# Reply Brief — Kisor v. Wilkie, 139 S. Ct. 657 (2018) (No. 18-15)

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Reply Brief
- **Published:** January 1, 2018

## Text

No. 18-15

In the Supreme Court of the Anited States

JAMES L. KISOR,

Petitioner,

ROBERT L. WILKIE,
Secretary of Veterans Affairs,

Respondent.

On Writ of Certiorari to the United States
Court of Appeals for the Federal Circuit

REPLY BRIEF FOR PETITIONER

KENNETH M. CARPENTER
Carpenter Chartered
1525 SW Topeka Blud.,

Suite D
Topeka, KS 66601
(785) 357-5251

EUGENE R. FIDELL
Yale Law School
Supreme Court Clinic
127 Wall Street
New Haven, CT 06511
(203) 432-4992

PAUL W. HUGHES
Counsel of Record
MICHAEL B. KIMBERLY
ANDREW J. PINCUS
CHARLES A. ROTHFELD
E. BRANTLEY WEBB
ANDREW A. LYONS- BERG
Mayer Brown LLP
1999 K Street, NW
Washington, DC 20006
(202) 263-3000
phughes@mayerbrown.com

RACHEL R. SIEGEL
Mayer Brown LLP
1221 Ave. of the Americas
New York, NY 10020
(212) 506-2500

Counsel for Petitioner

TABLE OF CONTENTS
po fee ii
Reply Brief for Petitioner.............................c.ccccc00000s 1
|. No deference is warranted to the VA's
SI saieieddithinitainiatncentiecteetntntictenemiereceseveecsewee l
A. Auer is incompatible with the APA............... 1
B. Skidmore is most consistent with the
Si nciarricsteiiticieeciastciliadtidaialstininiuiatindteisitiiamimnanennersvess 8
ll. Stare decisis does not justify retention of
a I tieactcictcectctimaninstitnmnnennseseemeves 12
Ill. Petitioner offers the best reading of
IIIT IIIT ccintieteaichinndinmigntbnetmmesnsasesescnnnadsens 17

ss

TABLE OF AUTHORITIES
Page(s)

Cases
Accardi v. Shaug-‘inessy,

ae 7
Alaska Dep't of Envtl. Conservation v. EPA,

eee Cee i ciaiinntnncsnscntcnnninictscericsnsoscscsesies 11
Christopher v. SmithKline Beecham Corp.,

| ES ae 10
City of Arlington v. FCC,

I a a 1, 2,5
Decker v. Northwest Envtl. Def. Ctr.,

EEE 13
Exxon Shipping Co. v. Baker,

eT 13
Federal Express Corp. v. Holowecki,

SES 11, 12
Gonzales v. Oregon,

ET 11
Henry Schein, Inc. v. Archer & White Sales, Inc.,

es I ciiictictinrtiaastnnhinabictninnthitnaiencecunns 10
League of United Latin Am. Citizens v. Perry,

A A ae 19
Lennox v. Principi,

353 F.3d 941 (Fed. Cir. 2003) .................ccccceeeeeeeess 5
Long Island Care v. Coke,

ft eae 16
Martin v. Occupational Safety & Health

Review Comm'n,

ere ccnecnsnstasccsnsnsssestemennnsenmsansentanss 4

ii

Cases—continued
Martinez v. Holder,
740 F.3d GOB (4th Cir. 3014).......00.cccccccccccccccsccceeees 7
Morton v. Ruiz,
ala cine eenaetielinnatdubiebent 5
Nielson v. Shinseki,
607 F.3d 802 (Fed. Cir. 2010) ...............0.....ccccceeeees 6
NLRB vy. Bell Aerospace Co.,
a onlutinneneeement 6
NLRB vy. Curtin Matheson Sci., Inc.,
I Ee Nee 6
Old Chief v. United States,
8 ne 19
Pearson v. Callahan,
ae 13
Perez v. Mortgage Bankers Ass'n,
EC 2,3, 7,9
SEC v. Chenery Corp.,
ETE a ee nN 6
Skidmore v. Swift & Co.,
an 11
United States v. Mead Corp.,
la acinetiat passim
University of Tex. Sw. Med. Cir. vy. Nassar,
REE 11
Statutes, Rules, and Regulations
5 U.S.C.
| ER RUE OPEC Ae soe nara 2,5
SIT icine dinai decade ianicinasiatsaniiniidaieiininliiel 2, 5, 7

iv

Statutes, Rules, and Regulations—continued
5 U.S.C.

SUIT icticesih tisiniainshinsiesieciniiansenenma ti natiinhiensin diadeneiebiimnitie 2

cht hl pt tt Ele ole eee ead 2

STU teianhattalesthdbeacsininieiniipitieicicisteptatimcbsartnciaasladaciimestttaiatiundad 4
EI ER RR nce tine era Ci 6
38 U.S.C.

