p.473, note 11.a., An important counterexample—Department of Commerce v. New York.
The Supreme Court’s opinion in Department of Commerce v. New York, 139 S. Ct. 2551 (2019), illustrates the importance of controlling the record for review and provides a notable counterexample to the general rule that the record for informal proceedings is usually what the agency says it is. The state of New York, among many other plaintiffs, challenged the decision by Secretary of Commerce Wilbur Ross to add a citizenship question to the census, notwithstanding analysis by Census Bureau staff concluding that this addition would lead to an undercount in minority communities. In a memo explaining this decision, Ross asserted that the Department of Justice had requested reinstatement of the citizen question to obtain more granular citizenship data that would be helpful for enforcing requirements of the Voting Rights Act. Shortly after the government submitted the administrative record purporting to include materials that Ross had considered, it submitted a memo explaining that Ross had been considering addition of a citizenship question since early 2017 and had asked DOJ to officially request that he do so. The plaintiffs argued that this memo demonstrated that the administrative record was incomplete, and they moved for completion of the record and extra-record discovery, including expert discovery and depositions of Secretary Ross and of the Acting Assistant Attorney General for the Civil Rights Division (AAG). After the district court granted these motions, the parties stipulated to the addition of 12,000 pages of material to the record. The government appealed the order authorizing depositions of the Secretary and the AAG; the Supreme Court stayed the Secretary’s deposition but allowed other extra-record discovery, including the deposition of the AAG, to proceed.
In an opinion by Chief Justice Roberts, five of the justices largely approved of the district court’s moves to expand the record, albeit with reservations. The Chief Justice’s discussion provides a nice encapsulation of many of the principles we have explored in the last few notes:
We now consider the District Court’s determination that the Secretary’s decision must be set aside because it rested on a pretextual basis, which the Government conceded below would warrant a remand to the agency.
We start with settled propositions. First, in order to permit meaningful judicial review, an agency must “disclose the basis” of its action. … SEC v. Chenery Corp., 318 U.S. 80, 94 (1943) (“[T]he orderly functioning of the process of review requires that the grounds upon which the administrative agency acted be clearly disclosed and adequately sustained.”).
Second, in reviewing agency action, a court is ordinarily limited to evaluating the agency’s contemporaneous explanation in light of the existing administrative record. That principle reflects the recognition that further judicial inquiry into “executive motivation” represents “a substantial intrusion” into the workings of another branch of Government and should normally be avoided.
Third, a court may not reject an agency’s stated reasons for acting simply because the agency might also have had other unstated reasons. Relatedly, a court may not set aside an agency’s policymaking decision solely because it might have been influenced by political considerations or prompted by an Administration’s priorities. Agency policymaking is not a “rarified technocratic process, unaffected by political considerations or the presence of Presidential power.” …
Finally, we have recognized a narrow exception to the general rule against inquiring into “the mental processes of administrative decisionmakers.” Overton Park, 401 U.S. at 420. On a “strong showing of bad faith or improper behavior,” such an inquiry may be warranted and may justify extra-record discovery.
The District Court invoked that exception in ordering extra-record discovery here. Although that order was premature, we think it was ultimately justified in light of the expanded administrative record. Recall that shortly after this litigation began, the Secretary, prodded by DOJ, filed a supplemental memo that added new, pertinent information to the administrative record. The memo disclosed that the Secretary had been considering the citizenship question for some time and that Commerce had inquired whether DOJ would formally request reinstatement of the question. That supplemental memo prompted respondents to move for both completion of the administrative record and extra-record discovery. The District Court granted both requests at the same hearing, agreeing with respondents that the Government had submitted an incomplete administrative record and that the existing evidence supported a prima facie showing that the VRA rationale was pretextual. …
We agree with the Government that the District Court should not have ordered extra-record discovery when it did. At that time, the most that was warranted was the order to complete the administrative record. But the new material that the parties stipulated should have been part of the administrative record—which showed, among other things, that the VRA played an insignificant role in the decisionmaking process—largely justified such extra-record discovery as occurred (which did not include the deposition of the Secretary himself). We accordingly review the District Court’s ruling on pretext in light of all the evidence in the record before the court, including the extra-record discovery.
