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

No. 18-15

IN THE

Supreme Court of the United States

JAMES L. KISOR,

Petitioner,

v.

ROBERT WILKIE,

Secretary of “’eterans Affairs,

Respondent.

On Writ of Certiorari to

the United States Court of Appeals

for the Federal Circuit

BRIEF OF WASHINGTON LEGAL FOUNDATION

AS AMICUS CURIAE IN SUPPORT OF PETITIONER

CORBIN K. BARTHOLD

Counsel of Record

Cory L. ANDREWS

WASHINGTON LEGAL

FOUNDATION

2009 Massachusetts Ave., NW

Washington, DC 20036

(202) 588-0302

January 31, 2019 cbarthold@wilf.org

QUESTION PRESENTED

Whether the Court should overrule Auer v.

Robbins, 519 U.S. 452 (1997), and Bowles v.

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

TABLE OF CONTENTS

TABLE OF AUTHORITIES ..............-..-0ccceeeseeee0s iv

INTEREST OF AMICUS CURIAE .....0000000000.....-.. 1

STATEMENT OF THE CASE....................--..cccceeeees 2

SUMMARY OF ARGUMENT... .........cccceceeeeeee 5

REET censcscrerescsevcsssecnecescessconccsssesveeusessesesseee 7

AUER ENCOURAGES AN AGENCY TO TEST

THe BOUNDARIES Or ITs POWER; TO

GRAB AUTHORITY OUTSIDE ITS AREA OF

EXPERTISE; TO SHIFT POSITIONS

UNPREDICTABLY; TO BYPASS NOTICE-

AND-COMMENT RULEMAKING; TO SPURN

HARASS DISFAVORED GROUPS ...................-... 7

A. The Board of Immigration

| EEE wae veneeanenee 7

B The Department of Labor.................. 9

C The Environmental Protection

REE cremains 11

D. The Department of Education......... 13

E. The Federal Trade Commission...... 16

IC ceccccsececusessceeccscszsvcenssssseemnennaemneeennne 19

iv

TABLE OF AUTHORITIES

Page(s)

Cases:

Appalachian Power Co. v. EPA,

208 F.3d 1015 (D.C. Cir. 2000) .............. 11, 12,13

Arlington v. FCC,

EE Ne ee 16

Auer v. Robbins,

8 Ee aan passim

Bowles v. Seminole Rock & Sand Co.,

EE ee 4

Christopher v. SmithKline Beecham Corp.,

gE ETERS 1,9, 10

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

a 5

G.G. ex rel. Grimm v. Gloucester Cnty.

School Bd.,

822 F.3d 709 (4th Cir. 2016)...........................-+- 15

Gutierrez-Brizuela v. Lynch,

834 F.3d 1142 (10th Cir. 2016)............................ 1

Indep. Training & Apprenticeship Prog.

v. Cal. Dep't of Indus. Relations,

730 F.3d 1024 (9th Cir. 2013)............................ 10

Marbury v. Madison,

aa ie eating 1

Nat Min. Ass’n v. McCarthy

758 F.3d 243 (D.C. Cir, 2014) oocccccccccccoccccsssseeee i

Page(s)

Perez v. Mortgage Bankers Assoc.,

ns i eeeinaeiieh 1, 11

Sandifer v. U.S. Steel Corp.,

678 F.3d 590 (7th Cir. 2012) ................ccccccccceee. 10

Soundboard Assoc. v. FTC,

888 F.3d 1261 (D.C. Cir. 2018) .................... 18, 19

Soundboard Assoc. v. FTC,

Ge 16

Talk Am., Inc. v. Mich. Bell Tel. Co.,

Ee a ee 5

Texas v. United States,

201 F. Supp. 3d 810 (N.D. Tex. 2016)................ 15

Zhou Hua Zhu v. U.S. Attorney General,

703 F.3d 1303 (11th Cir. 2013) ........00000000........ 7,8

Statutes and Regulations:

lia 11

I realiaieatio 16

SE EE RS ea onan oeeomtenel 14

EEE TRS EN rae orate nee eee 9

I 9

i eiaieniibiesiilaial 8

RE EE ee 17

Ee 15

i 3

ls Oe ei hcencnicenctcnsesnsansennsnctsnnniosatints 3, 4

Page(s)

