Administrative Law in the Crosshairs


The United States Supreme Court heard oral argument last week in a critical if obscure administrative law case: Kisor v. Wilkie asked the simple question of whether the courts should be highly deferential to federal administrative officials in the interpretation of their own statutes. Rebuffing agencies—like the Department of Veterans Affairs, in this case—could reshape the world of modern administrative law. The specific question at issue in Kisor is how to determine the date at which a veteran becomes eligible for disability benefits. Few people seem interested in the particulars of the case, not even the nine Justices, but a clear understanding of them and other key cases is needed to orient the basic theoretical discussion. Ultimately, giving judicial deference is either unnecessary or mischievous. It is best to make agencies defend their legal position like any other party in the system.

In this case, James Kisor applied to the VA for a disability claim for post-traumatic stress disorder. No one doubted that he had the condition. The dispute was over when it started. Kisor claimed an earlier date than the VA allowed, and he sought to introduce evidence from his file to support his contention. The VA disregarded his new evidence. On its view, the governing statutory provision requires that claims for disability benefits be reconsidered only if the VA gets “relevant official service documents” that pertain to his claim. Kisor thought that he should be able to introduce evidence already in the record when his initial claim date was determined. The VA refused to consider that new evidence from the record because it predated the “last denial” of Kisor’s claim. Kisor responded that this earlier evidence should be reviewed in any event so long as it has “any tendency” to tip the outcome in the case. Kisor wanted, therefore, a broader reading of the term “relevant” than the VA allowed, and he claimed that the Federal Rules of Evidence supported him because it used the same broad “any tendency” definition of “relevant” that he endorsed.

In ordinary litigation, Kisor’s argument would carry a lot of weight. But not here. Unfortunately, the Circuit Court for the Federal Circuit punted deciding the issue on the merits, saying in effect that it owed extreme deference to the federal administrator in the construction of his own statute. Eyebrows should raise because the VA is an interested party—but the Federal Circuit invoked two Supreme Court cases, decided over 50 years apart, Bowles v. Seminole Rock (1945) and Auer v. Robbins (1997), to bolster its decision. Both those decisions have come under spirited attack from the conservative side of the Court, because they are said to represent an abnegation of the judicial duty to decide all questions of law that come before a court. The liberal response has been equally emphatic, insisting that Congress wants agencies that use their greater expertise on these specialized issues to determine coherent public policy. So who’s right? To answer that question, it is important to see how judicial deference works in practice.

Seminole Rock involved a technical question of how to set the maximum price for crushed stone under price control regulations that went into effect in April 1942. The regulations of the Office of Price Administration stipulated that the price could not exceed the highest price of any stone delivered in March 1942. Earlier contracts for March deliveries set the price at $0.60 per ton. However, the $0.60 price did not reflect the looming shortages of crushed stone, which in March 1942 drove the price for new sales up to $1.50 per ton. So which price should Seminole Rock have used? The Supreme Court held that the lower price “clearly” controlled, relying both on its reading of the statute and the view of the administrator, which as the “ultimate criterion . . . becomes of controlling weight unless it is plainly erroneous or inconsistent with the regulation.” Seminole Rock is hardly the acid test for deference since the Court and the administrator agreed. Nor was there any political dimension to these determinations, similar to thousands of others, that needed a quick and effective resolution. The best explanation for the deference to the administrator was the need for uniformity, arising out of common practice, in a huge number of interrelated cases that no court could review individually.

But the same cannot be said about Auer, in which the Court had to decide in one large decision whether police sergeants and lieutenants should be paid overtime under the Fair Labor Standards Act. The Fair Labor Standards Act provides that “bona fide executive, administrative, and professional employees” (EAPs) are not eligible for overtime play in the same way as ordinary employees. The question is where to draw the line between the two groups. Previously, the Department of Labor regulations had excluded police sergeants and lieutenants from overtime protection. The Secretary of Labor in the Clinton administration reversed course and found these individuals were not EAPS and hence were eligible for overtime protection. His stated ground was EAPs “are not ‘disciplined’ by piecemeal deductions from their pay, but are terminated, demoted, or given restricted assignments.” Sergeants and lieutenant were subject to such deductions in pay and hence, in the Secretary’s view, were eligible for overtime protection.