I cereal linha nace rinsiaa hciitadatbceaeaiaaenkea 19

EE LS a a ek eae aOR Raa e NI 5

ER Seas OR AOE NT 22

icici inne tenia th aendbl ini icinniiiiiamatiailadll 23

RRS SE Ae nee aca ans 7
EEE Rae ae eae RES er eC Aa 6
RS eee 19, 20, 21, 22
a cirireceeilcaala passim
8 LS Eee ees 18, 20
ee i ee I on ccrcicccneatcanenntnsininascnsvnstianaeti 22
4 tS nee eae 19, 21
I nai eeatiaeinainisignemasinndatiale 19
Other Authorities
ee iiccitriianiniseniediianiinininniiaseersiitaiicenitemaes 5, 18
Stephen G. Breyer et al., Administrative Law

and Regulatory Policy (8th ed. 2017) ................ 2,7

U.S. Dep’t of Veterans Affairs, VA Achieves

Historic Goal by Delivering 81,000 Ap-

peals Decisions (Sept. 18, 2018).........................0... 6
Webster’s Third New International

REPLY BRIEF FOR PETITIONER

Criticism of Auer deference now comes from all
corners. Leading immigration organizations highlight
its harmful effects. NIJC & AILA Br. 21-31. The AFL-
CIO agrees that “the Court should * * * discard the
strong form of deference represented by Auer” (AFL-
CIO Br. 16) and, moreover, that deference is not ap-
propriate in this case (id. at 20-24). See also Nat’
Right to Work Legal Def. Found. Br. 2. Several States
call for overruling Auver—and none defend it.

Even the United States agrees. Acknowledging
that Auer “raises significant concerns” (U.S. Br. 12),
the government now concurs with our principal argu-
ment: no deference to the agency is warranted here.

Auer deference circumvents the procedural pro-
tections that Congress established in the APA, and it
transfers to agencies substantial lawmaking author-
ity absent any congressional delegation. The Court
should therefore overturn Seminole Rock and Auer.

The government instead asks the Court to adopt a
diminished form of Auer deference—one that looks
like Skidmore but carries Auer’s binding bite. Peti-
tioner would prevail under this rule. That said, the
better course is to overrule Auer outright. What would
remain, Skidmore, properly respects agency expertise.
I. No deference is warranted to the VA’s con-

struction.

A. Auer is incompatible with the APA.

1. Binding deference (either Chevron or Auer) con-
fers on an agency lawmaking authority, as its actions
have the force of law. See Pet’r Br. 25. In City of Ar-

2

lington v. FCC, 569 U.S. 290 (2013), the Court unani-
mously agreed that two conditions are necessary for
an agency to exercise this power: (1) “the agency must
have received congressional authority to determine
the particular matter at issue” and (2) the agency
must act in the “particular manner” Congress speci-
fied. Id. at 306. See also id. at 321-322 (Roberts, C.J.,

The APA specifies generally-applicable “manners”
by which an agency may act. An agency may promul-
gate a “rule,” which is defined as an “agency state-
ment of general or particular applicability and future
effect designed to implement, interpret, or prescribe
law or policy.” 5 U.S.C. § 551(4). A “rule” is the result
of a “rule making” process. Id. § 551(5). See Perez v.
Mortgage Bankers Ass'n, 135 S. Ct. 1199, 1203 (2015).
The APA establishes both informal notice-and-com-
ment rulemaking (5 U.S.C. § 553) and formal on-the-
record rulemaking (id. §§ 556-557). See Stephen G.
Breyer et al., Administrative Law and Regulatory Pol-
icy 466 (8th ed. 2017).!

In two complementary lines of cases, the Court
has held that an agency’s entitlement to binding def-
erence turns on whether it has used congressionally-
prescribed procedures. Auer’s fundamental flaw is

' Agencies may also act through formal and informal! adjudica-
tions. See Breyer, supra, at 457. Agency adjudications result in
an “order” (5 U.S.C. § 551(7)), which excludes matter that is
properly the subject of a “rule making” (id. § 551(6)). “Strikingly,
the APA imposes no procedural requirements specific to informa!
adjudications.” Breyer, supra, at 474.

3

that it provides agencies lawmaking authority in con-
travention of these settled principles. The government
now agrees. U.S. Br. 19-25.

Focusing on the APA’s protections in Section 553,
Perez recognized that “interpretive rules” are an ex-
ception to the general notice-and-comment require-
ment. “The absence of a notice-and-comment obliga-
tion makes the process of issuing interpretive rules
comparatively easier for agencies than issuing legis-
lative rules.” Perez, 135 S. Ct. at 1204. “But that con-
venience comes at a price: Interpretive rules ‘do not
have the force and effect of law and are not accorded
that weight in the adjudicatory process.” Ibid.

An agency's construction of its own ambiguous
regulation is an interpretive rule, and Perez holds that
such rules do not command binding deference. See
Pet’r Br. 31-33; U.S. Chamber Br. 16-19; Prof. Merrill
Br. 7-9, 14-16. Auer thus circumvents the APA’s criti-
cal procedural protections. See Pet’r Br. 28-31. Accord-
ing to the government, it is “anomalous that interpre-
tive rules about a statute’s meaning are generally ac-
corded no Chevron deference,” while “interpretive
rules about a regulation’s meaning are accorded Sem-
inole Rock deference.” U.S. Br. 24-25.

And in United States v. Mead Corp., 533 U.S. 218
(2001), the Court emphasized that binding deference
is limited to those agency actions that were “promul-
gated in the exercise” of the “authority” that Congress
delegated. Id. at 226-227. Mead held that, where there
is no “congressional intent” delegating lawmaking au-
thority to a specific kind of agency procedure, Chevron
does not apply. Id. at 227.

4

Auer deference, however, applies regardless
whether there is any “congressional intent” delegating
lawmaking authority to an agency. See Pet’r Br. 33-
36. The doctrine therefore bestows power on agencies
in violation of Mead. See U.S. Br. 19-22.

This all accords with the text of the APA. Section
706 provides that “the reviewing court”—and not the
agency—‘shall decide all relevant questions of law”
and shall “determine the meaning * * * of the terms of
an agency action.” 5 U.S.C. § 706. See also Pet’r Br.
27; Prof. Merrill Br. 14-16. There is no basis to con-
clude that Congress silently intended for agencies, not
courts, to decide these issues. See U.S. Br. 16-18.

