WASHINGTON (Reuters) - The U.S. Supreme Court on Wednesday constrained the power of federal agencies, scaling back a legal doctrine that calls for judges to give agencies deference to interpret their own rules but declining to eliminate it as four conservative justices wanted.

FILE PHOTO: U.S. Secretary of Veterans Affairs Robert Wilkie speaks during ceremonies on Veteran's Day at Arlington National Cemetery in Arlington, Virginia, U.S., November 11, 2018. REUTERS/Joshua Roberts/File Photo

The court, in a ruling written by liberal Justice Elena Kagan, unanimously sided with a Vietnam War veteran who sued the U.S. Department of Veterans Affairs (VA) after being denied retroactive disability benefits. But the justices split 5-4 in deciding not to entirely throw out the legal doctrine called “Auer deference,” which is rooted in Supreme Court precedents dating back to 1945.

“So the doctrine emerges maimed and enfeebled - in truth, zombified,” wrote conservative Justice Neil Gorsuch, who had wanted to terminate Auer deference.

Paring back the regulatory authority of federal agencies - which can control rules in important areas such as energy, climate change and the workplace - has been a key goal of many business and conservative groups, which complain about what they call the “administrative state.”

The new limits on Auer deference could constrict administrative agencies from issuing or maintaining certain policies and rules.

The Supreme Court threw out a lower court’s ruling denying retired U.S. Marine James Kisor, 75, benefits dating back to 1982 arising from battle-related post-traumatic stress disorder. The justices sent the case back to the lower court to reconsider Kisor’s claim on the meaning of a regulation that the VA had said was unfavorable to Kisor.

Kagan was joined by the three other liberal justices and conservative Chief Justice John Roberts in deciding that the court should uphold Auer deference because of its longstanding tradition of adhering to prior decisions, a principle known as stare decisis.

Gorsuch and fellow conservative Justices Clarence Thomas, Samuel Alito and Brett Kavanaugh said Auer deference should have been formally eliminated since it is already on “life support.”

Kisor’s attorney, Paul Hughes, said the ruling significantly narrows agency authority and “delivers a significant victory, not only for our client James Kisor, but also for regulated parties across the spectrum.”

TRUMP PURSUES DEREGULATION

Republican President Donald Trump has pursued extensive deregulation including efforts to roll back government regulations related to environmental protections, financial services and other industries. Trump’s Justice Department defended the VA in the case and had argued that Auer deference should be narrowed, but not overruled.

The doctrine’s critics have said judicial deference has allowed agencies to accumulate power by enabling them to issue vague or burdensome regulations and then enforce them according to the policy preferences of unelected administrators.

Supporters of judicial deference have said the views of agencies should be accorded greater weight because they often have technical expertise that judges lack. Some liberals view the attack on the “administrative state” as an effort by conservatives to hinder government regulation of a wide range of businesses.

Sam Berger of the liberal advocacy group Center for American Progress said it was heartening that the court did not “wipe away decades of precedent to favor the interests of big businesses and the wealthy over everyone else.”

The name of the doctrine arose from a 1997 Supreme Court ruling in the case Auer v. Robbins, which extended a 1945 precedent in the case Bowles v. Seminole Rock & Sand Co that had accepted an agency’s take unless it was plainly wrong or inconsistent with the regulation.

Kisor, who served during the Vietnam War installing field telephone networks, fought in a 1965 battle in which several of his fellow troops were killed. The VA granted Kisor disability benefits for PTSD in 2006, but refused to pay him retroactively going back to 1982, when he first made a benefits claim. At that time, he had not been diagnosed with PTSD.

The case hinged on the VA’s interpretation of a rule requiring “relevant” military service records to reconsider a denied claim.

The Washington-based U.S. Court of Appeals for the Federal Circuit in 2017 applied Auer deference to side with the VA over Kisor.

The current VA secretary is Robert Wilkie.

For a Reuters graphic on major Supreme Court cases of 2018-2019 term, click: tmsnrt.rs/2V2T0Uf