Cracks in the Façade – Supreme Court To Consider Reining In Agency Regulatory Interpretations

    View Authors December 2018

    The playing field in a lawsuit challenging agency action is tilted toward the agency, largely by means of various deference doctrines. One of the most important has been deference to an agency’s interpretation of its own regulations.

    However, the playing field might soon get a bit more level, as this week, the Supreme Court accepted review of a case expressly asking the court to overrule the longstanding precedent that created this rule.

    Courts have been deferring to those interpretations for decades, following a 1940s Supreme Court case, Bowles v. Seminole Rock & Sand Co. The ground really shifted in 1997, when in Auer v. Robbins, the Supreme Court said a court should generally defer to an agency’s interpretation developed for the first time in court briefing. The Supreme Court has occasionally walked that back, suggesting that an agency only gets this deference for interpretations that reflect the “fair and reasoned judgment” of the agency. But today, in many courts, the agency can craft a new interpretation of its regulation in litigation, directly targeted to the arguments that arise in the case.