Has Auer Time Passed? (8/20/24)

A question raised by the demise of deference pronounced in Loper Bright Enterprises v. Raimondo, 603 U. S. ____, 144 S. Ct. 2244 (2024) is the continuing viability or application of Auer/Kisor deference. Recall that Auer/Kisor deference applied Chevron-type deference framework to agency subregulatory guidance interpreting ambiguity in agency regulations. Loper Bright did not speak to the continuing viability of Auer/Kisor deference. The Loper Bright opinion of the Court cited Kisor for other propositions, but did not speak to whether Auer/Kisor was viable after Loper Bright.

Although Loper Bright did not speak directly to the continuing viability of Auer/Kisor deference, I think that the inevitable logic of Loper Bright pronounces the demise of Auer/Kisor deference. Of course, because the Supreme Court did not expressly overrule Auer/Kisor deference, some pundits and courts may still pay homage to it until and unless the Supreme Court speaks to its continuing viability. See e.g., Fourth Circuit Applies Auer/Kisor Deference to Include in Guidelines "Loss" the Commentary Inclusion of "Intended Loss" (Federal Tax Procedure Blog 8/24/24), here; and More on United States v. Boler (Federal Tax Procedure Blog 8/25/24), here.

However, a confident lower court reading Loper Bright as I do might be willing to step out on that issue by holding that Loper Bright is inconsistent with Auer/Kisor deference. Or, alternatively, as happened in Coplan, a Court of Appeals might signal in an opinion that there is a major conceptual problem that the Supreme Court should address. See Is It Too Much to Ask that the Defraud Conspiracy Crime Require Fraud? (Federal Tax Crimes Blog 8/3/24; 8/6/24), discussing United States v. Coplan, 703 F.3d 46 (2d Cir. 2012), cert. den. 571 U.S. 819 (2013).

Now, I will state why I think Auer/Kisor deference is not consistent with the demise of Chevron deference pronounced in Loper Bright.

More on United States v. Boler (8/25/24)

Yesterday, I wrote a blog entry on United States v. Boler, 115 F.4th 316 (4th Cir. 2024). Fourth Circuit Applies Auer/Kisor Deference to Include in Guidelines "Loss" the Commentary Inclusion of "Intended Loss" (Federal Tax Procedure Blog 8/24/24), here. (The blog entry was cross-posted on my Federal Tax Crimes Blog, here.) I think there is more that can and should be said about Boler. This post will be more of a “notice” post (like the fabled notice pleading lawyers at least of my generation learned about early in our law school careers).

1. The structure of the Federal Sentencing Guidelines. The 2023 version of the U.S. Sentencing Guidelines is here. The Guidelines (with accompanying Commentary and Policy Statements) are promulgated by the U.S. Sentencing Commission which is “a bipartisan, independent agency located in the judicial branch of government, was created by Congress in 1984 to reduce sentencing disparities and promote transparency and proportionality in sentencing.” See website here. So, we know at the outset that it is a strange creature in our constitutional framework—the only agency located in the judicial branch. 

JAT Side Note: Readers of this blog will surely have some passing acquaintance with the difficulty going back to the 1940s of determining precisely what the Tax Court was, even though the statute said since its earliest days (then the Board of Tax Appeals) that the Tax Court was an independent agency in the Executive Branch. As I have noted, the nature of the Tax Court was an issue was much discussed with more heat than light in the 1940s, including in the consideration of the APA; the Supreme Court in Dobson v. Commissioner, 320 U.S. 489 (1943), reh. den., 321 U.S. 231 (1944), a unanimous opinion authored by Justice Jackson, the most tax procedure savvy Justice ever, held that the Tax Court was an agency rather than a court and applied Chevron-like deference to its statutory interpretations. I cover these issues in John A. Townsend, The Tax Contribution to Deference and APA § 706 (SSRN December 14, 2023), pp. 5-23)   https://ssrn.com/abstract=4665227.

2. Guidelines treated as Legislative Rules; Commentary Treated as Interpretive Rules. As an agency, albeit a Judicial Branch agency, the issue underlying Boler was the authority of the Guidelines and the Policy Statements and Commentary. In Stinson v. United States, 408 U.S., 36 (1993), GS here, the Court treated the Guidelines as analogous to legislative rules which make law pursuant to Congress’ delegation and treated Commentary as an interpretive rule interpreting the law (the law being the Guidelines). The Court said (p. 44-45, cleaned up to omit most case citations):

