When the Court hears 80 or so cases in a year, not all of them will be interesting. In fact, some of them will be dreadfully boring. Those tend to be known as "telecommunications cases." (The occasional "fleeting expletive" or "wardrobe malfunction" case notwithstanding.)
And so when the Court issued a decision in another telecom case – Talk America v. Michigan Bell Telephone, a unanimous decision affirming the FCC's policy on the rates that one service provider may charge another for use of "entrance facilities" – you'd be forgiven for giving up after a page or two.
But in this case, quitters would miss out on a brief yet portentous concurring opinion attached to the end of the case. Justice Antonin Scalia, writing only for himself, penned a three-page concurrence raising a very important question of administrative law: how much deference should the courts give an agency when reviewing the agency's interpretation of the agency's own regulation?
Traditionally, under the the Auer or Seminole Rock doctrine, an agency gets utmost deference in interpreting its own regulation: the court will adopt the agency's "self-interpretation" unless it is "plainly erroneous or inconsistent with the regulation," or if there is any other "reason to suspect that the interpretation does not reflect the agency's fair and considered judgment." The practical implication of this rule is that the agency's interpretation of its own regulation almost always is affirmed by the courts – over 90 percent of the time in the Supreme Court, and over 75 percent in the lower courts.
The problem with this, of course, is that it creates perverse incentives for the agencies. If an agency knows that it gets virtually unlimited discretion in interpreting its own ambiguous regulations, then it will have all the more reason to write ambiguous rules in the first place. Justice Scalia's concurrence strongly urges that point, invoking Montesquieu’s Spirit of the Laws and one of his own ex-clerks, Harvard Law School professor John Manning, who in 1996 published an excellent, thorough article on the subject. (Which is available online but, unfortunately, not for free.)
And so Scalia opens the door to a future case in which the Court may be asked to reconsider the entire Auer doctrine: "When we are, I will be receptive to doing so." The odds of succeeding in such a challenge are, of course, daunting: after all, none of Scalia's colleagues joined his opinion.
The most likely candidate to join Scalia is Justice Clarence Thomas, who made similar arguments in a 1993 dissent criticizing the Court's deference to an agency's self-interpretation that "merely replaced statutory ambiguity with regulatory ambiguity," which in turn "maximizes agency power and allows the agency greater latitude to make law...." But it takes more than two justices to form a majority.
Then again, perhaps other justices are becoming increasingly sensitive to the amount of discretion traditionally given to agencies. Indeed, Scalia's own embrace of this new criticism is itself a surprising development. He notes in today's concurrence that he previously assumed that Auer was a proper commitment of discretion to the administrative agencies; he could well have further noted that he wrote the Supreme Court's opinion in Auer.
Change may well be afoot, however. The justices, while insulated in part from the political world, are no doubt aware of the immensely greater power that agencies are assuming under complex, expansive new regulatory schemes. The massive Dodd-Frank financial bill has sparked innumerable rulemakings (243, by one count); Obamacare's regulatory implementation will be even more complicated.
One of those regulatory quagmires, or another administrative action, might ultimately stretch Auer's rule of deference to the breaking point. When it does, we can look forward to a Supreme Court decision that will be fascinating – even if it's a telecom case.
Adam J. White is a lawyer in Washington, D.C.