And the Most Important Supreme Court Decision This Term is….

July 2, 2019 at 10:16 am Leave a comment

For credit unions the most important decision of the S.C. this term may well be one deciding if the Veterans Administration correctly interpreted its own regulations. It could indirectly impact every credit union regulation, and for that matter, every business subject to federal regulations. 

First, as my hardcore readers know, your faithful blogger believes that one of the key issues that courts and Congress must come to grips with is how much deference to give to agency rules and interpretations. Why is this important? Well, for those of you rooting for the appellate court to green-light NCUA’s expansive definition of what constitutes a “local community” for field of membership purposes, the answer to this question may very well determine how quickly you can grow (just to give one example). It is a question that hangs over every regulation promulgated by the federal government.

In KISOR v. ROBERT WILKIE the court heard an appeal from a veteran suffering from Post-Traumatic Stress Disorder who was originally denied benefits in 1982 only to have his case successfully reopened by the VA in 2006. The case was ostensibly about whether he was entitled to benefits from the date of his initial unsuccessful application or from the date that benefits were granted in 2006. The court of appeals ruled in favor of the VA’s less generous interpretation in part because it felt obligated to defer to the agency’s interpretation of its own regulation based on a case called Auer v. Robbins, 519 U. S. 452 (1997).

Under the majority decision, courts should only show deference to an agencies’ interpretation of its regulations only when a regulation is “genuinely ambiguous;” the agency has taken an authoritative or official position; the interpretation involves an issue within the agency’s area of expertise; and the agency’s reading of the rule reflects “fair and considered judgment.” That means, that a court should decline to defer to a merely “convenient litigating position” or “post hoc rationalization[n] advanced” to “defend past agency action against attack.”

Given these new constraints on judicial deference and practical difficulties of giving meaning to these nuanced requirements, I think Justice Gorsuch is right when he argues that the court merely gave “Auer deference” a stay of execution. For my money, this is a good thing. The regulatory state has grown too large with too little accountability. In a best case scenario, this case is a sign that the end is near for de facto laws being promulgated by unelected bureaucrats unrestrained by independent judicial oversight.

I’ll be back Monday. Enjoy your holiday.


Entry filed under: Legal Watch. Tags: , .

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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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