Is It Time to Revisit Auer Deference? Some Preliminary Empirical Findings

by Chris Walker — Tuesday, Dec. 2, 2014@chris_j_walker

Yesterday the Supreme Court heard argument in Perez v. Mortgage Bankers Association, which presents an important administrative law question of whether notice-and-comment rulemaking is required when an agency significantly alters an interpretive rule that sets forth the agency’s interpretation of its own regulation. Jeff has done two very thoughtful posts about the case here and here, and the oral argument transcript can be found here.

As Jeff explores in his posts and the Supreme Court suggested at oral argument, this case also may call into question the continuing propriety of Auer deference. Auer deference, which is also referred to as Seminole Rock deference, instructs courts that an agency’s interpretation of its own regulation is given “controlling weight unless it is plainly erroneous or inconsistent with the regulation.”

With John Manning leading the way (here), scholars have called for the Court to eliminate this deference doctrine and “replace Seminole Rock with a standard that imposes an independent judicial check on the agency’s determination of regulatory meaning.” Justice Scalia has joined the call to revisit Auer deference, observing that “[f]or decades, and for no good reason, we have been giving agencies the authority to say what their rules mean.” In his concurrence in Talk America v. Michigan Telephone Co., Justice Scalia explained his basic concerns with Auer deference:

For while I have in the past uncritically accepted that rule, I have become increasingly doubtful of its validity. On the surface, it seems to be a natural corollary — indeed, an a fortiori application — of the rule that we will defer to an agency’s interpretation of the statute it is charged with implementing, see Chevron U. S. A. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984). But it is not. When Congress enacts an imprecise statute that it commits to the implementation of an executive agency, it has no control over that implementation (except, of course, through further, more precise, legislation). The legislative and executive functions are not combined. But when an agency promulgates an imprecise rule, it leaves to itself the implementation of that rule, and thus the initial determination of the rule’s meaning. And though the adoption of a rule is an exercise of the executive rather than the legislative power, a properly adopted rule has fully the effect of law. It seems contrary to fundamental principles of separation of powers to permit the person who promulgates a law to interpret it as well. “When the legislative and executive powers are united in the same person, or in the same body of magistrates, there can be no liberty; because apprehensions may arise, lest the same monarch or senate should enact tyrannical laws, to execute them in a tyrannical manner.”  Montesquieu, Spirit of the Laws bk. XI, ch. 6, pp. 151-152 (O. Piest ed., T. Nugent transl. 1949).

Deferring to an agency’s interpretation of a statute does not encourage Congress, out of a desire to expand its power, to enact vague statutes; the vagueness effectively cedes power to the Executive. By contrast, deferring to an agency’s interpretation of its own rule encourages the agency to enact vague rules which give it the power, in future adjudications, to do what it pleases. This frustrates the notice and predictability purposes of rulemaking, and promotes arbitrary government.

In my empirical study on agency statutory interpretation, which I’ve blogged about here and here and which is forthcoming in the Stanford Law Review, I asked the 128 rule drafters surveyed at seven executive departments and two independent agencies about their awareness and use in drafting of the main administrative law deference doctrines. The following figure from the paper summarizes the results:

As the figure illustrates, 94% of the rule drafters knew Chevron deference by name, followed by 81% for Skidmore, 61% for Mead, and 53% for Seminole Rock/Auer. With respect to the role of these doctrines in drafting decisions, the agency rule drafters’ reported use of these doctrines follows the same pattern, with varying levels of less reported use than familiarity: Chevron at 90%, Skidmore at 62%, Mead at 49%, and Seminole Rock/Auer at 39%. (I also asked about Curtiss-Wright deference — the superdeference for executive interpretations of statutes implicating foreign affairs and national security — but only 6% reported awareness and only 2% indicated use in drafting.)

So what should we make of the responses about Seminole Rock/Auer deference?  It is a bit of a puzzle what impact Seminole Rock/Auer deference has on the two in five (39%) agency rule drafters who said they think about it when drafting regulations. One comment, however, may shed some light: “Re: Seminole Rock/Auer, I personally would attempt to avoid issuing ambiguous regulations that we would then have to interpret.” In other words, the rule drafters who indicated Auer deference plays a role in drafting decisions may be saying they attempt to avoid inconsistent regulations.

Or perhaps because Auer is so deferential to an agency’s interpretation of its own regulation, the rule drafters may be saying they do not have to worry about being clear and precise, as they can always clarify and clean up in subsequent guidance. In other words, that two in five rule drafters confirmed that Auer deference plays a role in drafting may provide some support for Justice Scalia’s call to revisit the doctrine due to the odd incentives it may create for agency drafting: “the power to prescribe is augmented by the power to interpret; and the incentive is to speak vaguely and broadly, so as to retain a ‘flexibility’ that will enable ‘clarification’ with retroactive effect.”

Unfortunately, because the survey already included 195 questions, I could only ask two about Auerdeference. I would have loved to have asked more about how the rule drafters “use” Auer deference when drafting regulations/interpreting statutes.* It would be interesting to know how exactly agency rule drafters use Auer in order to assess whether Justice Scalia’s intuitions about perverse incentives are empirically grounded.

But the fact that two in five rule drafters surveyed indicated that they are using Auer deference when drafting regulations may well persuade many that it’s not worth preserving as such doctrine should play no role at the initial regulation-drafting stage.

* I did ask a number of follow-up questions about Chevron, Mead, and Skidmore, which I explore more fully in aFordham Law Review symposium essay. The basic takeaway from those follow-up questions is that many rule drafters indicated that agencies are more aggressive in their statutory interpretation efforts if they are confident Chevron deference applies (as opposed to Skidmore deference or no deference at all).

Cite As: Author Name, Title, 36 Yale J. on Reg.: Notice & Comment (date), URL.

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About Chris Walker

Christopher Walker is a law professor at The Ohio State University Moritz College of Law. Prior to joining the law faculty, Professor Walker clerked for Justice Anthony Kennedy of the U.S. Supreme Court and worked on the Civil Appellate Staff at the U.S. Department of Justice. His publications have appeared in the California Law Review, Michigan Law Review, Stanford Law Review, and University of Pennsylvania Law Review, among others. Outside the law school, he serves as one of forty Public Members of the Administrative Conference of the United States and as Vice-Chair of the American Bar Association’s Section on Administrative Law and Regulatory Practice. He blogs regularly at the Yale Journal on Regulation.

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