2. The lone defender of Auer deference—a group
of six professors—offers two main legal contentions.

a. Amici (Admin. Law Scholars Br. 6-8) identify
Martin v. Occupational Safety & Health Review Com-
mission, 499 U.S. 144, 151 (1991), which “presume[d]
that the power authoritatively to interpret its own
regulations is a component of the agency’s delegated
lawmaking powers.” See also id. at 152 (similar). But
this addresses only City of Arlington’s first require-
ment. The agency must also act in the “particular
manner” that Congress prescribed. Auer violates this
principle.

b. Amici alternatively suggest that one “manner”
for an agency to act with the force of law is via an in-
formal adjudication. They imply that deference is war-
ranted here because the construction of the regulation
stemmed from a single AL.J’s non-precedential opin-
ion, rather than from a considered decision by VA
leadership with general application. See Admin. Law

5

Scholars Br. 21-24 & 28 n.11. That is incorrect. See
U.S. Br. 25 n.5.

First, Congress has never authorized the VA to en-
gage in lawmaking through informal adjudication.
The APA expressly disclaims adjudication as a proce-
dure for an agency “to implement, interpret, or pre-
scribe law or policy.” 5 U.S.C. § 551(4)-(7). See also
Morton v. Ruiz, 415 U.S. 199, 232 (1974) (“No matter
how rational or consistent with congressional intent a
particular decision might be, the determination of eli-
gibility cannot be made on an ad hoc basis.”).

Beyond the APA’s default rules, Congress speci-
fied the “particular manner” in which the VA may act.
City of Arlington, 569 U.S. at 306. It may “prescribe
all rules and regulations”—but not orders—‘“which
are necessary or appropriate to carry out the laws ad-
ministered by the Department.” 38 U.S.C. § 501(a).
Most relevant here, the VA may promulgate “regula-
tions with respect to the nature and extent of proof
and evidence” necessary “to establish the right to [vet-
erans| benefits.” Id. § 501(a)(1) (emphasis added).
The regulation at issue, 38 C.F.R. § 3.156(c), was
promulgated expressly pursuant to Section 501(a).
See 71 Fed. Reg. 52,455.

VA informal adjudications do not, accordingly,
qualify for any deference, including Chevron. See, e.g.,
Lennox v. Principi, 353 F.3d 941, 945 (Fed. Cir. 2003)
(“The [Board of Veterans’ Appeals’| explicit interpre-
tation of these statutes and regulations * * * is a legal

6

ruling to be reviewed without deference.”); Nielson v.
Shinseki, 607 F.3d 802, 805 (Fed. Cir. 2010).?

Second, the Board’s decisions cannot warrant
binding deference, including Chevron, because they
are non-precedential.

In Mead, 533 U.S. at 232, the Court denied Chev-
ron deference to an agency action that would not “nat-
urally bind more than the parties to the ruling.” The
Court underscored that, when an “agency makes it
clear that [an action’s] binding character as a ruling
stops short of third parties,” and thus is “conclusive
only as between” the parties directly affected, the
agency cannot be understood to have “ever set out
with a lawmaking pretense in mind.” /d. at 233.

Mead observed that “[a]ny suggestion that rulings
intended to have the force of law are being churned
out at a rate of 10,000 a year * * * is simply self-refut-
ing.” 533 U.S. at 233. So too here, where the Board of
Veterans’ Appeals issued 81,000 decisions in fiscal
year 2018. See U.S. Dep’t of Veterans Affairs, VA
Achieves Historic Goal by Delivering 81,000 Appeals
Decisions (Sept. 18, 2018), perma.cc/5AW5-3CLB. By

2 Congress may provide specific agencies different authority.
The governing statute in SEC v. Chenery Corp., 332 U.S. 194
(1947), authorized “such rules and regulations and such orders
as” the SEC “may deem necessary or appropriate.” 49 Stat. 803,
833 (emphasis added). The SEC's flexibility “to act either by gen-
eral rule or by individual order” (332 U.S. at 202) stemmed from
Congress's express delegation of that power. Likewise, the Na-
tional Labor Relations Act (see 29 U.S.C. § 160) at issue in NLRB
v. Bell Aerospace Co., 416 U.S. 267 (1974), authorized the NLRB
to act through adjudications. See NLRB v. Curtin Matheson Sci.,
Inc., 494 U.S. 775, 803 (1990) (Scalia, J., dissenting).

7

regulation, all 81,000 of these decisions are “|njon-
precedential.” 38 C.F.R. § 20.1303. Such mass-pro-
duced, non-precedential agency actions do not reflect
the “deliberation that should underlie a pronounce-
ment” that has “the effect of law.” Mead, 533 U.S. at
230. See also Martinez v. Holder, 740 F.3d 902, 910
(4th Cir. 2014).

Third, to “amend|]” a regulation, the APA obli-
gates agencies to engage in “rule making.” 5 U.S.C. §
551(5). The APA thus “mandate[s] that agencies use
the same procedures when they amend * * * a rule as
they used to issue the rule in the first instance.” Perez,
135 S. Ct. at 1206. Once an agency proceeds through
notice-and-comment rulemaking, it must return to
rulemaking for its actions to have the force of law. See
Pet’r Br. 36; Accardi v. Shaughnessy, 347 U.S. 260,
265-267 (1954); Breyer, supra, at 485.

Auer deference is irreconcilable with the Court’s
justifications (in Perez, City of Arlington, Mead, and
elsewhere) for affording agencies binding deference.*
And Auer impermissibly bestows on agencies lawmak-
ing authority unbounded by the procedural limita-
tions that Congress imposed in the APA to protect the
regulated public. For these reasons, the Court should
overrule Seminole Rock and Auer.

