Friday, October 5, 2018

Kavanaugh, Deference, the Administrative State, and Smith v. Berryhill

We start with Garco Construction, Inc. v. Speer.  Justices Thomas and Gorsuch dissenting from the denial of certiorari complained that Garco was the right case to revisit and presumably gut if not kill the Auer deference doctrine.  In Perez v. Mortgage Bankers Ass'n, Justice Alito said that he waited for the right case to explore Seminole Rock, the progenitor of Auer deference.  In Decker v. Northwest Environmental Defense Center, Chief Justice Roberts stated that it may be appropriate to review Seminole Rock, but not in that case.  For those keeping score at home, that is four votes to revisit the Seminole Rock-Auer deference doctrine.  Kavanaugh will make five and that my friends is a majority of a nine-person court.  (I write this on the assumption that Judge Kavanaugh will be Justice Kavanaugh in three days or less). 

As a refresher - an agency promulgates regulations permitted by statute to fill in the gaps in the statute or to even interpret the statute.  As long as the interpretation is not inconsistent with the statute or plainly erroneous, the understanding of the statute in the regulations gets deference.  The understanding of the statute may not be the best interpretation, just not inconsistent or plainly erroneous.  That is the Chevron deference doctrine off the back of my hand.  Regulations go through notice and comment requiring the agency to respond.  That regulatory rule making process has a safeguard in the notice and comment process. 

But regulations are written by people and sometimes those regulations are ambiguous.  Enter the Seminole Rock-Auer deference doctrine.  The agency can tell us what the regulation means by stroke of the pen.  That interpretation does not need notice or comment.  No procedural safeguards exist.  The agency just changes its mind. 

Acquiescence Ruling 99-4(11) informed the Social Security world that the Eleventh Circuit decision in Bloodsworth v. Heckler was wrong.  Here is what the agency said in restricting Bloodsworth to the boundaries of the Eleventh Circuit:
The Eleventh Circuit held that an Appeals Council dismissal of a request for review of an ALJ decision is a "final decision of the Secretary made after a hearing" (now a "final decision of the Commissioner of Social Security") within the meaning of section 205(g) of the Social Security Act and, therefore, subject to judicial review.
Contrary to the holding of the court in Bloodsworth, SSA policy is that the regulations make a clear distinction in regard to rights of judicial review between dismissals and determinations on the merits by the Appeals Council. The Appeals Council may take three types of action following an ALJ decision: (1) it may grant a request for review; (2) it may deny a request for review; or (3) it may dismiss a request for review. The dismissal of a request for review of an ALJ decision is binding and not subject to further review. 20 CFR 404.972, 416.1472. See also 20 CFR 404.955, 416.1455, 422.210. The Appeals Council will dismiss a request for review if it is untimely filed and the time for filing has not been extended.[6]The Appeals Council may also dismiss a request for review for other prescribed reasons. 20 CFR 404.971, 416.1471.
SSA's position, based on the above-cited regulations, is that an Appeals Council dismissal is not a "final decision of the Commissioner of Social Security made after a hearing." Therefore, such a dismissal is not judicially reviewable under section 205(g) of the Social Security Act (42 U.S.C. 405(g)).
That issue is now before the Supreme Court in Smith v. Berryhill on a petition for certiorari.  The Solicitor General agrees with Smith that the AR followed by the Sixth Circuit is wrong and that the Supreme Court needs to resolve the issue to fix the split in the circuits. 

In the administrative state, the courts permit the agency to interpret the statute.  In the administrative state, the courts permit the agency to change the rules by interpreting the regulations.  When the agency takes these acts through the subregulatory process, the agency does so without notice and comment.  Our liberal colleagues may not like the conservatives on the Supreme Court but on this issue and in reigning in the agency's reinterpretations in flux, those justices hostile to the blowing winds of discretion are our friends. 


  1. Thanks for putting a possible silver lining on a big dark cloud.

  2. If it were not for Thomas, Sims would have imposed issue preclusion at the AC.

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