Id. at 2573-74. Justice Thomas, joined by Justices Kavanaugh and Gorsuch, insisted that the evidence did not establish the “bad faith or improper behavior” required for extra-record discovery and “proves at most that the Secretary was predisposed to add a citizenship question to the census and took steps to achieve that end before settling on the VRA rationale he included in his memorandum.” Id. at 2580 (Thomas, J., concurring in part and dissenting in part).
p. 520, new note 4.a.
4.a. Not-so-concrete guidance about what it means to be “concrete.” In its first significant discussion of constitutional standing since the death of Justice Scalia, the Court reiterated that an injury-in-fact must be both “concrete and particularized,” and, in addition, it shared some thoughts on what it means to be “concrete.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016).
The Fair Credit Reporting Act of 1970 (FCRA) imposes various requirements governing the creation and use of “consumer reports” by “consumer reporting agencies.” It also creates a cause of action enabling an individual to sue “[a]ny person who willfully fails to comply with any requirement [of the FCRA] with respect” to that individual. 15 U.S.C. § 1681(n)(a). Liability can include actual damages, statutory damages, and punitive damages.
Spokeo produced a consumer report about Robins that contained many inaccuracies (e.g., his marital status), and Robins responded by using FCRA’s private cause of action to sue Spokeo. The Ninth Circuit concluded that Robins had suffered an injury-in-fact that was both particularized and concrete given that “Spokeo violated his statutory rights, not just the statutory rights of other people,” and that Robins’ interest at stake was “individualized rather than collective.” 742 F.3d at 413.
Justice Alito, writing for a six-justice majority, held that the Ninth Circuit had not given proper thought to whether Robins’ injury was properly “concrete.” He explained that an injury, to satisfy this requirement, must be “de facto,” it must “exist,” and it must be “real” rather than “abstract.” 136 S. Ct. at 1548. It need not, however, be “tangible.” Determining whether an intangible injury is concrete enough for standing implicates both “history and the judgment of Congress.” Id. at 1549. Regarding history, “it is instructive to consider whether an alleged intangible harm has a close relationship to a harm that has traditionally been regarded as providing a basis for a lawsuit in English or American courts.” Id. As for Congress, its judgment is “instructive and important” because it “is well positioned to identify intangible harms that meet minimum Article III requirements.” Id. (citing Lujan, 504 U.S. at 578). This congressional power does not extend, however, to authorizing plaintiffs to sue for violation of any statutory right at all—a plaintiff still must suffer “a concrete injury even in the context of a statutory violation.” Id. On a slightly more specific note, Justice Alito used the informational injury suffered in Akins (discussed in note 4, above) as an example of an intangible harm that turned out to be concrete enough for standing.
Justice Alito then observed that it was easy to imagine some violations of FCRA that would not actually cause anyone any real harm—e.g., a consumer report misidentifying someone’s zip code. Id. Robins therefore could not properly claim an injury-in-fact merely by “alleging a bare procedural violation” of the statute’s various reporting and process requirements. Id. The Ninth Circuit had not properly addressed “whether the particular procedural violations alleged in this case entail a degree of risk [of harm to Robins] sufficient to meet the concreteness requirement.” Id. So the Court remanded to the Ninth Circuit to think it over.
Justice Ginsburg, joined by Justice Sotomayor, would have upheld standing for Robins rather than remand to the Ninth Circuit on this issue. In support of this position, she included a big string cite of opinions suggesting that the “concreteness” requirement speaks to whether a litigant has a personal stake in the outcome of a case and whether that case involves genuinely adverse parties:
Illustrative opinions [explaining what it means to be “concrete”] include Akins, 524 U.S. at 20 (“[C]ourts will not pass upon abstract, intellectual problems, but adjudicate concrete, living contests between adversaries.” (internal quotation marks and alterations omitted)); Diamond v. Charles, 476 U.S. 54, 67 (1986) (plaintiff's “abstract concern does not substitute for the concrete injury required by Art [icle] III” (internal quotation marks and ellipsis omitted)); Los Angeles v. Lyons, 461 U.S. 95, 101 (1983) (“Plaintiffs must demonstrate a personal stake in the outcome.... Abstract injury is not enough.” (internal quotation marks omitted)); Babbitt v. Farm Workers, 442 U.S. 289, 297-98 (1979) (“The difference between an abstract question and a ‘case or controversy’ is one of degree, of course, and is not discernable by any precise test. The basic inquiry is whether the conflicting contentions of the parties present a real, substantial controversy between parties having adverse legal interests, a dispute definite and concrete, not hypothetical or abstract.” (citation, some internal quotation marks, and ellipsis omitted)); Simon v. Eastern Ky. Welfare Rights Organization, 426 U.S. 26, 40 (1976) ( “organization's abstract concern ... does not substitute for the concrete injury required by Art. III”); California Bankers Assn. v. Shulz, 416 U.S. 21, 69 (1974) (“There must be ... concrete adverseness”; “[a]bstract injury is not enough.” (internal quotation marks omitted)); Railway Mail Assn. v. Corsi, 326 U.S. 88, 93 (1945); Coleman v. Miller, 307 U.S. 433, 460 (1939) (opinion of Frankfurter, J.) (“[I]t [is] not for courts to pass upon ... abstract, intellectual problems but only ... concrete, living contest[s] between adversaries call[ing] for the arbitrament of law.”).
