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

No. 18-15

3n the Supreme Court of the Gnited States

James L. Kisor,

Petitioner,

Vv.

Rosert WILKIE, ACTING SECRETARY OF VETERANS AFFAIRS,

Respondent.

On Writ of Certiorari to the

United States Court of Appeals for the Federal Circuit

AMICUS BRIEF OF THE STATES OF UTAH, ALABAMA,

WEST VIRGINIA IN SUPPORT OF PETITIONER

Sean D. Reyes

Utah Attorney General

TYLER R. GREEN*

Utah Solicitor General

STANFORD E. PuRSER

Deputy Solicitor General

350 N. State Street, Suite 230

Salt Lake City, UT 84114-2320

Telephone: (801) 538-9600

Email: tylergreen@agutah.gov

*Counsel of Record

Counsel for Amicus Curiae State of Utah

Becker Gallagher - Cincinnati, OH - Washington, D.C. ~- 800.890.5001

TABLE OF CONTENTS

yr FP Te Fe ii

INTEREST OF AMICICURIAE ............... 1

SUMMARY OF ARGUMENT .................. 1

SE Si akc ue rehed eukneubhepeend eeave 3

Il. AUER DEFERENCE UNIQUELY HARMS THE

et er a ee ee tes coe ees 3

A. Auer Deference Impinges on State

EEE RS a 3

B. Decisions Applying Auer Show Its Real-

World Effects on States ................ 11

Il. THE COURT SHOULD OVERRULE AUER ........ 15

A. Auer Was Wrongly Decided ............. 15

B. Stare Decisis Considerations Do Not Save

DT tchebweds sekedade lias tésadenaexer 18

ss

TABLE OF AUTHORITIES

CASES

Am. Corn Growers Ass’n v. EPA,

291 F.3d 1 (D.C. Cir. 2002) ................ 14

Atascadero State Hosp. v. Scanlon,

IE, acc venndsceececéesscees 10

Auer v. Robbins,

PED wcvccuccocescceees passim

B & B Hardware, Inc. v. Hargis Indus., Inc.,

SEED Sec wcccsvcccccccccces 6

Bennett v. Ky. Dep’t of Educ.,

EE cd ces cctrcccecsececse 11

Bowles v. Seminole Rock & Sand Co..,

ee ED ce cccencvccces 1, 2, 18, 20

Chae v. SLM Corp.,

593 F.3d 936 (9th Cir. 2010) ............... 12

Christopher v. SmithKline Beecham Corp.,

EE 16

City & Cty. of San Francisco v. Trump,

897 F.3d 1225 (9th Cir. 2018) .............. 15

City of Arlington v. FCC,

ee cnn ceanenkene sheeveuas 5

City of New York v. FCC,

ns 26 vaweae eevee cee Cee¥s 54

Clinton v. City of New York,

a 4

tes

Decker v. Nw. Envtl. Def. Ctr.,

ee SE occ dcccececcsess 1, 2, 5, 18

FCC v. Fox Television Stations, Inc.,

ey ee oe eves bG66E% 16

G.G. ex rel. Grimm v. Gloucester Cty. Sch. Bd.,

822 F.3d 709 (4th Cir. 2016), vacated and

remanded on other grounds,

Be Ok ee SED wein Wane cctsebevectes 15

Garcia v. San Antonio Metro. Transit Auth.,

EE cnc Veécesewed rons 6, 17

Geier v. Am. Honda Motor Co..,

oe 6a a pose nk acow’ 5, 7,11

Gregory v. Ashcroft,

ec as been bas hae e 17

Janus v. Am. Fed. of State, Cty., & Mun.

Employees, Council 31,

SPE EE noc ceccecccecceceses 19

Kimble v. Marvel Entm’t, LLC,

Se CUED 6.0.00 0 ccecteceevetenss 1

Louisiana Pub. Serv. Comm’n v. FCC,

SE eda cba och ove dewon ues 4

Massachusetts v. United States,

522 F.3d 115 (1st Cir. 2008) ............ 12, 13

Medellin v. Texas,

ED cccccavesésvewsdsanee 5,6

Montejo v. Louisiana,

es SE woe nnbaastuecioanans 18, 19

iv

Ohio Dep’t of Medicaid v. Price,

864 F.3d 469 (6th Cir. 2017) ............... 14

Pearson v. Callahan,

555 U.S. EE SS I oe a 19

People of the State of Cal. ex rel. Dep't of Transp. v.

