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

No. 18-15

3n Ue

Supreme Court of the Anited States

,

4

JAMES L. KISOR,

Petitioner,

-

On Writ Of Certiorari To The

United States Court Of

For The Federal Circuit

Roswell,

(770) 977-2131

khermann@southeasternlegal org

January 31, 2019 Counsel for Amici Curiae

[Additional Counsel Listed On Signature Page|

i

QUESTION PRESENTED

Whether the Court should overrule Auer v. Rob-

bins, 519 U.S. 452 (1997), and Bowles v. Seminole Rock

& Sand Co., 325 U.S. 410 (1945).

ss

TABLE OF CONTENTS

Page

QUESTION PRESENTED. .....................2..-..eeeeeeeeee+ i

TABLE OF CONTENTS ...................-.c-ccseeeeeeeeeeeeee ii

TABLE OF AUTHORITIES ................-....cecceeeeeeeees iii

INTEREST OF AMICI CURIAE ....0...........00.0000-0+- 1

SUMMARY OF ARGUMENT 000000... 3

i ceidiniititiatinindsetitnainieniatsnenmmanennmneenennctenen 5

I. The Court should overrule Seminole Rock/

Auer deference because it is inconsistent

with separation of powers principles .......... 5

A. Seminole Rock/Auer deference provides

federal agencies with a vehicle to ad-

judicate their own ambiguous regula-

B. The power to interpret the meaning of

a regulation properly belongs to the ju-

GE sinentnemitebiiteitiiininiinpsirniiibiantniasiiatinenss 7

Il. The Court should overrule Seminole Rock/

Auer deference because it deprives Con-

gress and the People the benefits of the

APA’s notice-and-comment procedures....... 13

ED ccnsicciintieninnecsisnprenipiiaennntapiadinaneneaaiincien 17

tas

TABLE OF AUTHORITIES

Page

CASES

Alden v. Maine, 527 U.S. 706 (1999) .............ccccccceceeeeees 4

Auer v. Robbins, 519 U.S. 452 (1997).................. passim

Bowles v. Seminole Rock & Sand Co., 325 US.

i iiisttadicsanndccsnestapitincigbstnmanedsiitestenianags passim

Chevron U.SA., Inc. v. Nat. Res. Def Council,

mR Ee ee 2,11

Chrysler Corp. v. Brown, 441 U.S. 281 (1979)............ 11

City of Arlington, Tex. v. FCC, 133 S. Ct. 1863

IE hunsdeidiisatinbicatidindiddenincimongeniunacatiiinesibessansdenenapenvets 3, 4,6

Decker v. Nw. Envtl. Def. Ctr., 133 S. Ct. 1326

IED adisiincssectnlsiananiaiiianieadinitiipaiapaiieadaiinhdimmsiduiuntseaiiabiniaues 14