Id. at 1555-56 (Ginsburg, J., dissenting).
Justice Ginsburg then observed that Robins “complains of misinformation about his education, family situation, and economic status, inaccurate representations that could affect his fortune in the job market.” Id. at 1556 (Ginsburg, J., dissenting). Given this much, she saw “no utility in returning this case to the Ninth Circuit to underscore what Robins’ complaint already conveys concretely: Spokeo's misinformation causes actual harm to his employment prospects.” Id. at 1556 (Ginsburg, J., dissenting) (citation, internal quotation marks, and brackets omitted).
520, new note 4.b., Partisan gerrymandering—problems of proof and generalized grievances
In Gill v. Willford, 138 S. Ct. 1916 (2018), the Supreme Court unanimously rejected on standing grounds a § 1983 claim that twelve Democratic voters brought against members of the Wisconsin Elections Commission on the theory that partisan gerrymandering of state legislative districts had diluted the voting strength of Democratic voters, violating their rights under the Equal Protection Clause and the First Amendment. This gerrymandering took the form of “cracking” Democratic voters among multiple districts to prevent them from assembling majorities and “packing” them into a smaller number of districts where they win by large margins—thus wasting their votes and creating an “efficiency gap” between Democratic and Republican voters. Taking advantage of this efficiency gap, in 2014, Republicans won 63 of 99 seats in the Wisconsin Assembly with only 52% of the statewide vote.
The Court conceded, “‘voters who allege facts showing disadvantage to themselves as individuals have standing to sue’ to remedy that disadvantage.” Id. at 1929 (quoting Baker v. Carr, 369 U.S. 186, 206 (1962)). It added, however, that, given that Wisconsin uses single-member districts, the injury of vote dilution is district specific. Thus, a plaintiff may claim such an injury based only on gerrymandering of the district in which she resides. See id. at 1930. Just four of the plaintiffs alleged that they lived in Assembly districts that had been cracked or packed, thus diluting their votes. These claims could not provide standing, however, for the simple reason that the plaintiffs failed to offer evidence for these allegations at trial. Remarkably, no plaintiff had proven that she lived in a particular district with gerrymandered lines.
Instead, the plaintiffs based their claim for standing on harm to the statewide interests of Wisconsin Democrats. The Court insisted, however, that a voter who does not reside in a gerrymandered district has not had her particular vote diluted. Of course, if enough other districts are gerrymandered, a voter living in a non-gerrymandered district might find that her party cannot seriously contest control of the legislature. The Court characterized the plaintiffs’ interest in the composition of the legislature as a whole, however, as a “collective political interest, not an individual legal interest.” Id. at 1932. It added that, “the citizen's abstract interest in policies adopted by the legislature on the facts here is a nonjusticiable ‘general interest common to all members of the public.’” Id. at 1931 (quoting Ex parte Levitt, 302 U.S. 633, 634 (1937) (per curiam)).
The Court’s treatment of standing in Gill will not present much of a hurdle to gerrymandering claims in the future as the interest groups bringing them will just be more careful to make sure that they prove that their plaintiffs come from gerrymandered districts. Id. at 1936 (Kagan, J., concurring). Indeed, the plaintiffs in Gill will have that chance themselves as the Supreme Court took the unusual step of remanding to the district court for further proceedings where standing may be demonstrated rather than taking its usual course of dismissal. Id. at 1933-1934 (acknowledging that “where a plaintiff fails to demonstrate Article III standing, we usually direct the dismissal of the plaintiff’s claims). Cf. 138 S.Ct. at 1941 (Thomas, J., concurring in part and concurring in the judgment) (insisting that the case should have been dismissed given that “the plaintiffs had a more-than-ample opportunity to prove their standing”).