United States, 27 Fed. Cl. 130 (1992) ..... 14, 15

Pennhurst State Sch. & Hosp. v. Halderman,

ee 9, 10, 17

Pennhurst State Sch. & Hosp. v. Halderman,

i cece euceute os 10, 11

Perez v. Mortg. Bankers Ass'n,

i ED oo ccc eecccees 9, 16, 18

Phoenix Cement Co. v. U.S. EPA,

647 Fed. App’x 702 (9th Cir. 2016) .......... 14

PLIVA, Inc. v. Mensing,

EES 11

Qwest Corp. v. Colo. Pub. Utils. Comm'n,

656 F.3d 1093 (10th Cir. 2011) ............. 13

Rosa H. v. San Elizario Indep. Sch. Dist.,

106 F.3d 648 (Sth Cir. 1997) ............... 11

Smiley v. Citibank (S.D), N_A.,

cos eee eeeceeeee 5

Sossamon v. Texas,

EE 10

South Dakota v. Wayfair, Inc.,

EE woes ccedececececess 19

v

State Farm Bank, F.S.B. v. Burke,

445 F. Supp. 2d 207 (D. Conn. 2006) ........ 12

Talk America, Inc. v. Mich. Bell Tel.,

RE 16, 19

Thomas Jefferson Univ. v. Shalala,

2 4

United States v. Mead Corp.,

ako oc chnseeececese ee 5

Wells Fargo Bank of Tex. NA v. James,

321 F.3d 488 (5th Cir. 2003) ............... 12

Yates v. United States,

EE <5 esos cone eneeéees 18

CONSTITUTION, STATUTES, REGULATIONS

ee nn ccacceuchedeebeneesaane 6

ee ccc aecsneresenes 4,5

Se Pe, BE onodcecoesvceoceousss 6

eC MS oo occccesceveeness 7

ss ost co cebessneenese 4

Mn. . uve ec udeeees sensors 7

ed ee i che wedseenud 8, 16

CE CEE. cc cn ccdcdscescsscenen 14

vi

OTHER AUTHORITIES

The Federalist No. 17 (J. Cooke ed. 1961) ........

The Federalist No. 46 (Madison) (J. Cooke ed.,

BE Subecccceccctonenesccdeccedsaccoces

1961) ....... Ps AD es et A

John F. Manning, Constitutional Structure and

Judicial Deference to Agency Interpretations of

Agency Rules, 96 Colum. L. Rev. 612

GE Weéceccectedecencneaccavscceeces 8,9

Mich. L. Rev. 737 (2004) ...................

Miriam Seifter, States as Interest Groups in the

Administrative Process, 100 Va. L. Rev. 953

SE paiddadandsacednbeseiaceadeanéedee<

Herbert Wechsler, The Political Safeguards of

Federalism: The Role of the States in the

Government, 54 Colum. L. Rev. 543 (1954) ....

7

1

INTEREST OF AMICI CURIAE

Amici curiae are the States of Utah, Alabama,

Alaska, Arizona, Arkansas, Georgia, Indiana, Kansas,

Louisiana, Missouri, Nebraska, Ohio, Oklahoma, South

Carolina, Texas, and West Virginia. Amici have a

pronounced interest in cases that implicate federalism

and the separation of powers.

This case fits that bill. The interpretive rule from

Bowles v. Seminole Rock & Sand Co., 325 U.S. 410

(1945), reiterated in Auer v. Robbins, 519 U.S. 452

(1997), uniquely harms the States. That rule requires

courts to give controlling weight to a federal agency's

ad hoc views of its ambiguous regulations—even when

those views will preempt contrary State law, or

retroactively change the conditions of Spending Clause

legislation. Auer deference thus alters the balance of

federal-state power and raises serious constitutional

questions.

Those problems make overruling Auer the only

tolerable outcome here. To be sure, “lojverruling

precedent is never a small matter.” Kimble v. Marvel

Entm'’t, LLC, 135 S. Ct. 2401, 2409 (2015). But neither

is ensuring that federal law accords States the respect

due them as sovereigns. “Enough is enough.” Decker v.

Nw. Envtl. Def. Ctr., 568 U.S. 597, 616 (2013) (Scalia,

J., concurring in part and dissenting in part).

SUMMARY OF ARGUMENT

Alexander Hamilton once “confess|ed]” that he was

“at a loss to discover what temptation the persons

entrusted with the administration of the general

government could ever feel to divest the States” of their

“residuary authorities” to govern “for local purposes.”

2

The Federalist No. 17, at 105 (J. Cooke ed. 1961). To be

fair to Hamilton, he ran his agency 150 years before

Seminole Rock absolved agency employees who yield to

that lurking urge.

