Administrative Agencies Arbitrating Themselves

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Those in favor of a free society would reasonably be in agreement that an arbitration over a disagreement should be made by a third party. In the case of our current government, this is an independent court. The court is in theory, separate from the other branches of government. The arbiter should not have any vested interest in either side winning their case. To have a monopoly on interpreting previously written laws is an immense amount of power, that cannot be in the hands of special interests in a free society. Therefore, as we know it, the writer of laws does not hold a monopoly on interpretation, because this leads to obvious tyranny.

This is what James Kisor probably thought before the Veterans Affairs Department (VA) denied his disability benefits. Kisor is a Vietnam veteran, formerly having served in the Marines, and tried to claim benefits for post-traumatic-stress-disorder (PTSD) inflicted by the war. The rules and regulations that would entitle Kisor to these benefits have existed for years, but a redefinition of these rules can easily change that. Specifically, a reinterpretation of the term “relevant” in 38 C.F.R. § 3.156(c)(1). It is not the case of the VA being “right” and Kisor being “wrong”, because the lower courts have determined that both Kisor’s definition of the term “relevant”, and the interpretation by the VA itself, in the context of the law, are both correct. The original disagreement between the veteran and the executive agency went to the Court of Appeals and Federal Circuit Court, who determined that both interpretations were indeed correct, leaving the rules “ambiguous”. It turns out then that the self-interpretation of the VA is lawful because in this case, the courts must defer to an agency’s “reasonable interpretation” of their own rules.

This action is called the Auer Doctrine, and it essentially lets administrative agencies arbitrarily decide what their own rules and regulations mean ex post facto, in cases of disagreement similar to Kisor’s. In 1945, the Supreme Court of the United States upheld in Bowles v. Seminole Rock and Sand Co. that the ultimate criterion in the face of an ambiguous regulation is “the administrative interpretation”, which becomes of controlling weight unless it is plainly erroneous or inconsistent with the regulation. The current law, the Auer Doctrine, was established in 1997 in Auer v. Robbins, which does nothing but confirm the ruling from 1945.

James Kisor’s petition is challenging the Auer Doctrine outright. The doctrine is only invoked by the courts, handing arbitration powers to the administrative agency itself, when it is determined that the rules are indeed “ambiguous”. The court found that both definitions of “relevant” presented by Kisor and the VA were suitable and subsequently the case was in the hands of the powerful Veterans Affairs Department. As expected, the agency ruled in its vested interest, that the benefits for Kisor’s PTSD will not be administered. This brings forward the petition to challenge the Auer Doctrine itself as a solution, which the Supreme Court has agreed to consider.

In Kisor’s favor is longtime public support for overturning the Auer Doctrine since its inception. Not only for giving extra power to unelected bureaucrats but given that Kisor is a victim of PTSD from his service in the Marines in this case. With the Auer Doctrine, the VA does not have to question the validity of his condition, but to finally define a rule they have waited eight years to define since its writing. In Amicus brief, the Chamber of Commerce writes, “Auer deference harms the business community by encouraging agencies to adopt vague regulations that they can later interpret however they see fit… This practice upsets the expectations of regulated parties without the notice provided through formal rulemaking”. The petitioner has furthermore argued that the Auer deference has been criticized by members of lower courts in the past, causing confusion and making its overturn due. With the nature of this Supreme Court case of diminishing the power of executive agencies, a conservative majority will certainly be an advantage for Kisor.

Working against the petitioner is the fact that the Auer Doctrine is currently the “law of the land”. Rather than proving the VA is wrong on a certain decision, the petition is to flip a past ruling. It is also facing the vested interest of a much more powerful central government, whether it is the executive agency or the Supreme Court. Otherwise, at this point, no coverage of this impending SCOTUS case has made any clear arguments in favor of the Auer Doctrine. In previous cases with the US Court of Appeals and Federal Circuit, the judges have referred the disagreement to Auer, and now that doctrine itself will be considered.

Many of the arguments made in favor of overturning the Auer Doctrine are not necessarily based on law, but that of checking the power of administrative agencies of the executive branch, to which the existence might not even be constitutional in the first place. Although the doctrine may seem like a more efficient way to deal with disputes between citizens and agencies, the Cato Institute makes the allegation that this practice incentivizes agencies like the VA to purposely make regulations vague. As the Cato legal brief reports, “Only when the board denied Mr. Kisor’s full claim — eight years later — did the agency announce its interpretation unprompted and without having been briefed on the matter”. This reasoning follows that if administrative agencies are allowed to arbitrate the meaning of their own regulations when they are deemed “ambiguous”, they will write more vague and ambiguous regulations to gain more power. Supreme Court justices of the original interpretation will likely sympathize with Kisor on his line of thought. The line of thought that the Auer Doctrine produces more incomprehensible regulations that executive agencies will interpret years later, in favor of themselves.

Although there are currently little anti-Kiser arguments now, tension is likely to build until March 27, when oral arguments will be held in the Supreme Court. Increased coverage of the case will likely ensue over the next month as well, as it usually does when the powers that be are threatened. On the contrary, if SCOTUS indeed overturns the Auer Doctrine, Cato argues that there will be little effects after the initial tension from the case. The reason, “Finally, despite some predictions that overturning Auer will wreak havoc in administrative agencies, we point out that independent judicial assessment will only change the outcome in a small minority of cases”. If this is true, then the only effects of an Auer overturn is a definitive decision by the courts over the Kisor-VA disagreement and possibly less vague rules for the future.

Until the resolution, those passionately in favor of reining in the power of administrative agencies will write in favor of Kisor’s petition. In the case of interpreting the VA’s rules, it is objective to say that a court ruling on the meaning of the administrative agency rules is infinitely more democratic than an interpretation by the VA. Lawmakers in the 137 independent executive agencies are not elected by the people and can wait years (8 in this case) before revealing to the public what their own rules and regulations mean. It is the law of the land, however, decided by the Auer Doctrine, and this ruling will be checked in Kisor v. Wilkes.