Justice Kagan seized upon the unusual disposition of the case to offer suggestions for how standing might be litigated and determined on remand. To begin, she explained how the plaintiffs might easily prove that they live in a packed or cracked district as needed to show standing based on a vote dilution theory. She then discussed the possibility that the plaintiffs might be able to base standing on statewide rather than district-specific injuries by more clearly pursuing a claim that partisan gerrymandering had violated their First Amendment right to freedom of association. For support, she cited Justice Kennedy for the proposition that “‘First Amendment concerns arise’ when a State purposely ‘subject[s] a group of voters or their party to disfavored treatment.’” Id. at 1938 (Kagan, J., concurring) (quoting Vieth v. Jubelirer, 541 U.S. 267, 314 (2004) (Kennedy, J., concurring)). She explained that this “associational harm of a partisan gerrymander is distinct from vote dilution.” Thus, although a voter who does not live in a cracked or packed district does not suffer from vote dilution as such, she suffers cognizable harm where the cracking and packing of other districts “ravage[s]” her party’s fortunes. Id. at 1938 (Kagan, J., concurring). Other party members, party officials, and the party itself likewise suffer injury from such damage to a party’s electoral prospects.
p. 576, new note 6.a.
Note 6.a. at 576. More on finality and the second prong of Bennett
“Peat is . . . widely used for soil improvement and . . . can also be used to provide structural support and moisture for smooth stable putting greens that leave golfers with no one to blame but themselves for errant putts.” U.S. Army Corps of Engineers v. Hawkes Co., Inc., 136 S. Ct. 1807, 1812 (2016). In Hawkes, the Supreme Court took up the question of whether respondent peat miners could obtain judicial review under the Administrative Procedure Act (APA), of a “jurisdictional determination” (JD) from the Army Corps of Engineers (the “Corps”). Id.; 5 U.S.C. § 704. The JD indicated that the respondents’ peat mining resulted in the discharge of pollutants into “waters of the United States” in potential violation of the Clean Water Act, 33 U.S.C. §§ 1311(a), 1362(7), (12). The Corps argued that the JD was not judicially reviewable because it was not “final agency action.” Hawkes, 136 S. Ct. at 1813. More specifically, the Corps argued that the JD did not meet the second prong of the test outlined in Bennett v. Spear because no legal consequences flowed directly from the jurisdictional determination. See id. at 1813-14.
The Supreme Court disagreed. In an opinion written by Chief Justice Roberts, it held that the JD did constitute final agency action because it gave rise to “direct and appreciable legal consequences.” Id. at 1814 (citing Bennett, 520 U.S. at 178). The Court relied in part on the fact that the Corps had entered into a memorandum of agreement with the Environmental Protection Agency (EPA), the agency responsible for enforcing the Clean Water Act. The memorandum stated that the Corps’ JD would be “binding on the Government and represent the Government’s position in any subsequent federal action or litigation concerning that final determination.” Id. To the extent that a JD is indeed binding with regard to the Government’s litigation position, it would not be surprising to treat it as final, especially when read in conjunction with the Court’s prior decision in Sackett. See note 6, supra.
The Court’s opinion was made more interesting, however, by what the Chief Justice said next. After applying the legal consequences test from Bennett, he concluded by pointing out that permitting judicial review of the Corps’ JD is consistent with “the ‘pragmatic’ approach we have long taken to finality.” Hawkes, 136 S. Ct. at 1815. He cited Abbott Labs and an earlier case, Frozen Food Express v. United States, 351 U.S. 40, 76 (1956), for the proposition that agency actions can be deemed final, and thus reviewable, when they have sufficient practical effects on a party, including when a party experiences an increased risk of consequences that are not yet mandated by law. Id. This difference may not matter in the majority of cases because agency action will often have both legal and practical consequences. But there is nevertheless a theoretical difference between the legal consequences outlined in Bennett and the practical effects in Abbott Labs and Frozen Food Express that could be worth watching in future cases dealing with finality.