Seminole Rock and Auer, which amici refer to

synonymously, give federal agencies a judicially created

power to bind the States to ad hoc interpretations of

formulation of Auer deference is that [this Court] will

enforce an agency’s interpretation of its own rules

unless that interpretation is ‘plainly erroneous or

inconsistent with the regulation.” Decker, 568 U.S. at

617 (Scalia, J., concurring in part and dissenting in

part) (quoting Seminole Rock, 325 U.S. at 414).

But the more recent canonical statements about

Auer have been criticisms of it. Rightly so. Time and

experience have laid bare Auer’s faults. Auer allows

agencies to bind the public to informal rules adopted

without following the Administrative Procedure Act’s

(APA) strictures. That is bad for the public; they

become governed by agency caprice, with no prior

notice of an agency’s views (or a chance to help shape

them). In contrast, it’s hard to think of a better deal for

regulators, who can accomplish their goals free from

the hassle of complying with the APA.

Fixing those problems is reason enough to overrule

Auer. But there is more. Auer creates unique problems

for States that also justify ditching this deference

doctrine. Auer upsets the Constitution’s finely wrought

balance of federal-state power: By giving controlling

weight to informal agency action that conflicts with

contrary State law, Auer effectively expands the extent

of the Federal government’s power under the

3

Supremacy Clause, deprives States of constitutional

safeguards from Federal overreach, and undermines

the States’ APA protections. Auer also allows agencies

to retroactively change the terms of federal-state

agreements in Spending Clause legislation. That

threatens the States with the loss of vast sums—even

hundreds of millions of dollars—just because of one

federal employee’s change of mind.

Those problems call for abandoning Auer deference

unless stare decisis considerations support retaining it.

They do not. Auer rests on ipse dixit, not sound

reasoning; intervening events more than confirm its

flaws; and it has not—and cannot—engender any

legitimate reliance interests.

The Court should overrule Auer and reverse the

judgment below.

ARGUMENT

I. AUER DEFERENCE UNIQUELY HARMS THE STATES.

Amici endorse Petitioner's critiques of Auer

deference. See Pet’r Br. 26-45. This brief, in turn,

focuses on other theoretical flaws in Auer deference

that harm States specifically. Amici also discuss real-

world examples of courts deploying Auer deference to

reach results that undermine State sovereignty.

A. Auer Deference Impinges on State

Sovereignty.

The mischief made when an agency invokes Auer to

authoritatively interpret its own ambiguous

regulations yields at least four hardships uniquely for

States. First, Auer deference expands the Federal

4

government’s power to preempt State law. Second, it

undermines the States’ political protections built into

the Constitution. Third, it undercuts the States’ APA

protections, which decreases the States’ political checks

on federal lawmaking and upsets the balance of

federal-state power. Fourth, it allows agencies to

retroactively change conditions governing the States’

receipt of federal funds from Spending Clause

legislation—something not even Congress can do.

1. State laws that conflict with valid federal laws

are unenforceable. U.S. Const. art. VI, § 2. States thus

have an interest in ensuring that federal law arises

from constitutionally prescribed procedures. Auer

deference impairs the States’ ability to vindicate that

interest.

Federal legislation becomes law after both houses of

Congress approve it and the President signs it (or

Congress overrides a veto). U.S. Const. art. I, § 7, cl. 2;

Clinton v. City of New York, 524 U.S. 417, 439-40

(1998). The bicameralism and presentment

requirements reflect the Framers’ decision that Federal

legislative power should “be exercised in accord with a

single, finely wrought and exhaustively considered,

procedure.” Id. at 439 (internal quotation marks

omitted). That sole procedure is the only legislative

mechanism that the ratifying States agreed would

produce “the supreme law of the land,” U.S. Const. art.

VI, § 2, capable of displacing conflicting state law.

Even so, this Court has held that state laws may be

preempted not only by duly enacted federal statutes,

but also by “a federal agency acting within the scope of

its congressionally delegated authority.” Louisiana

Pub. Serv. Comm’n v. FCC, 476 U.S. 355, 369 (1986);

5

see also, e.g., City of New York v. FCC, 486 U.S. 57, 64

(1988). Whatever that holding’s vitality when Congress

has expressly (or implicitly) “delegated to the agency

the authority to interpret [statutory] ambiguities ‘with

the force of law,” City of Arlington v. FCC, 569 U.S.

290, 317 (2013) (Roberts, C.J., dissenting) (quoting

United States v. Mead Corp. , 533 U.S. 218, 229 (2001)),

that theory cannot justify a federal agency's

interpretation of its own ambiguous regulation

displacing state law. For even if Congress implicitly

authorizes an agency to resolve any ambiguities in a

statute it implements, see, e.g., Smiley v. Citibank

(S.D), N.A., 517 U.S. 735, 741 (1996), “there is surely

no congressional implication that the agency can

resolve ambiguities in its own regulations,” Decker, 568

U.S. at 619 (Scalia, J., concurring in part and

dissenting in part).

