Supreme Court Hears Case About Medical Benefits That Could Shake Administrative State

March 27, 2019 Updated: March 27, 2019

WASHINGTON—A lawyer for a Marine Corps veteran said to have been arbitrarily denied medical benefits urged the Supreme Court to overturn a bureaucracy-empowering legal doctrine that allowed the executive agency to refuse those benefits.

If the court agrees with James Kisor, who seeks disability benefits for post-traumatic stress disorder arising out of his participation in Operation Harvest Moon, a bloody combat battle in Vietnam in December 1965, the stage could be set for invalidating the 35-year-old so-called Chevron doctrine, under which courts defer to agency interpretations of the statutes they enforce.

If this happens, it could help work a smaller-government revolution that tears away at the legal underpinnings of the modern administrative state.

Critics call executive agencies the “fourth branch” of the U.S. government. They say officials in this so-called administrative state are unaccountable to voters and allow unelected bureaucrats to usurp the functions of governmental branches. Congress, they say, is supposed to make the laws of the land, but lawmakers have steadily ceded that body’s constitutionally prescribed powers to the administrative state, to the overall detriment of society.

Current case law “allows agencies to regulate ambiguously and then interpret those regulations to taste later, with the expectation of forcing such reinterpretations on the courts,” which, in turn, leads to “the near complete erasure of Congress’ legislative power itself,” and robs the judiciary of its “power to ‘say what the law is,’” transforming “the judiciary from a check and balance on the executive into a rubber stamp,” the Pacific Legal Foundation stated in a friend-of-the-court brief.

In the landmark administrative law ruling in Chevron v. Natural Resources Defense Council, the Supreme Court held while courts “must give effect to the unambiguously expressed intent of Congress,” where courts find “Congress has not directly addressed the precise question at issue” and “the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.”

In other words, under Chevron, an executive agency’s interpretation of a statute it administers is entitled to deference unless Congress has indicated otherwise.

PTSD

The Department of Veterans Affairs (VA) ruled in 1983 Kisor did not suffer from service-related Post-Traumatic Stress Disorder (PTSD). In 2007, the agency reversed that finding but refused to award him retroactive benefits.

He argues official records showing his involvement in Operation Harvest Moon were “relevant” “because they speak to the presence of an in-service stressor, one of the requirements of compensation for an alleged service-connected injury.”

The VA countered, saying the records were not relevant because “they addressed the matter of an in-service stressor, which was not ‘in issue,’ rather than the issue of whether he suffered from PTSD, which was ‘in issue.’”

Even though the Supreme Court has long recognized, as it did in Fishgold v. Sullivan Drydock & Repair Corp. (1946), that “legislation is to be liberally construed for the benefit of those who left private life to serve their country in its hour of great need,” the U.S. Court of Appeals for the Federal Circuit sided with the VA.

Regulations require the VA to reconsider a claim when it “receives or associates with” “relevant” official service department records. The effective date of the benefits is “the date entitlement arose or the date the VA received the previously decided claim, whichever is later,” the appeals court stated Sept. 7, 2017.

According to Kisor’s petition, the government’s “decision turns on the meaning of the term ‘relevant’ as used in” a federal regulation. “On that basis alone, the court held that the regulation is ambiguous, and … deferred to the VA’s interpretation of its own ambiguous regulation.”

Auer Deference

Kisor is asking the Supreme Court to overturn Auer v. Robbins (1997). The so-called Auer deference “instructs courts that an agency’s interpretation of its own regulation is given ‘controlling weight unless it is plainly erroneous or inconsistent with the regulation,’” Christopher J. Walker wrote last year in the Georgetown Journal of Law & Public Policy.

Liberals defend Auer deference but for years, conservatives have wanted to do away with it.

In an article titled “The boring Supreme Court case that could help make America great again,” David French wrote at National Review on Dec. 11, 2018, that the court’s decision to take the case was “a Big Deal in the battle against the metastasizing administrative state.”

Auer is “the Little Satan that works with the Great Satan—Chevron deference—to fuel the explosive growth in the power of executive-branch agencies.”

During oral arguments on March 27, liberal Justice Stephen Breyer mocked the conservative take on Auer.

“This sounds like the greatest judicial power grab since Marbury v. Madison, which I would say was correctly decided,” Breyer said to Kisor’s attorney, Paul W. Hughes. The 1803 Marbury case established the principle of judicial review in the United States.

Breyer told Solicitor General Noel Francisco that agencies may not be “very democratic but there is some responsibility.” Judges are “still less democratic” so “the best solution” may be to trust “the agency” because it is “the institution that’s closer to it.”

Francisco also defended Auer deference, saying it “promotes national uniformity, predictability, and political accountability.”

Frequently Changing Interpretations

To make a point, Justice Samuel Alito asked Hughes if the Federal Communications Commission “knows a lot more about the meaning of the word ‘relevant’ than federal district judges?” Hughes answered in the negative.

Hughes said that frequently changing agency interpretations, which are made without input from the public, violate federal law and are unfair.

The public is unable “to participate in the underlying lawmaking process that leads to the ultimate rules,” the lawyer said. “And that is not just some speed bump along the administrative process. This matters as a practical matter a great degree.”

Liberal Justice Elena Kagan asked Hughes why it was so urgent for the court to overrule “really 10 or 12 or more” decisions “over the past half-century.”

“Congress could have done this at any time,” Kagan said. “Congress knows that this goes on. Congress has repeatedly acted in this sphere and shown no interest whatsoever in reversing the rule that the court has long established.”

RECOMMENDED