In Kisor v. Wilkie, No. 18-15, the Supreme Court will decide this term whether to overrule or modify two prior decisions, Auer v. Robbins, 519 U.S. 452 (1997), and Bowles v. Seminole Rock & Sand Co., 325 U.S. 410 (1945), that require courts to defer to reasonable agency interpretations of their own regulations. The facts of Kisor suggest a very narrow ruling—that the court will either accept or reject an interpretation by the Department of Veterans Affairs (VA) of a technical regulation dealing with the effective date of a veteran’s benefits claim that the agency determines has been erroneously denied. Petitioner is aiming, however, at a larger target: striking the first blow against doctrines of judicial deference to agency interpretation that are believed to sustain an ever-expanding administrative state.
To appreciate the controversy, think of three different stances or standards of review a court might adopt in dealing with an agency interpretation of its authorizing statute or a regulation. One stance or standard is de novo review: the court decides the matter without according any particular significance or respect for the agency’s view; the agency’s view is given no greater weight than, say, a well-crafted law review article. An intermediate stance or standard is associated with the Court’s decision in Skidmore v. Swift & Co., 323 U.S. 134 (1944): the agency’s view is entitled to respect to the extent it has “power to persuade,” which would be a function of whether the view was consistently held and drew on the agency’s expertise or experience in the field. A third stance or standard at the other end of the deference spectrum is associated with the Court’s decision in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). When a court extends Chevron deference to an agency’s interpretation of its authorizing statute, the court has determined that the statute, properly read, indicates that Congress intended to delegate to the agency authority to make subsidiary policy decisions within statutory limits. In this context, unlike the other two, the agency is the principal decisionmaker within those limits; the court’s job is simply to make sure that the agency’s decision is a reasonable one even if the court, left to its devices, would come out another way.
The mistake the Supreme Court has made in this area, and this is largely due to Justice Scalia’s overeager embrace of the deference doctrine in Auer (which he later came to regret), was to apply Chevron-type deference to an agency’s interpretation of its own regulations. This was a mistake because, unlike Chevron, in the Auer context there is no delegation by Congress of authority in the agency to interpret its own regulations. Those regulations are legal instruments that stand or fall on their text which courts interpret all the time. Courts may accord Skidmore respect to an agency’s views if they reflect technical matters within the agency’s expertise or experience, or if the views are persuasive in their own right and have been consistently and openly held by the agency. Kisor presents an opportunity to make clear that Chevron-type deference is inappropriate and that at most Skidmore respect may be appropriate. The Court should do no more; it certainly should not raise questions generally about Chevron deference that rests on a congressional delegation of authority not present in the Auer context.
The Background of Kisor
Kisor comes to the Supreme Court by way of the US Court of Appeals for the Federal Circuit, which affirmed a decision of the US Court of Appeals for Veterans Claims (Veteran Appeals Court) holding that James L. Kisor was not entitled to an effective date earlier than June 5, 2006, for a grant of service connection for his post-traumatic stress disorder (PTSD) claim. Kisor served on active duty in the Marine Corps in Vietnam from 1962 to 1966. In December 1982, he filed an initial claim for disability compensation for PTSD. In March 1983 the VA regional office obtained a psychiatric examination for Kisor that did not diagnose him as suffering from PTSD although he had been involved in operations in which he came under attack, including an ambush which involved 13 deaths in a large company. Rather, it was the examiner’s view that Kisor suffered from an intermittent personality disorder which lacked a required service connection. Accordingly, in May 1983, the VA regional office rejected his claim. Kisor did not perfect an appeal at the time.
In June 2006, Kisor sought to reopen his denied claim. He presented evidence that included a July 20, 2007, report of a psychiatric evaluation diagnosing PTSD. In September of that year, a VA examiner diagnosed Kisor with PTSD. The VA regional office reopened the previously denied claim, this time granting Kisor a service connection for PTSD and assigning a 50 percent (subsequently raised to 70 percent) disability rating, effective June 5, 2006. Kisor challenged the effective date determination arguing that that it should have been the date his initial claim was denied in May 1980. He based his argument in substantial part on 38 C.F.R. § 3.156(c), which provides:
(c) Service department records. (1) Notwithstanding any other section in this part, at any time after VA issues a decision on a claim, if VA receives or associates with the claims file relevant official service department records that existed and had not been associated with the claims file when VA first decided the claim, VA will reconsider the claim, notwithstanding paragraph (a) of this section [which requires “new and material” evidence]. Such records include, but are not limited to: (i) Service records that are related to a claimed in-service event, injury, or disease, regardless of whether such records mention the veteran by name, as long as the other requirements of paragraph (c) of this section are met; * * * (3) An award made based all or in part on the records identified by paragraph (c)(1) of this section is effective on the date entitlement arose or the date VA received the previously decided claim, whichever is later, or such other date as may be authorized by the provisions of this part applicable to the previously decided claim.
The Board of Veteran Appeals denied Kisor’s entitlement to an earlier effective date because the service department documents received after the May 1983 rating decision were not “relevant” within the meaning of § 3.156(c)(1) because they did not document that he suffered from PTSD. The Veterans Appeals Court agreed. The Federal Circuit affirmed, deferring to the agency’s interpretation of “relevant” official department records under §3.156(c)(1). The court found that the meaning of the term “relevant” in the regulation was ambiguous and that the agency’s interpretation—that relevant records must bear on whether Kisor suffered from PTSD rather than from nonservice-connected stressors—was a reasonable one. “The Board’s ruling was thus based upon the proposition that that, as used in §3.156(c)(1), ‘relevant’ means noncumulative and pertinent to the matter at issue in the case…. Because Mr. Kisor’s 2006 records did not remedy the defects of his 1982 claim and contained facts that were never in question, we see no plain error in the Board’s conclusion that the records were no relevant for purposes of 3.156(c)(1).”
Skidmore Respect, Not Chevron-type Deference
Although the Federal Circuit purported to apply Auer, it is not clear that it was using a Chevron-type standard of review. Since the issue here seems to turn on what definition of “relevant” official records makes sense in setting effective dates for reversal of previously denied claims, this seems an area where courts should accord Skidmore respect to the agency’s view as to practicability and appropriate incentives for claimants. This is not a case involving unfair notice of an agency’s novel interpretation of a regulation.
Some arguments for rejecting Auer-Seminole Rock deference are overstated. Agencies are not incentivized by this doctrine to adopt ambiguous regulations. Agencies have every incentive to craft regulations that comply with legal requirements and make sense if they want to prevail in court—regardless of the deference regime. The case for rejecting Auer-Seminole Rock deference is that there is no analytical basis for Chevron-style deference in this context. All that is required is a sensible application of the Skidmore factors for when courts should pay respect to the agency’s view of the proper reach of its own regulations.