Although the analogy is not precise because Congress has a role in promulgating the guidelines, we think the Government is correct in suggesting that the commentary be treated as an agency's interpretation of its own legislative rule. The Sentencing Commission promulgates the guidelines by virtue of an express congressional delegation of authority for rulemaking, and through the informal rulemaking procedures in 5 U. S. C. § 553, see 28 U. S. C. § 994(x). Thus, the guidelines are the equivalent of legislative rules adopted by federal agencies. The functional purpose of commentary (of the kind at issue here) is to assist in the interpretation and application of those rules, which are within the Commission's particular area of concern and expertise and which the Commission itself has the first responsibility to formulate and announce. In these respects this type of commentary is akin to an agency's interpretation of its own legislative rules. As we have often stated, provided an agency's interpretation of its own regulations does not violate the Constitution or a federal statute, it must be given "controlling weight unless it is plainly erroneous or inconsistent with the regulation." Bowles v. Seminole Rock & Sand Co., 325 U. S. 410, 414 (1945). 

Bowles v. Seminole Rock is the predicate for Auer deference which I now call Auer/Kisor deference because of the authoritative treatment of Auer deference in Kisor v. Wilkie, 588 U.S. 558 (2019). As I discussed in yesterday’s blog on Boler, the issue was the application of Auer deference to Guidelines’ Commentary (Application Note) defining the Guidelines term “loss” to include “intended loss.”

3. Did Auer/Kisor Deference Survive the Demise of Chevron. One of the issues I presented in yesterday’s blog was whether Auer/Kisor deference survived the demise of Chevron deference. I just want to make a few bullet points about that issue.

Update on Supreme Court Deference Case (with Speculation) and New Supreme Court case on General 6-year Statute for Challenging Regulations Interpretations (Without Speculation) (10/1/23)

 Loper Bright (22-451)

The Supreme Court docket for the October Term includes Loper Bright Enterprises v. Raimondo (SEC) (Sup. Ct. Dkt. 22-451 here.) (“Loper Bright”) where the issue for which certiorari was granted is:

Whether the Court should overrule Chevron or, at least clarify that statutory silence concerning controversial powers expressly but narrowly granted elsewhere in the statute does not constitute an ambiguity requiring deference to the agency.

After being quiet on Chevron for several years (at least in an outcome-determinative sense), the Court appears poised to make some statement about Chevron. As I read the earlier decision in Kisor v. Wilkie, 139 S. Ct. 589 U.S. ___, 2400 (2019) (“Kisor”) (GS, here), where the Court approved so-called Auer deference to reasonable agency subregulatory interpretations of ambiguous regulations text, the Court could not have rendered the decision in Kisor without thinking that Chevron deference was still good law. If that is true, I speculate (correctly or not) the outcome in Loper Bright. (Emphasis on outcome.) I undertook this speculation in preparing a paper where the paper discusses the tax deference opinions before the APA was enacted in 1946 which have been largely ignored in discussing the meaning of APA 5 USC § 706, here [§ 10(e) of the original APA] and how central they were to the shape of the text of §10(e) [§ 706].

I undertook the speculation on the assumption that those voting in the majority to adopt Auer deference as formulated would vote to accept Chevron deference. The Court fine-tuned Auer deference in Kisor and perhaps that may be what happens in Loper Bright. 

Of course, there have been two key changes on the Court since Kisor – Justices Ginsburg and Breyer, both accepting deference in Kisor, are no longer on the Court and have been replaced by Justices Barrett and Jackson. I infer that Justice Barrett will vote to overturn or severely constrict Chevron deference (E.g., E.g., Jeremy W. Peters, Trump’s New Judicial Litmus Test: ‘Shrinking the Administrative State’ (NYT 3/26/18)); I infer that Justice Jackson will vote to approve Chevron deference, perhaps joining a majority will want to constrict somewhat the sweep of Chevron deference as it did for Auer deference in Kisor.

I assume that the Justices still on the Court who voted to accept Auer deference in Kisor will vote for Chevron deference. Those Justices are Kagan and Sotomayor and perhaps Roberts (although not clear to me). The reverse of that is true as to those Justices voting against Auer deference or constricting it to equipoise. Those Justice are Thomas, Alito, and Gorsuch.  I think Justice Roberts as in Kisor might be persuaded by stare decisis, and Justice Kavanaugh may approve Chevron on the basis he approved Kisor (with rigorous Chevron Footnote 9 interpretation, which, as he articulates it in Kisor, comes close to rejecting deference without formally rejection of Chevron deference except in rare interpretive equipoise where the court cannot determine that the agency interpretation is not best). 

So the lineup I see is:

For deference: Kagan, Sotomayor, Jackson

Against deference: Thomas, Aito, Gorsuch, and Barrett

Can't call: Roberts and Kavanaugh.

Corner Post (No. 22-1008)