FCC vu. Fox Television Stations, 556 U.S. 502

ii issichiintaibitladetinichdaentiniianstdsaltenbediienaiientinaianmnesiacas 13

Flytenow v. FAA, 137 S. Ct. 618 (2017) .............. ..... 1,2

Free Enter. Fund v. Pub. Co. Accounting Over-

sight Bd., 130 S. Ct. 3138 (2010) .............cccccccceeeeeeees 4

Garco Constr., Inc. v. Speer, 583 U.S. __ (2018).......... 1

Gutierrez-Brizuela v. Lynch, 834 F.3d 1142 (10th

SA ixicciahclielacinatatasnndaiauddielciiaiiianbinisiatiestumigngmanes 10

Marbury v. Madison, 5 US. (1 Cranch) 137

SEEN eA ee a A ee 12

Martin v. Occupational Safety & Health Review

Comm’n, 499 U.S. 144 (1991) 200.0000... ccccccccecceeeeeeenee 11

Nat'l Ass’n of Mfrs. v. Dep’t of Def., 138 S. Ct. 617

iv

TABLE OF AUTHORITIES — Continued

Page

Natl Cable & Telecomms. Ass’n v. Brand X In-

ternet Servs. , 545 U.S. 967 (2005) ................ccccccceeeeee 3

Pauley v. Bethenergy Mines, Inc., 501 U.S. 680

ices didaianlineeainessiceaetepidianabesiienaematiebiniindiiniigiamardine 10

Perez v. Mortg. Bankers Ass’n, 135 S. Ct. 1199

Sas siedich alicia iba tienidenniiammmmatiniienndiéts 11, 15, 16

Shands Jacksonville Med. Ctr. v. Burwell, 139

F. Supp. 3d 240 (D.D.C. 2015) ............0.......0.ceceeeeeeee 15

Smiley v. Citibank, 517 U.S. 735 (1996) ..................... 11

Talk Am., Inc. v. Mich. Bell Tel. Co., 564 U.S. 50

SI ansieditebiccctnidiasdndiiinaadinaiibihiban darimiantiisiatesudiieaitsemesinace 7,10

Thomas Jefferson Univ. v. Shalala, 512 U.S. 504

I inthetiiihiccahiniiie cicadas cecal nti aainelidsi inate iatemneeenen 15

Util. Air Regulatory Grp. v. EPA, 134 S. Ct. 2427

FT NE a a 1

Wong Yang Sung v. McGrath, 339 U.S. 33 (1950)......... 13

Youngstown Sheet & Tube Co. v. Sawyer, 343

RE ST TES ee ae i)

STATUTES

i RF en 5, 13, 14, 15, 16

RT Re a een ee eee 13

Ariz. Rev. Stat. § 12-910, as amended by, H.B.

2238, 53rd Legis. 2d Reg. Sess., 2018 Ariz.

Legis. Serv. Ch. 180 (Apr. 11, 2018) .......................... 2

Vv

TABLE OF AUTHORITIES — Continued

RULES

ee YY eee ee eet eT

er: i TG i iiiiiicii tee ee

OTHER AUTHORITIES

1 Charles de Secondat Montesquieu, The Com-

plete Works of M. de Montesquieu (London: T.

I, TIO Oe incdeiteielindiaitciertaciiciinitanrieiiadataita tinier

1 Kenneth C. Davis & Richard J. Pierce, Jr., Ad-

ministrative Law Treatise (3d ed. 1994)...........

2 Max Farrand, Records of the Federal Conven-

tg | LSS ae

Cass R. Sunstein, Nondelegation Canons, 67

U. Chi. L. Rev. 315 (2000).............ccccccsceeeeeeeeeeees

Charles Pinckney, Observations on the Plan of

Government, Submitted to the Federal Con-

vention of May 28, 1787, reprinted in 3 Max

Farrand, Records of the Federal Convention of

ROU GOES GIR, Fi sesencticessstessacsecnneensintguinnenesee

Geoffrey P. Miller, Rights and Structure in Con-

stitutional Theory, 8 Soc. Phil. & Pol’y 196

CED eres cevceveevennstsvessonssntsiouienipuninsnanisiiieenianiinaiinnins

Hearing on “Examining the Federal Regulatory

System to Improve Accountability, Transpar-

ency and Integrity” Before the Senate Comm.

on the Judiciary, 114th Cong. (2015) ................

sencens 1

vi

TABLE OF AUTHORITIES — Continued

Page

John F. Manning, Constitutional Structure and

Judicial Deference to Agency Interpretations

of Agency Rules, 96 Colum. L. Rev. 612 (1996)....... 15

Martin H. Redish & Elizabeth J. Cisar, “If Angels

were to Govern”: The Need for Pragmatic For-

malism in Separation of Powers Theory, 41

EE Ee i)

NFIB Small Business Legal Center, The Fourth

Branch & Underground Regulations (2015).......... 16

Office of the Federal Register, Federal Register

Pages Published 1936-2017 (2017) ..................000000+« 6

Richard B. Stewart & Cass R. Sunstein, Public

Programs and Private Rights, 95 Harv. L. Rev.

a 13

S. Doc. No. 77-8, Final Report of the Attorney

General’s Committee on Administrative Pro-

cedure in Government Agencies (1941)............ 13, 14

The Federalist No. 45 (James Madison) (Clin-

CE EE 4

The Federalist Nos. 47-51 (James Madison)

(Clizzon Rossiter ed., 1961) .............0...ccccceceeeee000- 8,9

The Federalist No. 78 (Alexander Hamilton) (Clin-

ES 12

1

INTEREST OF AMICI CURIAE'

