Why a Veterans Affairs Case Promises to be the Biggest Small Business Case of 2019
The NFIB Small Business Legal Center recently filed an amicus brief in Kisor v. Wilkie, a case about a regulation from the Department of Veterans Affairs. The underlying facts involve a Vietnam veteran who contested the VA’s decision denying him disability benefits. While small business veterans may take a personal interest in Mr. Kisor’s case, the NFIB Legal Center filed because there is a larger issue at stake—one that calls into question the power of federal regulatory agencies.
The U.S. Supreme Court granted certiorari in Kisor to reconsider—and potentially overturn—a case that has contributed greatly to the rise and growth of the administrative state. As we’ve stressed in the past, federal agencies wield inordinate power over businesses because of the deference federal courts give to the regulators. This deference has contributed to the rising tide of regulation that has made life exponentially more difficult for small business owners who struggle to ensure compliance without the benefit of in-house counsel or other compliance officers.
In Kisor the Supreme Court is set to decide whether to overturn Auer v. Robbins, which directs courts to defer to an agency’s reasonable interpretation of its own regulation where that regulation is said to be “ambiguous.” As you can imagine government lawyers have a way of seeing ambiguity in everything, which means that they are almost always calling upon the courts to simply rubber-stamp the agency’s interpretation of the law. But, as several Supreme Court Justices have already observed, this sort of deference conflicts the separation of powers doctrine, which is the foundation for our constitutional system. Indeed, it is not the role of the executive branch to write law or to have the final say in interpreting the law.
Auer creates a perverse incentive for federal agencies to use ambiguous language when promulgating regulations. Indeed, an agency may stretch its statutory powers by writing intentionally vague standards that provide little guidance to anyone, while preserving the prerogative to take whatever position the agency may find expedient later. This approach undermines the liberal democratic values underpinning the notice-and-comment process wherein we expect federal agencies to make their interpretation of statutory text known so that the regulated community may have an opportunity to voice concern.
Indeed Kisor is the most important case that Supreme Court will decide in 2019 and much has been written about this case already. For those who would like to take a deeper dive, check-out these posts from Professor Jonathan Adler of Case Western Reserve School of Law, and Kim Hermann of the Southeastern Legal Foundation, both of whom participated in a recent SCOTUS Blog symposium on Kisor. And meanwhile our friends at Cato Liberty Blog provide further perspective here.