Yet that is where Auer inevitably leads. State law

thus gets crumped by a form of federal law at least two

steps removed from any law “made in pursuance” of the

Constitution’s text. U.S. Const. art. I, § 7, cl. 2. See also

Geier v. Am. Honda Motor Co., 529 U.S. 861, 908 (2000)

(Stevens, J., dissenting) (noting that “with relative

ease” agencies “can promulgate comprehensive and

detailed regulations that have broad pre-emption

ramifications for state law”).

That troublesome conclusion is even more puzzling

given Auer’s incongruity with this Court’s precedent

about the preemptive reach of Executive action. The

President cannot arrogate to himself the power to

preempt state law. Medellin v. Texas, 552 U.S. 491,

523-32 (2008) (holding that the President cannot

preempt state law absent constitutional or statutory

6

authorization). It must follow that the President’s

administrative functionaries also cannot arrogate to

themselves the power to preempt state law absent

constitutional or statutory authorization. After all,

“lelxecutive agencies derive their authority from Article

II of the Constitution, which vests ‘[t]he executive

power in ‘a President of the United States.” B & B

Hardware, Inc. v. Hargis Indus., Inc., 135 S. Ct. 1293,

1316 (2015) (Thomas, J., dissenting) (quoting U.S.

Const. art. II, § 1, cl. 1). Yet Auer requires courts to

defer to agency action that inherently lacks statutory

authorization—even when it preempts state law. The

upshot? What Medellin prohibits of the principal, Auer

expressly authorizes by his agents.

In short, Auer deference impinges on the bargain

the States struck when they ratified the Supremacy

Clause.

2. Auer deference also undermines the

Constitution’s political protections for States. “[T|he

principal means chosen by the Framers to ensure the

role of the States in the federal system lies in the

structure of the Federal Government itself.” Garcia v.

San Antonio Metro. Transit Auth., 469 U.S. 528, 550

(1985). Indeed, the very “composition of the Federal

Government was designed in large part to protect the

States from overreaching by Congress.” Jd. at 550-51.

For example, Article I, section 7s bicameralism

requirement ensures that legislation must win the

approval of the Senate, “where each State received

equal representation and each Senator was to be

selected by the legislature of his State.” Id. at 551

(citing U.S. Const. art. I, § 3). More generally, the

Framers believed that legislators’ attachment to their

7

individual States would make them “disinclined to

invade the rights of the individual States, or the

prerogatives of their governments.” The Federalist No.

46, at 319 (Madison) (J. Cooke ed., 1961).

Even though Senators are now elected by popular

vote rather than by state legislature, U.S. Const.

representation in the Senate. And because both

Senators and Representatives are elected from specific

States, they have real incentives to be responsive to

their constituents’ varying state-specific needs and

interests. Cf. Herbert Wechsler, The Political

Safeguards of Federalism: The Role of the States in the

Composition and Selection of the National Government,

54 Colum. L. Rev. 543, 547 (1954) (“To the extent that

federalist values have real significance they must give

rise to local sensitivity to central intervention; to the

extent that such a local sensitivity exists, it cannot fail

to find reflection in the Congress.”).

But the States lack an analogous direct

constitutional role in the composition of federal

agencies. To be sure, Senators exercise advice-and-

consent authority when voting on the President’s

nominees to agency positions. U.S. Const. art. II, § 2,

cl. 2. But no officials dependent on a State’s political

support thereafter participate in an agency's workaday

activities in any way analogous to a Representative’s or

Senator’s involvement in the House’s or Senate’s daily

business. Agencies thus lack the same institutional

incentives to respect State interests when

promulgating regulations that motivate members of

Congress when they enact statutes. See Geier, 529 U.S.

at 908 (Stevens, J., dissenting) (“Unlike Congress,

8

administrative agencies are clearly not designed to

represent the interests of States .. . .”).

Auer deference further depresses the limited agency

incentives to promulgate clear rules when resolving

statutory ambiguities. Under Auer, an agency’s later,

ad hoc views of vague regulations have the same

preemptive force as formal rules. The resulting

concomitant attenuation between those informal acts

and statutory authority—reduce the States’ chances of

meaningfully influencing federal regulatory policies

that directly affect their interests. See John F.

Manning, Constitutional Structure and Judicial

Deference to Agency Interpretations of Agency Rules, 96

Colum. L. Rev. 612, 654 (1996) (explaining that Auer

“undermine[s] the effectiveness of external political

checks on administrative agencies”).

