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

No. 18-15

In THE

Supreme Court of the Anited States

JAMES L. KISOR,

Petitioner,

Vv.

ROBERT WILKIE,

SECRETARY OF VETERANS AFFAIRS,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals

for the Federal Circuit

BRIEF OF THE AMERICAN FEDERATION OF

LABOR AND CONGRESS OF INDUSTRIAL

ORGANIZATIONS AS AMICUS CURIAE

IN SUPPORT OF NEITHER PARTY

HAROLD C. BECKER

MATTHEW J. GINSBURG

(Counsel of Record)

SHELBY CALAMBOKIDIS

815 Sixteenth Street, NW

Washington, DC 20006

(202) 637-5397

mginsburg@aficio.org

Mosaic - (301) 927-3800 - Cheverty, MD

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TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ....................00000008 ili

INTEREST OF AMICUS CURIAE.................. 1

IT encccsctiesnsintenieninsoneoimemmnniiidial 1

SUMMARY OF ARGUMENT ......................... 4

SOE Wiiniccocccccduicscniteniiiinibidsiepemmdadeaaiaials 5

|

iis

TABLE OF AUTHORITIES

Page

CASES:

Auer v. Robbins,

EE eee passim

Blubaugh v. McDonald,

773 F.3d 1310 (Fed. Cir. 2014)...................... 22, 23

Bowen v. Georgetown University Hospital,

| ERE EES 14

Bowles v. Seminole Rock & Sand Co.,

RE passim

Burlington Truck Lines, Inc. v. United States,

Sn lee 14

Christensen v. Harris County,

= 19

Christopher v. SmithKline Beecham Corp.,

gf RRS EEE Tape 19, 20

Edwards’ Lessee v. Darby,

25 U.S. (12 Wheat) 206 (1827) ..............00..... 8

Ehlert v. United States,

Ee i 14

Epilepsy Foundation of Northeast

Ohio v. NLRB,

268 F.3d 1095 (D.C. Cir. 2001) .............0.0.0... 13

Ford Motor Credit Co. v. Mithollin,

A EE 6

Gonzales v. Oregon,

NET 19

iv

TABLE OF AUTHORITIES—Continued

Page

INS v. Cardoza-Fonseca,

GD UL, GE GO ccececccccrscesscccsccecesesesesesesee 13

INS v. Stanisic,

LN 14

Kisor v. Shulkin,

869 F.3d 1360 (Fed. Cir. 2017)..................... 2, 3, 4,

20, 21, 22, 23

Long Island Care at Home, Ltd. v. Coke,

561 U.S. 158 (2007) .....................-- denen 4

Martin v. Occupational Safety & Health

Review Comm'n,

ES a itd cteprctnncssncscsersmsecoon 6, 13

NLRB v. Hearst Publications, Inc.,

4 Sf Eee )

North Haven Board of Education v. Bell,

Ge EG I crncovsiierescnsssespsmnsetncinenseren 14

Northern Indiana Public Service Co. v.

Porter County Chapter of Izaak Walton

League, Inc.,

423 U.S. 12 (1975) ....................-. capenitt Sibbebtaiiens 14

Norwegian Nitrogen Products Co. v.

United States,

288 U.S. 294 (1933) ........ Sea eee ene re 4, 8, 9, 16

Perez v. Mortgage Bankers Assn,

it) 2.3) | ee 15

Vv

TABLE OF AUTHORITIES—Continued

Page

SEC v. Chenery Corp.,

EET ee ae oe 6,9

SEC v. Chenery Corp.,

332 U.S. 194 (1947).................. 4, 9, 12, 13, 16, 18

Skidmore v. Swift & Co.,

ES ARR 17

Surgett v. Lapice,

49 U.S. (8 How.) 48 (1850) 2.000000. cece. 8

Udall v. Tallman,

EST Ne 14

United States v. Larionoff,

| 14, 15

United States v. Macdaniel,

i 8

Watt v. Alaska,

ioe 13, 14

STATUTES AND REGULATIONS:

Ea 16

SE A a eS 3

EE eee 20

SB ULB.C. § TEBE MA) 2.n..cccccccccccccccesccccceees 20

ee 22

SO Gy I cccccrecesicneccceveccsecececeserecees 2, 22, 23

38 C.F-R. § 3.156@)())............................ 2, 20, 21, 24

A 3

BD Care BOD cscevcccnnessecenccscccccesinsony ws. 22,23

vi

TABLE OF AUTHORITIES—Continued

MISCELLANEOUS:

R. Pierce, Administrative Law Treatise

SI TEI ciniccninieeneianidiidedininememaniaenmmenionns

Brief for the United States as Amicus Curiae,

Auer v. Robbins,

519 U.S. 452 (1997) (No. 95-897) .................

Brief for the United States as Amicus Curiae

Supporting Affirmance, Auer v. Robbins,

519 U.S. 452 (1997) (No. 95-897) .................

Respondents Brief on the Merits,

Auer v. Robbins,

519 U.S. 452 (1997) (No. 95-897) .................

New and Material Evidence, 70 Fed. Reg.

35,388 (proposed June 20, 2005) .................

13

17

1

BRIEF OF THE AMERICAN FEDERATION OF

LABOR AND CONGRESS OF INDUSTRIAL

ORGANIZATIONS AS AMICUS CURIAE

IN SUPPORT OF NEITHER PARTY

INTEREST OF AMICUS CURIAE

The American Federation of Labor and Congress of

Industrial Organizations (AFL-CIO) is a federation of

55 national and international labor organizations

with a total membership of over 12 million working

men and women.’

The question presented in this case is “[w]hether

the Court should overrule Auer |v. Robbins, 519 U.S.

