Recently, the Supreme Court of the United States addressed the deference due to an agency when it is interpreting its own regulations. In Chase Bank USA, N.A. v. McCoy, the unanimous Court concluded inter alia that the Federal Reserve Board’s interpretation of a regulation dealing with the increase of interest rates for a delinquent or defaulting cardholder was reasonable. This decision could be cited for purposes of the Longshore and Harbor Workers’ Compensation Act because it addresses the deference owed to agencies like the Department of Labor.
The Court based its holding on Auer v. Robbins, 519 U.S. 452 (1997) (involving the Secretary of Labor). The Court will defer to an agency’s interpretation of its own regulation, even when that interpretation is advanced in a legal brief. In Chase Bank, the Federal Reserve Board’s interpretation was contained in an amicus brief, but that was of no import because the interpretation was consistent with the regulatory text.
Of course, an agency is not always entitled to deference. If the interpretation is a post hoc rationalization advanced to defend an agency action, then deference is not owed. Further, no deference is owed when the interpretation is “plainly erroneous” or “inconsistent with” the text of the regulation. Finally, deference is not owed when the regulation at question merely parrots the statute created by Congress because allowing deference would allow an executive agency to interpret Congress’ words. Here, that was not the case, and the Federal Reserve Board’s position was a “fair and considered judgment…”