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Saturday, December 30, 2017

Can Trump use Auer deference to undo Obama’s rules?

Last week, Judge Beryl Howell held that HUD could not refuse to implement an Obama Administration rule promoting income integration through the section 8 housing voucher program. The ruling is one of a string of defeats suffered by the Trump Administration in its various efforts to repeal the Obama Administration’s policies, ranging from immigration to clean water. This particular defeat, however, holds special interest for me, because it illustrates a relatively novel approach to overruling an earlier administration’s policies: Rather than launch a frontal assault through a notice-and-comment repeal, HUD attempted to “re-interpret” the Obama Administration’s Rule to permit the Rule‘s suspension for two years. For this “re-interpretation” to work, Secretary Carson needed a lot of Auer deference for his interpretation of his Department’s own rule. He did not get it from Judge Howell.

After the jump, some thoughts on Open Communities Alliance v. Carson‘s illustration of (1) how Auer deference theoretically empowers agencies to override the policies of earlier administrations that have been entrenched through notice-and-comment rule-making but (2) how easily courts can side-step Auer deference if they have a mind to do so, and (3) whether simple agency inaction — just sitting on their collective hands and not enforcing the prior administration‘s rule — is a more effective way to unravel its predecessor’s policies.

1. The issue settled by the Obama Administration’s “small area” rule: Should HUD require housing authorities to use zip codes or metro area rents for Section 8 vouchers?

After several years of pilot programs, data collection, data analysis, and N&C disputes over what the data suggest, the Obama Administration issued a final rule requiring the use of zip codes rather than metro areas to define the “fair market rent” covered by Section 8 vouchers. (This rule is known as the “small area fair market rent” rule). So stated, the policy seems mind-numbingly technical, but, as the Atlantic Monthly notes, the rule is a major desegregation effort, because the rule significantly protects the ability of poor families to escape impoverished neighborhoods by paying higher rents for richer neighborhoods. The “metro area method” of calculating “fair market rents” averages out the rents in the poorest and richest areas of a city, insuring that the rent covered by a section 8 voucher will be too low to cover the cost of housing in middle-class neighborhoods. Zip codes provide lower payments for housing in very poor neighborhoods where market-rate rents tend to be lower, higher payments in wealthier neighborhoods where rents are higher. The “zip code method,” therefore, gives poor families the means and incentive to get out of high-poverty neighborhoods afflicted with crime, low-performing schools, and high unemployment. Interestingly, the “zip code method” does not seem to cost more money than the metro area method for calculating fair market rents: While data are incomplete and debated, the extra money paid to landlords in middle-class neighborhoods is at least partly cancelled out by the lower sums paid to landlords in poorer neighborhoods.

So what’s not to like about a rule that enables poor households to escape poor neighborhoods at no extra cost to the taxpayer? The short answer: The Rule’s origins as an Obama Administration policy. Carson might be opposed to all things Obama, regardless of their merits. The longer and more charitable answer: There is a difficult empirical question about whether the “zip code method” will result in less affordable housing under the Section 8 program. As Secretary Carson’s Suspension Memo put the issue, it is unclear whether “the gain in units with rents below the applicable [fair market rent] in high-rent ZIP codes [will] offset the decrease in the number of units in the low-rent and moderate-rent ZIP codes.” By lowering the amounts provided to landlords in poor neighborhoods, the “zip code method” for calculating voucher payments could cause such landlords to leave the Section 8 market, reducing housing supply more than the extra units provided by voucher increases in higher-income neighborhoods. Ostensibly because of these worries about loss of housing, Secretary Carson issued a memo, not subject to notice and comment, suspending the Obama Administration’s “small area fair market rent” rule for two years, pending further study.

The problem with this reasoning, of course, is that deliberation about this empirical dispute has already occurred in the grueling N&C process used to issue the original SAFMR Rule. HUD had run a pilot program in seven cities using zip codes to calculate rents and had commissioned an expert study to analyze the results. Numerous stakeholders had commented on these data. HUD had conducted an Interim Evaluation of the data following the promulgation of the final rule. If the Trump Administration wants to revisit the empirical dispute and unravel the decision, then, under State Farm, they have to undergo the same slow process and provide a factual basis similar to that created by the Obama Administration.

2. Can Trump invoke Auer deference to suspend Obama’s rule?

Auer deference, however, suggests a way to undermine the rule without the grueling N&C process. Secretary Carson “interpreted” the SAFMR to permit the Rule’s suspension at the discretion of the HUD Secretary. The apparent vagueness of the SAFMR’s language seemed to suggest judicial deference to such an assertion of administrative discretion. The SAFMR provides that HUD may exempt public housing authorities or a metro area from using zip codes to calculate fair market rent when HUD determines that “such action is warranted.” As if this authorization were not broad enough, the rule specifies that such a suspension can be based on a presidential declaration of a housing-depleting disaster, a sudden influx of displaced households needing housing, or “or other events as determined by the Secretary.” 24 C.F.R. §888.113(c)(4).