452 (1997)] and [Bowles v.| Seminole Rock |& Sand

Co., 325 U.S. 410 (1945)].” The AFL-CIO has a strong

interest in the proper resolution of this question be-

cause members of AFL-CIO-affiliated unions depend

on a daily basis on the effective enforcement of work-

place-related regulations by numerous federal agen-

cies, including the Occupational Health and Safety

Administration, the Mine Safety and Health Adminis-

tration, and the Wage and Hour Division of the United

States Department of Labor.

STATEMENT

Petitioner James L. Kisor served on active duty in

the Marine Corps from 1962 to 1966, including with

the 2nd Battalion of the 7th Marines in the Vietnam

War, during which time he saw combat in “Operation

' Counsel for the petitioner and counsel for the respondent

have each consented to the filing of this amicus brief. No counse!

for a party authored this brief in whole or in part, and no person

or entity, other than the amicus curiae, made a monetary contri-

bution to the preparation or submission of this brief.

2

Harvest Moon.” Kisor v. Shulkin, 869 F.3d 1360, 1361

& n.1, 1362 (Fed. Cir. 2017). In December 1982, Kisor

filed a claim for disability compensation benefits for

post-traumatic stress disorder (PTSD) with the De-

partment of Veterans Affairs (VA) Regional Office in

Portland, Oregon. Jd. at 1361. The Regional Office

denied Kisor’s benefits claim in May 1983 on the basis

of a VA examiner’s determination that he “suffered

from ‘a personality disorder as opposed to PTSD.’”

Ibid. (quoting Addendum to PTSD review (J.A. 13)).

In June 2006, Kisor submitted a request to reopen

his previously-denied claim. Id. at 1362. While his

request was pending, Kisor submitted additional ser-

vice department records concerning his participation

in Operation Harvest Moon, records that the VA could

have—but did not—obtain and review as part of its

consideration of Kisor’s original claim for benefits. Id.

at 1362, 1364 n.5.

This time the Regional Office concluded that Kisor

did have PTSD based on his service in Vietnam. /d. at

1362. Benefits were made effective June 5, 2006, the

date he filed his request to reopen. Jbid.

Kisor appealed the Regional Office’s decision, seek-

ing an effective date based on his original benefits

claim. Id. at 1362-63. As relevant here, the Board of

Veterans Appeals analyzed this request under 38

C.F.R. § 3.156(c), which states that the VA will recon-

sider a prior claim “‘if VA receives or associates with

the claims file relevant official service department re-

cords that existed and had not been associated with

the claims file when VA first decided the claim.’” Id.

at 1363 (quoting 38 C.F.R. § 3.156(c)(1)). That same

regulation states that “[a]m award made based all or

in part on the records identified by paragraph (c)(1) of

this section is effective on the date entitlement arose

3

or the date VA received the previously decided claim,

whichever is later.” 38 C.F.R. § 3.156(c)(3).

The Board denied Kisor’s request for reconsidera-

tion on the basis that the service department records

submitted by Kisor in 2006 were not “‘relevant’”

within the meaning of the regulation. Kisor, 869

F.3d at 1364 (quoting Board decision). The Board

stated that “‘relevant evidence . . . would suggest or

better yet establish that the Veteran has PTSD as a

current disability.” Jbid. (quoting Board decision).

Kisor’s records “were not ‘outcome determinative’

and ‘not relevant to the decision in May 1983 because

the basis of the denial was that a diagnosis of PTSD

was not warranted, not a dispute as to whether or

not the Veteran engaged in combat with the enemy

during service.’” Ibid. (quoting Board decision).

Kisor appealed the Board’s decision to the United

States Court of Appeals for Veterans Claims. Jbid.

The Veterans Court denied Kisor’s appeal in a single-

member, non-precedential decision. Ibid. See App. to

Cert. Pet. 23a-25a (Veterans Court decision).

Kisor then appealed to the Federal Circuit, which

has jurisdiction over decisions of the Veterans Court.

See 38 U.S.C. § 7292. After considering both parties’

arguments concerning the meaning of the dispositive

regulation, the court of appeals ultimately concluded

that “neither party’s position strikes us as unreason-

able.” Kisor, 869 F.3d at 1366-68. On that basis, the

court deferred to the Board’s proffered interpretation

of the regulation,” explaining that it did not find the

Board’s interpretation to be “‘plainly erroneous or in-

* “Because the Board is part of the VA,” the court held that

“the Board’s interpretation of the regulation [was] deemed to be

the agency’s interpretation.” Jd. at 1367 n.10.

4

consistent’ with the VA’s regulatory framework.” Id.

at 1368 (quoting Long Island Care at Home, Lid. v.

Coke, 551 U.S. 158, 171 (2007), quoting, in turn, Sem-

inole Rock, 325 U.S. at 414). See also id. at 1367 (quot-

ing Auer, 519 U.S. at 461, for same).

Kisor filed a petition for a writ of certiorari. The

Court granted the writ limited to the following ques-

tion: “Whether the Court should overrule Auer and

Seminole Rock.”

SUMMARY OF ARGUMENT

Congress frequently delegates to administrative

agencies authority to both promulgate rules interpret-

ing a statute and to apply those rules in particular

cases. The judiciary’s role, in the first instance, is to

ensure that the agency’s rules represent a reasonable

interpretation of the statute and, with regard to the

agency's application of its rules in any subsequent

case, to determine whether the agency’s interpreta-

tion of its rules is reasonable.

When an agency exercises these congressionally-del-

egated powers through adjudication, judicial review is,

without question, deferential. See generally SEC v.

Chenery Corp. (Chenery II), 332 U.S. 194 (1947). That

is particularly the case when an agency, through its

decisions, provides an initial, contemporaneous con-

struction of the statute. Norwegian Nitrogen Products

Co. v. United States, 288 U.S. 294, 315 (1933).