Southeastern Legal Foundation (SLF), founded

in 1976, is a national nonprofit, public interest law

firm and policy center that advocates constitutional

individual liberties, limited government, and free en-

terprise in the cou. ts of law and public opinion. In par-

ticular, SLF advocates for the rigorous enforcement of

constitutional limitations on the activities of federal

and state governments. SLF drafts legislative models,

educates the public on key policy issues, and litigates

often before the Supreme Court, including such cases

as Utility Air Regulatory Group v. EPA, 134 S. Ct. 2427

(2014), and National Association of Manufacturers v.

Department of Defense, 138 S. Ct. 617 (2018). SLF also

of agency overreach and deference. See, eg, Garco

Constr., Inc. v. Speer, 583 U.S. _ (2018); Flytenow v.

FAA, 137 S. Ct. 618 (2017).

The Texas Public Policy Foundation (TPPF) is a

nonprofit, nonpartisan research organization based in

Austin, Texas, that promotes liberty, personal respon-

sibility, and free enterprise through academically-

sound research and outreach. Since its inception in

1989, TPPF has emphasized the importance of limited

government, private enterprise, private property rights,

' Amici curiae notified the parties of their intent and request

to file this brief. All parties consented to the filing of this brief. See

Sup. Ct. R. 37.3(a). No counsel for a party has authored this brief

in whole or in part, and no person other than amici curiae, their

members, and their counsel has made a monetary contribution to

the preparation or submission of this brief. See Sup. Ct. R. 37.6.

2

and the rule of law. In accordance with its central mis-

sion, TPPF has hosted policy discussions, authored re-

search, presented legislative testimony, and drafted

model erdinances to advance principles of liberty and

the Constituti

The Goldwater Institute was established in 1988

as a nonpartisan public policy and research foundation

dedicated to advancing the principles of limited gov-

ernment, economic freedom, and individual responsi-

bility through litigation, research, policy briefings, and

advocacy. Through its Scharf—Norton Center for Con-

stitutional Litigation, the Institute litigates cases and

files amicus briefs when a case directly implicates its

or its clients’ objectives. See, e.g., Flytenow, 137 S. Ct.

618. Goldwater Institute scholars authored, and Ari-

zona enacted, legislation ending Chevron-style and

Seminole Rock/Auer-style judicial deference given to

state administrative agency interpretations of agency

regulations, or constitutional or statutory provisions.

Ariz. Rev. Stat. § 12-910, as amended by, H.B. 2238,

53rd Legis. 2d Reg. Sess., 2018 Ariz. Legis. Serv. Ch.

180 (Apr. 11, 2018).

The Beacon Center is a nonprofit organization

based in Nashville, Tennessee that advocates for free-

rights and constitutional limits on government man-

dates are central to its goals.

The Mississippi Justice Institute (MJI) is a non-

profit, public interest law firm and the legal arm of

the Mississippi Center for Public Policy (MCPP) an

3

ind lent fit. public poli a

in Jackson, Mississippi. MJI represents Mississippians

when government actions threaten their state or fed-

eral constitutional rights. MJI’s activities include di-

rect litigation on behalf of individuals, intervening in

: tant to public pallen pasticinating ta sege-

latory and rule making proceedings, and filing amicus

briefs to offer unique perspectives on significant legal

matters in Mississippi and federal courts.

This case is of particular interest to amici because

the continued application of Bowles v. Seminole Rock

& Sand Co., 325 U.S. 410 (1945), and Auer v. Robbins,

519 U.S. 452 (1997), affords the executive branch op-

portunities to usurp both judicial and legislative pow-

ers that the Constitution does not grant it. Combining

that deference with a federal agency’s power to “con-

sider . . . its policy on a continuing basis,” National Ca-

ble & Telecommunieations Acs’n «. Brand X Internet

Services, 545 U.S. 967, 981 (2005), opens the door to ar-

bitrary and capricious agency actions that will remain

unchecked. This case presents the Court with an op-

portunity to preserve our structure of government and

overrule the highly deferential standard set forth in

Semincle Rock/Auer.

