The Nickel Report

In June 2019, the Supreme Court issued its decision in Kisor v. Wilkie, 139 S. Ct. 2400 (2019), which addressed the question of whether the Court should overrule the Auer doctrine, named after the 1997 Supreme Court case Auer v. Robbins. The Auer doctrine rests on the premise that agencies are in a better position than courts to interpret their own regulations. Under the doctrine, courts generally defer to an agency’s reasonable readings of its own “genuinely ambiguous” regulations. In a 5-4 decision, the Court declined to abandon the Auer doctrine on grounds of stare decisis but outlined important restrictions on the scope and applicability of the doctrine. See, e.g., Devon Energy Prod. Co., L.P. v. Gould, No. 16-CV-00161-ABJ, 2019 WL 6257793 (D. Wyo. Sept. 11, 2019) (“The Court [in Kisor] chose to restrict the Auer doctrine rather than abolish it.”); Johnson v. Starbucks Corp., No. 2:18-cv-02956, 2019 U.S. Dist. LEXIS 145900, *8 (E.D. Cal. Aug. 26, 2019) (“Kisor did not overrule Auer,” but “limited the deference afforded to an agency’s interpretation”).

On June 26, 2019, the Supreme Court issued its decision in Kisor v. Wilkie, 139 S. Ct. 2400 (2019), which presented the question of whether the Court should overrule the Auer doctrine, named after the 1997 Supreme Court case Auer v. Robbins. The Auer doctrine rests on the premise that agencies have more expertise on their own regulations and are therefore in a better position than courts to interpret them. Under the doctrine, courts generally defer to an agency’s reasonable readings of its own “genuinely ambiguous” regulations. In a 5-4 decision, the Court declined to abandon the Auer doctrine on grounds of stare decisis but outlined important limitations on the scope and applicability of that doctrine.

Hunton Andrews Kurth’s environmental practice launches its video series, Inside Look, focusing on recent events and trends impacting regulated industries through discussions with our top attorneys and thought leaders.  Our inaugural video focuses on recent changes in the composition of the US Supreme Court and the potential impact on industry.  Partners F. William Brownell and Elbert Lin discuss the effect of the appointments of Justices Neil Gorsuch and Brett Kavanaugh on administrative law, voting patterns at the Court and the importance of originalism-type arguments in constitutional cases.

Watch for more Inside Look videos from the Hunton Andrews Kurth environmental practice by subscribing to the Nickel Report and Hunton Andrews Kurth’s YouTube channel.

In Michigan v. EPA, 135 S. Ct. 2699 (2015), the Supreme Court held that the cost of regulation is an essential factor that EPA must consider when deciding whether to regulate.  Id. at 2707.  According to the Court, “[a]gencies have long treated cost as a centrally relevant factor when deciding whether to regulate.”

In subsequent regulatory proceedings, however, EPA has offered different views as to what Michigan’s cost mandate means.  At the end of the Obama Administration, EPA said Michigan only means that it need determine whether the costs of a regulatory action are “affordable” or can be “absorbed” by the regulated industry.  81 Fed. Reg. 24,421.  More recently, EPA has said that its earlier statement “does not meet the statute’s requirements to fully consider costs,” and that the Supreme Court’s decision in Michigan requires that it “meaningfully consider cost within the context of a regulation’s benefits.”  84 Fed. Reg. at 2675.