It can hardly be doubted that similar deference is

due where an agency engages in rulemaking and ini-

tially explains how the rule applies in common or oth-

erwise foreseeable situations—e.g., in the preamble

to a regulation or in published agency guidance—or

where an agency shows a record of consistently ap-

5

plying the same interpretation of its regulation in ad-

judications.

In Bowles v. Seminole Rock & Sand Co., 325 U.S.

410 (1945), this Court followed this approach, balanc-

ing the need for judicial oversight with appropriate

deference to the agency’s congressionally-delegated

authority to engage in rulemaking and to apply its

reasonable interpretations of those regulations in the

course of enforcing them in specific cases.

Auer vu. Robbins, 519 U.S. 452 (1997), purported to

do no more than apply the approach to deference il-

lustrated by Seminole Rock. However, Auer—which

deferred to an interpretation that the agency acknow!]-

edged it had announced for the first time in its amicus

brief to this Court—has come to stand for the indefen-

sible proposition that an agency’s interpretation of its

regulations is virtually unreviewable.

This Court should reaffirm the carefully-bounded

framework for judicial review of an agency’s interpre-

tation of its own regulations followed in Seminole

Rock, while disavowing the strong form of deference

Auer has come to represent.

Because the court of appeals in this case erred by

extending deference to the VA’s interpretation of its

regulation where that interpretation had no basis in

the text of the regulation, let alone in the agency’s pri-

or decisions or guidance, this Court should reverse

and remand this case for further proceedings.

ARGUMENT

Since its earliest decisions, this Court has recog-

nized that an agency’s consistent construction and ap-

plication of its own rule can provide practical meaning

to the text of the rule and, to that extent, be entitled

6

to deference. At the same time, this Court has estab-

lished limits on when such judicial deference is war-

ranted, thus maintaining the judiciary’s proper role in

making the ultimate determination of whether an

agency's interpretation of its rule is correct.

Petitioner contends that extending deference in this

manner allows the agency to informally “amend a rule

that was promulgated through notice-and-comment

procedures.” Pet. Br. 36. “Because applying an agen-

cy’s regulation to complex or changing circumstances

calls upon the agency’s unique expertise and policy-

making prerogatives, we presume that the power au-

thoritatively to interpret its own regulations is a com-

ponent of the agency’s delegated lawmaking powers.”

Martin v. Occupational Safety & Health Review

Comm'n, 499 U.S. 144, 151 (1991). An interpretation

that is consistent with the agency’s past practice and

adds nothing that could not have been included in the

regulation in the first instance is, therefore, no

“amend|[ment of] a rule.” Pet. Br. 36.

Where Congress has delegated to the agency “the

power authoritatively to interpret its own regula-

tions,” Martin, 499 U.S. at 151, “judges are not accred-

ited to supersede Congress or the appropriate agency

by embellishing upon the regulatory scheme,” Ford

Motor Credit Co. v. Milhollin, 444 U.S. 555, 565 (1980).

“Thus, while not abdicating their ultimate judicial re-

sponsibility to determine the law, cf. general-

ly SEC v. Chenery Corp., 318 U. S. 80, 92-94

(1943), judges ought to refrain from substituting their

own interstitial lawmaking for that of the [agency].”

Ford Motor Credit, 444 U.S. at 568.

This Court’s decision in Bowles v. Seminole Rock &

Sand Co., 325 U.S. 410 (1945), fully comports with

this approach, exhibiting a practical and carefully-

7

bounded framework for determining when an agency’s

interpretation of its own regulation is entitled to def-

erence that appropriately balances respect for the

agency's congressionally-delegated authority to inter-

pret its own regulations with the need for judicial

oversight. On the approach followed by Seminole

Rock, deference is appropriate when the agency has

interpreted an ambiguous regulation consistently

over time and thus provided notice to regulated par-

ties of the regulation’s meaning.

While the Court’s decision in Auer v. Robbins, 519

U.S. 452 (1997), purported to do no more than apply

Seminole Rock, Auer has come to stand for the inde-

fensible proposition that an agency’s interpretation of

its regulations is virtually unreviewable. The Court

should reaffirm the framework set forth in Seminole

Rock, while disavowing the strong form of deference

Auer has come to represent.

In this case, the court of appeals erred by extending

deference to the VA’s interpretation of the pertinent

regulation. In Seminole Rock terms, deference was

not appropriate because the VA’s interpretation had

no basis in the agency’s prior decisions or guidance

and because regulated parties had no way of knowing,

prior to this litigation, that the VA would interpret

the regulation in the constricted manner it has ad-

vanced here.

1. Seminole Rock stands for the proposition that, in

a case that “involves an interpretation of an adminis-

trative regulation a court must necessarily look to the

administrative construction of the regulation if the

meaning of the words used is in doubt.” 325 U.S. at

413-14. Where a regulation has been given a “consis-

tent administrative interpretation” by the agency,

that consistent interpretation should be afforded “con-

8

trolling weight unless it is plainly erroneous or incon-

sistent with the regulation.” Id. at 414, 418.

The roots of Ssminole Rock run deep. As this Court

long ago explained: “[O]f necessity, usages have been

established in every department of the government,

which have become a kind of common law, and regu-

late the rights and duties of those who act within their

respective limits.” United States v. Macdaniel, 32

U.S. (7 Pet.) 1, 15 (1833). “Usage cannot alter the law,

but it is evidence of the construction given to it, and

must be considered binding on past transactions.”

