Justice Kagan’s Powerful Defense of the Administrative State

(Bloomberg Opinion) -- The Supreme Court term that ended this week had a large number of high-profile cases. But many of its decisions involved the relatively technical field of administrative law, which sets out legal restrictions on the power of federal agencies. It has profound effects on people’s lives, and it is often the subject of intense judicial debates.

The court’s most far-reaching ruling settled a long-disputed question: If an agency issues an ambiguous regulation – involving clean air, food safety or civil rights – who gets to sort out the ambiguity? The agency or a court?

For a long time, the answer has been clear: the agency. Under “Auer deference” (after Auer v. Robbins, decided in 1997), courts must respect agencies’ interpretations of their own regulations, so long as those interpretations are “reasonable.”

Skeptics about the administrative state – mostly on the political right – despise Auer deference. For over a decade, they have worked hard to get the Supreme Court to overrule Auer, and in that way to limit the power of administrative agencies.

Many experts expected Auer to die. But by a vote of 5 to 4, the justices reaffirmed it.

Justice Elena Kagan, a noted expert in administrative law, wrote a masterful opinion in Kisor v. Wilkie, defending Auer deference. She observed that agency regulations often contain technical terms. What counts as a “diagnosis” of an occupational disease? What counts as an “active moiety” in connection with a drug approval process?

As Kagan explained, agencies are in a better position than courts to know what their regulations originally meant. In addition, resolution of ambiguities often requires a judgment of policy or application of technical expertise. Judges are neither policymakers nor technical experts.

Critics of Auer deference fear that if agencies get to interpret ambiguities, they will have far too much power. Under both Republican and Democratic presidents, they might be able to contort words to go in their preferred directions.

Kagan calmly responded that they really can’t do that. Auer deference applies only if regulations are “genuinely ambiguous” and only if the agencies’ interpretations are reasonable. Their interpretations will not receive deference if they create unfair surprise -- as might happen if, for example, one administration suddenly chooses to reject an interpretation favored by its predecessor.

Kagan also offered an extended and quite pointed argument in favor of adherence to precedent, which, as she put it, “is a foundation stone of the rule of law.” Abandoning a precedent can introduce instability into the law.

It would certainly do that here. Numerous regulations (involving, for example, worker safety, homeland security, and clean air) have previously been given Auer deference; would they now be thrown into doubt? One of Kagan’s most important points – a kind of marker for the future – is that the justices should not overturn a precedent merely because they believe that it was wrong.

Chief Justice John Roberts did not agree with all of Kagan’s opinion, but he fully endorsed her arguments about the need to respect precedent. That’s important, not only because his vote was essential to preserving Auer deference, but also because it is a strong signal that he might well hesitate before embracing revolutionary movements in the law.

Four justices – Clarence Thomas, Samuel Alito, Neil Gorsuch and Brett Kavanaugh – would have overruled Auer. The dissenting opinion by Justice Gorsuch is beautifully written and powerfully argued. He is intensely skeptical of the administrative state, committed to a certain conception of liberty, and entirely willing to reject longstanding precedent. If Roberts is generally a minimalist, favoring stability and small steps, Gorsuch is a maximalist, arguing for bold movements that some people will see as heroic.

In his view, Auer deference is an atrocity. It is inconsistent with congressional instructions. Worse than that, it is inconsistent with the Constitution, which gives the power of interpretation to courts.

With incredulity, Gorsuch wrote, “Auer tells the judge that he must interpret” regulations “to mean not what he thinks they mean, but what an executive agency thinks they mean.” The result is to “compromise our judicial independence and deny the people who come before us the impartial judgment that the Constitution guarantees them.”

Everyone should applaud Gorsuch’s insistence on independence and impartiality, but his argument here is overheated. As Kagan explained, independent courts must require agencies to respect the language of their regulations – and unreasonable interpretations will be struck down. Do we really want federal judges to be choosing among reasonable readings of terms like “diagnosis” and “active moiety”? 

Kagan and Gorsuch were both at the top of their game. Kagan got the better of the argument, and on the merits, she’s right. For the future, agencies – with their greater accountability and technical expertise – will be allowed to sort out genuine ambiguities in their regulations, but only if they act reasonably. From the standpoint of the separation of powers, that’s just fine.

To contact the editor responsible for this story: Katy Roberts at kroberts29@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Cass R. Sunstein is a Bloomberg Opinion columnist. He is the author of “The Cost-Benefit Revolution” and a co-author of “Nudge: Improving Decisions About Health, Wealth and Happiness.”

©2019 Bloomberg L.P.