3. Auer also hampers the States’ ability to invoke

statutory procedures that safeguard their sovereignty.

The APA requires agencies to promulgate substantive

regulations through notice-and-comment rulemaking.

See 5 U.S.C. § 553. When agencies comply with that

requirement, States can—and do—actively participate

in the notice-and-comment process to shape federal

regulations that accommodate their sovereign interests

and concerns. See Miriam Seifter, States as Interest

Groups in the Administrative Process, 100 Va. L. Rev.

953, 984-95 (2014) (discussing the role of the States

and state interest groups in administrative

proceedings); Nina A. Mendelson, Chevron and

Preemption, 102 Mich. L. Rev. 737, 777-78 (2004)

(reviewing opportunities for the States to participate in

the administrative process).

9

But Auer distorts agencies’ regulatory incentives. It

encourages them to issue ambiguous regulations that

they can later interpret in less formal proceedings, free

from the APA’s formal constraints. Agencies thus can

accomplish their regulatory goals and avoid the

accountability contemplated by the APA’s notice-and-

comment requirements. See, e.g., Manning,

Constitutional Structure, 96 Colum. L. Rev. at 654

(explaining that Aver limits “the efficacy of rulemaking

as a check upon arbitrary and discriminatory agency

action”). Indeed, in light of Auer, “[ijt is perfectly

understandable . . . for an agency to issue vague

regulations, because to do so maximizes agency power

and allows the agency greater latitude to make law

through adjudication rather than through the more

cumbersome rulemaking process.” Thomas Jefferson

Univ. v. Shalala, 512 U.S. 504, 525 (1994) (Thomas, J.,

In short, when courts give “controlling weight” to

agency interpretations of ambiguous regulations, they

sanction an agency’s intentional circumvention of the

APA, thus “allow[ing] agencies to make binding rules

unhampered by notice-and-comment procedures.” Perez

v. Mortg. Bankers Ass’n, 135 S. Ct. 1199, 1212 (2015)

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

coordinate sovereigns of their statutory rights to mold

state-sovereignty-protecting federal regulations

through the notice-and-comment process.

4. Auer deference generates obvious tension with

the Court’s Spending Clause precedents.

Under the Spending Clause, “if Congress intends to

impose a condition on the grant of federal moneys, it

must do so unambiguously.” Pennhurst State Sch. &

10

Hosp. v. Halderman, 451 U.S. 1, 17 (1981). That is

because spending statutes are “much in the nature of

a contract: in return for federal funds, the States agree

to comply with federally imposed conditions.” Jd. And

Congress’s power to make those contracts “rests on

whether the State voluntarily and knowingly accepts

the terms of the ‘contract”; that is, “[t]here can . . . be

no knowing acceptance if a State is unaware of the

conditions or is unable to ascertain what is expected of

it.” Id. Thus Congress may not “surprisle] participating

States with post acceptance or ‘retroactive’ conditions.”

Id. at 25.

That need for clarity peaks when Congress

conditions receiving federal funds on the States’

agreement to relinquish their historic immunity from

suit. In the Eleventh Amendment context, “Congress

may abrogate the States’ constitutionally secured

immunity from suit in federal court only by making its

intention unmistakably clear in the language of the

statute.” Atascadero State Hosp. v. Scanlon, 473 U.S.

234, 242 (1985). This clear-statement rule recognizes

“the vital role of the doctrine of sovereign immunity in

our federal system.” Pennhurst State Sch. & Hosp. v.

Halderman, 465 U.S. 89, 99 (1984).

Auer’s deference rule creates tension with those

Spending Clause precedents in at least two ways. First,

because those cases require Congress to speak clearly

as to whether the States are bound to an obligation, no

basis exists for courts to give binding deference to an

agency when Spending Clause legislation “is

susceptible of multiple plausible interpretations.”

Sossamon v. Texas, 563 U.S. 277, 287 (2011). Yet Auer

requires that course. Second, courts must defer under

11

Auer no matter when the agency announces its ad hoc

views. But the Pennhurst canon requires that Congress

provide notice of the conditions “at tlhe] time” the

funds are received. Bennett v. Ky. Dep’t of Educ., 470

U.S. 656, 670 (1985). Auer deference may thus be the

sole exception to the general rule that the federal

government may not “modify past agreements with

recipients by unilaterally issuing” new “guidelines”

after the agreement has been consummated. Rosa H. v.

San Elizario Indep. Sch. Dist., 106 F.3d 648, 658 (5th

Cir. 1997).

B. Decisions Applying Auer Show Its Real-

World Effects on States.