* Amici (Admin. Law Scholars Br. 27) are wrong to suggest that
overturning Auer undermines Chevron. Perez, City of Arlington,
and Mead are all consistent with Chevron. See, e.g., Pet’r Br. 45-
47; Cato Br. 8-13; Prof. Merrill Br. 12-14; Admin. Law & Fed.
Reg. Profs. Br. 3-13.

8

B. Skidmore is most consistent with the
APA.

Acknowledging Auer’s severe flaws, the United
States urges a sharp retreat from Auer. In its view,
courts must give binding deference to an agency’s in-
terpretation of its own ambiguous regulation when
(1) the regulation remains ambiguous after a “search-
ing” analysis using “all the traditional tools of con-
struction,” (2) the agency’s interpretation is “reasona-
ble,” (3) the agency’s interpretation “was issued with
fair notice to regulated parties,” (4) the interpretation
“is not inconsistent with the agency’s prior views,” (5)
it “rests on the agency's expertise,” and (6) it “repre-
sents the agency’s considered view, as distinct from
the views of mere field officials or other low-level em-
ployees.” U.S. Br. 12.

Under this Auer-light approach, deference is not
appropriate here. The AL.J’s non-precedential decision
was not “issued with fair notice to regulated parties,”
it does not rest on any agency “expertise,” and it does
not reflect “the agency's considered view.” Not once
does the government suggest that deference would be
warranted here.

The government’s new position is preferable to ex-
isting Auer deference. But the most sound outcome,
both legally and practically, is to overturn Auer.

1. Dialing back Auer deference may reduce some
of its pragmatic harms, but that does not create a legal
foundation. The government’s reformulated Auer doc-
trine still conflicts with the APA’s procedural require-
ments (U.S. Br. 22-26), and it lacks congressional au-
thorization (id. at 19-22). The government’s statement
that its new theory would “mitigate”—rather than

9

eliminate—“the tensions between Seminole Rock def-
erence and the APA” (id. at 32) only confirms that the
legal defects would remain.

Additionally, while the government’s approach
may ameliorate some of Auer’s policy flaws, it would
introduce several problems of its own.

We agree that Auer is defective because binding
deference attaches notwithstanding agency “incon-
sistency.” U.S. Br. 31-33. As a remedy, the govern-
ment would accord the agency's first interpretation
binding deference, but not subsequent ones; changes
would require notice-and-comment. /bid. The govern-
ment thus seeks to resurrect the Paralyzed Veterans
doctrine that the Court rejected in Perez—that, to
change an initial interpretive rule, an agency must re-
sort to notice-and-comment. Perez, 135 8. Ct. at 1207-
1208. As Justice Scalia recognized, while Paralyzed
Veterans was “a courageous” “attempt to limit the mis-
chief” of Auer, the proper remedy is to overturn Auer
altogether. Jd. at 1212 (Scalia, J., concurring in the
judgment).

The government’s approach would also create a
race-to-interpret, where the first administration to
construe a regulation would claim privileged legal sta-
tus. That would be a bizarre, if not destructive, rule.

Separately, the government asserts that the pub-
lic must have “fair notice” of a regulation through “fa-
miliar, official agency channels.” U.S. Br. 31-33. But
the government fails to specify whether that requires
notice in the Federal Register, opportunity for public
comment, and an obligation of the agency to respond.
In the APA, Congress adopted specific procedures. See
Pet’r Br. 26-31. The proper result is to hold agencies

10

to the APA as written, not to permit agencies to invent
their own procedures that somewhat resemble it.

Tightening the standard for what qualifies as an
“ambiguous” regulation (U.S. Br. 28-29) is neither a
manageable nor sufficient solution. Because there is
no objective measure, parties and courts would be left
adrift as to how much ambiguity triggers deference.
See Henry Schein, Inc. v. Archer & White Sales, Inc.,
139 S. Ct. 524, 531 (2019) (“It is not unheard-of for one
fair-minded adjudicator to think a decision is obvious
in one direction but for another fair-minded adjudica-
tor to decide the matter the other way.”).

Additional practical problems abound. Parties
would dispute whether an agency has actually
brought its “expertise” (U.S. Br. 33-34) to bear, includ-
ing whether that is a factual or legal question. If fac-
tual, discovery disputes would ensue. The govern-
ment, moreover, offers no standard to evaluate what
constitutes “agency acquiescence.” Jd. at 31. And the
distinction between an “agency’s considered view” and
“the views of mere field officials” (id. at 12) would oc-
cupy appellate lawyers for years.

More broadly, the Court already imposed the sort
of limitations to Auer that the government envisions.
See Christopher v. SmithKline Beecham Corp., 567
U.S. 142, 155-157 (2012). But SmithKline did not
solve Auer’s legal or pragmatic flaws. See Nat’l Ass’n
of Home Builders (NAHB) Br. 14-16.

2. There is a better way to respect agency exper-
tise (U.S. Br. 42-43) and to provide public guidance
(id. at 39-44), all without transgressing the APA—
Skidmore. See Prof. Merrill Br. 19-24; Cato Br. 15-17.

11

Skidmore addresses the same factors that the gov-
ernment now identifies. It considers whether “the
agency has applied its position with consistency” (Fed-
eral Express Corp. v. Holowecki, 552 U.S. 389, 399
(2008)) and the agency’s “formality” of procedure and
“relative expertness” (Mead, 533 U.S. at 228). See also
Alaska Dep't of Envtl. Conservation v. EPA, 540 U.S.
461, 487 (2004) (respecting views of “an expert admin-
istrator”).