I 3

SE TIE erh Me eNOS 3

Miscellaneous:

Cynthia Barmore, Auer in Action:

Deference After Talk America,

76 Ohio St. L.J. 813 (2015) ..........................-2-+- 5, 7

Cynthia Barmore, An Empirical Analysis

of Auer Deference in the Courts of Appeals,

36 Yale J. on Reg.: Notice & Comment,

https://perma.cc/G6WG-C863 (Sep. 13, 2016)...... 5

Karen Blumenthal, The Truth About Title LX,

The Daily Beast, https://perma.cc/

MV6K-RQUJB (June 22, 2012) ...000000. cess. 14

Lisa Shultz Bressman, Beyond

, bility: Arbi : —_

Legitimacy in the Administrative State,

78 N.Y.U. L. Rev. 461 (2003) ....................0.0.000000. 5

i. 4 eo 1,2

Alan Greenspan & Adrian Wooldridge,

Capitalism in America: A History (2018)........... 18

Montesquieu, The Spirit of the Laws ...................... l

U.S. Department of Education, Office for

Civil Rights, Dear Colleague Letter: Sexual

Violence Background, Summary, and Fast

Facts, https://perma.cc/Z99C-28TB

SUTIInE, Ss, TI icceniadiediniiinidishniabdnteliniieaptsiniinstihinaddmpdinanies 14

U.S. Department of Education, Sexual

Harassment: It’s Not Academic,

https://perma.cc/UG7A-RJCU (Sept. 2008)........ 14

U.S. Department of Justice, Civil Rights

Division, and U.S. Department of

Education, Office for Civil Rights, Dear

Colleague Letter on Transgender Students,

https://perma.cc/2LW7-RQ26 (Feb. 22, 2017) .... 16

Letter from U.S. Department of Justice,

Civil Rights Division, and U.S. Department

of Education, Office for Civil Rights,

to Royce Engstrom and Lucy France,

University of Montana,

https://perma.cc/RU9Z-GPHd (May 9, 2013) ..... 14

l

INTEREST OF AMICUS CURIAE*

Washington Legal Foundation (WLF) is a

nonprofit, public-interest law firm and policy center

with supporters in all 50 states. WLF promotes free

enterprise, individual rights, limited government,

and the rule of law. It has appeared as amicus curiae

before this Court in important administrative-law

cases. See, e.g., Perez v. Mortgage Bankers Assoc.,

135 S. Ct. 1199 (2015); Christopher v. SmithKline

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

“There is no liberty if the power of judging be not

separated from the legislative and executive

powers.” The Federalist No. 78 (A. Hamilton)

(quoting 1 Montesquieu, The Spirit of the Laws 181).

The principal judicial power is, of course, the power

to “say what the law is.” Marbury v. Madison, |

Cranch 137, 177 (1803). What would happen if the

legislative and executive branches could wield this

power? “They might be tempted to bend existing

laws, to reinterpret and apply them retroactively in

novel ways and without advance notice.” Gutierrez-

Brizuela v. Lynch, 834 F.3d 1142, 1149 (10th Cir.

2016) (Gorsuch, J., concurring). “Parties who cannot

alter their past conduct” would then be left “to the

mercy of majoritarian”—or, worse, bureaucratic —

“politics.” Jd. “Unpopular groups,” in particular,

would likely “be singled out for this sort of

mistreatment.” /d.

* No party's counsel authored any part of this brief. No

person or entity, other than WLF and its counsel, helped pay

for the briefs preparation or submission. All parties have

consented to the briefs being filed.

2

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

these fears to life. It instructs the judiciary in most

instances to adopt, as binding law, the executive's

interpretation of its own regulations. It enables an

executive agency, flush with power delegated by the

legislature, to issue open-ended rules, and then to

contort those rules as it sees fit. This is not a

hypothetical problem. As we shall see, agencies use

their Auer privileges to seize power, to shift policy

haphazardly, to evade democratic checks and

balances, and to pick on unpopular groups.

Regulated entities cope as best they can. But they

“have every thing to fear” from the judiciary’s

“union,” through Auer, with “the other departments.”