Justices Kagan and Ginsburg reflected this distinction in their respective concurrences in Hawkes. Justice Kagan seemed to favor the legal consequences language from Bennett, explaining that the “memorandum of agreement between the Army Corps of Engineers and the Environmental Protection Agency,” which she read as legally binding the EPA to the conclusions reached in the Corps’ JD, “is central to the disposition of this case.” Id. at 1817. By contrast, Justice Ginsburg rejected the relevance of the memorandum and thought it enough for finality purposes that the JD “has ‘an immediate and practical impact’” on the respondents. Id. at 1817-18 (citing Frozen Food Express). It is unclear whether the distinction between legal consequences and practical impacts will turn out to be critical for the finality doctrine, but the various opinions in Hawkes at least leave the issue open for future treatment by the Court.
p. 681, new note 8.a.
Note 8.a. at 681. Arbitrariness as a threshold question
If step two of Chevron is the same as arbitrariness review under the APA, as Justice Kagan stated in Judulang, (see note 8, supra) then what is one to do when an agency applies its own statute in a way the Court deems arbitrary and capricious? (Recall that in Judulang the agency action at issue was not a matter of statutory interpretation, so the above question was not answered directly.) That task fell to the Court this past term in Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117 (2016).
Encino involved a dispute over whether people employed as “service advisors” at car dealerships are entitled to overtime pay under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 201 et seq. The particular facts are complicated, but the key for our purposes is that the Department of Labor (DOL), the agency tasked with administering the FLSA, had its own long and winding history of interpreting the statutory overtime exemption for service advisors. Initially, the agency interpreted the statute such that service advisors were eligible for overtime. Several years after that, the agency issued an opinion letter interpreting a statutory amendment to deny them overtime. The agency held to that position for thirty years. Then in 2011 the agency changed its position again, issuing a final rule requiring overtime pay for auto dealer service advisors.
When the Encino car dealership refused to pay overtime to its service advisors, the advisors sued to enforce the overtime requirements of the new rule. Although the service advisors lost in the district court, the Ninth Circuit reversed, applying Chevron and deferring to the DOL’s 2011 rule as a reasonable interpretation of the FLSA overtime provision. 780 F.3d 1267 (9th Cir. 2015).
The Supreme Court reversed in language that has caused considerable confusion about the relationship between arbitrary and capricious review and Chevron deference. As a matter of substance, the Court held that the 2011 regulation was arbitrary and capricious under the APA because the agency had not explained why it adopted the new position after many years of having taken the opposite view. This is a longstanding principle, particularly reflected in FCC v. Fox Television Stations (the details of which we discuss supra at note 7 on page 636). Had the Court stopped there, the result would have been fairly simple. It would essentially have confirmed the proposition that Chevron Step 2 is the same as arbitrary and capricious review. The agency had simply failed the test of FCC v. Fox, so it also failed under Step 2 of Chevron. In other words, an agency decision subject to Chevron Step 2 is not “reasonable” if it cannot survive arbitrary and capricious review.
But the Court complicated things by saying that
But where a proper challenge is raised to the agency procedures, and those procedures are defective, a court should not accord Chevron deference to the agency interpretation.
Encino, 136 S. Ct. at 2125. The Court concluded its discussion of the requirements of arbitrary and capricious review by saying
It follows that an “[u]nexplained inconsistency” in agency policy is “a reason for holding an interpretation to be an arbitrary and capricious change from agency practice.” An arbitrary and capricious regulation of this sort is itself unlawful and receives no Chevron deference.
Id. at 2126 (citations omitted).
These references suggest that the courts must somehow resolve whether an agency’s decision is arbitrary and capricious before determining whether Chevron deference can be considered. It is difficult to see how that determination can be separated from the Step 2 analysis itself. Indeed, Justice Ginsburg, concurring in Encino, considered that case to be a relatively typical instance of arbitrary and capricious review. Id. at 2128 (Ginsburg, J., concurring) (“I write separately to stress that nothing in today’s opinion disturbs well-established law.”). Encino’s ultimate impact will depend on which approach courts take going forward, although it is fair to say that where challengers to agency action bring both arbitrary and capricious and statutory interpretation challenges, questions about the relationship between the two may well be largely academic.
- 685, revision to note 15
- What about deference to an agency’s interpretations of its regulations? The struggle over Auer deference. Auer deference, once more usually known as Seminole Rock deference, has required courts to defer to an agency’s reasonable interpretation of its own regulation “unless it is plainly erroneous or inconsistent with the regulation.” Bowles v. Seminole Rock Co., 325 U.S. 410 (1945); Auer v. Robbins, 519 U.S. 452 (1997) (confirming this approach).