These vague terms seem to invite Auer deference, but the district court declined the invitation. Invoking the ejusdem generis canon, Judge Howell concluded that the Rule’s grant of authority to suspend the Rule based on events “as determined by the Secretary” had to be read in light of the preceding clauses specifying conditions specific to a particular metro area or PHA such as disasters or influx of displaced persons. Otherwise, Judge Howell, reasoned, the final clause would swallow up the rest of the section, rendering those specific suspension-justifying conditions unnecessary. As for Auer deference, Judge Howell dismissed it in a single sentence: “the defendants’ construction is ‘inconsistent with the regulation,’ and thus due no deference.”

Auer deference, in short, foundered on the usual shoals where tie-breaking canons are generally wrecked: The judge declared that the text was not ambiguous enough to justify the use of the canon. Because few legal concepts are as ambiguous as “ambiguity,” such a doctrine leaves judges free to turn tie-breaking canons like Auer, lenity, Chevron, etc., on and off like a spigot. Ejusdem generis, for instance, could be applied to the SAFMR, but it need not be: The SCOTUS routinely brushes aside ejusdem generis when the limiting principle inferred from the narrow terms in a series is just too limiting. (See Ali v Bureau of Prisons or (if you agree with McKenna’s dissent) Caminetti v. United States examples).

Auer, in sum, may be more window-dressing than window. Judges who want to defer to an agency can invoke it, and others can insist that the rule “unambiguously” disfavors the agency’s reading. Judge smight feel free to sneer at the notion that the agency knows the rule because the agency wrote the rule, given the obvious point that the rule-writing agency might have been controlled by a political party and president different from the rule-interpreting agency, and the latter might want to subvert the rule being construed. In such a case, a judge might be tempted to cast a fish eye on the agency’s “re-interpretation” that seems to gut, delay, or otherwise undermine the rule being construed.

Should we be glad that Auer is easily evaded and agencies, easily controlled, by judges so inclined? To evaluate Auer, one must have a theory of bureaucratic entrenchment: Should one administration be able to entrench its policies through purely executive means against being unraveled by its successors? Auer is best understood as such an unraveling device. The defenders of Auer, therefore, ought to focus on whether and how bureaucracies should be permitted to entrench their policies. As Sunstein and Vermeule note, Auer gives entrenchment-minded agencies a reason to be extra-clear in their wording in order to foreclose a later hostile administration’s undermining the rule through interpretation. If one is inclined to facilitate bureaucratic entrenchment, however, it should not take much textual clarity for a judge to side-step Auer in order to protect an earlier administration’s handiwork, because judges like Judge Howell might feel free to invoke every possible tool of statutory interpretation (purpose, policy-based canons, textual canons, etc.) before invoking Auer, insuring that Auer serves as little more than a make-weight.

3. Don’t just do something: sit there!

The flimsiness of Auer leads to one final question: Why did the Trump Administration not undermine the Obama Administration’s SAFMR Rule just by refraining from enforcing it? Sheer failure to bring an enforcement action against non-complying Public Housing Authorities, after all, would, in theory, have the same effect as formally issuing a “suspension policy,” but such pure inaction would likely be unreviewable under Heckler v. Chaney.

I actually have no answer to this final question: It is intended for the readers of the post — both of them, optimistically, given the tediousness of the topic to all but the most avid admin law nerd. If you have made it this far, gentle reader, and have any insights as to why Secretary Carson did not simply sit on his hands w.r.t. the SAFMR or, more generally, why Trump does not gut Obama’s legacy simply by doing nothing, your thoughts, online or offline, are most welcome.

As comment-priming speculation...there might be practical or political obstacles to non-enforcement. Perhaps the “Deep State” (i.e., the professional federal civil service) is likely stubbornly to enforce the law without some sort of explicit and legally binding opinion from the top. But this is rank guessing on my part. I note only that the formal anti-entrenchment doctrine of Auer is easily evaded by judges who believe that presidents should be able to entrench their policies. That we law profs spill so much ink over a doctrine that has such little bite suggests how we academics love a good abstract argument regardless of its importance to policy.

Posted by Rick Hills on December 30, 2017 at 03:35 PM | Permalink


I guess I don’t quite understand where the free lunch is coming from. If there are currently section 8 recipients in poor zip codes that will receive more valuable vouchers under the metro area rule than in order for program costs to not increase there must be a significant number of recipients whose vouchers will be cut because the zip code they live in is considerably wealthier than the metro area as a whole.

First, that doesn’t at all match my observations as to where “section 8 okay” housing is located, and second if many such people do exist, I don’t see how it helps the cause of desegregation to kick them out of their homes.

Posted by: Brad | Dec 31, 2017 7:14:00 PM

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