In any event, this payment detail is manifestly irrelevant in light of their relevant job descriptions, which show real professional, executive, and administrative responsibilities: police sergeants “supervise Police Officers and other department employees in enforcement of local, state, and federal laws,” and a lieutenant “plans, organizes, oversees, and coordinates the daily activities of a designated operational entity of the Police Department.” Speaking through Justice Scalia (who later rued his decision), the Supreme Court deferred to the Department of Labor on how to interpret its own regulation.

Auermarks a dangerous extension of the deference principle of Seminole Rock. There is no claim that the ordinary language of the statute supports the reading given by the Secretary of Labor, an intensely political position. There was no effort to insist that the new interpretation followed some prior consistent agency practice, in order to prevent constant flip-flops in the overtime coverage between Democratic and Republican administrations. All of these legal uncertainties compound the long-term planning and budgeting problems for local governments and private firms alike. During the oral argument in Kisor, Solicitor General Noel Francisco—a Republican SG in an obviously ticklish position—insisted that Auer promoted certaintyimplying that a cautious dose of administrative deference would help preserve administrative continuity. He was promptly met with an indignant response from Justice Neil Gorsuch, who pointed out that private parties had showered the Supreme Court with briefs lamenting the unpredictably they faced under Auer. No one would have had that reaction to Seminole Rock, which was notable for its seamless interaction between judicial oversight and administrative discretion.

The basic dynamics of the deference game, then, heavily depend on the statutory and political context. Consider the Fourth Circuit decision in Gloucester County School Board v. G.G. The case arose when G.G., then age 14 and born female, was diagnosed as having gender dysphoria, a condition that made her think of herself innately as a male captured inside a female body. She had started hormone therapy with an eye to reassignment surgery after she reached eighteen. Thereafter, G.G. identified himself solely with the male pronoun. He was denied access to the boy’s locker room in the Charlotte, North Carolina school system, but was offered the accommodation of a single-person bathroom stall for changing. That accommodation was rejected and G.G. sued for a violation of Title IX, which makes it illegal in institutions receiving public aid to discriminate on “the basis of sex.” The trial court dismissed the claim holding that under Title IX, sex referred to biological sex at birth.

That decision was reversed by the Fourth Circuit which invoked Auer deference because of a letter from the Departments of Education and Justice, which in May 2016 was embodied in an administrative Guidance that announced as to transgender individuals: “When a school elects to separate or treat students differently on the basis of sex . . . a school generally must treat transgender students consistent with their gender identity.” The regulation did not require proof of gender dysphoria or any other medical or psychological condition. Its sole rationale for this position: “As is consistently recognized in civil rights cases, the desire to accommodate others’ discomfort cannot justify a policy that singles out and disadvantages a particular class of students.” No expert evidence was invoked to explain why centuries of uniform contrary practice counted only as “discomfort,” rather than physical insecurity or psychological distress.

Gloucester County represents a farcical form of statutory construction. Neither the text nor the legislative history of Title IX contains a single syllable about gender identity. Nonetheless, the Fourth Circuit invoked Auerafter it found the statutory language contained sufficient ambiguity that the DOJ/DOE letter controlled. The supposed source of ambiguity was that the statutory language did not explicitly address sex-reassignment surgeries (not applicable to minors), cases of XXY syndromes, or physical abnormalities in genitalia. Why these separate issues, which have been dealt with for years, allow gender identity to be the sole test of sex under Title IX remains a mystery. Title IX was originally drafted to protect women and girls. Why should government administrators, devoid of any expertise or accountability, wreck the statutory scheme of Title IX by letting non-biological females compete against women and girls?

The Fourth Circuit’s decision in Gloucester County reverberated throughout the nation. Fortunately, the misguided Guidance on which it was based was overturned by the Trump administration in February 2017, while making clear that the “withdrawal of these guidance documents does not leave students without protections from discrimination, bullying, or harassment.”

