High Court Declines to Address Deference to Agencies

(CN) – The U.S. Supreme Court’s decision Monday not to take up a case about whether courts should defer to federal agencies’ interpretation of their own regulations spurred a dissent from conservative Justices Clarence Thomas and Neil Gorsuch.

In 2006, Garco Construction Inc. was awarded a contract to build housing units on Malmstrom Air Force Base in Great Falls, Mont., home to the Minuteman III intercontinental ballistic missiles, which carry a nuclear payload. Garco contracted some of the work to James Talcott Construction, or JTC.

The contract between the U.S. Army Corps of Engineers and Garco stated that contractors are allowed to employ ex-felons and required contractors to adhere to the base access policy, which involved a 911 dispatcher running workers’ names through the National Criminal Information Center system to check for warrants.

The subcontractor, JTC, had problems bringing some of its workers onto the base, particularly those who were bussed in from a local prison’s pre-release facility.

According to court records, JTC had a retired military member ride on the bus and vouch for everyone on it. However, the base’s policy was clarified to prevent that from happening after a worker with a violent criminal background beat his manager with a wrench.

JTC then requested adjustment of the contract, arguing that its inability to use convict labor reduced the pool of potential workers for the housing project. It claimed it spent $454,000 from additional time hiring and training new workers and paying overtime.

The Air Force denied the request and the Armed Services Board of Contract Appeals eventually upheld the decision, finding that the base’s policy was not changed but merely clarified after the on-site incident involving the wrench.

Garco, which had sought damages related to the additional costs incurred by its subcontractor, appealed the board’s decision but the Federal Circuit affirmed in May 2017 after finding that there was no change in the base-access policy.

The contractor then asked the U.S. Supreme Court to take up the case, but on Monday it denied Garco’s petition for a writ of certiorari.

Justice Clarence Thomas, joined by the high court’s newest member Justice Neil Gorsuch, dissented from the denial.

Thomas wrote that he would have granted review of the case to answer whether the court should overrule its 1997 decision in Auer v. Robbins and its 1945 ruling in Bowles v. Seminole Rock & Sand Co., which held that courts can defer to an agency’s interpretation of its own regulations unless the interpretation is clearly wrong.

“This would have been an ideal case to reconsider Semi­nole Rock deference, as it illustrates the problems that the doctrine creates. While Garco was performing its obliga­tions under the contract, the base adopted an interpreta­tion of its access policy that read ‘wants and warrants’ to include ‘wants or warrants, sex offenders, violent offend­ers, those who are on probation, and those who are in a pre-release program,’” the dissent states. “The Federal Circuit deferred to that textually dubious inter­pretation.”

Thomas concluded, “Because this Court has passed up another opportunity to remedy ‘precisely the accumulation of governmental powers that the Framers warned against,’ I respectfully dissent from the denial of certiorari.”

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