The Administrative Procedure Act and The Evolution of Environmental Law

Pillsbury - Gravel2Gavel Construction & Real Estate Law

Enacted in 1946, the Administrative Procedure Act (APA) has provided a lasting framework for federal agency rulemaking and adjudication, as well as establishing the power of the federal courts to exercise judicial review over these actions of the federal bureaucracy. The APA is codified at 5 U.S.C. §§ 551–559, and §§ 701-706. There have been very few amendments made to the APA over these years, which indicates that Congress is reasonably satisfied with its administration and implementation.

What follows is an overview of how the APA has been used by the courts to resolve disputes involving the federal agencies, with particular attention being paid to the development of environmental law and practice. While there have been very few amendments to the statute, the courts have been free to enlarge upon the sometimes-opaque text of the APA to, in effect, change the law, even in an era when “textual fidelity” to the language of the statute is the prevalent approach.

Judicial Review of Federal Agencies before the Advent of the APA
While there were ad hoc reviews of federal agency actions before the APA was enacted, there was no uniform approach to judicial review in the federal courts. The case of Skidmore, et al. v. Swift & Company, 323 U. S. 134 (1944), is illustrative. This was a Fair Labor Standards Act dispute, which was decided by the Supreme Court in an opinion written by Justice Jackson. He notes that “There is no statutory provision as to what, if any deference courts should pay to the Administrator’s conclusions … The rulings of the Administrator are not reached as the result of adversary proceedings. They do not constitute an interpretation of the Act or a standard for judging factual situations which bind a district court’s processes, as an authoritative pronouncement of a higher court might do … But the fact that the Administrator’s policies and standards are not reached by trial in an adversary form does not mean they are not entitled to respect.” Moreover, “we consider that the rulings, interpretations and opinions of the Administrator under this Act, while not controlling on the courts, do constitute a body of experience and informed judgment to which the courts and litigants may properly resort for guidance. The weight of such a judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements and all those factors which give it the power to persuade, if lacking power to control.” Hence, “Skidmore Respect” for federal agency actions was established.

However, the explosive growth of the “administrative state” spurred by the New Deal legislation of the 1930s, the enactment of the Federal Register Act to create an official government “gazette” for federal agency pronouncements, and the exigencies of World War II persuaded the Congress and the public that some kind of uniform federal agency practice should be enacted. In another opinion by Justice Jackson, Wong Yang Sung v. McGrath, 339 US 33 (1950)—a deportation case—the creation of the APA was described as: “The Administrative Procedure Act of June 11, 1946, is a new, basic and comprehensive regulation of procedures in many agencies … Multiplication of federal administrative agencies and expansion of their functions to include adjudications which have serious impact on private rights has been one of the dramatic developments of the past half-century.” [Therefore] “the decisions of administrative tribunals were accorded considerable finality, but the conviction developed, particularly within the legal profession, that this power was not sufficiently safeguarded and sometimes was put to arbitrary and biased use.” There was a strong demand for reform, the Justice notes, and the APA’s enactment resulted. “The Act thus represents a long period of study and strife; it settles long continued and hard-fought contentions, and enacts a formula upon which opposing social and political forces have come to rest. It contains many compromises and generalities and, no doubt, some ambiguities.” In the end, the Court in this case, held that the Section 5 of the APA does cover deportation proceedings conducted by the Immigration Service.

Relevant Provisions of the Administrative Procedure Act
As former Senator Alan Simpson often remarked, “When in doubt, read the law.” Here are the fundamental provisions of the APA:

i.  Section 551—Definitions. This provision defines “agency”—which excludes the Congress. The courts and governments of the United States; “rule”—which is a statement of general or particular applicability and future effect designed to implement, interpret or prescribe law or policy; “rule making”; “agency action” and “ex parte

ii.  Section 552 —Publication. This section provides for the Federal Register publication of an agency’s organization, descriptions of its organization, rules of procedure, rules and statements of general policy and interpretation, and each amendment, revision, or repeal of the foregoing. Each agency must make available for inspection and copying final opinions, orders, administrative staff manuals, and other items. Section 552 also includes the Freedom of Information Act that was enacted in 1966, and at Section 552b, the Government in the Sunshine Act of 1978.

iii.  Section 553—Rulemaking. This section provides that any proposed agency’s rulemaking requires a Federal Register notice and to give interested parties an opportunity to participate in the proceeding through oral or written comments. Interpretative rules or general statements of policy are not subject to notice and comment. The final rule generally must be published no less than 30 days before its effective date. Each agency must give an interested party the right to petition for the issuance, amendment, or repeal of a rule.

iv.  Sections 554 (Adjudications), 555 (Ancillary Matters), 556 (Hearings), 557 (Initial Decisions, Ex Parte Considerations). These sections apply to the conduct of hearings made on the record before an ALJ.

v.  Section 558—Sanctions. This section provides that sanctions imposed by an agency may not be imposed except consistent with jurisdiction delegated to the agency and as authorized by law, as is the case for the issuance of a substantive rule or order.