Ibid. Deference is especially appropriate for a “con-

struction . . . adopted by the departments . . . soon af-

ter the act .. . went into operation.” Surgett v. Lapice,

49 U.S. (8 How.) 48, 68 (1850). In such a circumstance,

this Court has stated, “we should feel ourselves re-

strained, unless the error of construction was plainly

manifest, from disturbing the practice.” Ibid. See also

Edwards’ Lessee v. Darby, 25 U.S. (12 Wheat.) 206,

210 (1827) (“In the construction of a doubtful and am-

biguous law, the contemporaneous construction of

those who were called upon to act under the law, and

were appointed to carry its provisions into effect, is

entitled to very great respect.”).

This doctrine of a “kind of common law” of adminis-

trative “usage,” Macdaniel, 32 U.S. at 15, remained

robust during the early days of the modern adminis-

trative state, when much administrative policy mak-

ing was conducted through adjudication. In Norwe-

gian Nitrogen Products Co. v. United States, 288 U.S.

294 (1933), a tariff case, this Court explained:

“[Ajdministrative practice, consistent and general-

ly unchallenged, will not be overturned except for

very cogent reasons if the scope of the command is

indefinite and doubtful. The practice has peculiar

9

weight when it involves a contemporaneous con-

struction of a statute by the men charged with the

responsibility of setting its machinery in motion, of

making the parts work efficiently and smoothly

while they are yet untried and new.” Jd. at 315 (ci-

tations omitted).

“[W here the question is one of specific application of

a broad statutory term in a proceeding in which the

agency administering the statute must determine it

initially, the reviewing court’s function is limited”—

viz. “the [agency]’s determination .. . is to be accepted

if it has ‘warrant in the record’ and a reasonable basis

in law.” NLRB v. Hearst Publ’ns, 322 U.S. 111, 131

(1944). See also id. at 130-31 (explaining that “the

judgement of those whose special duty is to administer

the questioned statute” is entitled to “appropriate

weight” (citing Norwegian Nitrogen, supra)). It mat-

ters not whether “the reviewing court might have made

a different determination were it empowered to do so.”

SEC v. Chenery Corp. (Chenery I), 318 U.S. 80, 94

(1943). The Court will uphold an agency decision so

long as “the [agency] has made a thorough examina-

tion of the problem, utilizing statutory standards and

its own accumulated experience,” i.e., “has made. . . an

informed, expert judgment on the problem.” SEC v.

Chenery Corp. (Chenery IT), 332 U.S. 194, 207 (1947).

It was against this doctrinal background that Semi-

nole Rock was decided. Because that case so aptly il-

lustrates the traditional approach to judicial review of

an agency’s interpretation of its own regulations, it is

worth describing in detail.

Seminole Rock involved the Administrator of the

Office of Price Administration’s interpretation of Max-

imum Price Regulation No. 188, promulgated pursu-

ant to the Emergency Price Control Act of 1942. 325

10

U.S. at 411. “The core of the regulation was the re-

quirement that each seller shall charge no more than

the prices which he charged during the selected base

period of March 1 to 31, 1942.” Id. at 413. Seminole

Rock & Sand Company entered into a contract in Oc-

tober 1941 to provide crushed stone to a customer for

60 cents per ton, but did not deliver the stone until

March 1942. Id. at 412. When Seminole Rock later

agreed to sell stone to additional customers at higher

rates, the Administrator brought an action to enjoin

the sales on the ground that they exceeded the 60

cents per ton maximum established by operation of

the Maximum Price Regulation, a conclusion Semi-

nole disputed. Jd. at 412-13.

The regulation stated that the “‘Highest price

charged during March, 1942’ means”:

“(i) The highest price which the seller charged to a

purchaser of the same class for delivery of the arti-

cle or material during March, 1942; or

(ii) If the seller made no such delivery during March,

1942, such seller’s highest offering price to a pur-

chaser of the same class for delivery of the article or

material during that month; or

(iii) If the seller made no such delivery and had no

such offering price to a purchaser of the same class

during March, 1942, the highest price charged by

the seller during March, 1942, to a purchaser of a

different class, adjusted to reflect the seller's cus-

tomary differential between the two classes of pur-

chasers...” Id. at 414-15 (quoting Maximum Price

Regulation No. 188, § 1499.163(a)(2)).

The dispute, as described by the Court, “centers

about the meaning and applicability of rule (i).” Id. at

415. “The Administrator claims that the rule is satis-

11

fied and therefore is controlling whenever there has

been an actual delivery of articles in the month of

March, 1942, such as occurred when respondent de-

livered the crushed rock .. . at the 60-cent rate.” Ibid.

“(Seminole Rock], on the other hand, argues that

there must be both a charge and a delivery during

March, 1942, in order to fix the ceiling price according

to rule (i).” Ibid.

The Court began by noting that, “[a]ls we read the

regulation, . . . rule (i) clearly applies to the facts of

this case.” Ibid. “Whatever may be the variety of

meanings, . . . rule (i) adopts the highest price which

the seller ‘charged . . . for delivery’ of an article during

March, 1942.” Id. at 415-16 (second alteration in

Seminole Rock) (quoting Maximum Price Regulation

No. 188, § 1499.163(a)(2)). On the plain language of

the regulation, then, “[t]he essential element bringing

the rule into operation is thus the fact of delivery dur-

ing March.” Id. at 416.

The Court then noted that this interpretation was

“further borne out by” the regulatory scheme taken as

a whole. Ibid. “[Rjule (ii) becomes applicable only

where ‘the seller made no such delivery during March,

1942,’ as contemplated by rule (i).” Ibid. (quoting Max-

imum Price Regulation No. 188, § 1499.163(a)(2)).

And, a different section of the Maximum Price Regula-

tion “defines the word ‘delivered’ as meaning ‘received

by the purchaser or by any carrier . . . for shipment to

the purchaser’ during March, 1942.” Ibid. (quoting

General Maximum Price Regulation, § 1499.20(d)).

