On June 26, the U.S. Supreme Court issued a ruling which limits the power government agencies have to interpret their own ambiguous regulations. The decision will impact the courts’ review of some EPA, Army Corp of Engineers, and USDA decisions which are based on interpretations of their own regulations.

Auer deference, a legal doctrine established in the Supreme Court case Auer v. Robbins, directs courts to defer to the agency’s reading of its own regulations when there is ambiguity in the law. This gives agencies substantial flexibility to interpret regulations how they see fit.

The recent Supreme Court case Kisor v. Wilkie sought to overturn Auer deference. The case involved a Vietnam War veteran who was denied disability benefits from the Department of Veterans Affairs due to the VA’s interpretation of its own regulation.

The U.S. Supreme Court held that Auer deference will not be overturned. However, it clarified and reinforced limits on appropriate application of the doctrine. Courts cannot automatically defer to the agency’s interpretation of a regulation. Rather, a court must treat Auer deference as a last resort after determining that a regulation is genuinely ambiguous.

If – after considering a regulation’s text, structure, history and purpose – a court decides the regulation is genuinely ambiguous, deference can only be given to an agency’s reasonable interpretation of the rule. Even then, an agency’s interpretation of a regulation should not be deferred to unless a court determines it is entitled to controlling authority. Agency interpretations entitled to Auer deference have implicated the agency’s expertise and represent a fair ruling.

The Supreme Court held that the lower court improperly deferred to the VA’s interpretation of its regulation in Kisor v. Wilkie. Thus, the case was remanded to be reviewed with the established limitations on Auer deference in mind.

Justices Gorsuch, Thomas, Kavanaugh, and Alito disagreed with the majority – writing that Auer deference should have been overturned altogether.

The American Farm Bureau Federation submitted a “friend of the court” legal brief to the court regarding this case’s potential impact on farmers.

While the ruling may not have gone as far to restrict agency power as had been hoped for, this is a positive decision for landowners and others subject to federal agency regulation, as it limits the power government agencies have over regulated parties.