Auer deference has roots in the plausible proposition that the entity best placed to interpret a regulation is the agency that wrote it and applies it. Critics, however, have argued that Auer deference grants too much power to agencies to manipulate the meaning of regulations in enforcement actions. In the words of Justice Scalia, deferring to an agency’s interpretation of its own regulation “contravenes one of the great rules of separation of powers: He who writes a law must not adjudge its violation.” Decker v. Nw. Envtl. Def. Ctr., 133 S. Ct. 1326, 1342 (2013) (Scalia, J., concurring and dissenting in part).
In response to such critiques, the Court took steps to limit agency manipulation of regulatory interpretations. In Gonzales v. Oregon, 546 U.S. 243 (2006), the Court ruled that Auer deference applies only to those regulations that are genuine products of agency “expertise and experience.” An agency therefore cannot reap the benefits of Auer deference by issuing a regulation that merely “parrots” statutory language. In Christopher v. SmithKline Beecham Corp., 132 S. Ct. 2156 (2012), the Court imposed additional limits on the reach of Auer deference, blocking its application to interpretive flip-flops — especially where they take regulated parties by surprise.
But for opponents of Auer deference, including four members of the Court, these limitations were not enough. In 2019, the Court addressed the issue of whether to overrule Auer deference in Kisor v. Wilkie, 139 S. Ct. 2400 (2019). The Department of Veterans Affairs (VA) had denied benefits claims by James Kisor, a Vietnam War veteran suffering from post-traumatic stress disorder, for almost twenty-five years. The VA finally awarded benefits to him in 2006, when his claim was reopened. Based on an interpretation of its own regulation, however, the agency denied retroactive benefits to cover the period before this date. Kisor’s challenge to this decision argued that Auer should be overruled. Although all nine justices voted to remand the case to give Kisor another chance to argue that he should be granted pre-2006 benefits, only four agreed that it was time to overrule Auer.
Justice Kagan wrote the lead opinion, which three other justices joined in full, and the Chief Justice joined in large part to add a fifth vote. Writing for this five-justice majority, Justice Kagan offered the following explanation for the reach and operation of Auer deference:
First and foremost, a court should not afford Auer deference unless the regulation is genuinely ambiguous. … If uncertainty does not exist, there is no plausible reason for deference. The regulation then just means what it means—and the court must give it effect, as the court would any law. Otherwise said, the core theory of Auer deference is that sometimes the law runs out, and policy-laden choice is what is left over. …
And before concluding that a rule is genuinely ambiguous, a court must exhaust all the “traditional tools” of construction. … To make that effort, a court must “carefully consider[]” the text, structure, history, and purpose of a regulation, in all the ways it would if it had no agency to fall back on. …
If genuine ambiguity remains, moreover, the agency’s reading must still be “reasonable.” … In other words, it must come within the zone of ambiguity the court has identified after employing all its interpretive tools. …
Still, we are not done—for not every reasonable agency reading of a genuinely ambiguous rule should receive Auer deference. We have recognized in applying Auer that a court must make an independent inquiry into whether the character and context of the agency interpretation entitles it to controlling weight. … The inquiry on this dimension does not reduce to any exhaustive test. But we have laid out some especially important markers for identifying when Auer deference is and is not appropriate.
To begin with, the regulatory interpretation must be one actually made by the agency. In other words, it must be the agency’s “authoritative” or “official position,” rather than any more ad hoc statement not reflecting the agency’s views. … The interpretation must at the least emanate from those actors, using those vehicles, understood to make authoritative policy in the relevant context. … If the interpretation does not do so, a court may not defer.
Next, the agency’s interpretation must in some way implicate its substantive expertise. … So the basis for deference ebbs when “[t]he subject matter of the [dispute is] distan[t] from the agency’s ordinary” duties or “fall[s] within the scope of another agency’s authority.” … When the agency has no comparative expertise in resolving a regulatory ambiguity, Congress presumably would not grant it that authority.5
Finally, an agency’s reading of a rule must reflect “fair and considered judgment” to receive Auer deference. … That means, we have stated, that a court should decline to defer to a merely “convenient litigating position” or “post hoc rationalizatio[n] advanced” to “defend past agency action against attack.”6 And a court may not defer to a new interpretation, whether or not introduced in litigation, that creates “unfair surprise” to regulated parties. … That disruption of expectations may occur when an agency substitutes one view of a rule for another. Or the upending of reliance may happen without such an explicit interpretive change. This Court, for example, recently refused to defer to an interpretation that would have imposed retroactive liability on parties for longstanding conduct that the agency had never before addressed.
