U.S. Solicitor General Noel Francisco. Photo: Diego M. Radzinschi / ALM

U.S. Solicitor General Noel Francisco, choosing a middle path in a major dispute over the power of regulators, told the U.S. Supreme Court on Monday that two precedents directing courts to defer to an agency's interpretation of its own ambiguous regulations should be significantly narrowed but not reversed.

“As appropriately limited,” Francisco wrote in a brief posted Monday night, “stare decisis counsels against overturning Seminole Rock and Auer in their entirety.”

Auer v. Robbins, a 1997 Supreme Court decision, and its 1945 predecessor Bowles v. Seminole Rock & Sand have long been targets of business advocates and conservatives because they are viewed as giving too much power to agencies that may interpret ambiguous regulations too broadly or vaguely.

Francisco's brief was filed in the case of Kisor v. Wilkie, a veterans' benefit dispute that was granted review in December and explicitly asked the court to overrule Auer and Seminole Rock. Marine veteran James Kisor sought disability benefits for his post-traumatic stress disorder, but the Department of Veterans Affairs refused to award him retroactive benefits, based on its interpretation of the pertinent regulation.

Ordinarily, the U.S. solicitor general would defend the federal agency's action before the high court, and Francisco did just that in an earlier stage when he told the court that the VA's interpretation “reflects by far the best understanding of the regulation's plain text and purpose.”

Once the case was granted, some court-watchers speculated that Francisco might reverse course and urge the court to overturn the two precedents to comport with the Trump administration's high-priority campaign to weaken regulatory agency power.

Even though Francisco did not go that far, University of Texas law professor Stephen Vladeck tweeted this morning that Francisco's assertion that Auer and Seminole Rock should be narrowed was “a remarkable moment.”

In Monday's filing, Francisco purports to strike a compromise. He criticized Seminole Rock for raising “significant concerns,” arguing that if a court gives too much weight to an agency's interpretation of a regulation, “it arguably treats the interpretive rule as though it were a legislative rule” and can “cause practical hardship to regulated parties.”

He urged the court to use the Kisor case to “impose and reinforce significant limits on Seminole Rock deference” by, among other things, ensuring that an agency's interpretation is given deference “only if the interpretation was issued with fair notice to regulated parties.”

But Francisco said that the more drastic approach of overturning the precedents altogether would be disruptive.

“Overruling Seminole Rock and Auer could call into question the thousands of precedents that rely on them, including many of this court's decisions,” Francisco wrote. “Private parties may have relied on those decisions to order their affairs.”

Francisco's stance will carry weight with the court, whose conservative justices have voiced varying degrees of dissatisfaction with Auer and the related Chevron deference. Argument is set for March 27.

 

Read the U.S. solicitor's filing in Kisor v. Wilkie:

 

 

Read more:

Supreme Court Tees Up Major Challenge to Power of Federal Regulators

Clarence Thomas Resumes a Quixotic Campaign, and Gets a Gorsuch Nod

Justices Thomas and Gorsuch Call for Curbs on Federal Agency Power

When the Government Fights Itself in Court

Topsy-Turvy at Main Justice