The Federalist No. 78.

WLF urges the Court to overturn Auer.

STATEMENT OF THE CASE

James Kisor served as a Marine in the Vietnam

War. He saw combat. In December 1982, contending

that that combat had given him post-traumatic

stress disorder (PTSD), he filed a claim for service-

connected disability benefits with the Department of

Veterans Affairs (VA). Pet. App. 2a. A counselor

declared that Kisor displayed symptoms associated

with PTSD. Jd. A psychiatric examiner concluded,

however, that Kisor suffered not from PTSD, but

from a “personality disorder”—a condition that does

not qualify a veteran for benefits. /d. at 3a. Finding

insufficient evidence that Kisor suffered from PTSD,

the VA Regional Office (RO) denied the claim in

1983. Id.

3

In June 2006 Kisor reasserted his claim. He

submitted, among other things, (1) a new psychiatric

evaluation stating that he suffers—and has suffered,

since at least the 1980s—from PTSD and

(2) documents confirming that he partook in combat

operations in Vietnam. Pet. App. 3a-4a; J.A. 38-40.

Finding that Kisor suffers from PTSD, the %O

awarded benefits.

There are two main ways the VA can grant a

renewed claim. First, under 38 C.F.R. § 3.156(a), the

VA may “reopen” a claim to consider “new and

material evidence.” This is what the RO did in

Kisor’s case, using the new psychiatric evaluation.

But when a claim is reopened under § 3.156(a),

benefits accrue from the day the veteran filed the

renewed claim. Id. § 3.400(q). The RO therefore

granted Kisor benefits effective June 2006.

Second, under 38 C.F.R. § 3.156(c)(1), the VA

may “reconsider” a claim if it receives or finds

“relevant official service department records” that

existed, but were not considered, when the claim was

denied. If the VA grants benefits under § 3.156(c)(1),

benefits accrue from “the date the entitlement arose

or the date [the] VA received the previously decided

claim, whichever is later.” Jd. § 3.156(c)(3). In Kisor’s

case this would shift the accrual of benefits back to

December 1982, when Kisor filed his original claim.

Kisor contends that the documents confirming

his combat experience are “relevant official service

department records” that trigger § 3.156(c)(1). Pet.

App. 12a-13a. The government disagrees. It argues

that the documents are not “relevant” records,

because Kisor’s combat experience was not a point of

4

dispute when the VA denied Kisor’s claim in 1983.

Id. at 13a. The Board of Veterans’ Appeals, the

Veterans Court, and the Federal Circuit sided with

the government.

This appeal revolves around the Federal

Circuit’s use of Auer, 519 U.S. 452, to adopt the

government's reading of the word “relevant” in

§ 3.156(c)(1). Under Auer (and its predecessor,

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

(1945)), a court defers to an agency’s interpretation

of its own ambiguous regulation, so long as that

interpretation is not “plainly erroneous or

inconsistent with the regulation” itself. 519 U.S. at

461. A Federal Circuit panel concluded that the word

“relevant,” as used in § 3.156(c)(1), is ambiguous;

and that the government's reading—under which

“relevant” means, not “relevant to an element of the

veteran’s claim,” but “relevant to the outcome of the

dispute”"-—-was neither plainly erroneous nor

inconsistent with the regulation. Pet. App. 17a-19a.

So the panel applied the government's narrow

reading of “relevant ... records”; declared that

Kisor’s documents, which confirmed his combat

experience but shed no light on his PTSD, were not

“relevant”; and declined to shift the accrual of

benefits back to December 1982.

The full court of appeals denied rehearing en

banc. Judges O'Malley, Newman, and Moore

dissented. They based their dissent on a canon of

construction not at issue in this appeal. Along the

way, though, they paused to observe that “several

justices of the Supreme Court recently have urged

their colleagues to abandon Auer.” Pet. App. 48a.

Auer, they explained, “encourages agencies to write

5

ambiguous regulations and interpret them later,”

which “defeats the purpose of delegation,

undermines the rule of law, and ultimately allows

agencies to circumvent the notice-and-comment

rulemaking process.” Jd. at 49a (quoting Lisa Shultz

Bressman, Beyond Accountability: Arbitrariness and

Legitimacy in the Administrative State, 78 N.Y.U. L.