Id. at 2415-18 (numerous citations omitted). Your editors have identified at least five limiting factors on the reach of Auer deference articulated by the majority. Can you do the same? Are there underlying themes in Justice Kagan’s description that can help us better understand the doctrine as a whole?
After describing the proper use of Auer deference going forward, Justice Kagan emphasized that stare decisis strongly weighed against overruling this doctrine given that it rested on a “long line of precedents” reaching back at least 75 years, its overruling would “cast doubt on many settled constructions of rules,” and Congress has not acted, as it could, to overrule Auer by statute.
Justice Gorsuch’s concurring opinion (writing for as many as four justices in some parts) strongly argued for jettisoning Auer deference. He argued that the APA, the Constitution, and policy considerations all counsel against judicial deference to agency interpretations of regulations. In addition to invoking the general Marbury principle that the judicial branch must have the final say on interpreting legal provisions, he contended that judicial deference to executive branch interpretations deprives individuals of the protection of independent courts and improperly expands executive power by providing agencies too much influence over the legal effect of their regulations. Instead of applying Auer’s strong form of deference, courts should instead exercise independent judgment to issues of regulatory interpretation and, following Skidmore, affirm only those interpretations that they find “persuasive.”
Chief Justice Roberts and Justice Kavanaugh both wrote short concurring opinions. The Chief Justice emphasized that the practical difference between Justice Kagan’s and Justice Gorsuch’s approaches might not be that great as, given the limitations on Auer deference identified by Justice Kagan, “the cases in which Auer deference is warranted largely overlap with the cases in which it would be unreasonable for a court not to be persuaded by an agency’s interpretation of its own regulation.” Id. at *15 (Roberts, C.J., concurring). Similarly, Justice Kavanaugh found a potentially powerful limit to Auer deference in the majority’s instruction to courts to exhaust the “traditional tools” of construction before concluding that a regulation is sufficiently ambiguous to merit Auer deference. Justice Kavanaugh predicted that courts that assiduously apply these “traditional tools” will “almost always reach a conclusion about the best interpretation of the regulation at issue. After doing so, the court will then have no need to adopt or defer to an agency’s contrary interpretation.” Id. at 2448 (Kavanaugh, J., concurring).
Might this struggle over Auer portend anything for the fate of Chevron deference? Both the Chief Justice and Justice Kavanaugh were careful to note that Kisor’s treatment of Auer deference has no bearing on Chevron deference, which they contend raises different issues. Are they right about this?
5 For a similar reason, this Court has denied Auer deference when an agency interprets a rule that parrots the statutory text. See Gonzales v. Oregon, 546 U.S. 243, 257 (2006). An agency, we explained, gets no “special authority to interpret its own words when, instead of using its expertise and experience to formulate a regulation, it has elected merely to paraphrase the statutory language.”
33
Chapter 5 Judicial Review of Agency Action
Insert as Note 8a in Part 5A:
8a. Can the agency head supplement the record on review? The Supreme Court had another occasion
to consider the administrative record in a high-profile case involving the Obama Administration’s Deferred
Action for Childhood Arrivals (DACA) program. DACA was initiated in 2012 via a memorandum issued
by the Secretary of Homeland Security, the official responsible for enforcing immigration laws. In general, DACA did two things. It offered undocumented individuals who came to the United States as children and met certain conditions during their stay temporary relief from deportation. It also, by triggering conditionsin other, preexisting regulations, rendered some DACA recipients eligible for federal social security andhealth care benefits.
In 2017, the Acting Secretary of Homeland Security in the Trump Administration, Elaine C. Duke,
issued a memorandum rescinding DACA on the grounds that the program was illegal (“Duke Memo”). The
memo relied on an opinion from the Attorney General stating that DACA was illegal as adopted because
making federal benefits available to a class of people—individuals who qualify to participate in DACA—
was not within the president’s statutory authority.
The Duke Memo was challenged in three different cases on arbitrary and capricious grounds. (For a
more detailed discussion of the arbitrary and capricious challenges to the program, see note 8a in Part 5G.2.)
