Ninth Circuit Review-Reviewed: Kisor’s Coming Out Party, by William Yeatman

by Guest Blogger — Monday, Sept. 9, 2019

Welcome back to Ninth Circuit Review-Reviewed, your monthly recap of administrative law before arguably “the second most important court in the land.” Let’s get straight to last month’s cases.

Unanimous Panel Puts Ninth Circuit’s Stamp on Kisor v Wilkie

Administrative law doctrines develop in lower courts within the boundaries set from above by the Supreme Court. Sometimes, this development goes awry. Take the famous Chevron principle of judicial deference to an agency’s statutory interpretations. The Chevron Court never thought it was articulating some novel and grand administrative law doctrine. Rather, the opinion took on a life of its own in the lower courts and thus morphed into “reflexive deference.”

Next, consider the mixed signals emanating from the Supreme Court’s recent decision in Kisor v. Wilkie. On the one hand, Justice Kagan’s plurality opinion upheld the Auer doctrine, which requires courts to give binding judicial respect to an agency’s reasonable interpretations of regulatory ambiguities. On the other, her opinion “reinforced” and “expanded on” the doctrine’s limits, so much so that Justice Gorsuch claimed in a dissent that Auer deference emerges “enfeebled” and “maimed.”

So, which is it? Did Kisor affirm or enfeeble Auer deference? Some scholars claim that the doctrine lives; others, including me, argue that Kisor effectively killed Auer deference by imposing so many conditions on its use. Only time will tell, as Kisor reverberates through the lower courts.

Last month, I reported on the first Kisor sighting in the Ninth Circuit. In that case, Winding Creek Solar v. California Public Utilities Commission, the panel invoked Kisor in the course of denying deference to the government’s interpretation. There are, however, two reasons to be wary of reading too much into Kisor’s inaugural appearance before the Ninth Circuit. First, the agency did not participate in the controversy at issue in Winding Creek Solar; instead, one party relied on a prior interpretation by the Federal Energy Regulatory Commission. The government therefore never had the opportunity to defend its regulatory interpretation. Second, deference was one of many claims and, accordingly, the agency’s regulatory interpretation received little attention from the court.

By comparison, this month I report on a case that lends much stronger insight into the Ninth Circuit’s post-Kisor mindset. In Amazon v. I.R.S., the entire controversy hinged on the agency’s interpretation of the phrase “preexisting intangible property” as it appears in a tax rule published a quarter-century ago.

Based on the text alone, the court determined that the regulation is “susceptible to, but does not compel, an interpretation that embraces [the government’s argument].” Simply put, the court found that the tax regulation is ambiguous and plausibly comports with the agency’s reading. Under Auer deference as historically practiced, the rule’s ambiguity would trigger binding judicial respect for the IRS’s interpretation.

But that’s not what happened in this case. Citing Kisor, the Ninth Circuit court reasoned that “[g]enuine ambiguity is not determined by examination of the regulatory text alone.” Instead, “a court must exhaust all the traditional tools of construction” before concluding that a rule’s text is “genuinely ambiguous.”

With this instruction in mind, the court turned to the “tools of construction” in order to interpret the tax regulation. The panel started with an analysis of the rule’s structure “as a whole.” Although “the overall regulatory scheme doesn’t definitively resolve the issue,” the court nevertheless concluded that the rule’s structure, in toto, “favors Amazon more than the Commissioner.” Then, the court turned to the regulation’s “drafting history.” After closely examining the history of the tax rule and attendant IRS commentary, the panel concluded that these factors “strongly support” the taxpayer.

Far from discerning a “genuine ambiguity,” the tools of construction instead “le[ft] little room for the Commissioner’s proffered meaning.” The opinion, furthermore, observed that the government would have lost, even if the panel had located a genuine ambiguity, because the agency’s interpretation violated one of Justice Kagan’s “markers” that limit Auer deference. Specifically, the court determined that the IRS’s regulatory interpretation failed to provide sufficient notice to taxpayers.

In Amazon v. I.R.S., the Ninth Circuit employed a version of Auer/Seminole Rock deference that is a shadow of this doctrine’s former self. In the (recent) past, mere “ambiguity” was enough to trigger agency deference. No more. Thanks to Kisor, the government now must demonstrate a “genuine ambiguity” in order to win binding judicial respect from judges on the Ninth Circuit. A “genuine ambiguity,” moreover, becomes evident only after exhausting all the tools of construction—including the rue’s drafting history. And even if the government can demonstrate a “genuine ambiguity,” its interpretation must survive Kisor’s “markers.”

There is reason to believe that Amazon v. I.R.S. is a tone-setting opinion with respect to how Kisor v. Wilkie  will develop in the Ninth Circuit. The Amazon panel featured three long-serving active judges whose appointments span the political spectrum (Judges Fletcher, Callahan & Christen), and the foundation of their unanimous opinion is an extended and thoughtful discussion that squarely takes on regulatory deference with Kisor as the touchstone.

In the immediate wake of Kisor v. Wilkie, no one could know how the decision would shake out in the lower courts. In the Ninth Circuit, at least, the early results are in, and they indicate that Auer deference is dead in the west.