Rev. 461, 551-52 (2003)).

SUMMARY OF ARGUMENT

“Questions of ... Auer deference arise as a

matter of course on a regular basis.” Decker v. Nw.

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

C.J., concurring). That is not a good thing. Judging

from how often courts reject an agency’s bid for

deference—for many agencies the rejection rate is

above thirty percent—Auer disputes arise with such

frequency because agencies regularly try the limits

of their authority. Cynthia Barmore, Auer in Action:

Deference After Talk America, 76 Ohio St. L.J. 813,

830-31 (2015) (cataloguing agencies’ Auer success

rates).

“Common concerns about Auer [deference],” one

defender of Auer contends, “have not materialized in

practice.” Cynthia Barmore, An Empirical Analysis

of Auer Deference in the Courts of Appeals, 36 Yale J.

on Reg.: Notice & Comment, https://perma.cc/G6WG-

C863 (Sep. 13, 2016). This, however, is incorrect. All

too often, an agency seeks to exploit any source of

power at hand. See Talk Am., Inc. v. Mich. Bell Tel.

Co., 564 U.S. 50, 69 (2011) (Scalia, J., concurring)

(“The seeming inappropriateness of Auer deference is

especially evident in cases such as these, involving

an agency that has repeatedly been rebuked in its

6

attempts to expand the statute beyond its text, and

has repeatedly sought new means to the same

ends.”).

This brief offers concrete examples of agencies’

efforts aggressively to expand, or abruptly to alter,

the import of their regulations. Agencies suddenly

and radically change how they interpret rules—and

then seek deference for those new interpretations.

Agencies seek deference for their interpretations of

rules unconnected with their areas of expertise.

Agencies try to stretch the meaning of rules beyond

the scope even of the statutes that give agencies the

power to regulate in the first place. Under the guise

of rule “interpretation,” agencies dodge notice-and-

comment procedures, defy democratic norms, and

undermine the very notion of equal justice under

law.

When these abuses are challenged in court, Auer

deference is not always the central issue. Sometimes

the agency argues that its action is not even subject

to judicial review. Sometimes the court concludes

that the agency improperly used “interpretation” as

a vehicle to create a whole new rule. What is clear,

however, is that agencies try to expand their

dominion at almost every turn, and that Auer

emboldens them in their wanton arrogations of

power.

Auer surely generates both costs and benefits.

Sadly, however, a major cost—indeed, a ruinous

cost—arises from its constant abuse. Agencies use

Auer as cover for highhanded, unpredictable, and

nakedly political behavior. Auer, therefore, should

go.

ARGUMENT

AUER ENCOURAGES AN AGENCY TO TEST THE

BOUNDARIES OF ITS POWER; TO GRAB

AUTHORITY OUTSIDE ITS AREA OF EXPERTISE;

To Su#irr POSITIONS UNPREDICTABLY; TO

BYPASS NOTICE-AND-COMMENT RULEMAKING;

To SPURN DEMOCRATIC LEGITIMACY; AND TO

HARASS DISFAVORED GROUPS.

What follows is by no means an exhaustive

review of Auer-fueled agency mischief. The examples

below have been selected (1) to capture the conduct

of a variety of distinct agencies and (2) to illustrate

several distinct problems that Auer creates,

promotes, or exacerbates.

A. The Board of Immigration Appeals.

The government frequently invokes Aver when

defending a decision of the Board of Immigration

Appeals (BIA); yet the courts reject almost forty

percent of the government’s interpretations of its

own immigration rules. Barmore, supra, 76 Ohio St.

L.J. at 830-31. This failure rate suggests that the

government often uses Auer to defend shifting,

extreme, or untenable readings of immigration

regulations.

An arresting example of such Auer abuse

appears in Zhou Hua Zhu v. U.S. Attorney General,

703 F.3d 1303 (11th Cir. 2013). An immigrant from

China, Zhu, fathered three children while in the

United States. During his removal proceeding, he

contended that he would, if sent back to China, be

8

forcibly sterilized for violating China’s one-child

policy. The immigration judge (IJ) granted Zhu’s

application for asylum. The BIA reversed, however,

in an opinion that reviewed de novo the IJ’s findings

of fact on the likelihood that China would forcibly

sterilize Zhu.

