Mayer Brown offices in Washington, D.C. Credit: Diego M. Radzinschi/NLJ

The U.S. Supreme Court on Monday agreed to consider overturning a key precedent that has been the target of business groups and conservatives who want to weaken the authority of federal regulators.

The justices granted review in Kisor v. Wilkie, a veterans’ benefit case that asks the court to overturn Auer v. Robbins, a 1997 decision that directs courts to defer to an agency’s “reasonable interpretation” of its own ambiguous regulations. The court specifically agreed to consider that issue alone.

The court’s action could also signal its future interest in reviewing the Chevron doctrine, which called for judicial deference to agency interpretations, also a nemesis for conservatives.

“Not only is the question of Auer deference important in its own right, but the frequent criticism of Auer deference by Members of this Court has caused substantial confusion in the lower courts,” Mayer Brown partner Paul Hughes wrote in his petition in the case. “Ultimately, the Court should abandon Auer. And this case is a suitable vehicle for doing so.”

Chief Justice John Roberts Jr., Justices Clarence Thomas, Samuel Alito Jr., the late Justice Antonin Scalia, and retired Justice Anthony Kennedy have all suggested a second look at the Auer doctrine and a related 1945 precedent, Bowles v. Seminole Rock & Sand. Justice Neil Gorsuch expressed similar views in a decision he wrote as a judge on the U.S. Court of Appeals for the 10th Circuit.

The U.S. Chamber of Commerce, in an amicus brief filed in the Kisor case, asserted that “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.” Covington & Burling partner Mark Mosier is counsel of record on the brief.

In the sympathetic case before the court, Marine veteran James Kisor sought disability benefits for his post-traumatic stress disorder. The Department of Veterans Affairs agreed that he suffers from the disorder, but refused to award him retroactive benefits, based on its interpretation of the pertinent regulation.

U.S. Solicitor General Noel Francisco, in a brief opposing review, defended the Veterans Affairs action in Kisor’s case, and said it was not a suitable vehicle for re-examining Auer and Seminole Rock, because the agency’s action “reflects by far the best understanding of the regulation’s plain text and purpose.”

But Francisco also told the court that the petitioner’s request to overturn Auer is “an important one that may warrant this court’s review in an appropriate case.”

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