Finally, the Court stated that “[a]ny doubts con-

cerning this interpretation of rule (i) are removed by

reference to the administrative construction of this

method of computing the ceiling price.” Jd. at 417.

“(I]n a bulletin issued by the Administrator concur-

12

rently with the General Maximum Price Regulation

..., which was made available to manufacturers as

well as to wholesalers and retailers, the Administra-

tor stated []: “The highest price charged during March

1942 means the highest price which the retailer

charged for an article actually delivered during that

month or, if he did not make any delivery of that ar-

ticle during March, then his highest offering price for

delivery of that article during March.” Ibid. (empha-

sis and footnote omitted). The bulletin also stated

that, “It should be carefully noted that actual delivery

during March, rather than the making of a sale dur-

ing March, is controlling.” Jbid. (emphasis omitted).

And, the Court noted that the position set forth in the

bulletin “has uniformly been taken by the Office of

Price Administration in the countless explanations

and interpretations given to inquirers affected by this

type of maximum price determination.” /d. at 417-18.

Seminole Rock provides a practical and carefully-

bounded framework for determining when deference

to an agency’s interpretation of its regulation is ap-

propriate. The question only arises “if the meaning of

the words used [in the regulation] is in doubt.” Jd. at

414. Deference is then appropriate if the agency's

construction of the regulation is “[]consistent with the

regulation,” ibid., and comports either with a “consis-

tent administrative interpretation of the [relevant]

phrase,” id. at 418 (footnote omitted), or, if the regula-

tion is new, guidance “issued by the [agency] concur-

rently with the . . . [rjegulation,” id. at 417, based on

“a thorough examination of the problem, utilizing

statutory standards and [the agency’s] own accumu-

lated experience,” Chenery IT, 332 U.S. at 207.

By contrast, “[a]n agency interpretation of a relevant

provision which conflicts with the agency’s earlier in-

13

terpretation is ‘entitled to considerably less deference’

than a consistently held agency view.” INS v. Cardo-

za-Fonseca, 480 U.S. 421, 446 n.30 (1987) (quoting

Watt v. Alaska, 451 U.S. 259, 273 (1981)). An impor-

tant reason for this rule concerns “the adequacy of no-

tice to regulated parties.” Martin, 499 U.S. at 158. Cf.

1 R. Pierce, Administrative Law Treatise § 6.11, p. 543

(5th ed. 2010) (“In penalty cases, courts will not accord

substantial deference to an agency’s interpretation of

an ambiguous rule in circumstances where the rule

did not place the individual or firm on notice that the

conduct at issue constituted a violation of a rule.”).

Surprise, of course, can be avoided if the agency makes

a clear public announcement of its interpretation. See,

e.g., Seminole Rock, 325 U.S. at 417 (describing the

ager.cys “What Every Retailer Should Know About

the General Maximum Price Regulation” bulletin);

Red Lion Broad. Co. v. FCC, 395 U.S. 367, 384 (1969)

(describing “the FCC’s 1949 Report on Editorializing,

which the FCC views as the principal summary of

its ratio decidendi in cases in this area”). Or, if the

agency announces its new interpretation in an adjudi-

cation or other fact-based determination, it can decide

to apply that interpretation prospectively only. See

Epilepsy Found. of Northeast Ohio v. NLRB, 268 F.3d

1095, 1102 (D.C. Cir. 2001) (“[W]hen there is a substi-

tution of new law for old law that was reasonably clear,

the new rule may justifiably be given prospectively-

only effect in order to protect the settled expectations

of those who had relied on the preexisting rule.” (Cita-

tion and internal quotation marks omitted)).

Another rationale for denying deference to an agen-

cy’s changed interpretation of a regulation—especial-

ly if it first appears in the context of litigation—is to

ensure that the agency has exercised its “informed,

expert judgment on the problem,” Chenery II, 332 U.S.

14

at 207, and is not simply engaged in “post hoc ratio-

nalizations for agency action,” Burlington Truck Lines,

Inc. v. United States, 371 U.S. 156, 168 (1962). For

that reason, a Court may require a more thoroughgo-

ing explanation for a changed interpretation of a regu-

lation than for an interpretation that simply contin-

ues longstanding policy. Cf. Bowen v. Georgetown

Univ. Hosp., 488 U.S. 204, 212-13 (1988).

In light of the carefully-bounded approach described

above, it is no surprise that, in the decades that fol-

lowed, this Court regularly applied Seminole Rock in a

wide range of settings, and without significant contro-

versy. Notably, this Court did so both to extend defer-

ence where it was warranted, see, e.g., Udall v. Tall-

man, 380 U.S. 1, 4, 16-18 (1965) (Secretary of Interior

interpretation of regulation regarding issuance of oil

and gas leases on public land); INS v. Stanisic, 395

U.S. 62, 72 (1969) (INS interpretation of regulation

concerning hearings for alien crewman); Ehlert v.

United States, 402 U.S. 99, 105 (1971) (Selective Ser-

vice interpretation of regulation concerning timing of

conscientious objection claims); N. Ind. Pub. Serv. Co.

v. Porter Cty. Chapter of Izaak Walton League, Inc.,

423 U.S. 12, 14-15 (1975) (Atomic Energy Commission

interpretation of regulation concerning location of nu-

clear plants); United States v. Larionoff, 431 U.S. 864,

872-73 (1977) (Navy’s interpretation of Department of

Defense regulation pertaining to reenlistment bonus-

es), as well as to deny deference when the Seminole

Rock standard was not met, see, e.g., Watt, 451 U.S. at

272-73 (new Department of Interior interpretation

conflicting with prior interpretation that was issued

contemporaneously with regulation not entitled to def-

erence); North Haven Bd. of Educ. v. Bell, 456 U.S.

