We live in a system where administrative agencies exercise extraordinary power. Under existing law, administrative agencies are free to fine people, deny them licenses, and even recommend criminal penalties for alleged violations of agency rules and regulations. These rules and regulations are not made by elected lawmakers, but by the agency itself.
Last week, the U.S. Supreme Court heard arguments in Kisor v. Wilkie, a case that may fundamentally alter administrative law at the federal level. But states don’t need to wait — and shouldn’t wait — for the Supreme Court’s decision to address the same issues in their own backyards.
Administrative agencies are empowered to make rules through the rulemaking process (and often through less formal processes that have the force of law), investigate alleged violations of those rules, and adjudicate those alleged violations with an administrative-law judge hired and employed by the agency. In other words, this system allows unelected bureaucrats at administrative agencies to be lawmaker, sheriff, judge, and jury.
And then, if and only if the case finds its way to an actual, supposedly impartial court, the court is required to defer to the agency’s interpretation of disputed questions of law, meaning courts are required to put a thumb on the scale for the agency. This is the result of a series of deference doctrines the Supreme Court and lower courts have put in place over several decades.
One of the most offensive of these doctrines is known as Seminole Rock or Auer deference, after the U.S. Supreme Court decisions that memorialized them. These cases stand for the proposition that when an administrative agency interprets its own regulation, reviewing courts must give “controlling weight” to the agency’s interpretation, unless it is plainly erroneous.
The issue before the Court in the Kisor case is whether courts should dispense with these doctrines at the federal level — and with the addition of Justice Neil Gorsuch, there is a strong likelihood the Court will do precisely that. This is wonderful news for those who believe in the rule of law and due process, as well as for those who have fallen under the extraordinary power of regulatory enforcement action.
Not so encouraging, however, is that 36 states have adopted some form of deference doctrine when interpreting legal questions involving state administrative agencies. So even if the Supreme Court gets it right in Kisor, state courts may still defer to regulators. Some state supreme courts, including Wisconsin’s and Mississippi’s, have reversed these doctrines in recent years. But state legislatures can also work to restore due process. Because most states model their administrative procedures acts on the federal version, a simple amendment to these laws can eliminate deference in the states.
Last year, Arizona was the first state in the country to do this. Arizona’s change inserted a simple sentence in the state Administrative Procedures Act that allows a regulated party to appeal adverse agency actions and to have its case reviewed fairly and impartially by a trial-court judge, without deference to an agency’s own interpretation of the law. In other words, it directs courts to treat cases from administrative agencies the same as they would any other case, without favoring the government party over the private party.
Administrative deference is offensive to both due process and republican government. The Supreme Court has a real opportunity in Kisor to end this charade at the federal level. And state legislatures do, too. Other states should follow Arizona’s lead by statutorily eliminating deference doctrines. When the regulatory state comes after its citizens, they should have a right — at all levels of government — to an equal and fair hearing in court without having to contend with a deck that is stacked against them.