Dilution of Auer Deference?

It is hornbook administrative law that agencies' interpretations of their own regulations received heightened judicial deference.  The standard cites are Bowles v. Seminole Rock Co., 325 U.S. 410 (1945), and Auer v. Robbins, 519 U.S. 79 (1997).  The principle has a number of possible justifications: (a) the agency best understands what interpretation will make sense and advance statutory goals, (b) deference will help achieve national uniformity, (c) the agency knows what it meant, and (d) even if the agency is stretching, it could rewrite the regulation anyway, so there is not much point in rejecting the interpretation and thus forcing it to go the long way round to ending up in the same place.

Nonetheless, there is an undercurrent of doubt regarding Auer deference. Rubber-stamping an agency's interpretations of its own regulations allows (and perhaps encourages) the agency to issue a vague or benign regulation with notice and comment, then "interpret" it aggressively, unpredictably, or in bad faith, without notice and comment.  A strong statement of doubts about Auer deference is John Manning, Constitutional Structure and Judicial Deference to Agency Interpretations of Agency Rules, 96 Colum. L. Rev. 612 (1996).

Unitl recently, the Manning critique impressed many scholars but was not influential in the courts.  That seems to be changing.  Last year saw a striking concurring opinion by Justice Scalia in Talk America v. Michigan Bell Telephone Co., 131 S. Ct. 2254 (2011).  Scalia endorsed the Manning position, expressed basic doubts about Auer deference, and declared himself open to abandoning Auer:

Now at least five Justices seem to have shifted toward that position.  Yesterday the Court decided Christopher v. Smithkline Beecham Corp.  The case concerned whether the time-and-a-half for overtime requirements of the FLSA apply to certain drug company sales reps.  The statute exempts "outside salesmen" from its coverage.  It does not define that term; it does authorize the Secretary of Labor to "define and delimit" its meaning by regulation.  Here the reps' main activity was obtaining promises by doctors to prescribe the company's products; if such agreements were "sales" then the reps were "salesmen" and the exemption applied.  Relying on an interpretation of its own regulations that had been set forth in several amicus briefs, the Department of Labor took the position that a "sale" requires actual transfer of title, and that therefore the reps were not salesmen.  In a 5-4 decision, the Court held that Auer deference did not apply and rejected the DOL's interpretation on the merits.

Justice Alito's opinion for the majority does not establish any hard and fast rules, and expressly acknowledges that Auer deference can apply to views set out in briefs, but finds Auer inapplicable in these circumstances.  The heart of his discussion rests on concerns about notice and fair warning to regulated entities -- the industry had treated reps as "outside salesmen" for decades and DOL had never taken issue with that understanding until a 2009 amicus brief.

Justice Breyer's dissenting opinion (joined by Justices Ginsburg, Sotomayor, and Kagan) has little to say about Auer.  The case is not cited, and the word "deference" does not appear.  However, Breyer does note in passing that in light of the fact that the government's precise understanding of the meaning of the regulations had fluctuated during the litigation, "I . . . agree that we should not give the Solicitor General's current interpretative view an especially favorable weight."  He goes on to grapple with the DOL regulations and the statute without mentioning or relying on the agency's views.

Thus, while the opinions leave a great deal of room for debate about just when Auer applies, all nine Justices found it inapplicable here, and that principle seems a good deal less rock solid today than it did yesterday.

Sackett v. EPA and pre-enforcement review of agency orders

Today the Supreme Court heard argument in Sacket v. EPA, No. 10-1062, concerning whether a landowner can obtain pre-enforcement review of an EPA order to remove unpermitted filling of wetlands.  The Ninth Circuit, agreeing with every other court of appeals to decide the issue, had held that such review was unavailable.

Former Section chair Bill Funk offers these comments on the case:

   The media has characterized this case, depending upon their orientation, either as an overbearing government threatening a family for trying to build a house on slightly more than a half-acre of its property or as threat to the ability of the Environmental Protection Agency to take necessary action to protect the environment.  Unfortunately, for those of us who prefer truth to propaganda, neither of these descriptions accurately state what is before the Court. 

