WEBVTT - Justices Appear Split in Regulatory Fight

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<v Speaker 1>Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every

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<v Speaker 1>day we bring you insight and analysis into the most

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<v Speaker 1>important legal news of the day. You can find more

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<v Speaker 1>episodes of the Bloomberg Law Podcast on Apple podcast, SoundCloud

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<v Speaker 1>and on Bloomberg dot com slash podcasts. The case before

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<v Speaker 1>the Supreme Court involved a Vietnam War veteran who says

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<v Speaker 1>he suffers from post traumatic stress syndrome and wants the

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<v Speaker 1>Department of Veterans Affairs to reconsider its denial of his

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<v Speaker 1>claim for benefits. But it's really about a broad issue

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<v Speaker 1>whether courts should defer to federal agency's interpretations of their

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<v Speaker 1>own regulations, making it one of the top business cases

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<v Speaker 1>of the term. Joining me is Stephen Vladdock, professor at

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<v Speaker 1>the University of Texas School of Law. Steve explained the

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<v Speaker 1>precedent and ruling that's in question here Hidgens. So the

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<v Speaker 1>short version is this kissing about an older Supreme courtsition

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<v Speaker 1>called our au e er an Hour is a lesser

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<v Speaker 1>known cousin of perhaps better known Chevron case, both of

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<v Speaker 1>which are about when federal courts will defer to reasonable

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<v Speaker 1>interpretations of ambiguous language by the government. So Chevron, the

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<v Speaker 1>sort of better known cases about when a statute is

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<v Speaker 1>ambiguous and the agency tasked with enforcing the statute says,

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<v Speaker 1>we think the ambiguity should be resolved this way. Hour

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<v Speaker 1>is about regulations. Hour is a step past Chevron, where

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<v Speaker 1>if there's a dispute over the meaning of an ambiguous

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<v Speaker 1>term in a government regulation, courts will generally side with

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<v Speaker 1>reasonable interpretations of that ambiguity by the agency. That's what

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<v Speaker 1>happens here. The Veterans Affairs Department had interpreted its own

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<v Speaker 1>regulations in a way that precluded the benefits that Mr

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<v Speaker 1>Kaiswar was seeking, and he's challenging it not on the

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<v Speaker 1>ground that they acted incorrectly, but that that interpretation was

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<v Speaker 1>not entitled to deference. Now, the our case was written

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<v Speaker 1>by a conservative icon, the late Justice antonin Scalia, and

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<v Speaker 1>yet it's under attacked by conservatives, and all five of

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<v Speaker 1>the conservative justices have question the our ruling in the past.

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<v Speaker 1>Why so, Yeah, I mean, we've seen a real shift

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<v Speaker 1>June in the last five ten years where what really

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<v Speaker 1>used to not necessarily be an ideological divide over these

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<v Speaker 1>difference doctrines has turned into one and where the conservative

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<v Speaker 1>justices we heard this from you know, then Judge Canalla's

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<v Speaker 1>confirmation here I am have talked about what they view

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<v Speaker 1>as a democratic accountability gap, that it's given far too

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<v Speaker 1>much power to unelected, unrepresentative bureaucrats and government agencies to

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<v Speaker 1>defer to these kinds of interpretations. I think the tricky part, June,

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<v Speaker 1>is the alternative isn't any more democratic. I mean, if

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<v Speaker 1>you get rid of these difference doctrines, that's not creating

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<v Speaker 1>a more room for Congress or for the president to

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<v Speaker 1>actually created more for courts, and so I think the

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<v Speaker 1>question is, you know, who do we better want resolving

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<v Speaker 1>these ambiguities, agencies that are taffed with enforcing of these

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<v Speaker 1>statutes and rules on a daily basis, or federal judges

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<v Speaker 1>who may have their own reasons for wanting to resolve

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<v Speaker 1>the ambiguities one way or the other. Liberal Justice Steven

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<v Speaker 1>Bryer said that overturning Hour would amount to the greatest

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<v Speaker 1>judicial power grabs since Marbury versus Madison? Is he going

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<v Speaker 1>a little far in that that may be a little

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<v Speaker 1>colorful on Justice Briar's part. I do think though, that

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<v Speaker 1>it's an important point that gets lost. You know, there's

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<v Speaker 1>there's so much discussion, there's so many sound bites about

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<v Speaker 1>how difference doctrines are bad for democracy. You know, Briar's

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<v Speaker 1>point is that the alternative is not any more democratic, right,

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<v Speaker 1>It's just about which unelected, unaccountable decision maker, you know,

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<v Speaker 1>we trust to get it right. Do we trust the

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<v Speaker 1>agency which is dealing with these often june very complicated,

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<v Speaker 1>intricate regulations and statutes, or would we prefer you know,

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<v Speaker 1>federal judges who, for better or for worse, aren't experts

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<v Speaker 1>in the field. I think reasonable folks can disagree. I

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<v Speaker 1>think part of the problem with the conversation that's been

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<v Speaker 1>happening in public about this doctrine is the assumption that

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<v Speaker 1>the alternative to these difference doctrines is greater accountability. I

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<v Speaker 1>think justus is Briar's right. The alternatives greater judicial power.