,

—

SUMMARY OF ARGUMENT

“The administrative state ‘wields vast power and

touches almost every aspect of daily life.’” City of

Arlington, Tex. v. FCC, 133 S. Ct. 1863, 1878 (2013)

4

(Roberts, C.J., dissenting) (quoting Free Enter. Fund

v. Pub. Co. Accounting Oversight Bd., 130 S. Ct. 3138

(2010)). “[T]he authority administrative agencies now

hold over our economic, social, and political activi-

ties|,]” id., stands in stark contrast to the government

of enumerated powers the Framers envisioned. Our

Founding Fathers sought to create a limited govern-

ment. Addressing concerns that the proposed national!

government would usurp the People’s power to govern

themselves, James Madison explained: “The powers

delegated by the proposed Constitution to the federal

government are few and defined . . . [and] will be exer-

cised principally on external objects, as war, peace, ne-

gotiation, and foreign commerce... .” The Federalist

No. 45, at 292 (James Madison) (Clinton Rossiter ed.,

1961). Today’s wide-reaching “administrative state

with its reams of regulations would leave [the Found-

ers] rubbing their eyes.” City of Arlington, 133 S. Ct. at

1878 (quoting Alden v. Maine, 527 U.S. 706, 807 (1999)

(Souter, J., dissenting)). “It would be a bit much to de-

scribe the result as ‘the very definition of tyranny,’ but

the danger posed by the growing power of the admin-

istrative state cannot be dismissed.” Jd. at 1879 (cita-

tion omitted).

This case involves one such example of the execu-

tive branch’s overreach and disregard for our carefully

crafted government structure, but there are many

thousands of other examples. The government action

at issue is emblematic of a systemic problem in a gov-

ernment that no longer imposes meaningful checks on

executive action. This case provides an opportunity to

5

address doubts raised by several members of this Court

about the continued validity of Seminole Rock/Auer.

Amici maintain that any deference afforded to a

federal agency must be consistent with the Constitu-

tion and the Administrative Procedure Act (APA), 5

U.S.C. §§ 551, et seq. Deference to an agency’s interpre-

tation of its own ambiguous regulation offends the

separation of powers principles embedded in our Con-

stitution because it enables agencies to circumvent the

APA’s notice-and-comment procedures. As applied

here, Seminole Rock/Auer deference gives Veterans Af-

fairs license to issue arbitrary and capricious interpre-

tations of its own regulations that carry the force of

law. Amici therefore join Petitioner in asking this

Court to overrule Seminole Rock/Auer deference.

°

ARGUMENT

lL The Court should overrule Seminole Rock/

Auer deference because it is inconsistent

with separation of powers principles.

A. Seminole Rock/Auer deference provides

federal agencies with a vehicle to adju-

dicate their own ambiguous regulations.

Although nobedy caz say for sure just how many

federal agencies exist, one count put the number at

“over 430 departments, agencies, and sub-agencies in

the federal government.” Hearing on “Examining the

Federal Regulatory System to Improve Accountability,

Transparency and Integrity” Before the Senate Comm.

6

on the Judiciary, 114th Cong. 1 (2015) (statement of

Senator Grassley) (“Examining the Federal Regulatory

System”). As federal agencies grow in number, so does

the Federal Register. For example, from 2008 to 2016,

the Federal Register grew from 80,700 to 97,110 pages.

Office of the Federal F egister, Federal Register Pages

Published 1936-2017 (2017).? That is an increase of

20% during the tenure of just one president. And from

2013 to 2014, “the federal bureaucracy finalized over

7,000 regulations.” Examining the Federal Regulatory

System. When one compares those 7,000 regulations to

the 300 statutes enacted by Congress during those

same years, the growing power of the federal bureau-

cracy is undeniable. Id.

This growing number of official regulations tells

only part of the story. As this Court is well aware, fed-

eral agencies issue, interpret, and enforce the rules

that govern our lives. “[A]s a practical matter they ex-

ercise legislative power, by promulgating regulations

with the force of law; executive power, by policing com-

pliance with those regulations; and judicial power, by

adjudicating enforcement actions and imposing sanc-

tions on those found to have violated their rules.” City

of Arlington, 133 S. Ct. at 1877-78 (Roberts, C.J., dis-

senting). The authority agencies exercise is startling.

