event of genuine ambiguity.” Justice Kagan authored the Court’s opinion, which was joined in full by Justices Ginsburg, Breyer, and Sotomayor, and joined in part by Chief Justice Roberts.
156(c)(1), the Veterans Affairs Department denied him benefits. The Court of Appeals for the Federal Circuit ultimately affirmed and denied rehearing en banc, with three judges dissenting.The Supreme Court took the case only on the first question presented by petitioner – whether the Court should overrule Auer v. Robbins, 519 U.S. 452 (1997), and Bowles v. Seminole Rock & Sand Co., 325 U.S. 410 (1945). Both decisions directed courts to defer to an administrative agency’s reasonable interpretation of its own ambiguous regulation.Auer deference has been a concern from some business groups and academics as well as for justices Neil Gorsuch and Brett Kavanaugh.
At a minimum, regulated companies will more often get to learn the law before they do business, rather than discovering it in an agency’s brief against them. 325 U.S. 410 (1945) 519 U.S. 452 (1997).Decker v. N.W. Envtl.