The harms described above are not hypothetical.

Cases from around the Country reveal how the Federal

government has deployed Auer deference to strike

blows against State sovereignty.

1. Courts invoke Auer to preempt State law. For

example, the Food and Drug Administration’s

views—expressed in a brief to this Court—about

labeling requirements for generic drugs were a reason

this Court held that Minnesota and Louisiana duty-to-

warn laws were preempted. PLIVA, Inc. v. Mensing,

564 U.S. 604, 612-25 (2011). And this Court “place[d]

some weight upon” the Department of Transportation's

view, expressed in an amicus brief, about the

preemptive scope of a Federal Motor Vehicle Safety

Standard to hold that the standard preempted District

of Columbia tort law. Geier, 529 U.S. at 883.

As expected, lower courts follow suit. The Ninth

Circuit “accordled] . . . interpretational deference” to

the Department of Education’s views (expressed in an

12

appellate brief) about student-loan-servicing

regulations. Chae v. SLM Corp., 593 F.3d 936, 950 (9th

Cir. 2010). It ultimately held that those regulations

preempted State-law claims for fraud and breach of

contract, among other things, challenging some of

Sallie Mae’s actions when servicing student loans. See

id. at 948-50.

Those cases involved only private parties, but State

law fares no better when the State is a litigant. The

Fifth Circuit rejected the Texas Banking

consumer-protection banking regulation. Wells Fargo

Cir. 2003). So too in Connecticut; when that State’s

F.S.B. v. Burke, 445 F. Supp. 2d 207, 221 (D. Conn.

2006).

2. The Federal Government also routinely invokes

Auer deference when litigating against State

governments to protect the flanks its ambiguous

regulations left unguarded.

For example, Massachusetts wanted to participate

as a party in license-renewal proceedings for two

nuclear power plants in or near its borders.

Massachusetts v. United States, 522 F.3d 115 (1st Cir.

2008). It sought to ensure that the Nuclear Regulatory

Commission accounted for its sovereign concerns about

13

the “treatment of spent fuel rods.” Jd. at 118. The First

Circuit rejected the Commonwealth’s request based on

the NRC’s “{dlispositive” interpretation of its

ambiguous rule governing who could participate in

licensing proceedings, id. at 129, thereby forcing

Massachusetts to try to present its safety concerns to

the NRC through other administrative routes—ones

that Massachusetts rightly feared “may not move

quickly enough to address” its concerns before the NRC

acted on those license renewals, id. at 127.

Or consider when Colorado tried to implement a

Federal Communications Commission rule arising from

the Telecommunications Act of 1996, a statute designed

market.” Qwest Corp. v. Colo. Pub. Utils. Comm’n, 656

F.3d 1093, 1095 (10th Cir. 2011). Among the many FCC

based on the number of “business lines” an upstart

company serves. See id. (citing 47 C.F.R. § 51.5). The

Colorado Public Service Commission’s view of what

counted as a business line under the rule conflicted

with the FCC’s view, expressed in an amicus brief. See

id. at 1101-02. The Tenth Circuit ultimately agreed

with the FCC, but noted its “reluctan|ce] to afford such

solicitude to an agency's amicus brief” and said it

“would not necessarily reach the same result if not

required to defer to the FCC.” Jd. at 1101.

Consider also how Auer deference nullified

Arizona’s efforts to discharge its duties under the Clean

Air Act. That statute “givies] the states broad

authority” to determine which sources of air pollution

might contribute to visibility impairment—and how

14

best to reduce emissions from those sources. Am. Corn

Growers Ass'n v. EPA, 291 F.3d 1, 8 (D.C. Cir. 2002);

see also id. at 5 (citing 42 U.S.C. § 7491(bX2XA)).

Arizona exercised that authority and concluded that a

certain source’s emissions could be managed using the

best available reduction technology. But EPA

disagreed, and the Ninth Circuit deferred to EPA

because whether that source qualified for management

by best available reduction technology depended on an

interpretation of EPA rules. Phoenix Cement Co. v. U.S.

EPA, 647 Fed. App’x 702, 704-05 (9th Cir. 2016); see

also id. at 706-07 (Bybee, J., dissenting).

3. Finally, Auer deference inflicts harm on the

States’ fiscs. For instance, the Ohio Department of

Medicaid asked the Centers for Medicare and Medicaid

Services to amend its State Medicaid plan and allow

reimbursements for services to juveniles who are

pretrial detainees. Ohio Dep't of Medicaid v. Price, 864

F.3d 469, 472 (6th Cir. 2017). CMS denied Ohio’s

requested amendment, and the Sixth Circuit denied

Ohio’s petition for review. It held that the relevant

juvenile pretrial detainees are barred from Medicaid

coverage,” so it deferred to CMS’s interpretation

excluding them. Jd. at 477-78. So Ohio itself must

continue to bear the costs for those services.