The BIA’s standards of review are set forth in a

regulation, 8 C.F.R. § 1003.1(d)(3). The regulation

states that “the Board will not engage in de novo

review of findings of fact,” and that it shall review

such findings only for clear error. Jd. The

government sought Auer deference for the BIA’s

conclusion that, § 1003.1(d)(3) notwithstanding, the

BLA may independently weigh evidence about the

likelihood of a future event. 703 F.3d at 1308.

In issuing § 1003.1(d)(3), the Department of

Justice intended to adopt the federal courts’

standard of review for findings of fact. 703 F.3d at

1309-10. Yet, as Zhu observes, the BIA’s use of de

novo review for “future” facts “flfew] in the face of

centuries of common-law adjudication.” Jd. at 1310.

Zhu reviews a “wide variety of contexts” in which

courts treat a prediction as a finding of fact. Id. at

1310-11. Zhu then joins four other circuits in

rejecting the BILA’s attempts to review findings about

future events de novo. Id. at 1312-14.

Auer stands in large part on the notion that a

court should defer to an agency’s expertise. As Zhu

illustrates, however, the government is not averse to

using Auer merely to rationalize its defense of a

patently unreasonable position.

B. The Department of Labor.

Some agencies struggle to interpret their

regulations consistently and coherently. The

Department of Labor (DoL) is a prime offender.

Consider Christopher, 567 U.S. 142. The Fair

Labor Standards Act (FLSA)—that is, the federal

wage-and-hour law—exempts from its ambit a

worker “employed ... in the capacity of outside

salesman.” 29 U.S.C. § 213(a)(1). The FLSA defines a

“sale” to include any “exchange” or “other

disposition.” Jd. at § 203(k). In the 1930s and 1940s

the Dol issued regulations that incorporated the

“outside salesman” exemption.

In the late 2000s enterprising plaintiffs’

attorneys began suing drug manufacturers, on

behalf of pharmaceutical sales representatives, for

unpaid wages under the FLSA. They argued that,

because sales reps do not literally sell

pharmaceuticals—they merely convince doctors to

agree to prescribe them—they fall outside the

“outside salesman” exemption. The Dol “had

acquiesced in the sales practices of the drug industry

for over seventy years,” 567 U.S. at 153; but in 2009,

in “an uninvited amicus brief” filed in an appeal, id.

at 152, it declared that the FLSA governs

pharmaceutical sales reps. It sought, in effect, to

expose the pharmaceutical companies to “potentially

massive liability” for “conduct that occurred well

before” its “interpretation was announced.” /d. at

156.

The Dol did not offer a consistent explanation

for its new position. In the courts of appeals, it

10

argued that a “sale” requires a “consummated

transaction.” Jd. at 154. But, apparently realizing

that pharmaceutical sales reps’ work satisfies this

definition, it argued before this Court, in

Christopher, that a “sale” requires a transfer of

property. Jd. This (new) new reading, however, was

“flatly inconsistent” with the definition of “sale” in

the FLSA itself (recall that definition’s use of the

term “other disposition”). /d. at 159. Still, the Dol

sought Auer deference for its position. Jd. at 154-55.

Concluding that the DoL had “unfair[ly] surprised”

its regulated entities, the Court declined to go along.

Id. at 156.

The DoL’s shifting approaches often bear no

connection to its area of expertise. The Dol. fails, in

other words, to tie its about-faces “to any

institutional knowledge of labor markets possessed

by the Department's staff.” Sandifer v. U.S. Steel

Corp., 678 F.3d 590, 599 (7th Cir. 2012). Its

“oscillation[s}” appear to arise, rather, from raw

“politics.” Id. The courts of appeals have (not

surprisingly) “come together in spurning” the DoL’s

“gyrating agency letters.” /d.; see also id. (“All that

the [Obama] Department has contributed to our

deliberations .. . is letting us know that it disagrees

with the position taken by the Bush Department”).