But Skidmore differs in one fundamental respect.
Auer (including the government’s diminished form) is
binding deference. Skidmore, however, reflects an
agency's “power to persuade,” not its power to “con-
trol.” Skidmore v. Swift & Co., 323 U.S. 134, 140
(1944). This distinction is crucial. Because it does not
place a substantive thumb on the scale, Skidmore does
not provide agencies lawmaking authority. Rather,
Skidmore is a procedural mechanism that obligates
courts to respect a coordinate branch of government,
including the Executive’s expertise, by giving the
agency's analysis due consideration. See Mead, 533
U.S. at 234-235. If the court arrives at a result differ-
ent from the agency, it is incumbent on the court—as
a matter of inter-branch comity—to address the
agency’s reasoning and explain why the court disa-
grees.

Recent cases are illustrative. Applying Skidmore,
the Court in University of Texas Southwestern Medi-
cal Center v. Nassar, 570 U.S. 338, 360-361 (2013),
evaluated the agency’s reasons and, in coming to a
contrary result, explained why. See also Gonzales v.
Oregon, 546 U.S. 243, 269 (2006). Alternatively, in
Alaska Department of Environmental Conservation,
540 U.S. at 487-495, while recognizing that agencies’

12

views do not have “dispositive force,” the Couri traced
the agency’s arguments, explained why they were per-
suasive, and so gave due consideration to the views of
a co-equal branch.‘

We agree with the government (at 42-43) and the
Administrative Law Scholars (at 7-9) that agencies of-
ten have special expertise. Agencies can exercise that
expertise in a binding way via notice-and-comment
rulemaking. That provides the regulated public an op-
portunity to respond, negatively or favorably, to the
agency’s views. Outside of notice-and-comment rule-
making, an agency’s expertise deserves procedural re-
spect. If a court disagrees, the court must explain why
with specificity.

The problem with Auer is that it permits an
agency to exert its expertise in binding fashion with-
out any participation by the regulated public. Not-
withstanding their expertise, agencies sometimes get
it wrong.

Il. Stare decisis does not justify retention of

Auer deference.

Bound by Auer, the court of appeals deferred to
the VA. Now, the government appears to admit that
no deference is warranted. The government’s own ap-
proach thus requires departure from stare decisis—
which is no doubt the correct result.

* Limited cases could suggest that Skidmore has substantive
weight. See, e.g., Holowecki, 552 U.S. at 403. But Skidmore itself,

occupying the far end of the “spectrum of judicial responses”
(Mead, 533 U.S. at 228) warranted.

13

A. Multiple “special justifications” warrant over-
turning Seminole Rock and Auer. See Pet’r Br. 47-48.
The failure of Seminole Rock or its progeny to identify
a meaningful legal foundation is reason enough. /d. at
47. So too is the clear contradiction between Auer and
the law governing interpretive rules. Jd. at 47-48. Ad-
ditionally, Seminole Rock/ Auer deference is a “direct
obstacle” to the realization of the policies embodied in
the APA. Id. at 48. And, as experience has proven,
Auer deference guts predictability. [bid.®

B. Stare decisis carries less weight here because
Auer deference is a judge-made rule of construction.
See Pet’r Br. 48-50.

That “Congress remains free to alter or eliminate
the doctrine” (U.S. Br. 36) misses the mark. That was
equally true in Pearson v. Callahan, 555 U.S. 223,
233-234 (2009); as the Prison Litigation Reform Act
illustrates, Congress retains authority to alter rules of
procedure in Section 1983 litigation. The Court none-
theless held that, in the face of a “judge made” “rule,”
“change should come from this Court, not Congress.”
Ibid. See also Exxon Shipping Co. v. Baker, 554 U.S.
471, 507 (2008) (“[T]he judiciary [cannot] wash its

5 Auer deference also improperly vests agencies with simultane-
ous authority to both issue and interpret law. See Pet’r Br. 43-
45; Ctr. for Constitutional Jurisprudence Br. 3-13. The govern-
ment responds by pointing to justifications for Chevron. U.S. Br.
45-46. But “Congress cannot enlarge its own power through
Chevron—whatever it leaves vague in the statute will be worked
out by someone else.” Decker v. Northwest Envtl. Def. Ctr., 568
U.S. 597, 620 (2013) (Scalia, J., concurring in part and dissenting
in part). By contrast, “when an agency interprets its own rules—
that is something else.” Jbid. It improperly “[clombinfes] the
power to prescribe with the power to interpret.” Jbid.

14

hands of a problem it created[] simply by calling [the
doctrine] legislative.”).

The government’s attempt to distinguish so-called
primary and secondary conduct rules fails. See U.S.
Br. 36-37. Evidentiary and procedural rules that do
not address “primary conduct” (ibid.) certainly may
bear on case outcomes. But these rules—like defer-
ence doctrines—do not warrant full stare decisis
weight when, as here, the public does not rely upon
them. See Pet’r Br. 49-50

C. Stare decisis has substantially less force be-
cause the public cannot legitimately rely on Auer def-
erence; indeed, Auer undermines legal stability. See
Pet’r Br. 51-53.

1. The United States responds that “[p]rivate par-
ties have ordered their affairs in reasonable reliance
on” Auer deference. U.S. Br. 37-44. But not a single
regulated party appearing in this Court agrees. The
lone brief defending Auer says nary a word about the
regulated public’s reliance interests, much less stare
decisis as a whole.

