SCOTUS to Rule on Agency Deference––Ruling May Impact Contractors
On March 27, 2019, the Supreme Court of the United States heard oral argument in a veteran's disability benefits case, the outcome of which will likely impact the government contracting community (agency deference). Kisor v. Wilkie (No. 18-15).
Specifically, the question in Kisor is whether the Court should overrule Auer and Seminole Rock. See Auer v. Robbins, 519 U.S. 452 (1997), and Bowles v. Seminole Rock & Sand Co., 325 U.S. 410 (1945).
In Seminole Rock, the Supreme Court concluded that an agency's interpretation of its own regulation is afforded "controlling weight unless it is plainly erroneous or inconsistent with the regulation." Subsequently, in Auer, the Supreme Court confirmed that agencies are afforded broad deference when interpreting their own ambiguous regulation.
Auer and Seminole Rock are twin cases that have been the subject of much debate in administrative law circles. Some critics argue that Auer deference invites purposefully ambiguous regulations. That is, drafters can take advantage of imprecise language because Auer deference allows the agency to rely on its own interpretation of the ambiguous regulation. In addition, critics also argue that Auer deference conflicts with the separation of powers doctrine (i.e., agencies should not be tasked with interpreting their own regulations, which is the role of the judiciary).
Given that agency discretion in government contracts litigation is sometimes at play––bid protest and claims––the outcome in Kisor could be welcome news for government contractors.
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