512, 538 n.29 (1982) (no deference for Department of

Education’s interpretation of its regulation where

15

“that interpretation has fluctuated from case to case”).

The common thread in these cases, following Seminole

Rock itself, was that deference will apply only where

the pertinent regulation contains “ambiguous terms,”

the agency’s “interpretation is not plainly inconsistent

with the wording of the regulations,” and, “throughout

the period in which the [relevant] program was in ef-

fect, the [agency] interpreted the . . . regulations” con-

sistently. Larionoff, 431 U.S. at 872-73.

2. Auer v. Robbins, 519 U.S. 452 (1997), displays a

significantly less-bounded approach to deference to an

agency’s interpretation of its own regulations than

Seminole Rock. As a result, Auer came to stand for the

proposition that an agency’s interpretation of its own

regulation is virtually unreviewable. In response, some

agencies sought deference for their interpretations of

regulations in circumstances that would not have qual-

ified for deference under Seminole Rock. This Court

then cut back on Auer, and, in addition, some members

of this Court began to question the entire enterprise of

extending judicial deference to agency interpretation of

regulations. See, e.g., Perez v. Mortg. Bankers Ass'n,

135 S. Ct. 1199, 1210-11 (2015) (Alito, J., concurring in

part and concurring in the judgment) (“I await a case in

which the validity of Seminole Rock may be explored

through full briefing and argument.”); id. at 1213 (Sca-

lia, J., concurring in the judgment) (“I would .. .

abandon|] Auer... .”); id. at 1225 (Thomas, J., concur-

ring in the judgment) (“[T]he entire line of precedent

beginning with Seminole Rock raises serious constitu-

tional questions and should be reconsidered in an ap-

propriate case.”). But see id. at 1208-09 & n.4 (Soto-

mayor, J., opinion for the Court) (generally approving

of extending deference to agency interpretations of

their own regulations, while making clear that “Auer

deference is not an inexorable command in all cases”).

16

Auer itself is flawed, as we explain below, but not

for any reason that provides a basis for overruling

Seminole Rock. To the contrary, as we have demon-

strated, the Seminole Rock framework constitutes a

practical and bounded approach to judicial review of

agency interpretation of regulations that recognizes

that those “charged with the responsibility of setting

[the agency’s] machinery in motion,” Norwegian Ni-

trogen, 288 U.S. at 315, are frequently best-positioned

to provide authoritative interpretations of the regula-

tions they enforce, while also requiring clear indicia

that the agency actually “has made .. . an informed,

expert judgment on the problem,” Chenery IT, 332 U.S.

at 207, before judicial deference is extended. The

Court should thus reaffirm the approach set forth in

Seminole Rock and discard the strong form of defer-

ence represented by Auer.

Auer, which involved two private parties, concerned,

inter alia, dueling interpretations of the Secretary of

Labor’s “salary-basis” test regulation implementing

the Fair Labor Standards Act’s exemption from over-

time requirements for “bona fide executive, adminis-

trative, or professional” employees. 519 U.S. at 454-

55 (quoting 29 U.S.C. § 213(a)(1)). The United States

filed an amicus brief on behalf of the Secretary of La-

bor supporting the respondent employer’s interpreta-

tion of the regulation. Citing Seminole Rock and its

“plainly erroneous or inconsistent with the regula-

tion” standard, the Court deferred to the Secretary’s

position, noting that the Secretary’s interpretation of

“[t]he critical phrase [of the regulation] comfortably

bears the meaning the Secretary assigns.” Jd. at 461.

The Court did not, however, reference any prior opin-

ions or interpretations by the Secretary that support-

ed this interpretation. Rather, the Court cited only to

two dictionaries containing similar definitions of the

17

relevant regulatory phrase, and extolled the fact that

“(t]he Secretary's approach rejects a wooden require-

ment” and “avoids the imposition of massive and un-

anticipated overtime liability.” Jbid.

It is notable, in this regard, that neither the respon-

dent employer nor the United States sought Seminole

Rock deference for the Secretary of Labor’s views.’ See

Respondents Brief on the Merits at 27-28 & n.12, Auer

v. Robbins, 519 U.S. 452 (1997) (No. 95-897); Brief for

the United States as Amicus Curiae Supporting Af-

firmance at 21-24, Auer v. Robbins, 519 U.S. 452

(1997) (No. 95-897). Instead, the employer sought

only Skidmore deference for the Secretary's “body of

experience and informed judgment” as expressed in

the amicus brief. Respondents Brief on the Merits at

28 n.12 (citing Skidmore v. Swift & Co., 323 U.S. 134,

140 (1944)). The United States sought no deference at

all for the Secretary's views. That is presumably be-

cause, as the United States explained in its brief filed

at the certiorari stage—in which it set forth the same

merits argument while urging the Court not to take

the case—“the cases upon which petitioners rely [to

show a circuit split] were all decided without the ben-

efit of a clear statement by the Department of Labor on

the correct reading of its regulations.” Brief for the

United States as Amicus Curiae at 14 (emphasis add-

ed). Citing Seminole Rock, the government then as-

serted that, “[a]ccordingly, in future cases, the courts

of appeals will be guided by the Secretary’s interpre-

* The employer was aware of the Secretary of Labor’s position

at the time it filed its merits brief because, as we explain in the

text, the United States had previously filed a brief at the certio-

rari stage in which it set forth the Secretary's view on the merits.

See Brief for the United States as Amicus Curiae at 8-11, Auer v.

Robbins, 519 U.S. 452 (1997) (No. 95-897).

18

tation in construing the applicable regulations.” /d. at

15 (emphasis added). Yet, despite the frank acknow!l-

edgment by the United States that there was no clear

prior statement of the Secretary of Labor’s position on

the dispositive interpretive issue, this Court summar-

ily dismissed the petitioners’ complaint that the Sec-

retary’s interpretation was not worthy of deference.