Instead, every regulated party to opine has ex-
plained that Aver is at war with reliance interests be-
cause agency interpretations are not durable. An
agency may shift its position via a press release, a pol-
icy memorandum posted to a website, or an amicus
brief.

Business associations explain that Auer deference
“nudges courts to acquiesce in agency actions that dis-
rupt legitimate reliance interests” (NAHB Br. 12-16)
and “upsets the expectations of regulated parties and
deprives them of the notice provided through rule-
making” (U.S. Chamber Br. 3, 6-8). State and local

15

governments demonstrate that Auer “invites dramatic
shifts in federal policy with each new administration.”
State & Local Gov't Ass’ns Br. 5. The American Immi-
gration Lawyers Association states that “[t]he evils of
Auer are most notable in their effects on the regulated
public.” NIJC & AILA Br. 17-20. And veterans’ asso-
ciations show that the “VA regularly advances inter-
pretations that are intentionally vague, wildly unrea-
sonable, or inconsistent with its past positions—all
the while demanding that courts defer under Auer.”
Nat'l Org. of Veterans’ Advocates (NOVA). Br. 10-21.
More plainly: “Application of Auer deference to VA
regulations harms veterans.” Nat'l Veterans Legal
Servs. Program (NVLSP) Br. 6-14.

These concerns are not theoretical. Amici have
identified numerous examples of administrative flip-
flops enabled by Auer deference. See, e.g., State & Lo-
cal Gov't Ass’ns Br. 13-19; Nat'l Right to Work Br. 6-
11. They demonstrate several occasions where courts
have endorsed constructions of regulations that are
not the fairest reading. See, e.g., NIJC & AILA Br. 17-
20; U.S. Chamber Br. 8-14; NAHB Br. 12-16; Wash.
Legal Found. Br. 7-19. States illustrate how Auer un-
dermines their unique, sovereign interests. Utah Br.
11-15. And amici show how agencies have acted in in-
tentionally opaque ways; the VA has admitted as
much. See NOVA Br. 10-13; NVLSP Br. 20-27.

2. The government’s fear of “unsettling decisions
based on Seminole Rock deference” (U.S. Br. 37-41) is
baseless. To start, there is no reason to fear any mass
disruption in the lower courts or among the regulated
public. See Cato Br. 17-19; NAHB Br. 26-29.

In any event, the government’s argument—which
rests on the contention that the regulated public has

16

reliance interests in PLIVA, Chase Bank, Auer, and
Long Island Care (U.S. Br. 38)—defeats itself. Under
the government’s own test, Auer deference would not
attach in any of these cases.

In each of PLIVA, Chase Bank, and Auer, the
Court deferred to agency views expressed in briefs.
That is one of the very ills the government recognizes
with Auer. See U.S. Br. 19. (If the government’s rule
is meant to retain agency lawmaking-by-amicus-brief,
it is not a retraction from Auer at all.)

Long Island Care v. Coke, 551 U.S. 158, 170-171
(2007), hit a trifecta of Auer flaws: the Court defezred
to a non-public advisory memorandum, the memoran-
dum was “written in response” to that litigation, and
the memorandum was inconsistent with the agency’s
past positions. See U.S. Br. 19. The government’s need
to use these cases to make its public reliance argu-
ment speaks volumes.

3. The government posits that Auer deference,
once narrowed to preclude agency flip-flops, would en-
hance predictability by insulating “the agency’s” in-
terpretation from judicial review. U.S. Br. 40. As the
government sees it, courts will all fall in line, preclud-
ing review by this Court (id. at 40-42), and private
parties will not have a meaningful opportunity any-
way to challenge agency action (id. at 43-44). To the
extent these arguments hold merit (earlier in its brief,
at 26, the government appears to take the opposite
view), the regulated public does not seek predictabil-
ity in a vacuum. The public is entitled to participate
in, and seek judicial review of, agency actions that im-
pact their interests. The APA provides both predicta-
bility and substantive protections. That framework—
and not any variation on Auer—should govern.

17

Ill. Petitioner offers the best reading of Section

3.156(c).

The government does not dispute that reconsider-
ation under Section 3.156(c) has three elements: (1)
the VA originally erred by failing to consider a service
record in its possession; (2) the service record is “rele-
vant”; and (3) the VA later grants an award, per the
usual standards, “based” at least “in part” on the rec-
ord it initially overlooked. Pet’r Br. 55.

Nor does the government deny that petitioner has
satisfied the first and third elements: the VA origi-
nally erred by failing to consider his service records
(Pet’r Br. 55-56), and, when the VA granted petitioner
benefits, its award was “based” “in part” on those rec-
ords (id. at 56). See also AFL-CIO Br. 23-24.

Instead, the government contends that service
records are “relevant” only if they demonstrate that
“the VA would have reached a different result at the
time of its prior decision had it considered the addi-
tional records” (U.S. br. 49)—and not if they are “rel-
evant” to the veteran’s claim generally. The govern-
ment’s two arguments are not persuasive, and they
pale in comparison to our position, much of which the
government disregards.

A.1. The government begins by asserting that the
“matter at hand” in Section 3.156(c) is the “VA’s prior
decis. n denying the veteran’s claim.” U.S. Br. 49. But
the government has no textual support for that con-
tention.

The regulatory text makes plain that the “official
service department records” must be “relevant” to the
veteran’s “claim.” It provides:

18

[Ajt any time after VA issues a decision on a
claim, if VA receives or associates with the
claims file relevant official service department
records that existed and had not been associ-
ated with the claims file when VA first decided
the claim, VA will reconsider the claim, not-
withstanding paragraph (a) of this section.