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<v Speaker 1>And you know, some folks will see as a future,

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<v Speaker 1>but others will as a bug. Greg's Store was at

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<v Speaker 1>the arguments and he said that it appears the court

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<v Speaker 1>will divide along ideological lines in the case. Is it

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<v Speaker 1>more likely that they'll completely overturn the precedent or scale

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<v Speaker 1>it back? So you know, it's interesting. I was a

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<v Speaker 1>little surprised by the position that the Trump administration took.

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<v Speaker 1>The Solicitor General, you know, who's the putitive defendant in

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<v Speaker 1>this case, took the position the court actually shouldn't overrule Hour,

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<v Speaker 1>that it should just be a little bit tighter and

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<v Speaker 1>when Hour is appropriate, that is to say, narrow the

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<v Speaker 1>circumstances in which courts will defer to reasonable interpretations of

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<v Speaker 1>regulations by the agency that promulgated them. I think that's

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<v Speaker 1>probably the position that's most likely to carry the day.

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<v Speaker 1>But we've been seeing, especially from the conservative justices Hins

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<v Speaker 1>dropping left and right in opinion after opinion, that this

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<v Speaker 1>is not just about the our doctrine um. This is

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<v Speaker 1>actually also about the Chevron doctrin, which June is a

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<v Speaker 1>much bigger deal and ultimately, I think a much more

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<v Speaker 1>important referendum on the role of courts versus agencies when

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<v Speaker 1>it comes to these highly technical, highly complex federal statutes

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<v Speaker 1>and rules. Business groups have been urging that our be overturned,

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<v Speaker 1>especially in this case. Explain why, well, I mean, I

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<v Speaker 1>think it's a bit of a simplification, but you know,

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<v Speaker 1>for the most part, the power that agencies have in

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<v Speaker 1>a world in which there's our deference is a power

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<v Speaker 1>that is often used to regulate private entities, to regulate banks,

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<v Speaker 1>if you are you know, the financial regulation agencies, to

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<v Speaker 1>regulate you know, industrial concerns, if you are like the

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<v Speaker 1>Environmental Protection Agency. And so I think the big corporations

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<v Speaker 1>worry that the sort of the regulatory powers of agencies

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<v Speaker 1>are most often directed at them. They won't necessarily win

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<v Speaker 1>all of these cases if instead these decisions are being

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<v Speaker 1>made by judges. But I think, you know, especially looking

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<v Speaker 1>at who's been appointing judges over the last two years,

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<v Speaker 1>you know, these kinds of corporations are making a strategic

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<v Speaker 1>decision that they'd rather take their chance is with these

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<v Speaker 1>judges than with these agencies. But Steve might have hurt

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<v Speaker 1>the Trump administration's attempt to roll back Obama era rules,

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<v Speaker 1>for example, like those protecting the environment, if it's up

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<v Speaker 1>to judges instead of the agency. So I mean, in

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<v Speaker 1>one sense, June, I think it will it will make

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<v Speaker 1>it harder. Anything that gives agencies less power is obviously

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<v Speaker 1>bad for the current president because it gives the current

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<v Speaker 1>president less flexibility. On the other hand, I mean, I

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<v Speaker 1>think if you are the Trump administration and you know,

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<v Speaker 1>one of your big pushes in judicial confirmations has been

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<v Speaker 1>judges who share your concerns about overregulation or about deregulation.

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<v Speaker 1>Maybe you're actually not that worried about the judges making

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<v Speaker 1>those moves now, and you're more worried about the next

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<v Speaker 1>president who may not share your views about deregulation, and

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<v Speaker 1>that this is a sort of long term game or

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<v Speaker 1>a long term strategy to generally weaken the authority of agencies,

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<v Speaker 1>even if the cost is short term weakening of this administration.

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<v Speaker 1>We have to leave it there, Steve, this is a

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<v Speaker 1>fascinating topic, though. We'll have you back what the decision

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<v Speaker 1>is made. That's Stephen Vladdock. He's a professor at the

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<v Speaker 1>University of Texas School of Law. Thanks for listening to

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<v Speaker 1>the Bloomberg Law Podcast. You can subscribe and listen to

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<v Speaker 1>the show on Apple Podcasts, SoundCloud, and on Bloomberg dot

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<v Speaker 1>com slash podcast. I'm June Grosso. This is Bloomberg