A five-member majority decided to retain the rule, which is called Auer (or Seminole Rock) Deference. Kagan wrote for the liberal wing and Chief Justice Roberts, although the Chief Justice was unwilling to join the entire opinion. The majority opinion did, however, narrow the Auer rule, which was the portion the Chief was willing to sign. Gorsuch wrote for the dissent, and the four Justices of that opinion would have overturned the rule.

Here’s the background.

Background: Agency deference generally

Congress makes laws. Agencies interpret them. And because agencies are the substantive experts, agencies get to interpret laws with a degree of flexibility.

Here’s an example. Congress passes a law relating to healthcare. Congress doesn’t sort out all of the details, but it tells the health agency, Health and Human Services, to pass regulations specifying the details. HHS does that. When a case presents some confusion about what the law says, courts will generally defer to the agency’s interpretation of the law, as long as that interpretation is reasonable. This doctrine is called Chevron Deference. And here’s some more background on agency deference, including some political controversy over it.

This case is not about overruling Chevron Deference; it’s about one of Chevron’s corollaries: Auer Deference.

Auer Deference

Where Chevron Deference allows agencies to interpret laws (passed by Congress), Auer Deference allows agencies to interpret (or re-interpret) the agency’s own regulations.

Justice Kagan, who wrote the majority opinion for the case gave several typical examples of ambiguous agency regulations:

In a rule issued to implement the Americans with Disabilities Act (ADA), the Department of Justice requires theaters and stadiums to provide people with disabilities “lines of sight comparable to those for members of the general public.” Must the Washington Wizards construct wheelchair seating to offer lines of sight over spectators when they rise to their feet? Or is it enough that the facility offers comparable views so long as everyone remains seated?

The Transportation Security Administration (TSA) requires that liquids, gels, and aerosols in carry-on baggage be packed in containers smaller than 3.4 ounces and carried in a clear plastic bag. Does a traveler have to pack his jar of truffle pâté in that way?

Supporters of Auer Deference will say that in such cases the agencies are in the best position to clarify the ambiguities. For one, they are the substantive experts in the field. And furthermore, wouldn’t an agency know best what its own regulation should mean?

The litigant in this case argued Auer Deference is bad policy. Not just bad, but unconstitutional.

The case

In this case, a Vietnam war veteran requested benefits based on suffering from Post-Traumatic Stress Disorder and was denied. In denying Kisor’s claim, the Department of Veterans Affairs relied on an interpretation of the word “relevant” in its own regulations.

Kisor said the VA’s interpretation was wrong. Kisor wanted a chance to argue that the agency regulation actually meant something else (and that his claim for benefits is valid). But, because of Auer Deference, the federal court would not question the agency’s interpretation.

Kisor’s arguments

Kisor’s arguments fell under two main headers: (1) Auer does not protect against excessive agency power and (2) Auer allows the agency to make rules without giving notice to the public.

Excessive Agency Power. Our Constitution established three branches of government because they are supposed to balance each other out; and they are supposed to watch each others’ behavior. Auer Deference takes the power of review — a judicial power — and gives it to an agency. That’s not just another branch, but it’s the branch that was supposed to be being reviewed in the first place. So Kisor brought out the big guns (the Constitution) for this argument, and he also use a provision of the Administrative Procedure Act for a similar point.

Lack of Notice. People should know the laws that govern them. It’s a concept embodied in the Constitution (Due Process, see, e.g. Sessions v. Dimaya). You can’t just change the laws on people without giving a proper heads up. The Administrative Procedure Act tells federal agencies how to give proper notice to the public (and additionally, opportunities to comment). Kisor argued Auer Deference violates the APA because Auer allows an agency to just change its rules without following the proper notice procedures.

The ruling (majority opinion)

A 5-member majority of the Court ruled to keep Auer Deference in place. That would be the liberal wing plus Chief Justice Roberts. Justice Kagan wrote the opinion, stating that although Auer is still good law, it should be limited to only certain situations. Kagan described the situations in which the rule should be used and sent the case back to the lower courts to evaluate whether to apply Auer in Kisor’s case.

When does Auer work?

Justice Kagan had her reasons for upholding Auer, and those reasons we have to call the plurality opinion. Justice Roberts did not sign on to them. Roberts did agree, however, Kagan’s view on what situations would suit Auer Deference.

An agency interpretation must meet all three of the following conditions before deserving Auer deference:

First, the regulation must be “genuinely ambiguous.” It can’t be just a little bit ambiguous; it has to be actually unclear. What does that mean?

Kagan explained that “[a] court must carefully consider the text, structure, history, and purpose of a regulation before resorting to deference,” and courts should exhaust all the tools of statutory interpretation before deciding a regulation is truly ambiguous and deserving of deference. This condition is meant to keep agencies from altering meaning that was actually intended to be otherwise.

Secondly, to qualify for Auer, the agency’s reading of the rule must be reasonable. So a court does actually get to review the agency’s interpretation for reasonableness.

And finally, before an agency interpretation qualifies for Auer, the court must review the legitimacy of the agency’s interpretation. Does the interpretation deserve controlling weight? To explain further: was it an “official” agency view? Does it implicate the agency’s substantive expertise? Was it “fair and considered judgement” on the part of the agency?

If all three of these conditions are met, Auer can apply. But not otherwise.

The plurality (Roberts dropped off)

Roberts agreed with this, but he didn’t agree with Kagan’s discussion of what justified Auer and her rationale for rejecting Kisor’s arguments. The plurality part of Kagan’s opinion discussed that the Auer comes from a presumption of Congressional intent. She says Congress did want agencies to resolve issues of interpretation. An agency is of course in a good position to know how it interpret its own regulations and also resolve issues in its own substantive areas. It’s also good for uniformity (in rules) if the agency can resolve these questions.

What did the plurality think of Kisor’s arguments? Those four Justices simply didn’t agree that the limited power being given to agencies in Auer Deference was as grave as Kisor argued. It doesn’t violate the APA; doesn’t violate the Constitution’s Separation of Powers; and Kisor didn’t give any real evidence or statistics that Auer would actually cause agencies to issue vague rules on purpose just so that it could turn things around later.

The dissent

Gorsuch wrote for the dissent (Gorsuch, Alito, Thomas and Kavanaugh). The dissenting crew liked Kisor’s APA arguments and said Auer even “sits uneasily” with Separation of Powers. Gorsuch didn’t agree with Kagan’s discussion of Congress’ intent for agencies to interpret their own rules. He said only that agencies might be able to persuade courts to take their interpretations. But they shouldn’t be properly given the control, like Auer does.

Roberts’ concurrence

Roberts was the difference between Auer standing and falling. What did he say? Roberts wrote separately to say that, in his view, the majority and the dissent aren’t far off. Gorsuch ended up explaining when agencies should be able to persuade courts to accept their interpretations of regulations. Roberts said, actually those situations were quite similar to the ones Kagan explained are deserving of deference. Functionally similar, he says. But Auer shouldn’t be overruled. And it’s not.