So how does the overall scorecard look? In cases like Seminole Rock, judicial deference does no harm, but it also does very little good. In cases like Kisor, that deference leads courts to ignore relevant materials. And in cases like Auerand Gloucester, it invites massive political abuse that can force on a hapless public comprehensive legal reforms for which there is little legislative or popular approval. Chucking Auer will not save the nation from legislative foolishness. But it can curb manifest administrative abuse. So keep Seminole Rock if need be. But dump Auer.

© 2019 by the Board of Trustees of Leland Stanford Junior University

There are 9 comments.

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  1. Bryan G. Stephens Thatcher
    Bryan G. Stephens

    Wow. Thank you for this education.  I understand this far more now.

    • #1
  2. Ralphie Member

    Clarence Thomas has been concerned about administrative law’s corruption of constitutional law.  It should be curious to see if there will be a dent in it this time.

    • #2
  3. CarolJoy, Above Top Secret Coolidge
    CarolJoy, Above Top Secret

    Thank you for alerting us on this upcoming ruling. It is a story of great complexity.

    Do I want the courts to rule on situations of which most judges and lawyers possess little understanding? Of course not.

    On the other hand, do I want that “understanding” to be brought into the court room by those top bureaucrats inside agencies, who’ re often political appointments? While this particular case might have to do with common sense advice from VA officials, other cases might not be involving common sense. (Although in reading the case over, I would say the VA member, Kiser, should be allowed the earlier date, despite what the bureaucrats state.)

    Rather a damned if we do, damned if we don’t scenario, I’d say.

    • #3
  4. unsk2 Member

    Great informative post.

    Anything that reverses this insane deference to Administrative Agencies is a good by me. The Constitution not only does not grant Administrative Agencies this right to make and decide law, but it relegates the ability to make law solely to Congress alone.  This power to play the legislative role as well as  judge and  jury granted to Administrative Agencies is a incredibly destructive Constitutional abomination without question. 

    • #4
  5. Clifford A. Brown Contributor
    Clifford A. Brown

    It seems to me that this is about as good a case as you could want for SCOTUS to revisit its deference to administrative agencies. This is a veteran versus an agency that has faced massive public and political criticism for mistreatment and misconduct, culminating in a change to law, allowing some bad actors to be fired more promptly than the civil service system protections would normally dictate. Why side with an agency that has bi-partisan disapproval and whose administrators have been targeted as bad people who should be more easily fired? 

    • #5
  6. John Park Member
    John Park

    Seminole Rock should be suspect because it was a wartime ruling. Time for Seminole Rock to make its contribution to the war effort without profiteering.

    Wickard v. Filburn (1942) came out in November 1942, the time of Ex parte Quirin (German saboteurs who were executed before the Court ruled), and in the same month we went ashore in North Africa,

    Both of those decision have gone on to haunt our jurisprudence.

    • #6
  7. The Reticulator Member
    The Reticulator

    Richard Epstein: Eyebrows should raise because the VA is an interested party

    However we get there, we should not have the same entity acting as lawmaker, administrator, and judge. Any progress in breaking apart those roles would be good.

    • #7
  8. CarolJoy, Above Top Secret Coolidge
    CarolJoy, Above Top Secret

    The Reticulator (View Comment):

    Richard Epstein: Eyebrows should raise because the VA is an interested party

    However we get there, we should not have the same entity acting as lawmaker, administrator, and judge. Any progress in breaking apart those roles would be good.

    Then depending on how SCOTUS rules, we could see the end of the IRS, an agency that for far too long has played the role of lawmaker, administrator and judge!

    • #8
  9. The Reticulator Member
    The Reticulator

    CarolJoy, Above Top Secret (View Comment):

    The Reticulator (View Comment):

    Richard Epstein: Eyebrows should raise because the VA is an interested party

    However we get there, we should not have the same entity acting as lawmaker, administrator, and judge. Any progress in breaking apart those roles would be good.

    Then depending on how SCOTUS rules, we could see the end of the IRS, an agency that for far too long has played the role of lawmaker, administrator and judge!

    I doubt that they will get us there in one leap. Congress needs to get involved. 

    • #9

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