What Feds Should Know About Two Recent Supreme Court Rulings

In late June, the Supreme Court issued decisions in two cases concerning the limits of executive agencies’ authority. While the Court maintained the status quo for now, both cases demonstrate the Court’s willingness to chip away at long-standing doctrines allowing executive agencies to implement and enforce their own rules and regulations, and to be afforded deference by courts for their interpretations of their own rules and regulations. The Court also signaled its view that agencies’ authority is perhaps too expansive and is ripe to be reigned in, despite not clearly articulating how that should be accomplished. 

The nondelegation doctrine bars Congress from transferring its legislative power to another branch of government pursuant to Article I of the Constitution (“all legislative Powers herein granted shall be vested in a Congress of the United States”), although the Supreme Court has long held that Congress may confer substantial discretion on executive agencies to implement and enforce laws without violating the doctrine. 

In Gundy v. U.S., the Supreme Court considered whether part of the Sex Offender Registration and Notification Act (SORNA) properly delegated authority to the Justice Department to extend SORNA’s requirements to those who committed offenses prior to the passage of the act. The Court found it did, as Congress laid out its intent for Justice to take the actions it took within the statute. Justice Kavanaugh did not participate in this decision, so the scales may well be tipped the next time the Court considers this doctrine, which it likely will given Justice Alito’s statement in his concurring opinion that, “if SORNA’s delegation is unconstitutional, then most of Government is unconstitutional—dependent as Congress is on the need to give discretion to executive officials to implement its programs.” 

It is not difficult to imagine another lawsuit wherein the plaintiff alleges that an agency overstepped its mandate from Congress, and agencies would be wise to ensure that their rules and regulations fall within the confines of the relevant statutes. 

Similarly, in situations where agencies have exercised the authority granted by Congress to issue their own rules and regulations, the Supreme Court has long deferred to an agency’s reasonable reading of its own genuinely ambiguous regulations applying a doctrine called Auer (or sometimes, Seminole Rock) deference. (See Auer v. Robbins and Bowles v. Seminole Rock & Sand Co.) This deference doctrine is rooted in a presumption that Congress intended for courts to defer to agencies when they interpret their own ambiguous rules. 

But agencies shouldn’t take that longstanding deference for granted. In Kisor v. Wilkie, the Court considered whether the Veterans Affairs Department’s interpretation of its rule governing retroactivity of benefits decision was entitled to deference. While the Court technically upheld the Auer deference doctrine, it carved out occasions when an agency’s reading of its own rules is not entitled to deference. Specifically, the Court explained that for an agency determination to be afforded deference, the underlying regulation must be genuinely ambiguous; the agency’s interpretation must be reasonable and must reflect its authoritative, expertise-based, and fair and considered judgment; and the agency must take account of reliance interests and avoid unfair surprise. In other words, if it’s light red, an agency can call it pink and be afforded deference, but if the agency calls it blue, do not expect the court to defer to that determination.

In explaining these limits on deference to agencies, the Court noted, “It is true that agencies have far-reaching influence today; that is one reason the Court has taken care to reinforce the limits of Auer deference. But it is no answer to the growth of agencies for courts to take over their expertise-based, policymaking functions.” In stating this, the Court signaled its belief that agencies’ “growth” requires an “answer,” despite finding that the courts are not the body to best limit the reach of agencies. 

Agencies should review these Supreme Court decisions carefully to avoid creating an opportunity for the Court to have another bite at the apple, and be mindful that the courts are watching to make sure both that agencies are not doing the job of Congress and that agency determinations are worthy of deference. Given the regulation-slashing tendency of the current administration, I hope agencies do not read these decisions as a directive to curtail the important work agencies are performing. Who better, for example, to implement and enforce statutes like the Clean Water Act than the dedicated civil servants at the Environmental Protection Agency, many of whom bring years of skill, expertise, and experience to the table? I doubt many would point to Congress, or the courts for that. 

Debra D’Agostino is a founding partner of The Federal Practice Group. She has nearly 20 years of experience in employment law and has represented federal employees in matters before the EEOC, MSPB, the U.S. Court of Appeals for the Federal, Fourth, and D.C. Circuits and the U.S. Court of Federal Claims.