38 C.F.R. § 3.156(c)(1). The triggering event, accord-
ingly, is the VA “associat[ing] with the claims file” ma-
terial that is an “official service department record|}”
and that should have been “associated with the claims
file” the first time. What goes into the “claims file”?
Documents that are “relevant” to the veteran’s
“claim.”

In promulgating the current regulation, this is
precisely how the VA understood it would work: “If a
newly discovered service department record is one
that VA should have received at the time it obtained
the veteran’s service medical records, we believe it or-
dinarily would be within the scope of proposed [Sec-
tion] 3.156(c)(1).” 71 Fed. Reg. 52,455 (emphasis
added). A “relevant” record is one that belonged in the
“claims file” at the time of the original adjudication.

Assuming, for the sake of argument, that the “of-
ficial service department records” must be “relevant”
to the “VA’s prior decision denying the veteran’s
claim” (U.S. Br. 49.), these records still qualify. They
bear on whether an in-service event occurred and the
likelihood that petitioner suffered from PTSD—both
of which were elements of the original adjudication.
See Pet’r Br. 57-58 & n.16. Indeed, Dr. Davies criti-
cized Dr. Henderson’s 1983 report (on which the gov-
ernment solely relies, see U.S. Br. 48) because Dr.
Henderson “misunderstood the impact of [petitioner’s]

19

war trauma upon him.” JA38. Petitioner’s war trauma
was undeniably a fact “of consequence in determining
the action.” Fed. R. Evid. 401. The records document-
ing it were thus “relevant” ones. bid.

The government argues that the service records
are not “relevant” because they reveal facts that “no
one disputed.” U.S. Br. 48. But it is long settled that
evidence is “relevant” even if “[tjhe fact to which the
evidence is directed” is not “in dispute.” Old Chief v.
United States, 519 U.S. 172, 179 (1997) (quoting Ad-
visory Committee’s Notes on Fed. R. Evid. 401). Fed-
eral Rule of Evidence 403 exists because—and ex-
pressly recognizes that—evidence may be both “rele-
vant” and “cumulative.” (By contrast, the regulation
excludes “cumulative” evidence from the meaning of
the defined term “material.” 38 C.F.R. § 3.156(a). See
pages 20-21, infra.)

The government's actual contention is that the
regulation’s use of “relevant” should be interpreted as
“dispositive.” While the government studiously avoids
the language now, the Board of Veterans’ Appeals fo-
cused on whether the service records are “outcome de-
terminative.” Pet. App. 42a-43a. But “relevant” does
not mean “dispositive” or “outcome determinative.”
See Pet’r Br. 57; 38 U.S.C. § 101(35) (defining “rele-
vant evidence” as “evidence that tends to prove or dis-
prove a matter in issue”); League of United Latin Am.
‘»tizens v. Perry, 548 U.S. 399, 436 (2006) (distin-
guishing “relevant” and “dispositive”).

2. The government further asserts that the “hall-
mark of reconsidering * * * is that the VA concludes
that its prior decision on the claim was incorrect ab
initio.” U.S. Br. 49. But the government has no textual

20

support for this contention, either. In fact, the text ex-
plains that the “hallmark of reconsidering” (ibid.) is
an earlier VA procedural error—the VA's failure to
“associate[|” records in the government’s possession
with the “claims file.” 38 C.F.R. § 3.156(c)(1).

Section 3.156(c)(3) strongly supports our argu-
ment. To trigger reconsideration, the VA’s award
must be “based” at least “in part” on the overlooked
records. See Pet’r Br. 55. Here, the VA did rely on the
overlooked records when it granted petitioner bene-
fits. JA51-52. See also AFL-CIO Br. 23-24. The gov-
ernment admitted as much earlier. BIO 16 n.2. This
confirms that the evidence is “relevant.”6

B. Several other aspects of the regulatory text and
structure require our construction.

First, the government improperly reuders “rele-
vant” identical to the “new and material evidence”
standard that governs reopening under Section
3.156(a). See Pet’r Br. 57-59. “Material evidence” must
relate to “an unestablished fact necessary to substan-
tiate the claim” and may not be “cumulative [Jor re-
dundant” of existing evidence. 38 C.F.R. § 3.156(a).
That is the same as the government’s preferred test
here. See U.S. Br. 48-49. But, as we have shown, “rel-
evant” is more expansive. See Fed. R. Evid. 401.’

® Section 3.156(c)(4) also bolsters our conclusion. See AFL-CIO
Br. 22-23.

' Webster's Third New International Dictionary (1961) confirms
that, in ordinary usage, “relevant” and “material” differ in de-
gree. “A thing is RELEVANT when it has a connection * * * with
a matter under consideration.” Jd. at 1917. “A thing is MATE-
RIAL when it has so close a relationship with a case in hand that

21

The government responds that Section 3.156(a)’s
“new and material evidence” standard is actually
“broader” than and subsumes Section 3.156(c). U.S.
Br. 51. The government alternatively contends that
the different language has the same meaning. /d. at
51-52.

The regulation’s text forecloses these arguments.
It provides that a veteran may satisfy the require-
ments of Section 3.156(c) “notwithstanding paragraph
(a) of this section.” 38 C.F.R. 3.156(c)(1) (emphasis
added). Section 3.156(c) must apply in circumstances
outside the scope of Section 3.156(a), or else this “not-
withstanding” clause would be meaningless.

Additionally, the VA amended “material” out of
Section 3.156(c), replacing it with the broader term
“relevant.” See Pet’r Br. 58-59; AFL-CIO Br. 22. If the
VA had actually intended for reopening to hinge on
the defined concept of “material” evidence (see 38
C.F.R. § 3.156(a)), the VA would have retained that
term.