What is more, courts rarely question this concentra-

tion of power. Instead, they frequently rely on Seminole

Rock/Auer deference and abdicate their judicial inter-

pretive power to the agencies, giving them unchecked

? https//www_federalregister gov/uploads/20 1 8/03/pagesPublished

2017. pdf.

7

power to interpret their own rules (formal and infor-

mal). Under this theory of deference, an agency’s inter-

pretation is “controlling” unless it is “plainly erroneous

or inconsistent with the regulation|.|” Seminole Rock,

325 U.S. at 414. Thus, to state the obvious, Seminole

Rock/Auer deference provides the over 400 federal de-

partments, agencies, and sub-agencies with the means

to write their own regulations, enforce their own regu-

lations, and interpret their own regulations — essen-

tially supplanting the legislature and the judiciary,

and proclaiming themselves as supreme.

B. The power to interpret the meaning of a

regulation properly belongs to the judi-

ciary.

This concentration of power is unconstitutional.

As the author of Auer himself later explained, Semi-

nole Rock/Auer deference is “contrary to [the] funda-

mental principles of separation of powers.” Talk Am.,

Inc. v. Mich. Bell Tel. Co., 564 U.S. 50 (2011) (Scalia, J.,

concurring). This is because the Constitution contem-

plates that each branch of government will jealously

guard its own prerogatives, thus protecting individual

liberty. But with Seminole Rock/Auer deference, the ju-

diciary leaves the field, removing an indispensable

check on federal agency activities.

“Political liberty . . . is there only when there is no

abuse of power.” 1 Charles de Secondat Montesquieu,

The Complete Works of M. de Montesquieu 197 (Lon-

don: T. Evans, 1777). ““There can be no liberty where

the legislative and executive powers are united in the

8

same person, or body of magistrates’ or, ‘if the power of

judging be not separated from the legislative and exec-

utive powers.’”* The Federalist No. 47, at 299. As Mon-

tesquieu explained:

Were the power of judging joined with the leg-

islative, the life and liberty of the subject

would be exposed to arbitrary control, for the

judge would then be the legislator. Were it

joined to the executive power, the judge might

behave with all the violence of an oppressor.

Montesquieu, at 199. The same is true in the reverse.

If the power of the legislator joins with the judiciary,

the legislator would then be the judge.

These foundational principles were front and cen-

ter during the Constitutional Convention. As Charles

Pinckney observed: “In a government, where the liber-

ties of the people are to be preserved . . . the executive,

legislative and judicial, should ever be separate and

distinct, and consist of parts, mutually forming a check

upon each other.” Charles Pinckney, Observations on

the Plan of Government, Submitted to the Federal

Convention of May 28, 1787, reprinted in 3 Max

Farrand, Records of the Federal Convention of 1787,

108 (rev. ed. 1966); see The Federalist Nos. 47-51, at

297-322 (James Madison) (Clinton Rossiter ed., 1961)

® Quoting Montesquieu in Federalist No. 47, James Madison

explained that these passages “sufficiently establish the meaning

which we have put on this celebrated maxim of this celebrated

author.” The Federalist No. 47, at 300.

9

(explaining and defending the Constitution’s struc-

tural design of separated powers).

Our Founding Fathers thus created a government

of limited power, both as compared to the states and to

its own branches.‘ “Separation of powers and federal-

ism form the fundamental matrix or Euclidian plane

of our constitutional law.” Martin H. Redish & Eliza-

beth J. Cisar, “If Angels were to Govern”: The Need for

Pragmatic Formalism in Separation of Powers Theory,

41 Duke LJ. 449, 451 n.8 (1991) (citing Geoffrey P.

Miller, Rights and Structure in Constitutional Theory,

8 Soc. Phil. & Pol’y 196 (1991)). “In structuring their

unique governmental form, the Framers sought to

avoid undue concentrations of power by resort to insti-

tutional devices designed to foster three political val-

ues: checking, diversity, and accountability.” Id. at 451.