Again, Auer stands in part on the premise that

agencies can apply specialized knowledge. But the

DoL, frequently fails to display, or use, such

knowledge. See, eg. Indep. Training &

Apprenticeship Prog. v. Cal. Dept of Indus.

Relations, 730 F.3d 1024, 1034 (9th Cir. 2013)

C(TTlhe DOL’s new interpretation is nearly as

11

difficult to decipher as the underlying regulation it

seeks to interpret.”).

Cc. The Environmental Protection

Agency.

An agency is allowed to issue an “interpretive”

rule—as opposed to a more substantive “legislative”

rule—without conducting notice-and-comment

procedures. 5 U.S.C. § 553(b). “But this concession to

agencies was meant to be more modest in its effects

than it is today.” Perez, 135 S. Ct. at 1211 (Scalia, J.,

concurring). Thanks to Auer, ‘agencies may now use

[interpretive] rules not just to advise the public, but

also to bind them.” /d. at 1212.

The inquiry into whether an agency rule is

“legislative” or “interpretive” is “quite difficult and

confused.” Natl Min. Ass'n v. McCarthy, 758 F.3d

243, 251 (D.C. Cir. 2014) (Kavanaugh, J.). If

maintaining democratic legitimacy were one of its

principal aims, an agency would, when in doubt,

conduct notice and comment. But Auer encourages

an agency simply to proceed by diktat through a

memorandum or guidance letter. An agency can

argue that it is not making a new rule, but merely

exercising its wide discretion to “interpret” an old

one. The vaguer the regulation, of course, the more

room the agency has for such “interpretation.”

Appalachian Power Co. v. EPA, 208 F.3d 1015

(D.C. Cir. 2000), illustrates the point. Under the

Clean Air Act, a company must obtain a permit to

operate a stationary source of air pollution. The

permitting process has been assigned to the States.

Congress directed the EPA, however, to issue

12

regulations setting the minimum requirements of

each State’s process. The EPA issued these

regulations in 1992. The regulations directed the

States to ensure that each permit requires periodic

monitoring of a stationary source’s emissions. If a

background state or federal rule already required

such monitoring, incorporating that rule into the

permit constituted compliance with the 1992

regulations. In 1998, however, the EPA issued a

memorandum entitled “Periodic Monitoring

Guidance ” The memorandum ordered each State,

before granting a permit, to assess whether

monitoring was needed in addition to the monitoring

required by an extant state or federal rule.

The EPA’s “guidance” memorandum drastically

expanded the scope of the regulations it purported to

“interpret.” “Nothing” in the underlying regulations,

the D.C. Circuit observed, “said anything about

giving State authorities a roving commission” to

supplement “State and _ (federal [monitoring]

standards.” 208 F.3d at 1026. The EPA had

promised, moreover, in its 1992 rulemaking, that “if

federal standards were found to be inadequate in

terms of monitoring,” it “would open [new]

rulemaking proceedings.” /d. In issuing the

“guidance” memorandum, the court noted, the EPA

had broken its promise. Jd. The EPA’s “guidance”

memorandum was in fact a whole new rule, one the

EPA had tried to issue without going through notice

and comment. The court therefore set it aside. Jd. at

1028.

Although it does not itself discuss Auer,

Appalachian Power contains an incisive description

of the process that Auer facilitates:

13

The phenomenon we see in this case is

familiar. Congress passes a broadly worded

statute. The agency follows with regulations

containing broad language, open-ended

phrases, ambiguous standards and the like.

Then as years pass, the agency issues

circulars or guidance or memoranda,

explaining, interpreting, defining and often

expanding the commands in the regulations.

One guidance document may yield another

and then another and so on. Several words in

a regulation may spawn hundreds of pages of

text as the agency offers more and more

detail regarding what its regulations

demand of regulated entities. Law is made,

without notice and comment, without public

participation, and without publication in the

Federal Register or the Code of Federal

Regulations.

208 F.3d at 1020. Skip the notice and comment, Auer

suggests. Just issue a memo. A court might accept it

as an “interpretation” owed deference.

Auer invites an agency to explore the frontiers of

notice-and-comment-free “interpretive” rulemaking.

D. The Department of Education.

Auer also entices administrators to view

themselves, not as trustees of authority delegated by

Congress, but as philosopher kings empowered to

govern as they see fit.