Similarly, the Court of Federal Claims invoked Auer

to uphold the Federal Highway Administration’s

decision, based on its interpretation of its “Policy and

Procedure Memoranda,” to deny California’s request for

a supplemental contractual reimbursement of $13.8

million—funds California spent to acquire land near

Sacramento for the construction of Interstate 5. People

15

of the State of Cal. ex rel. Dep't of Transp. v. United

States, 27 Fed. Cl. 130, 135-41 (1992).

What is more, the Federal government now

routinely tries to extend its Auer advantage well

beyond state-by-state litigation and threaten multiple

States’ budgets at once. In one recent example, federal

agencies sent a letter to State education officials in

which they changed their interpretation of a statutory

term in Title IX. See G.G. ex rel. Grimm v. Gloucester

Cty. Sch. Bd., F.3d 709, 715 (4th Cir. 2016),

vacated and remanded on other grounds, 137 S. Ct.

1239 (2017). The Fourth Circuit “accorded controlling

weight” to the agencies’ new position, id. at 723, even

though this threatened the agencies’ contracting State

partners with the loss of hundreds of millions of dollars

in educational funding. In another, the Ninth Circuit

declined the Department of Justice’s request “to give

controlling construction” to its interpretation of an

executive order that would have deprived counties in

California of potentially billions of dollars in federal

funds because they disagree with the Administration’s

immigration policies. City & Cty. of San Francisco v.

Trump, 897 F.3d 1225, 1241 (9th Cir. 2018).

IL. THE COURT SHOULD OVERRULE AUER.

It is time to jettison Auer. Experience has confirmed

that Auer’s deference rule cannot bear its own weight.

And stare decisis considerations do not support

retaining it.

A. Auer Was Wrongly Decided.

Auer’s deference rule consistently yields results that

16

For example, where administrative law presumes

that regulations “must give fair notice of conduct that

is forbidden or required,” FCC v. Fox Television

Stations, Inc. , 567 U.S. 239, 253 (2012), Auer deference

warning—let alone “fair warning”—“of the conduct a

regulation prohibits or requires,” Christopher v.

SmithKline Beecham Corp., 567 U.S. 142, 156 (2012)

(internal quotation marks and brackets omitted). And

where the APA presumes that the public will be bound

by formal rules made through notice-and-comment

procedures, see 5 U.S.C. § 553, Auer deference allows

an agency’s informal, ad hoc views “not just to advise

the public, but also to bind them.” Perez, 135 S. Ct. at

1212 (Scalia, J., concurring in the judgment). So much

for the “extensive procedural safeguards” that the

States secured as part of administrative law’s main

“working compromise.” Fox Television Stations, 556

U.S. at 537 (Kennedy, J., concurring in part and

concurring in the judgment) (internal quotation marks

omitted).

Auer also produces results that conflict with the

Constitution. The Founders viewed the separation of

powers as the “political truth” of “greate|st] intrinsic

value.” The Federalist No. 47, at 324 (Madison) (J.

Cooke ed. 1961). For were the judicial power “joined to

the executive power, the judge might behave with all

the violence of an oppressor.” Id. at 326 (internal

quotation marks omitted). Yet Auer “permiti|s] the

person who promulgates a law to interpret it as well.”

Talk America, Inc. v. Mich. Bell Tel., 564 U.S. 50, 68

(2011) (Scalia, J., concurring).

17

Equally problematic, Auer deference contradicts

longstanding constitutional presumptions under the

Supremacy Clause and the Spending Clause. First, the

Federal government’s power to preempt State law “is

an extraordinary power in a federal system” that this

Court “assume[s] Congress does not exercise lightly.”

Gregory v. Ashcroft, 501 U.S. 452, 460 (1991). Auer,

however, upends that presumption when an agency is

the lawmaker. An agency’s ad hoc views of ambiguous

regulations are the very embodiment of lawmaking

“exerciseld| lightly’—yet Auer commands courts to

credit them over contrary State law. Second, Congress

must clearly state the terms it requires of States as a

condition of receiving federal funds before the State

agrees to them. Pennhurst, 451 U.S. at 17, 25. But Auer

requires courts to defer to an agency’s after-the-fact

views of those conditions—views the assenting States

never could have known. Neither result is

allowing courts to grant more slack to agencies who

mount ad hoc attacks on State law, or revise the States’

contracting conditions, than they grant to Congress.