As Justice Frankfurter later reminded us in Youngs-

town Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (1952),

the purpose of the separation of powers principles is

“not to avoid friction, but, by means of the inevitable

friction incident to the distribution of the governmen-

tal powers among three departments, to save the

people from autocracy.” Jd. at 629 (Frankfurter, J., con-

curring). This is because “unchecked disregard of the

restrictions that fence in even the most disinterested

assertion of authority” leads to the “accretion of dan-

gerous power|.|” Jd. at 594.

* “In order to form correct ideas . . . it will be proper to inves-

tigate the sense in which the preservation of liberty requires that

the three great departments of power should be separate and dis-

tinct.” The Federalist No. 47, at 298.

10

Under these principles, any action taken by one

branch of the federal government that presumes to en-

croach upon the constitutionally assigned functions of

another branch presents a fundamental threat to the

preservation of liberty. For instance, it is “contrary to

fundamental principles of separation of powers to per-

mit the person who promulgates a law to interpret it

as well.” Talk Am., 564 US. at 68 (Scalia, J., concur-

ring). Thus, Seminole Rock/Auer deference creates sep-

aration of powers issues and threatens individual

liberty by giving federal agencies, not the judiciary, the

primary role in determining the meaning of ambiguous

regulations. See Seminole Rock, 325 U.S. at 414; Auer,

519 US. at 461-62; see also Gutierrez-Brizuela v. Lynch,

834 F.3d 1142, 1149 (10th Cir. 2016) (Gorsuch, J., con-

curring) (noting that the Supreme Court’s decisions on

agency deference “permit executive bureaucracies to

swallow huge amounts of core judicial and legislative

power and concentrate federal power in a way that

seems more than a little difficult to square with the

Constitution of the framers’ design”).

Some argue that Seminole Rock/Auer deference is

“common sense” because an agency “is in a superior po-

sition to determine what it intended when it issued a

rule, how and when it intended the rule to apply, and

the interpretation of the rule that makes the most

sense given the agency’s purposes in issuing the rule.”

1 Kenneth C. Davis & Richard J. Pierce, Jr., Adminis-

trative Law Treatise §6.10, at 282 (3d ed. 1994).

At times, this Court’s rationales for Seminole Rock/

Auer deference reflect these arguments. See Pauley v.

11

Bethenergy Mines, Inc., 501 U.S. 680, 697 (1991) (ex-

plaining that interpretation of agency rules involves

policy considerations); Martin v. Occupational Safety &

Health Review Comm’n, 499 U.S. 144, 151 (1991) (jus-

tifying deference to agency interpretations because of

agency’s expertise and competence to understand and

explain its own rules).

Yet this deference rests on the premise that Con-

gress has the constitutional authority to delegate to an

agency the power to interpret its own regulations.

While Congress may currently be able to vest agencies

with limited legislative authority to fill ambiguous

statutory gaps, Chevron U.SA., Inc. v. Natural Re-

sources Defense Council, Inc., 467 U.S. 837, 843-44

(1984),° it may not vest agencies with authority to in-

terpret their own regulations. This is because under

Chevron, Congress delegates its own legislative au-

thority and not the powers constitutionally assigned to

the judicial branch.* See Perez v. Mortg. Bankers Ass’n,

135 S. Ct. 1199, 1203-04 (2015) (citing Chrysler Corp.

v. Brown, 441 U.S. 281, 302-03 (1979)) (explaining that

* Courts have rarely used the delegation doctrine to disci-

pline Congress, or by extension, to rein in federal agencies. “Since

1935, the Supreme Court has not struck down an act of Congress

on nondelegation grounds, notwithstanding the existence of a

number of plausible occasions.” Cass R. Sunstein, Nondelegation

Canons, 67 U. Chi. L. Rev. 315, 315 (2000).

® Underlying Chevron is the “presumption that Congress,

when it left ambiguity in a statute meant for implementation by

an agency, understood that the ambiguity would be resolved, first

and foremost, by the agency, and desired the agency . . . to possess

whatever degree of discretion the ambiguity allows.” Smiley v.

Citibank, 517 U.S. 735, 740-41 (1996).

12

rules issued through the notice-and-comment process

are “legislative rules”). Congress cannot delegate a

power that it does not have.

