If you thought Wednesday's U.S. Supreme Court argument in Kisor v. Wilkie would definitely foreshadow the next step in the Trump era dismantling of the administrative state, think again.

Several justices, along with U.S. Solicitor General Noel Francisco, expressed concern about overturning two precedents that direct courts to defer to an agency's interpretation of its own ambiguous regulations. That level of deference, dubbed “Auer deference” after the 1997 Auer v. Robbins decision, has been attacked by conservatives and business organizations for giving too much power to regulatory agencies.

But Francisco said that the other precedent, Bowles v. Seminole Rock & Sand, a 1945 precursor of Auer, carries with it “significant practical benefits,” including national uniformity, maintaining reliance interests and political accountability. Conservative justices, notably Neil Gorsuch and Brett Kavanaugh, pushed back against Francisco. Chief Justice John Roberts Jr., who asked questions that did not tip his hand, may be the swing vote on the issue.

The case came to the high court from Marine veteran James Kisor, who sought disability benefits for his post-traumatic stress disorder. The Department of Veterans Affairs refused to award him retroactive benefits, based on its interpretation of the pertinent regulation, and the U.S. Court of Appeals for the Federal Circuit sided with the government, invoking Auer.

Four takeaways from the hourlong argument:

>> Francisco's middle path: After the court granted review in Kisor in December, it seemed possible that Francisco, who defended Auer and Seminole deference at earlier stages, might switch sides altogether and ask that they be overturned as examples of regulatory overreach. But in his merits brief Wednesday, Francisco led off with a vigorous defense of the Seminole precedent in particular. While acknowledging that the precedent “raises some problems in some applications,” he said it as been “on the books for decades” and should be preserved with “reasonable limitations on the doctrine.” That approach may appeal to a majority of the court.

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

>> Gorsuch leads the attack: Gorsuch dominated the argument, attempting to poke holes in the positions taken by Hughes and Francisco. “You're asking us to keep on going” with the precedent, Gorsuch said to Francisco, but Gorsuch questioned the modifications Francisco suggested. “As I understand it, there are six elements of your test. Is that a recipe for stability and predictability in the law, or is that a recipe for the opposite?” Later, he said, “At what point does this whole edifice just fall upon itself?”

>> Breyer leads the defense: Justice Stephen Breyer was the most upset about abandoning Auer deference, arguing that it would bog down millions of interpretive rules. He told Mayer Brown partner Paul Hughes, who represented Kisor, that overturning Auer and Seminole amounted to taking the stance that “instead of paying attention to people who know about [the regulations] the judges should decide. I mean, this sounds like the greatest judicial power grab since Marbury vs. Madison, which I would say was correctly decided.” Justice Elena Kagan also chimed in in favor of stare decisis: “Congress has repeatedly acted in this sphere and shown no interest whatsoever in reversing the rule that the Court has long established.”

>> Don't Forget Kisor: At one point, when asked about the specific case at issue, Francisco said, “We are much less concerned with the outcome of this particular case than we are with preserving Seminole Rock in its core applications.” When Justice Sonia Sotomayor called him on that statement, Francisco quickly said, “I didn't mean to say that we don't care about the outcome of this case, because we deeply care about the rights of our veterans and we do care about the outcome of all of these types of cases.”