14

Take, for example, how the Department of

Education (DoE) has applied Title IX. In 1972

Congress passed, and President Nixon signed, a law

declaring that no person “shall, on the basis of sex,

be excluded from participation in, be denied the

benefits of, or be subjected to discrimination under

any education program or activity receiving federal

financial assistance.” 20 U.S.C. § 1681. The idea was

to stop schools from applying gender quotas or

excluding girls from advanced classes, after-school

clubs, and the like. See Karen Blumenthal, The

Truth About Title IX, The Daily Beast,

https://perma.cc/MV6K-RQJB (June 22, 2012).

Reading the law expansively, however, the Dok

has claimed for itself the power to regulate student-

on-student behavior, to impose detailed codes of

conduct, and to lower the burden of proof in schools’

grievance hearings. See, e.g., Letter from U.S.

Department of Justice, Civil Rights Division, and

U.S. Department of Education, Office for Civil

Rights, to Royce Engstrom and Lucy France,

University of Montana, https://perma.cc/RU9Z-GPHJ

(May 9, 2013); U.S. Department of Education, Office

for Civil Rights, Dear Colleague Letter: Sexual

Violence Background, Summary, and Fast Facts,

https://perma.cc/Z99C-28TB (Apr. 4, 2011); U.S.

Department of Education, Sexual Harassment: It’s

Not Academic, https://perma.cc/UG7A-RJCU (Sept.

2008).

In 2015 the DoE went a step farther, ordering

schools to allow students to use the bathroom that

matches their gender identity. In 1975, however, the

DoE’s predecessor had issued an implementing

regulation governing bathrooms. A _ school, this

15

regulation says, “may provide separate toilet, locker

room, and shower facilities on the basis of sex, but

such facilities provided for students of one sex shall

be comparable to such facilities provided for students

of the other sex.” 34 C.F.R. § 106.33. Several schools

argued that this regulation permits them to allocate

bathroom access based solely on biological sex.

It is fanciful to suppose that in the 1970s, when

Title IX was passed and the implementing

regulation was issued, “sex,” as used in this context,

meant anything other than “biological sex.” See G.G.

ex rel. Grimm v. Gloucester Cnty. School Bd., 822

F.3d 709, 736 (4th Cir. 2016) (Niemeyer, J.,

dissenting), vacated, 137 S. Ct. 1239 (2017). Still, the

DoE sought Auer deference for its conclusion that

“sex,” as used in the 1975 regulation, includes

gender identity. In the courts this argument yielded

mixed results. Compare G.G., 822 F.3d 709

(upholding the DoE’s interpretation, even though it

is “perhaps not the intuitive one”), with Texas v.

United States, 201 F. Supp. 3d 810 (N.D. Tex. 2016)

(rejecting the DoK’s interpretation, because “it

cannot be disputed that the plain meaning of the

term sex,” at the time of the regulation’s passage,

was “the biological and anatomical differences

between male and female ... as determined ... at

birth”). Clearly, though, the government's position

was untenable without Auer deference.

The point is not that a given code of conduct, a

given burden of proof, or a given bathroom policy is

bad. The point, rather, is that Auer has helped an

agency push, at every opportunity, to expand its

authority. It is for the people’s representatives in

Congress, not unelected civil servants, to resolve

16

major policy disputes. Under Auer, however, a

citizen “can perhaps be excused for thinking that it

is the agency really doing the legislating.” Arlington

v. FCC, 569 U.S. 290, 315 (2013) (Roberts, C.J.,

dissenting).

It bears noting that in 2017 the DoE rescinded

its bathroom guidance. Its decrees defining “sex” to

include “gender identity” did not, it wrote, “contain

extensive legal analysis or explain how the position

is consistent with the express language of Title [X”;

nor, it conceded, “did they undergo any formal public

process.” U.S. Department of Justice, Civil Rights

Division, and U.S. Department of Education, Office

for Civil Rights, Dear Colleague Letter on

Transgender Students, https://perma.cc/2LW7-RQ26

(Feb. 22, 2017). So the DoE’s policy on school

bathrooms is an instance of Auer-enabled vacillation

to boot.