By contrast, the power to interpret laws lies solely

with the courts. The Federalist No. 78, at 466 (Alexan-

der Hamilton) (Clinton Rossiter ed., 1961) (“The inter-

pretation of the laws is the proper and peculiar

province of the courts.”). The Constitution assigns the

courts with the authority “to ascertain . . . the meaning

of any particular act proceeding from the legislative

body.” Id. It follows that when an agency writes a law

— whether it be through a formal rule, an opinion mem-

orandum, or a guidance letter — it acts as a legislative

body. It must also follow that, as our Framers put it,

“the power of making ought to be kept distinct from

that of expounding the laws.” 2 Max Farrand, Records

of the Federal Convention of 1787, 64 (1911). In other

words, the power to interpret agency rules (both formal

and informal) “belongs” tu our country’s judges.

While the growing administrative state tests the

limits of separation of powers principles, it does not

change the judiciary’s duty to “say what the law is.” See

Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177 (1803)

(“It is emphatically the province and duty of the judi-

cial department to say what the law is.”). Seminole

Rock/Auer deference gives federal agencies a roadmap

to usurp the role of the judiciary and unilaterally

write, enforce, and interpret laws. For these reasons,

this Court should overrule Seminole Rock/Auer and

properly return the interpretive ~ole to the courts.

13

Ii. The Court should overrule Seminole Rock/

Auer deference because it deprives Con-

gress and the People the benefits of the

APA’s notice-and-comment procedures.

Despite Congress’s all too frequent delegation of

legislative power to federal agencies, there once was a

time when Congress recognized the hazard that agen-

cies pose to the democratic process and liberty. For

over 20 years, “a succession of bills offering various

remedies appeared in Congress,” Wong Yang Sung ".

McGrath, 339 U.S. u3, 38 (1950), leading to the APA.

The law was then, and is today, “a ‘working compro-

mise, in which broad delegations of discretion were

tolerated as long as they were checked by extensive

procedural safeguards.’” FCC v. Fox Television Sta-

tions, 556 U.S. 502, 537 (2009) (Kennedy, J., concurring

in part and concurring in the judgment) (quoting Rich-

ard B. Stewart & Cass R. Sunstein, Public Programs

and Private Rights, 95 Harv. L. Rev. 1193, 1248 (1982)).

It follows then that the APA’s chief procedural

safeguard, Section 553, requires administrative agen-

cies to provide “notice of proposed rule making” and

“give interested persons an opportunity to participate

in the rule making through submission of written data,

views, or arguments with or without opportunity for

oral presentation.” 5 U.S.C. §§ 553(b)-(c). Congress un-

derstood that if agencies were going to wield legislative

power, their procedures must “givile] adequate oppor-

tunity to all persons affected to present their views, the

facts within their knowledge, and the dangers and ben-

efits of alternative courses.” S. Doc. No. 77-8, Final

14

Report of the Attorney General’s Committee on Admin-

istrative Procedure in Government Agencies, at 102

(1941). Public notice-and-comment is “essential in or-

der to permit administrative agencies to inform them-

selves and to afford adequate safeguards to private

interests.” Id. at 103.

In these notice-and-comment procedures, Congress

sought to hold agency heads accountable to both Con-

gress and the public. Congress also sought to foster

predictability and stability in the administrative arena

and to establish a baseline against which the courts

could measure future agency action. Seminole Rock/Auer

deference undermines these objectives because it effec-

tively exempts agencies from the APA’s notice-and-

comment requirements. It leaves agencies free to

promulgate ambiguous regulations and later interpret

them, all the while knowing that their interpretation

will never be subject to judicial review. See Decker v.

Nw. Envtl. Def. Ctr., 133 S. Ct. 1326, 1341 (2013)

(Scalia, J., dissenting) (internal quotation marks omit-

ted) (“Then the power to prescribe is augmented by the

power to interpret; and the incentive is to speak

vaguely and broadly, so as to retain a flexibility that

will enable clarification with retroactive effect.”). Fur-

ther, Seminole Rock/Auer deference leaves agencies

free “to control the extent of [their] notice-and-com-

ment-free domain,” and provides them the opportunity

“[tlo expand this domain, . . . [by] writ|ing] substantive

rules more broadly and vaguely, leaving plenty of gaps

to be filled in later, using interpretive rules unchecked

15

by notice and comment.” Perez, 135 S.Ct. at 1212

(Scalia, J., concurring in the judgment).

