Regulatory deference, not restrooms, at issue in high-profile petition

By John Grimm

One of the most closely watched cert petitions before the U.S. Supreme Court in its new term is G.G. v. Gloucester County School Board, scheduled for conference on October 14. The Fourth Circuit decision — which gained national attention in April — was a major milestone for transgender rights, but the petition raises only a narrow question unrelated to civil rights: whether the Court should abandon a relatively obscure, but increasingly controversial, doctrine of administrative law. G.G. is a striking example of how seemingly dry concepts of administrative procedure can have unexpected relevance outside of traditional “administrative law” practice areas.

G.G., a transgender student, sued his school district to allow him access to the boys’ restroom at school. Unsuccessful at the district court, he appealed to the Fourth Circuit. That court’s decision has been colloquially understood as holding that, pursuant to Title IX of the Education Amendments of 1972, a school must allow transgender students to use the restroom that corresponds to the gender they identify with, as opposed their biological sex.

Technically, however — and importantly for the petition — what the court actually held was that the district court had failed to properly consider a U.S. Department of Education opinion letter expressing the view that, pursuant to the agency’s Title IX regulations, schools must treat transgender students consistently with their gender identity. The decision had rapid, nationwide consequences, as the U.S. Department of Justice sent letters to schools across the country advising that, consistent with the DOE’s interpretation of Title IX regulations, any schools receiving federal funding must not treat transgender students differently from other students of the same gender identity. A Northern District of Texas judge then issued a nationwide injunction against enforcement of the position espoused in the DOJ’s letter.

Meanwhile, the Fourth Circuit voted against en banc review and denied a petition to stay its decision. The Supreme Court, however, did grant such a stay in August, and the school board sought cert. Its petition does not ask the Court to decide any question about transgender rights. Instead, it asks the Court to revisit an administrative-law principle, known as Auer deference, that is at the heart of the Fourth Circuit’s decision.

Auer deference, articulated in Auer v. Robbins, 519 U.S. 452 (1997), is similar to the better-known doctrine of Chevron deference. While Chevron requires courts to defer to an agency’s reasonable interpretation of its own organic statute in an area where Congress has not clearly spoken, Auer deference provides that courts will defer to an agency’s interpretation of its own regulations as long as it is not clearly erroneous or inconsistent with the regulation or statute. In G.G., the Fourth Circuit held that the district court should have deferred to the DOE’s opinion letter construing its Title IX regulations.

The concept of Auer deference seems logical, but it can be controversial. Critics argue that it is inconsistent with the Administrative Procedure Act’s command that “the reviewing court shall . . . determine the meaning or applicability of the terms of an agency action.” 5 U.S.C. § 706. And just last year, in Perez v. Mortgage Bankers Association, 135 S. Ct. 1199 (2015), Justices Scalia, Thomas, and Alito each separately suggested the Auer doctrine may be incorrect — an indication the school board’s petition relies on heavily. Justice Scalia (who, ironically, authored the opinion in Auer) wrote that “[h]eedless of the original design of the APA, we have developed an elaborate law of deference to agencies’ interpretations of statutes and regulations.”

The petitioners are hoping these justices’ opinions signal that the Court is ready to abolish Auer deference, but they also ask the Court to clarify when Auer applies. Specifically, the petition asks the Court whether an unpublished agency opinion letter, that was not subject to notice-and-comment rule-making, and that was obtained for purposes of the very litigation in which it was relied on, is entitled to deference by courts. On its face, Auer would appear to answer to that question.

In Auer, the Court deferred to an agency’s interpretation of its regulations that was expressed in an amicus brief submitted at the Court’s request, and Justice Scalia, writing for the Court, said that the interpretation was not “unworthy of deference” just because it “comes to us in the form of a legal brief.” But, as the petition points out, the Supreme Court has also noted that “[i]nterpretations contained in policy statements, agency manuals, and enforcement guidelines, all of which lack the force of law — do not warrant Chevron-style deference.” Christensen v. Harris County, 529 U.S. 575 (2000). The school board also points to a circuit split about whether Auer applies to informally produced interpretations, such as those in the DOE’s opinion letter.

The school board’s petition contains elements that are often thought to make a strong cert petition: a non-frivolous legal argument, signals by a third of the Court, and a split among the circuits. But there are also strong arguments against granting it. First, from the petitioner’s perspective, there may be tactical advantages to challenging an obscure administrative-law rule instead of addressing a civil-rights decision head-on, but from the Court’s perspective, a case with major civil-rights implications may be a poor vehicle for modifying a technical doctrine of administrative review.

The justices may also be hesitant to grant cert in a consequential case when there is the risk of a 4-to-4 stalemate instead of a clear pronouncement. Further, even if the Fourth Circuit improperly applied Auer to an unpublished opinion letter, as the petition suggests, that doesn’t mean that Auer itself is defective. The Supreme Court is not a court of error correction, and an erroneous decision by a lower court alone will not necessarily justify granting cert.

Even setting aside the case’s potential political dimensions, reversing it would have major ramifications. Auer deference is a firmly established doctrine that has been relied on extensively by lower courts — including the Court of Special Appeals. What could the consequences be if the Court took granted cert?

At one extreme, if the Court affirmed Auer and explicitly stated that deference applies even to unpublished opinion letters, it could re-enforce agencies’ ability to enact policy outside the notice-and-comment process. In Perez, the Supreme Court held that, pursuant to the APA, agencies can issue interpretive rulings that depart from earlier interpretations without notice and comment, because those interpretations do not have the force of law. However, Justice Scalia’s dissent in Perez argued that the Court’s deference jurisprudence allows agency interpretations to become authoritative anyway. G.G. could provide an opportunity to clarify the extent to which agencies can create policy through informal interpretations of their rules.

At the other extreme, if the Court reversed Auer, it would appear to be a major change in administrative procedure. In reality, however, even if courts were no longer required to defer to agencies’ interpretations of their own rules, it seems likely that they often would do so, because agencies possess unique subject-matter expertise and well-reasoned agency interpretations may be persuasive. As to the merits of G.G.’s case, reversing Auer would not guarantee he loses (although the district court ruled against him before the Fourth Circuit held it must apply Auer). The Fourth Circuit could agree with the Department of Education about what its Title IX regulations mean, and the Department could conduct an APA rule-making procedure and promulgate rules consistent with its opinion letter (which would be a lengthy process).

Finally, the timing of the G.G. petition is noteworthy in one other respect: a new presidential administration will begin in January. One feature of strong deference principles is that they can help agencies change policies from prior administrations. For example, consistent with the Fourth Circuit’s holding, a future Department of Education might be able to moot G.G.’s case simply by issuing a new interpretation of the Agency’s Title IX rules. (The Fourth Circuit did note that Auer might not apply to agency statements that depart from earlier views, that are adopted as a litigation tactic, or that are post hoc rationalization of agency action, but Justice Scalia’s Perez dissent points out that Auer and Perez still leave agencies great discretion to create binding policy informally.) But if courts decide the meaning of agency rules without deferring to the agency, it could make it harder for new administrations to dramatically change agency policy. If the Court did take on Auer this term, it could have a significant effect as the leadership of federal agencies changes hands.