AGENCY DEFERENCE POST-KISOR AND LOPER
For the last decade, the Supreme Court has progressively altered the case law on agency deference. The two landmark decisions on agency deference are now Kisor v. Wilkie, 588 U.S. 558 (2019) and Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024), which respectively clarified and overturned the previous landmark decisions in Auer v. Robbins, 519 U.S. 452 (1997) and Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984).
I. Auer v. Robbins, 519 U.S. 452 (1997) and Kisor v. Wilkie, 588 U.S. 558 (2019).
Until the Kisor decision in 2019, Auer deference was an agency’s principal defense to a challenge to the meaning of a regulation. Note that this section and these cases apply to agency interpretations of regulations, not statutes. Under Auer deference, a court was required to defer to an agency’s reasonable reading of its own genuinely ambiguous regulations. In practice that meant that when a regulation was unclear as to its meaning, a court would accept the agency’s interpretation of the regulation. Only in rare cases where the reading was not reasonable would a court rule against the agency’s understanding of its own regulation.
The Court in Kisor clarified that Auer deference does not apply unless the regulation is “genuinely ambiguous.” And a Court can only find genuine ambiguity after “exhausting all the traditional tools of construction.” The Court believes that most ambiguities will be resolved at this stage. Note that the “exhaust traditional tools of construction” is a term of art that includes a long list of legal doctrines applied to regulations and texts to discern their “legal” meaning.
If a regulation is deemed “genuinely ambiguous,” the agency’s interpretation must still be deemed reasonable by a court, which means that the agency’s interpretation of an ambiguous regulation must nonetheless fall within the zone of ambiguity. This, in effect, means that a court must determine how a regulation is ambiguous, and an agency interpretation must reasonably fall within and address that ambiguity while acting within its scope of designated authority.
Courts are still further advised to “make an independent inquiry into whether the character and context of the agency interpretation entitles it to controlling weight.” This in itself is a three-part inquiry. First, the agency interpretation must “be the agency’s authoritative or official position, rather than any more ad hoc statement not reflecting the agency’s views.” Second, the “interpretation must in some way implicate its substantive expertise.” And finally, an agency’s interpretation “must reflect fair and considered judgment.”
In effect, these three factors mean that for an agency to receive deference to its interpretation of a genuinely ambiguous regulation, the interpretation must be written or published in some form, it must fall within the agency’s sphere of expertise, and it cannot simply be a convenient litigating position or a post hoc rationalization of challenge action.
The ultimate outcome from Kisor is that only in the exceedingly rare case will an agency’s interpretation of its own regulations receive deference.
II. Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984) and Loper Bright Enterprises v. Raimondo, 144 S. Ct. 2244 (2024).
In June of 2024, the Supreme Court explicitly overruled the landmark decision Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837 (1984), which established Chevron deference. In broad terms, Chevron required courts to defer to agency interpretation of the ambiguous statutes they governed.
The Loper decision states that courts may no longer defer to an agency’s interpretation of a statute because the statute is ambiguous.
However, the Court did not explicitly state what replaces Chevron or if the long list of Chevron-related cases is still to be relied upon. The conservative reading of the Loper decision is that it returns the law to the doctrine of Skidmore deference with caveats. In the landmark case, Skidmore v. Swift & Co., 323 U.S. 134 (1944), an agency’s interpretation of a statute it implements was relevant to a court’s understanding of the statute, but that the weight of the judgment depended on the thoroughness of the consideration, the validity of reasoning, and consistency of the application of the statute. Another way of saying this is that the agency has the power to persuade but lacks the power to control the statute’s meaning.
The Loper Court also leaves in place the idea that Congress can purposefully leave gaps and ambiguity for an agency to fill. In those cases, the role of the courts is to determine whether the agency’s actions fall within the boundaries of that delegated authority. It also leaves in place the idea that respect should be given to longstanding interpretations of a statute by an agency, specifically interpretations that are contemporaneous with the enactment of the statute. See United States v. Am. Trucking Ass’ns, 310 U.S. 534 (1940).
Finally, the Loper decision made it clear that overruling Chevron does not overrule all previous cases that rely on Chevron, the Loper ruling is prospective, not retrospective.
III. Conclusion.
In summary, agency deference has been severely curtailed. Agency interpretation over both regulations and statutes is now subject to greater scrutiny. However, agency deference still broadly exists to the extent that interpretations are reasonable, thorough, longstanding, and not contrary to the statute’s language. There is reason to be optimistic about our ability to challenge agency actions going forward. Still, ensuring that our challenges are based on reasonable arguments and reliable and persuasive data is also necessary.