Just as there is no incentive for an agency to cre-

ate airtight regulations, there is no incentive for “an

agency [to] give clear notice of its policies either to

those who participate in the rulemaking process pre-

scribed by the APA or to the regulated public.” Id.; see

Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 524-

25 (1994) (Thomas, J., dissenting) (noting that Auer

deference undermines the objective of providing regu-

lations that are “clear and definite so that affected par-

ties will have adequate notice concerning the agency’s

understanding of the law”). As a result, Seminole

Rock/Auer deference relieves an agency of the burden

of the “imprecision that it has produced.” John F. Man-

ning, Constitutional Structure and Judicial Deference

to Agency Interpretations of Agency Rules, 96 Colum. L.

Rev. 612, 617 (1996). And that burden instead falls on

the regulated community.

In addition to shifting the burden of uncertainty

to the regulated community, Seminole Rock/Auer def-

erence undermines a major purpose of the APA — pre-

serving our government structure. Legal regimes are

more likely to endure if aggrieved parties believe that

they had an adequate opportunity to voice objections

and that the disappointing result was the product of a

fair fight. Popular acceptance of agency rules depends

on the “legitimacy that comes with following the APA-

mandated procedures for creating binding legal obliga-

tions.” Shands Jacksonville Med. Ctr. v. Burwell, 139

F. Supp. 3d 240, 268 (D.D.C. 2015).

16

This is why agency actions and interpretations

that proceed without notice-and-comment, like they do

here, lack legitimacy and put the regulated community

at risk. If an agency advances an interpretation of its

regulations that requires the regulated community to

take, or refrain from taking, a particular action, that

interpretation becomes de facto — if not de jure — law

on the matter, regardless of the form the interpretation

takes. It follows that the regulated community must

either conform to the interpretation or risk an enforce-

ment action, administrative or judicial, based on al-

leged non-compliance.’ As Justice Scalia explained:

{I}f an interpretive rule gets deference, the

people are bound to obey it on pain of sanc-

tion, no less surely than they are bound to

obey substantive rules, which are accorded

similar deference. Interpretive rules that com-

mand deference do have the force of law.

Perez, 135 S. Ct. at 1212.

The Veterans Affairs’ interpretation is but one ex-

ample of how federal agencies disregard the APA when

they interpret their own regulations. And the Federal!

Circuit’s reliance on Seminole Rock/Auer allows agen-

cies continuously to change their interpretations of

their own regulations with the force of law. This opens

the door to the type of abuse Congress sought to pre-

vent with the APA. Until this Court demands that the

executive branch abide by the APA, federal agencies

' See generally NF1B Small Business Legal Center, The Fourth

Branch & Underground Regulations (2015), http//www_nfib.com/

pdfs/fourth-branch-underground-regulations-nfib. pdf.

17

will continue their unconstitutional usurpation of

power.

=)

CONCLUSION

For all these reasons, and those stated by Peti-

tioner, amici request that this Court overrule Auer v.

Robbins, 519 U.S. 452, and Bowles v. Seminole Rock &

Sand Co., 325 U.S. 410, and reverse the decision of the

United States Court of Appeals for the Federal Circuit.

Respectfully submitted,

ROBERT HENNEKE KIMBERLY S. HERMANN

TEXAS PUBLIC Counsel of Record

POLICY FOUNDATION SOUTHEASTERN

901 Congress Ave. LEGAL FOUNDATION

Austin, TX 78701 560 W. Crossville Rd..,

Ste. 104

JONATHAN RICHES

GOLDWATER INSTITUTE (770) 977-2131

SCHARF—NORTON CENTER khermann@

vor CONSTITUTIONAL southeasternlegal org

LITIGATION BRADEN BOUCEK

500 E. Coronado Rd. BEACON CENTER

Phoenix, AZ 85004 OF TENNESSEE

P.O. Box 198646

AARON R. RIcE -

Mineesesrri Nashville, TN 37219

JUSTICE INSTITUTE Counsel for Amici Curiae

520 George St.

Jackson, MS 39202

January 31, 2019