   The Sacketts want to build a house on their .6 acre property, and in preparation for that they filled an area that EPA believes is a wetland.  While they might have qualified for a permit for this activity, they did not seek one, and when informed by EPA that it appeared they were violating the Clean Water Act, they did not desist from their activity.  EPA consequently issued a “compliance order,” as authorized by the Clean Water Act, ordering the Sacketts to cease and desist from their filling activities and in addition to remove the fill material and restore the area to its original condition.  The order included the warning that violation of the order might subject the Sacketts to substantial civil or administrative penalties.  The Sacketts then brought suit in federal court alleging among other things that the compliance order was arbitrary and capricious. 

   Whether the Sacketts or EPA are correct is not the issue before the Court.  The issue is simply whether the Sacketts may seek a judicial determination of the correctness of EPA’s order without having to violate that order and risk large civil or administrative penalties in order to obtain a judicial determination of the legality of EPA’s order as a defense to that enforcement action.  EPA, understandably, would like to avoid judicial review until it brings an enforcement action in court.  The threat of huge penalties if EPA is correct often may be enough to force compliance even if the defendant strongly believes that EPA is wrong.  Recall Clint Eastwood’s challenge as Dirty Harry to various perpetrators; “make my day,” he would say, leaving them to guess whether he had another bullet in his pistol. 

   Many environmentalists fear that a decision by the Court in favor of the Sacketts would hamstring environmental enforcement, on the theory that if defendants may delay compliance during lengthy judicial review proceedings, there may substantial harm to the environment, even if EPA eventually prevails.  Moreover, if obtaining judicial review would delay compliance, then defendants might be induced to seek judicial review simply to put off the cost of compliance, even if the defendants knew they were likely to lose in the end.  However, this fear is unfounded.  The Administrative Procedure Act is clear that obtaining judicial review of a compliance order does not by itself relieve a person from the requirement to comply with that order pending judicial review.  That Act provides that a person may seek a stay of the order first from the agency and then from the court if the agency denies the request, but that request will be judged on its own merits.  For example, with respect to the Sacketts, it is unlikely a court would stay EPA’s order to cease and desist from further damage to the alleged wetlands, but it might well stay the requirement that the Sacketts restore the wetlands until a determination of the validity of EPA’s order.  Thus, the judicial review the Sacketts seek would not enable continued harm to the environment during the review proceedings.

   One need not view EPA as a rogue agency, or even as Dirty Harry, to appreciate the need for providing a judicial check on agency action.  Even in good faith EPA has made errors in the past and will again in the future; after all, it is staffed by humans.  Knowing that persons may be able to seek judicial review, rather than be coerced into compliance out of fear of large penalties, provides a healthy incentive for EPA to ensure that its decisions are based on sound facts and law that will be readily upheld in courts.  Absent that incentive, the tendency noted by Lord Acton that power corrupts and absolute power corrupts absolutely could lead an agency to rely more on coercion than law.  It is an essential element of the rule of law that government action be subject to judicial review, and here EPA’s order likewise should be subject to review.

Rulemaking: D.C. Circuit Decision in ATA v. National Mediation Board

Here's a post from Jeffrey Lubbers, Professor of Practice in Administrative Law at American University's Washington College of Law:

Friends—The D.C. Circuit affirmed the district court’s upholding of the National Mediation Board’s election ballot counting rule today.  Judge Tatel wrote for himself and Judge Griffin.  Judge Henderson dissented.

The court ruled, using Chevron, that the statute was ambiguous and that the Board’s rule was permissible.  It also ruled that its change from a longstanding rule was not arbitrary and capricious, citing Fox TV Stations, and affirmed Judge Friedman’s denial of a discovery request by ATA seeking evidence of bias on the part of the Board majority, citing the ANA case.  It is a rare rulemaking bias case in that regard. 

http://www.cadc.uscourts.gov/internet/opinions.nsf

10-5253, Air Transp. Assoc. of America v. National Mediation Board