Symposium: The Supreme Court and the forgotten “Three Ring Government”

Kimberly Hermann is General Counsel at Southeastern Legal Foundation.

As James Madison captured in Federalist 51, our federal structure is designed to give unique powers to each branch of government for “keeping each other in their proper places” – the critical separation of powers principles. The Constitution contemplates that each branch of government will jealously guard its role, thus protecting individual liberty. Although we learn this in middle-school civics class, too many people quickly forget the critical role our government structure plays in guaranteeing our substantive freedoms. If you fall into the camp that can remember Schoolhouse Rock’s “I’m Just a Bill” but can’t quite remember the words to “Three Ring Government,” you are not alone. Members in all three branches of our federal government frequently “forget” them too.

Rather than guard their constitutional duties and powers, our nation’s legislators and judges frequently abrogate them, delegating and deferring to the 430 federal departments, agencies and sub-agencies that make up the administrative state. As a practical matter, this vests federal agencies with executive, legislative and judicial powers. Although this abandonment of duty may not always be intentional, it is enough to leave middle-school civics teachers shaking their heads and, more seriously, has led for calls from every corner to return to the lawful constitutional order.

Hearing those calls, and at times making them, the Supreme Court recently agreed to hear Kisor v. Wilkie and re-examine the most constitutionally suspect of all the deference doctrines. Under Auer v. Robbins and Bowles v. Seminole Rock, courts give “controlling weight” to a federal agency’s interpretation of its own regulations rather than applying the court’s independent judgment to interpret the regulations. The courts initially only abrogated their judicial power in challenges to price controls, but Seminole Rock/Auer deference quickly reached official agency interpretations and informal interpretations, including internal memorandums and “dear colleague” letters. With the administrative state touching almost every aspect of life, the time has come to revisit Auer and Seminole Rock.

The present conflict arises out of the Department of Veterans Affairs’ interpretation of its own regulation regarding disability benefits and what qualifies as a “relevant” document for purposes of reconsidering a previously denied claim. In 1982, the petitioner, James Kisor, a former Marine who served in the Vietnam War, sought service-connected disability benefits. In 1983, the VA denied those benefits for lack of sufficient proof that Kisor suffered from post-traumatic stress disorder. Still suffering 24 years later, Kisor sought review of the denied claim and asked for relief as of 1983 because the VA had failed to consider documents relevant to his original claim. The VA granted relief, but only as of 2006. It argued that based on its interpretation of its own regulation, the documents at issue were not “relevant.” The U.S. Court of Appeals for Veterans Claims affirmed, and Kisor appealed to the U.S. Court of Appeals for the Federal Circuit. The Federal Circuit found the VA’s regulation “ambiguous” and applied Seminole Rock/Auer deference to accept the VA’s interpretation of what constitutes a “relevant” document instead of independently reviewing and interpreting the regulation. Over a three-judge dissent that called for abandoning Auer, the court of appeals denied rehearing en banc and Kisor brought his case to the Supreme Court.

The Supreme Court granted certiorari to decide whether it should overrule Auer and Seminole Rock. A number of Supreme Court opinions – concurring and dissenting – suggest that the court will answer that question with a “yes” for two key reasons: (1) Seminole Rock/Auer deference violates separation of powers principles, and (2) Seminole Rock/Auer deference allows federal agencies to bind the public without following the Administrative Procedure Act.

At its core, Seminole Rock/Auer deference is unlawful because it violates separation of powers principles by vesting executive, legislative and judicial powers in a single entity. It allows agencies to interpret the very rules (formal and informal) that they write and enforce. This usurps the courts’ power and duty to “say what the law is” and undermines the central guarantees of our government.

It’s easy to argue that an agency itself is in a better position to interpret its own formal and informal rules. Based on that reasoning, however, we should let Congress interpret federal statutes, let the president interpret executive orders, let police departments interpret their policies, and let contracting parties interpret their own contracts. But this and other recent cases illustrate why concentrating the three powers together is “the very definition of tyranny.” This promotion of arbitrary government was front and center in Garco Construction v. Secretary of the Army, which came before the Supreme Court just last term. While Garco Construction was performing its contractual obligations on an Army base, the Army issued a new interpretation of its policy detailing who could access the base. The interpretive change resulted in unilateral retroactive modifications to the government contract. The courts below declined to independently interpret the policy, instead deferring to the Army. Over a dissent, the then-eight-member Supreme Court denied certiorari, leaving federal agencies with a roadmap to unilaterally alter government contracts by reinterpreting internal policies.

Seminole Rock/Auer deference is also suspect because this resulting unilateral and expansive power effectively exempts federal agencies from the APA’s notice-and-comment procedures. To protect the democratic process, Congress through the APA requires administrative agencies to provide notice of proposed rulemaking and to give the public an opportunity to comment. Seminole Rock/Auer deference allows an agency to write its substantive rules broadly, vaguely and ambiguously, knowing that it has carte blanche authority to later interpret (and reinterpret) them however it wants. This reduces transparency and predictability, putting the regulated community at great legal and financial risk.

The Supreme Court’s decision to finally revisit Auer and Seminole Rock, especially after the federal government had argued that the deference doctrine did not warrant review at this time, confirms what several justices have already told us – Seminole Rock/Auer deference is “on its last gasp.” The time has come for all three “rings” of our government to remember what Justice Antonin Scalia once so prophetically stated: “Without a secure structure of separated powers, our Bill of Rights would be worthless.”

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Past cases linked to in this post:

Auer v. Robbins, 519 U.S. 452 (1997)
Bowles v. Seminole Rock Co., 325 U.S. 410 (1945)