We made both arguments earlier (Pet’r Br. 58-59),
but the government responds to neither. For these two
reasons, “relevant” must be a broader standard than
ernment’s construction.

Nor does the government's construction meaning-
fully distinguish between “relevant” and “material.”
The government asserts that “material” evidence in
Section 3.156(a) “need not suggest that the VA’s prior
decision on the claim was incorrect at the time.” U.S.

it cannot be dispensed with without serious alteration of the
case.” Ibid.

22

Br. 51 (emphasis added). But that is just wordplay;
under the government's view, “material” and “rele-
vant” mean the same thing. And Section 3.156(c) is
limited to “official service department records” (ibid.)
because of the regulation’s use of those specific words,
not because of the term “relevant.”

Our construction—not the government’s—prop-
erly captures the different meaning of these words.

Second, the regulation states unequivocally that
“relevant official service department records” “in-
clude” “[s]ervice records that are related to a claimed
in-service event.” 38 C.F.R. § 3.156(c)(1)(i). That is
what these records are. See Pet’r Br. 56-57 & n.15.
Unable to muster a response, the government disre-
gards our argument.

Third, current Section 3.156(c) was promulgated
against the backdrop of then-recently-enacted 38
U.S.C. § 5103A(c). That statute’s usage of “relevant
records” accords with our construction. See Pet’r Br.
59. These two provisions dovetail: Section 5103A(c)
obligates the VA to locate records to assist the vet-
eran, and Section 3.156(c) provides the remedy when
the VA errs. The government fails to explain why “rel-
evant” should have different meanings in these re-
lated provisions.

Fourth, we showed that the pro-veteran and anti-
drafter canons resolve any lingering ambiguity. See
Pet’r Br. 59-61; NOVA Br. 23-29; NVLSP Br. 6-7. Once
more, the government is silent.

C. The government rests heavily on its policy ar-
gument—that our construction could leave some vet-
erans in a “better position” than if the VA had made

23

no underlying error. U.S. Br. 52. But the government
fails to address this regulation’s remedial nature.

The government’s construction requires a coun-
terfactual inquiry about what the VA would have
done, often decades earlier, had it not made an error.
Because the veteran bears the burden of proof (see 38
U.S.C. § 5107(a)), that speculative analysis is a recipe
for mass under-compensation of veterans.

It is often impossible to determine with confidence
the precise effect that overlooked evidence would have
had on the original claim adjudication. Not only might
the evidence influence the ultimate decisionmaker,
but it would also be in the record for doctors and ther-
apists to consider when they prepare their medical re-
ports.

Moreover, when seeking reconsideration, a vet-
eran will often present (as petitioner did here) both
the evidence that the VA overlooked and new medical
evidence confirming the injury. Under the govern-
ment’s approach, VA adjudicators would have wide
discretion to reject claims for retroactive benefits by
heavily weighting the new medical evidence.

These concerns are magnified by the VA’s history
of irrational claims administration (see Sergeant Ma-
jor Jeff Howard Br. 9-13) and the “VA’s penchant for
unreasonable litigating positions.” NOVA Br. 21-23
(summarizing alarming statistics).

As we construe it, the VA’s reconsideration mech-
anism operates far more objectively. The veteran
must show that the VA procedurally erred by failing
to evaluate records the government possessed, that
the records are relevant to the veteran’s claim, and
that, when the VA later awarded benefits (pursuant

24

to the traditional standards), it relied in part on the
records it previously overlooked. See Pet’r Br. 55.

The government’s main objection is that this con-
struction could overcompensate some veterans, in-
cluding, the government insinuates, petitioner. U.S.
Br. 52. But our construction is equitable, both here
and more generally.

In awarding petitioner benefits, the VA credited
Dr. Davies’ 2007 evaluation. JA52. In it, Dr. Davies
explained that petitioner has had PTSD since around
1980 and that Dr. Henderson bungled his analysis.
JA37-38. In sum, the evidence demonstrates that pe-
titioner should have received benefits when he origi-
nally applied in 1982 and that the VA erred when it
first adjudicated his claim.

More generally, it was reasonable for the VA to
select a procedure that might overcompensate some
veterans rather than one that would undercompen-
sate many.® Not only is our construction true to the
regulation’s text, but it also evinces the VA’s interest
in providing a fair procedure for remedying its past
errors. Our veterans deserve no less.

If the VA has since changed its view, it may
amend the regulation through notice-and-comment
rulemaking.

® Allocating the risk of loss this way also incentivizes the VA to
avoid errors. Under the government's approach, VA errors
would, in the aggregate, result in financial advantage to the gov-
ernment at the expense of veterans.

25

CONCLUSION

The Court should reverse the judgment entered
below.

Respectfully submitted.
KENNETH M. CARPENTER PAUL W. HUGHES
Carpenter Chartered Counsel of Record
1525 SW Topeka Bivd., MICHAEL B. KIMBERLY
Suite D ANDREW J. PINCUS
Topeka, KS 66601 CHARLES A. ROTHFELD
(785) 357-5251 E. BRANTLEY WEBB
EUGENE R. FIDELL ANDREW A. LYONS- BERG
Yale Law School Mayer Brown LLP
Supreme Court Clinic 1999 K Street, NW
127 Wall Street Washington, DC 20006
New Haven, CT 06511 (202) 263-3000
(203) 432-4992 phug rown.com
RACHEL R. SIEGEL
Mayer Brown LLP
1221 Ave. of the Americas
New York, NY 10020
(212) 506-2500
Counsel for Petitioner

MARCH 2019

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0846%3A13. Public record. Not legal advice.