See Auer, 519 U.S. at 462 (“There is simply no reason

to suspect that the interpretation does not reflect the

agency's fair and considered judgment on the matter

in question.”).

The problem, in Seminole Rock terms, was that there

was no reliable indicia that the Secretary's interpreta-

tion as set forth in the amicus brief reflected the agen-

cy’s fair and considered judgment. For example, there

was neither evidence of a “consistent administrative

interpretation” of the relevant phrase of the regulation,

325 U.S. at 418, nor any pre-litigation publication of

the agency’s views—akin to the Maximum Price Regu-

lation bulletin in Seminole Rock—that would ensure

both that regulated parties had notice of the agency’s

interpretation and that the view expressed by the agen-

cy in litigation was the result of “a thorough examina-

tion of the problem, utilizing statutory standards and

[the agency’s] own accumulated experience with [such]

matters,” Chenery II, 332 U.S. at 207. By extending

“controlling weight,” Seminole Rock, 325 U.S. at 414, to

the Secretary’s interpretation in this circumstance,

Auer appeared to signal a loosening of this Court’s stan-

dards for when it is appropriate to afford deference to

an agency’s interpretation of its own regulation.

Intentional or not, that signal was received by agen-

cies. Their aggressive assertion of Auer deference in

subsequent cases led to a series of decisions in which

this Court imposed limits on the seemingly sweeping

19

assertion of the doctrine in Auer. See Christensen v.

Harris County, 529 U.S. 576, 588 (2000) (“Auer defer-

ence is warranted only when the language of the regu-

lation is ambiguous.”); Gonzales v. Oregon, 546 U.S.

243, 256-57 (2006) (Auer does not apply “when, in-

stead of using its expertise and experience to formu-

late a regulation, [the agency] has elected merely to

paraphrase the statutory language”); Christopher v.

SmithKline Beecham Corp., 567 U.S. 142, 154-56

(2012) (Auer deference inappropriate where agency

“changed course after we granted certiorari in this

case,” because “it would result in precisely the kind of

unfair surprise against which our cases have long

warned” (internal quotation marks omitted)).

To be sure, the specific concerns expressed by the

Court in these post-Auer cases are valid. Importantly,

however, they are all concerns addressed by Seminole

Rock. Seminole Rock makes clear that “a court must

necessarily look to the administrative construction of

the regulation if the meaning of the words used is in

doubt,” 325 U.S. at 414, i.e., “deference is warranted

only when the language of the regulation is ambigu-

ous,” Christensen, 529 U.S. at 588. Seminole Rock

also makes clear that “merely . . . paraphras{[ing] the

statutory language,” “instead of [the agency] using its

expertise and experience to formu!ate a regulation,”

Gonzales, 546 U.S. at 257, is insufficient. In order to

earn deference under Seminole Rock, the agency must

provide an affirmative “administrative construction”

that provides regulated parties with clear notice of the

agency’s interpretation of the regulation and that con-

struction must be “consistent.” 325 U.S. at 417-18.

For the same reasons, nothing in Seminole Rock sug-

gests that an agency may receive deference when it

“change[s] course” in its interpretation without notice

to regulated parties, since such an approach “would

20

result in ... unfair surprise.” Christopher, 567 U.S. at

154-56 (internal quotation marks omitted).

There is, in sum, no reason to overrule Seminole

Rock. Rather, this Court should reaffirm the practical

and carefully-bounded Seminole Rock framework for

judicial review of agency interpretations of regula-

tions, while making clear the ways in which Auer

strayed from that approach.

3. In this case, deference to the agency’s interpreta-

tion of its regulation under Seminole Rock is clearly

not appropriate. The Court should thus reverse and

remand the case to the court of appeals for further

consideration.

The Federal Circuit has “‘exclusive jurisdiction to

review and decide any challenge to the validity of any

. . . regulation or any interpretation thereof’” by the

Veterans Court. Kisor, 869 F.3d at 1365 (alteration in

original) (quoting 38 U.S.C. § 7292(c)). The Court

“must set aside an interpretation of a regulation that

[is] .. . ‘arbitrary, capricious, an abuse of discretion, or

otherwise not in accordance with law.’” Ibid. (quoting

38 U.S.C. § 7292(d)(1)(A)).

As the Federal Circuit explained, “[a]t the heart of

this appeal is Mr. Kisor’s challenge to the VA’s inter-

pretation of the term ‘relevant’ in 38 C.F.R. § 3.156(c)

(1).” Jd. at 1367. The court affirmed the Veterans

Court’s decision denying Kisor’s request for reconsid-

eration on the grounds that: (a) “[t]he Board interpret-

ed 38 C.F.R. § 3.156(c)(1) when it ruled that Mr. Ki-

sor’s service department records were not ‘relevant’

under that subsection”; (b) “[bjecause the Board is

part of the VA, the Board’s interpretation of the regu-

lation is deemed to be the agency’s interpretation’;

and (c) therefore, “we defer to an agency’s interpreta-

21

tion of its own regulation” pursuant to Seminole Rock

and Auer. Id. at 1367 & n.10 (citations omitted).

The court of appeals’ basis for extending deference

to the Board’s interpretation of the term “relevant” in

§ 3.156(c)(1) does not come close to meeting the crite-

ria set forth in Seminole Rock. Most notably, there is

nothing here to defer to except the Board’s bare inter-

pretation of that term as applied to the specific facts of

this case. The Board did not cite to any decision of the

Board or of the Veterans Court for its interpretation,

much less to any VA guidance explaining the meaning

of the regulatory term. The Secretary, in defending

the Board’s decision, merely “collect[ed] various com-

peting definitions from case law, legal dictionaries,

and legal treatises.” Jd. at 1368. In short, nothing in

this case suggests that the VA’s view is entitled to the

“controlling weight” that a “consistent administrative

interpretation” merits under Seminole Rock. 325 U.S.

at 414, 418.

