The Supreme Court agreed Monday to revisit the question of when courts should defer to regulators' interpretations of regulations when there is possible ambiguity.
The court accepted the petition for review filed by former Marine James Kisor against the Department of Veterans Affairs. Mr. Kisor's petition argued that the case, which has gone through various court proceedings, "is an attractive vehicle for the court to reconsider a significant and recurring issue at the heart of administrative law: how much deference courts should afford an agency's interpretation of its own ambiguous regulation."
Mr. Kisor is challenging the VA's denial of benefits dating back to when he first filed a claim for post-traumatic stress disorder. The VA based its decision on its interpretation of the term "relevant" in a regulation. An appeals court agreed the regulation was ambiguous but sided with the VA.
Revisiting the ruling has the potential to affect actions by all federal regulatory agencies, including the Securities and Exchange Commission and the Department of Labor.
In its amicus brief supporting review of previous legal precedents set by the Supreme Court in Auer vs. Robbins in 1997 and Bowles vs. Seminole Rock & Sand Co. in 1945, the U.S. Chamber of Commerce said: "The business community has a particular interest in the interpretive principles applied to federal regulations. Given the breadth of government regulations, virtually every Chamber member has at least some portion of its business regulated by federal agencies. These businesses have a strong interest in seeing the court revisit its decisions giving deference to agencies' interpretations of their regulations."
The legal concept of the Auer deference gives agencies the highest level of deference in interpreting their own regulations. The related Chevron deference, which legal experts say has been increasingly questioned in the courts, deals with an agency's interpretation of the statutes it administers.