E. The Federal Trade Commission.

A petition for certiorari pending before the

Court, Soundboard Association v. FTC, Case No. 18-

722 (U.S.), provides another vivid example of the

sort of regulatory whiplash that can occur under

Auer.

Congress directed the Federal Trade

Commission (FTC) to issue rules for the

telemarketing industry. “The Commission,” it said,

“shall prescribe rules prohibiting deceptive ... or . . .

abusive telemarketing acts or practices.” 15 U.S.C.

§ 6102(a)(1). Exercising its delegated authority, the

FTC issued the Telemarketing Sales Rule (TSR),

which, among other things, bans telemarketing calls

17

at odd hours. In 2008 the FTC added to the TSR

some rules governing robocalls. The new rules ban

most “outbound telephone call[s]” that deliver “a

prerecorded message” without the recipient's written

consent. 16 C_F_R. § 310.4(b)(1)(v).

“Soundboard” technology enables a telemarketer

to interact with a call recipient using prerecorded

clips. The telemarketer can play scripted questions

and responses; but she can also enter the call and

speak for herself. A telemarketing company asked

the FTC whether its use of soundboard technology

violated the 2008 TSR amendments. The FTC

responded, in a 2009 staff opinion letter, that the

amendments “do not prohibit” soundboard-assisted

calls.

Over the next few years the FTC received

complaints that companies were abusing soundboard

technology by, for example, having telemarketers

use the technology to conduct many calls at once.

Rather than ban the specific abuses, however, the

FTC in 2016 issued a staff opinion letter that

rescinded the 2009 letter. The new letter declares

that soundboard technology falls within the “plain

language” of the robocall ban.

A trade group sued to enjoin enforcement of the

2016 letter. The group argued, among other

things, that the letter announces a legislative rule

that should have been put through notice and

comment. The district court rejected this argument.

The D.C. Circuit declined to reach it; it concluded

that the 2016 letter—which, like most such letters,

emphatically asserts a position but disclaims any

binding effect—is not a final agency action subject to

18

review. As Judge Millett noted in dissent, however,

the letter “speaks in final, conduct-altering, and

compliance-demanding terms.” Soundboard Assoc. v.

FTC, 888 F.3d 1261, 1280 (D.C. Cir. 2018) (Millett,

J., dissenting). The letter “leaves the soundboard

industry whipsawed between abandoning its

business and facing potentially ruinous enforcement

actions and penalties.” Jd. at 1284.

“Businesspeople crave certainty as much as

almost anything: certainty allows them to make

long-term plans and long-term investments.” Alan

Greenspan & Adrian Wooldridge, Capitalism in

America: A History 258 (2018). Issue a reliable,

stable rule and, even if it is not the rule a company

would have wanted, the company will adjust. Had

the FTC in 2009 interpreted its regulation to ban

soundboard technology, telemarketing companies

would no doubt have made do. Instead the FTC

invited those companies to invest in soundboard

technology, then pulled the rug from under them

seven years later. The FTC could provide shifting

readings of its rule, knowing that even an unreliable

interpretation often enjoys Auer deference.

Auer invites an agency cavalierly to change the

meaning of its regulations. It gives an agency the

space to rotate its position 180 degrees—to

“condemn|{] as illegal an entire business model,” 888

F.3d at 1284 (Millett, J.}—in a mere staff opinion

letter.

It is no accident, moreover, that the parties in

the examples we have seen include pharmaceutical

companies, pollutant emitters, and telemarketers. It

is when dealing with unpopular groups that an

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empowered regulator will feel least obliged to act

consistently and with restraint. “The pride of our

legal system is its evenhandedness and fairness to

all who come before it.” Jd. at 1285 (Millett, J.). The

fact that Auer assists agencies in singling out

disfavored groups for special (poor) treatment is yet

another strike against it.

CONCLUSION

The judgment should be reversed.

Respectfully submitted,

CORBIN K. BARTHOLD

Counsel of Record

Cory L. ANDREWS

WASHINGTON LEGAL

FOUNDATION

2009 Mass. Ave., NW

Washington, DC 20036

(202) 588-0302

January 31, 2019 cbarthold@wlf.org