On the merits, Kisor raises a substantial argument

that the Board’s decision interpreting the regulatory

term “relevant” to mean evidence that is “outcome de-

terminative” or would “establish” a claim was arbi-

trary and capricious.

First, as a matter of common English usage,

“‘whether or not the Veteran engaged in combat with

the enemy during service’” is relevant to whether “‘a

diagnosis of PTSD was .. . warranted.’” Kisor, 869

F.3d at 1364 (quoting Board decision). Whether the

service records the VA failed to consider would have

affected the VA’s decision in 1983 that Kisor did not

have PTSD is a fact-based question the agency should

have decided after granting reconsideration, rather

than stretching the meaning of the regulatory term

22

“relevant” to cover only those records that necessarily

would have changed the fact-finder’s decision.

Notably, the VA’s amendment to, and contempora-

neous explanation of, the regulation at issue in this

case fully accords with this common sense under-

standing.

In promulgating the current version of 38 C.F.R.

§ 3.156(c), the VA removed a prior “new and material”

requirement that had been in an earlier version of the

regulation. New and Material Evidence, 70 Fed. Reg.

35,388, 35,388 (proposed June 20, 2005). See Blubaugh

v. McDonald, 773 F.3d 1310, 1313 (Fed. Cir. 2014) (“In

contrast to the general rule, § 3.156(c) requires the VA

to reconsider a veteran’s claim when relevant service

department records are newly associated with the vet-

eran’s claims file, whether or not they are ‘new and

material’ under § 3.156(a),” which “only permits claims

to be reopened”). It would thus be odd to interpret

the regulatory term “relevant” as setting a higher ev-

identiary bar than the deleted term “material”’—e.z.,

as applying only to evidence that is “outcome deter-

minative” or would “establish” a claim, Kisor, 869

F.3d at 1364 (quoting Board decision)—as the Board

did in this case.

Moreover, paragraph (4) of 38 C.F.R. § 3.156(c),

which neither the Board, nor the Veterans Court, nor

the court below considered, expressly contemplates

the possibility of “[a] retroactive evaluation of disabil-

ity resulting from disease or injury subsequently ser-

vice connected on the basis of the new evidence from

the service department,” explaining that “[w]here such

records clearly support the assignment of a specific

rating over a part or the entire period of time involved,

a retroactive evaluation will be assigned accordingly.”

38 C.F.R. § 3.156(c)(4). The court of appeals’ conclu-

23

sion that “Mr. Kisor’s personnel records submitted in

2006 are not probative here because they do not pur-

port to remedy the defects of his 1982 PTSD claim,”

Kisor, 869 F.3d at 1368, fails to take into account the

regulation’s allowance for a “retroactive evaluation of

disability . . . on the basis of the new evidence from the

service department.” 38 C.F.R. § 3.156(c)(4).

That common sense understanding of the regulato-

ry term “relevant” described above is buttressed by

the VA’s explanation in the preamble to the current

regulation, which explained: “We intend that this

broad description of ‘service department records’ will

also include unit records, such as those obtained from

the Center for Research of Unit Records (CRUR) that

pertain to military experiences claimed by a veteran.

Such evidence may be particularly valuable in connec-

tion with claims for benefits for post traumatic stress

disorder.” 70 Fed. Reg. at 35,388. The purpose of this

rule was to “allow VA to reconsider decisions and ret-

roactively evaluate disability in a fair manner, on the

basis that a claimant should not be harmed by an ad-

ministrative deficiency of the government... .” 70

Fed. Reg. at 35,389. See also Blubaugh, 773 F.3d at

1313 (Ҥ 3.156(c) serves to place a veteran in the posi-

tion he would have been had the VA considered the

relevant service department record before the disposi-

tion of his earlier claim.” (citing 70 Fed. Reg. at 35,388-

89)). That is precisely Kisor’s argument here—that he

be allowed the “retroactive[] evaluat[ion of his] dis-

ability in a fair manner, on the basis that [he] should

not be harmed by an administrative deficiency of the

government.” 70 Fed. Reg. at 35,389.

Finally, as a factual matter, the VA did rely on “offi-

cial service department records that existed and had

not been associated with the claims file when VA first

24

decided the claim,” 38 C.F.R. § 3.156(c)(1), in reversing

its earlier decision that Kisor did not have PTSD and in

deciding that he is now entitled to benefits. The VA

Regional Office’s decision explained straightforwardly

that: “Since VA examination shows that you have been

diagnosed with posttraumatic stress disorder due to

your experiences that occurred in Vietnam and your

service administrative records show that you are a

combat veteran (Combat Action Ribbon recipient), ser-

vice connection for posttraumatic stress disorder has

been established as directly related to military service.”

J.A. 42. Because the VA relied on “official service de-

partment records that existed and had not been associ-

ated with the claims file,” 38 C.F.R. § 3.156(c)(1), in

reaching the decision to reverse itself, a fortiori, those

records were “relevant” to the new determination.

CONCLUSION

The Court should decline to overrule Seminole Rock.

Rather, the Court should hold that the VA is not en-

titled to deference under Seminole Rock and, there-

fore, should reverse the court of appeals and remand

this case for a decision that does not rely on Seminole

Rock deference.

Respectfully submitted,

HAROLD C. BECKER

MATTHEW J. GINSBURG

(Counsel of Record)

SHELBY CALAMBOKIDIS

815 Sixteenth Street, NW

Washington, DC 20006

(202) 637-5397

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