Notice & Comment

Ninth Circuit Review-Reviewed: Assessing Five Years of Kisor v. Wilkie at CA9

Welcome back to Ninth Circuit Review-Reviewed, your monthly recap of administrative law before (arguably) the “second most important court in the land.” Let’s get straight to business.

FCIC Reaps Kisor Deference

Congress created the Federal Crop Insurance Corporation “to improv[e] the economic stability of agriculture.” The FCIC carries out this mandate by offering reinsurance to private providers of crop insurance.

Naturally, FCIC assistance comes with strings attached. To qualify for federal reinsurance, private providers must comply with FCIC regulations, which affects the terms and conditions of individual crop insurance policies. When disagreements arise between the insurer and claimants, the parties may seek clarification of legal issues from the FCIC. See 7 U.S.C. § 1506(r).

Thus, in September of 2020, the FCIC resolved a request to interpret the phrase “farming activity” in a regulatory document pertaining to program eligibility. The requester, M&T Farms, advanced an interpretation that “farming activity” is limited to the actual production of agricultural commodities. But the FCIC disagreed. As the agency read it, “farming activity” is broad enough to include the marketing and sale of agricultural commodities, and not just their production.

The practical result of the agency’s interpretation was the denial of M&T Farms’s $2 million claim, despite having paid the premiums.

M&T Farms sought judicial review in federal district court, arguing that the FCIC’s interpretation of “farming activity” is arbitrary and capricious under APA § 706. With the parties’ consent, Magistrate Judge Susan G. Van Keulen presided. In March of 2023, she granted summary judgment to the government.

In sustaining the FCIC’s regulatory interpretation, Judge Van Keulen relied on Auer deference, which she granted to the agency after applying the five-factor Kisor test:

  1. Is the regulation “genuinely ambiguous”?
  2. Is it reasonable?
  3. Is it the agency’s “authoritative” interpretation?
  4. Does the interpretation bear on the agency’s expertise?
  5. Does the interpretation reflect the agency’s “fair and considered judgment”?

M&T Farms appealed. Last month, in a unanimous opinion by Judge Andrew Hurwitz, the Ninth Circuit affirmed. Like the magistrate judge, the CA9 panel determined that all five of the Kisor factors militated in favor of deference.

After Kisor, What Happened to Auer Deference in CA9?

The panel’s 5-factor test in M&T Farms struck me as a straightforward application of Kisor v. Wilkie. But what about other cases? Is M&T Farms representative of post-Kisor deference in CA9?

To find answers, I performed overlapping searches of Ninth Circuit caselaw. After weeding out nongermane controversies and criminal cases, I was left with 13 (published) opinions involving the Auer doctrine since 2019, when Kisor was decided. See Idaho Conservation League v. Poe, 86 F. 4th 1243 (2023); Backcountry Against Dumps v. FAA, 77 F. 4th 1260 (2023); Love v. Marriott Hotel Services, Inc., 40 F. 4th 1043 (2022); Miskey v. Kijakazi, 33 F. 4th 565 (2022)*; Mountain Communities for Fire Safety v. Elliott, 25 F. 4th 667 (2022)*; Etemadi v. Garland, 12 F. 4th 1013 (2021)*; NPCA v. FERC, 6 F. 4th 1044 (2021); Rubalcaba v. Garland, 998 F. 3d 1031 (2021)*; Goffney v. Becerra, 995 F. 3d 737 (2021); Innova Solutions, Inc. v. Baran, 983 F. 3d 428 (2020)*; Attias v. Crandall, 968 F. 3d 931 (2020)*; Secretary of Labor v. Seward Ship’s Drydock, Inc., 937 F. 3d 1301 (2019)*; NRDC v. Perry, 940 F. 3d 1072 (2019)*.

What can we glean from these cases?

The worst of Auer is seemingly over. Prior to Kisor, the leading criticism of the Auer doctrine was that it encouraged courts to skip straight to deference, without first scrutinizing the regulatory text. As I discussed on this blog in 2018, circuit courts failed to perform any sort of “step one” analysis about 35% of the time when applying the Auer framework.