Auer also incentivizes the creation of federal

lawmaking via informal agency action. If more law is

made that way—trather than in Congress or by formal

regulatory proceedings—the States continue to lose the

benefits of the Constitution’s structural protections

“designed in large part to protect the States from

overreaching by Congress,” Garcia, 469 U.S. at 550-51,

and of their APA right to advocate their interests in

notice-and-comment proceedings.

Those myriad problems should be fatal to Auer’s

deference rule. A hypothetical example about the

18

canons of ejusdem generis and noscitur a sociis makes

the point. If interpreting a text’s ambiguous, general

term in light of that text’s more specific related or

associated terms, see Yates v. United States, 135 S. Ct.

1074, 1085-87 (2015), consistently led to outcomes that

flouted bedrock principles of constitutional and

administrative law, not another year would pass before

this Court would purge those canons from the United

States Reports. The same fate is appropriate for Auer

deference—a rule used to interpret an agency’s

informal views of ambiguous regulatory text.

B. Stare Decisis Considerations Do Not Save

Auer.

As Petitioner explains, this Court may not even

need to consider traditional stare decisis principles

before jettisoning Auer deference because Auer is

merely an “interpretive principle[].” Pet’r Br. 50 (citing

Perez, 135 S. Ct. at 1214 n.1 (Thomas, J., concurring in

the judgment)).

But even if stare decisis applies, not one of its

factors supports retaining Auer deference.

Far from being “well reasoned,” Montejo v.

Louisiana, 556 U.S. 778, 793 (2009), Auer’s deference

rule rests solely on “ipse dixit,” with “no justification

whatsoever,” Decker, 568 U.S. at 617 (Scalia, J.,

concurring in part and dissenting in part). Auer did not

fill that gap; it rotely applied Seminole Rock. See 519

U.S. at 461. Nor have this Court’s cases since Seminole

Rock “put forward a persuasive justification for Auer

deference.” Decker, 568 U.S. at 617 (Scalia, J.,

concurring in part and dissenting in part).

19

Compounding that problem, the intervening years

have created “a considerable body of new experience to

Callahan, 555 U.S. 223, 234 (2009). None of it bodes

well. See supra at 3-18. Thus “developments since”

Auer “was handed down” further confirm why this

Court should abandon it. Janus v. Am. Fed. of State,

Cty., & Mun. Employees, Council 31, 138 S. Ct. 2448,

2478-79 (2018).

Nor can the “reliance interests at stake,” Montejo,

556 U.S. at 792, save Auer’s deference rule.

“[I}mportantly, stare decisis accommodates only

legitimate reliance interests.” South Dakota v. Wayfair,

Inc., 138 S. Ct. 2080, 2098 (2018) (internal quotation

marks and brackets omitted). The federal government

cannot claim any legitimate reliance interest in

“enactling] vague rules which give it the power, in

future adjudications, to do what it pleases.” Talk

America, 564 US. at 69 (Scalia, J., concurring).

In short, Auer inhibits “the States from exercising

their lawful sovereign powers in our federal system.”

Wayfair, 138 S. Ct. at 2096. “[Tlhe Court should be

vigilant in correcting the error.” Id.

20

CONCLUSION

The Court should overrule Seminole Rock and Auer.

Respectfully submitted.

SEAN D. REYES

Utah Attorney General

TYLER R. GREEN*

Utah Solicitor General

STANFORD E. PURSER

Deputy Solicitor General

350 N. State Street, Suite 230

Salt Lake City, UT 84114-2320

Telephone: (801) 538-9600

Email: tylergreen@agutah.gov

*Counsel of Record

Counsel for Amicus Curiae

State of Utah

21

ADDITIONAL COUNSEL

STEVE MARSHALL

Attorney General

STATE OF ALABAMA

KEVIN G. CLARKSON

Attorney General

STATE OF ALASKA

MARK BRNOVICH

Attorney General

STATE OF ARIZONA

LESLIE RUTLEDGE

Attorney General

STATE OF ARKANSAS

CHRISTOPHER M. CARR

Attorney General

STATE OF GEORGIA

CuRrtTIs T. HILL, JR.

Attorney General

STATE OF INDIANA

Eric S. SCHMITT

Attorney General

STATE OF MISSOURI

DOUG PETERSON

Attorney General

STATE OF NEBRASKA

DAVE YOST

Attorney General

STATE OF OHIO

MIKE HUNTER

Attorney General

STATE OF OKLAHOMA

ALAN WILSON

General

STATE OF SOUTH CAROLINA

KEN PAXTON

Attorney General

STATE OF TEXAS

PATRICK MORRISEY

General

STATE OF WEST VIRGINIA