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. 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.
However, the playing field might get a bit more level, as this week the Supreme Court accepted a case expressly asking the Court to overrule Auer and Seminole Rock. The case under review involves a Vietnam veteran’s claim for retroactive disability benefits for service-related post-traumatic stress disorder. The claim had been rejected in 1983 due to an erroneous disqualifying diagnosis, but was reopened in 2006 with new evidence of PTSD. The Board of Veterans’ Appeals granted the veteran benefits from 2006 forward, but rejected the claim for retroactive benefits, because it deemed additional service records, which had been available in 1983 with the original request, not “relevant.” “Relevant” was a key term in the agency’s regulations about retroactive benefits, and the Board interpreted the term to encompass only evidence that directly addressed the basis of the 1983 decision. The Federal Circuit, denying a challenge to that decision, deferred to the Board’s interpretation under Auer. Now, the Supreme Court will now revisit its position that judges should accept an agency’s interpretation of its own ambiguous regulation rather interpret the meaning of the regulation on their own.