The Kisor Court admonished the federal bench for “wav[ing] the ambiguity flag” on regulatory interpretations. In lieu of “reflexive” deference, the Court instructed judges to dig deeper into the text, as “hard interpretive conundrums, even relating to complex rules, can often be solved.” Only after “exhaust[ing] all the traditional tools of construction,” and concluding that a regulation is “genuinely ambiguous,” could courts even contemplate deference (by proceeding to the remaining four Kisor factors).

Before Kisor, it was not uncommon for Ninth Circuit panels to “wave the ambiguity flag.” See, e.g., California Pacific Bank v. FDIC, 885 F. 3d 560, 574 (CA9 2018); Harkonen v. Dept. of Justice, 800 F. 3d 1143, 1150 (CA9 2015); Home Builders Ass’n of Northern Cal. v. FWS, 616 F. 3d 983, 991 (CA9 2010).

In Kisor’s wake, all 13 of the CA9 opinions cited above performed some sort of step one inquiry. For example, the M&T Farms panel (and the magistrate judge) identified a “genuine ambiguity” only after consulting the disputed text, surrounding text, other regulatory materials, and a dictionary. In 7 of the 13 cases cited above, the Ninth Circuit determined the text to be unambiguous. (These cases are marked by an asterisk).

The upshot is that the Kisor Court seems to have been largely successful in eliminating the worst of Auer from the Federal Reporter.

Still, there are problematic applications of Auer. Not all textual analyses are created equally. In most of the post-Kisor cases, the Ninth Circuit applied a legitimate “step one” methodology.  However, in at least two recent controversies, CA9 panels have performed skimpy “step one” inquiries that arguably fail to meet the level of scrutiny demanded by Kisor v. Wilkie.

For example, in Backcountry Against Dumps v. FAA, Judge Daniel Bress concurred in judgment to fault the majority for their “rather casual” application of Auer. See 77 F. 4th at 1274.

Another example is Idaho Conservation League v. Poe. (Full disclosure: Poe was litigated by PLF, where I work). In Poe, the panel basically incorporated by reference an analysis of a federal regulation performed by the Oregon Supreme Court. See 86 F. 4th at FN1; id. at 1250 (citing Eastern Oregon Mining Ass’n v. Dep’t of Envt’l Quality, 445 P. 3d 251 (2019)). Yet in outsourcing its analysis, the Poe panel ignored a strong dissent by Oregon Justice Tomas Balmer, who argued that the operative rule “is not genuinely ambiguous as to the question at hand, once ordinary interpretive methods have been applied.” The Poe panel, moreover, seemed to conflate “genuine” ambiguity with “sufficient” ambiguity, which appears to merge two standards of unequal rigor. See 86 F. 4th at 1250. And before deferring to the agency’s interpretation, the Poe panel failed to apply the remaining (four) limiting factors from Kisor v. Wilkie.

Troublingly, these two wayward applications of Auer are two of the most recent cases involving the doctrine. Although two data points are insufficient to establish a trend, this blogger will be watching closely to see whether the Ninth Circuit is reverting to pre-Kisor practices.

Ninth Circuit Nuggets

Cascadia Wildlands v. Scott Timber Co. is an important Endangered Species Act case. A unanimous panel held that recent Supreme Court jurisprudence implicitly overruled the Ninth Circuit’s long-held precedent that the ESA’s 60-day notice requirement for citizen enforcement suits is a jurisdictional requirement. The panel further upheld the plaintiff’s use of “anticipatory” notice that was sent two years before the contested project began. The result is to significantly loosen the ESA’s notice requirements in the Ninth Circuit. …

According to David Munkittrick in the National Law Review, “Sidibe v. Sutter Health marks a potential shift in how rule of reason antitrust cases are approached and adjudicated. The opinion underscores the significance of historical evidence in antitrust trials it places considerable emphasis on analyzing the purpose behind challenged conduct.” …

In Calise v. Meta Platforms, the Ninth Circuit “does more damage to Section 230,” writes Eric Goldman of the Technology & Marketing Blog. But Bloomberg Law’s Golriz Chrostowski reports that the court’s decision in Calise “may ultimately be toothless.” …

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