Ninth Circuit Battle Lines Are Drawn Over Scope of Nationwide Injunctions

In mid-July, the Departments of Justice and Homeland Security relied on the § 553 “Good Cause” exception to avoid notice-and-comment requirements for their joint rule to limit eligibility for asylum under immigration law. Soon thereafter, immigration advocates challenged the regulation in federal district court, where they sought a nationwide injunction against the asylum rule’s implementation. With respect to the merits, they argued that the agencies improperly invoked the APA’s Good Cause exception to circumvent notice-and-comment. On July 24th, eight days after the promulgation of the asylum rule, a federal district court granted the plaintiffs-appellees’ request and barred the regulation from taking effect anywhere in the country.

Before the Ninth Circuit, in East Bay Sanctuary Covenant v Barr, the government sought to stay the district court’s injunction, but all three judges on the panel agreed with the trial court that the plaintiffs-appellees were likely to prevail on the merits.

Although the panel unanimously agreed that the injunction is well-founded, they disagreed over its nationwide scope. Two judges decided to limit the injunction’s geographic applicability to the Ninth Circuit. For this majority, “the nationwide scope of the injunction is not supported by the record as it stands.” The split-panel spoke in strong terms, accusing the trial court of “conclusory” reasoning in its apparent understanding that “nationwide relief is warranted simply because district courts have the authority to impose such relief.” Because the trial court neither explained itself nor “tailored” its remedy to the “specific harm alleged,” the majority lifted the lower court injunction outside the Ninth Circuit’s jurisdiction.

Partially dissenting, Judge Atsushi Tashima faulted the majority’s decision on procedural grounds. Specifically, he argued that it is not “within a motion panel’s province” to “parse the record for error” with respect to the propriety of an injunction’s scope. More broadly, Judge Tashima defended nationwide injunctions as being necessary to remedy the wrongs wrought by an illegal rule with a nationwide scope. On this point, he accused the majority of “splitting the baby.”

In fact, this intra-panel squabble reflects an active debate among legal scholars over nationwide injunctions—one that has featured frequently on the pages of this blog. The controversy touches on legal history, statutory interpretation, and pragmatic policy concerns. With East Bay Sanctuary Covenant v Barr, the Ninth Circuit has joined the fray over nationwide injunctions, and, if the split-panel’s reasoning holds, then these countrywide court orders will endure much greater scrutiny in the circuit.

Almost assuredly, the Ninth Circuit soon will get another opportunity to weigh in on the debate. On remand from East Bay Sanctuary, the trial court today reinstituted a nationwide injunction on the asylum rule. Although I’ve not yet read the court’s order, I assume that the lower court beefed up its explanation in support of the injunction’s scope. In the likely event that the government again seeks a stay of the district court’s order, the Ninth Circuit will revisit its evolving doctrine on the propriety of countrywide injunctions.

Growth in Opposition to Crimes Involving Moral Turpitude in Immigration Law

In prior posts, I’ve reported on the Ninth Circuit’s growing dissatisfaction with Crimes Involving Moral Turpitude (“CIMT”) in immigration law. The problem, in a nutshell, is that the CIMT concept is too amorphous to be a fair basis for deportation. Despite decades of trying, Ninth Circuit panels repeatedly have conceded “the consistent failure of either the [Board of Immigration Appeals] or our own court to establish any coherent criteria for determining which crimes fall within that classification and which crimes do not.”

Already, active Ninth Circuit judges Carlos Bea, Consuelo Callahan, William Fletcher, and Marsha Berzon have questioned CIMT deportations on due process grounds. Last month, Judge John Owens joined the chorus.

In a concurrence to Gonzalez Romo v. Barr, Judge Owens felt compelled by precedent to uphold the Board of Immigration Appeals’s order that Eva Isabel Gonzalez Romo is inadmissible (to the country) due to her conviction for felony solicitation to possess marijuana. Under circuit caselaw, a conviction for soliciting less than four pounds of marijuana is not a CIMT, while soliciting more than four is. Because Gonzalez Romo solicited more than four pounds, the court reasoned that she had committed a CIMT. Of course, the court did not explain why four pounds is the magical weight of marijuana that distinguishes CIMTs from non-CIMTs. (In this author’s opinion, no such reasoned explanation is possible.)

After ascribing his concurrence to precedent, Judge Owen stated his belief that “the current moral turpitude jurisprudence makes no sense . . . [a]nd the experience of our court leaves no doubt about the arbitrariness of the results.” Hear, hear!

Obviously, I agree with the growing number of CIMT critics on the Ninth Circuit—five and counting—and I’m hopeful that these criticisms resonate with a critical mass of Supreme Court justices.

Did All the Parties Forget about APA § 555(b)?

Of the procedural sections in the APA, perhaps the least glamorous is § 555 (“Ancillary Matters”). It’s easy to forget about § 555, and I think that’s what happened to both parties in Zuniga v. Barr.

At issue in Zuniga was a “simple question”: do noncitizens subject to expedited removal have a statutory right to counsel in reasonable-fear proceedings before immigration judges?

In answering in the affirmative, the panel spent many paragraphs parsing the Immigration and Nationality Act. Yet the court never mentioned APA § 555(b), which provides that “a person compelled to appear before an agency . . . is entitled to be accompanied, represented, and advised by counsel.” Although Congress exempted deportation hearings from “on the record” procedural requirements set forth in APA §§ 554, 556, and 557, I can find no evidence of the Board of Immigration Appeals being excepted from § 555. Of course, I might have missed something (please comment if I did!). If, however, I’m right, then Zuniga v. Barr was an unnecessarily long and complex opinion.

 

William Yeatman is a research fellow at the Cato Institute.

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