The lower courts all ruled in favor of the challengers, but one court stayed its judgment for 90 days to allow
the current DHS Secretary, Kirstjen Nielsen, to “reissue a memorandum rescinding DACA, this time
providing a fuller explanation for the determination that the program lacks statutory and constitutional
authority” (the “Nielsen Memo”).
The Nielsen Memo agreed with the Duke Memo that DACA “was contrary to law.”
It also offered three new policy reasons for rescinding DACA that were not in the Duke Memo.
The lower court concluded that the Nielsen Memo’s additional explanation was not enough to cure the Duke Memo’s arbitrariness.
At the Supreme Court, the government argued that the Nielsen Memo’s rationale is sufficient to
overcome an arbitrary and capricious challenge, citing the policy reasons in the Nielsen Memo that were
absent from the Duke Memo. Chief Justice Roberts, writing for the Court, held that the Nielsen Memo,
insofar as it offered explanations that were not included in the Duke Memo, was not part of the relevant
administrative record in this case:
Because Secretary Nielsen chose to elaborate on the reasons for the initial rescission [the Duke Memo] rather than take new administrative action, she was limited to the agency’s original reasons, and her explanation “must be viewed critically” to ensure that the
rescission is not upheld on the basis of impermissible “post hoc rationalization.” But despite purporting to explain the Duke Memorandum, Secretary Nielsen’s reasoning bears little relationship to that of her predecessor.
Acting Secretary Duke rested the rescission on the conclusion that DACA is unlawful. Period. By contrast, Secretary Nielsen’s new memorandum offered three “separate and independently sufficient reasons” for the rescission, only the first of which is the conclusion that DACA is illegal. . . .
The policy reasons that Secretary Nielsen cites as a [] basis for the rescission are alsonowhere to be found in the Duke Memorandum. That document makes no mention of a preference for legislative fixes, the superiority of case-by-case decisionmaking, the importance of sending a message of robust enforcement, or any other policy consideration.
Nor are these points included in the legal analysis from the . . . Attorney General. They can
be viewed only as impermissible post hoc rationalizations and thus are not properly before
us.
Because the Nielsen Memo claimed to be an elaboration on the Duke Memo, rather than a new agency
action, the Nielsen Memo’s arguments that were not also part of the Duke Memo were post hoc rationalizations,
and thus could not be considered in the Court’s arbitrary and capricious analysis.
Justice Kavanaugh, writing in dissent, argued that the Chief Justice misapplied the Court’s
administrative record precedents.
First, Justice Kavanaugh argued that the exclusive record requirement
only applied to review of agency adjudications, not rulemakings as in the case at hand. (The Court accepted
that the Duke and Nielsen Memos were interpretive rules, not adjudications).
The Chief Justice effectively dismissed this argument out of hand, noting that Justice Kavanaugh “cites no authority” for his proposition
and that “[t]he Government does not even raise this unheralded argument.”
Second, Justice Kavanaugh argued that prior cases only excluded post hoc rationalizations made by lawyers defending agency action
on review, not explanations (like the Nielsen Memo) provided by the agency head herself. The Chief Justice
rejected this argument by explaining that:
While it is true that the Court has often rejected justifications belatedly advanced by
advocates, we refer to this as a prohibition on post hoc rationalizations, not advocate
rationalizations, because the problem is the timing, not the speaker. The functional reasons
for requiring contemporaneous explanations apply with equal force regardless whether post
hoc justifications are raised in court by those appearing on behalf of the agency or by
agency officials themselves.
In sum, the majority decision in the DACA cases affirmed the exclusive record requirement in judicial
review of agency action by explaining that courts must reject arguments raised for the first time by the
agency on review, regardless of who made the argument on behalf of the agency and whether the agency
action under review is a rulemaking or an adjudication.
6 The general rule, then, is not to give deference to agency interpretations advanced for the first time in legal briefs. …. But we have not entirely foreclosed that practice. Auer itself deferred to a new regulatory interpretation presented in an amicus curiae brief in this Court. There, the agency was not a party to the litigation, and had expressed its views only in response to the Court’s request. “[I]n the circumstances,” the Court explained, “[t]here [was] simply no reason to suspect that the interpretation [did] not reflect the agency’s fair and considered judgment on the matter in question.” ….