vi.  Section 559—Effect on other laws. This section provides that Section 559, Chapter 7 (Judicial Review) and the ALJ provisions cited do not limit or repeal additional requirements imposed by statute or otherwise recognized by law.

vii.  Section 701—Judicial Review. This section applies to covered agency proceedings except where a statute precludes judicial review, or the action is committed to agency discretion by law.

viii.  Section 702—Right of Review. This section provides that a person suffering a legal wrong because of agency action or adversely affected by an agency action is entitled to judicial review. The United States may be named as a defendant.

ix.  Section 703—Form and Venue of Proceeding. This will be determined by the applicable statutes. Generally, agency action is subject to judicial review in civil or criminal proceedings for judicial enforcement.

x.  Section 704—Actions Reviewable. Agency action made reviewable by statute “and final agency action” for which there is no adequate remedy in a court are subject to judicial review.

xi.  Section 705Relief Pending Review. If justice requires, either the agency or the reviewing court may postpone the effective date of an agency action and preserve the status quo.

xii.  Section 706Scope of Review. To the extent necessary, the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions and determine the meaning or applicability of an agency action. The court will compel agency action unlawfully withheld or unreasonably delayed; hold unlawful or set aside agency action that is arbitrary, capricious an abuse of discretion, or otherwise not in accordance with law; that is contrary to constitutional right; without observance of procedure required by law; unsupported by substantial evidence in a case subject to sections 5656or 557, or otherwise reviewed on the record; or unwarranted by the facts to the extent the facts are subject to trial de novo by the reviewing court.

The Courts Confront the Administrative Procedure Act
As acknowledged by Justice Jackson in the McGrath case, the APA “contains many compromises and generalities and, no doubt, some ambiguities.” Consequently, it should not be surprising that the federal courts have used their power of judicial review to correct these deficiencies. The early, pre-APA cases stated that agency decisions demanded respect, or more properly, “Skidmore Respect” as it came to be known: “We consider that the rulings, interpretations and opinions of the Administrator … while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which the courts and litigants may properly resort for guidance.” Indeed, the agency judgment may possess such strengths as give it “the power to persuade, if lacking the power to control.” See Skidmore, et al. v. Swift & Company, 323 U.S. 134 (1944).

As the agencies became comfortable with the APA and its procedures, more and more cases were heard and decided by the federal courts. For instance, these cases should be noticed:

  • Abbott Laboratories, et al. v. Gardiner, 387 U.S. 136 (1967). In a high-stakes drug labeling case, the Court held that pre-enforcement review of an agency action was available to challenge a rule as soon as it was final. It was noted by the Court that the APA provides for such review when there is no other adequate remedy in a court, 5 U.S.C. § 704.
  • Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971). Review of a highway construction decision was available under the APA, but a thorough review required the courts to have “the full administrative record that was before the Secretary at the time he made his decisions.” Also, see PAP Section 70, and the need to see the “whole record.”
  • Vermont Yankee Nuclear Power Corporation v. Natural Resources Defense Council, 435 U.S. 519 (1978). This is a nuclear power plant licensing case, where the lower court held that the Atomic Energy Commission’s licensing procedures were inadequate and attempted to prescribe the procedural format the agency must follow. The Supreme Court forcefully rejected this notion: “We find absolutely nothing in the relevant statutes to justify what the court did here.” This decision represented something of a turning point for the Court and the agencies.
  • Motor Vehicles Manufacturers Association v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29 (1983). The arbitrary and capricious standard of review also apples to a rescission of an existing regulation following the change in Presidential administrations. Here, the rescission of a “seatbelt rule” was not explained as required by the APA, and the matter was remanded to the lower courts.
  • Chevron, USA. v. Natural Resources Defense Council, et al., 467 U.S. 837 (1984). Reversing the D.C. Circuit, the Supreme Court held that the EPA’s Clean Air Act “bubble rule” was a reasonable interpretation of a statute the agency is charged with implementing. The famous “two-step” Chevron approach devised by the Court requires the judiciary to determine first whether the statute was ambiguous; if it is, then at step two, the courts must determine whether the agency’s formulation is based on a permissible construction of the statute. This is by far the most frequently cited Supreme Court ruling.
  • Bennett v. Spear, 520 U.S. 154 (1997). Per APA Section 704, an agency action to be judicially reviewable must be a “final agency action.” To be final, the action must (i) mark the consummation of the agency’s decision-making process, and (ii) be one by which rights or obligations have been determined, or from which legal consequences flow.”
  • West Virginia, et al. v. Environmental Protection Agency, ___U.S.___(June 30, 2022). In this case the Court held that the EPA had misconstrued its authority under the Clean Air Act, and that it could not regulate or require existing power plants to engage in an energy shifting system on the basis of any implied regulatory authority. This is an “extraordinary” case to be decided under the “major questions doctrine” and the agency must point to a clear Congressional authorization for its proposed action. This authorization was absent, and the contrary decision of the Court of Appeals for the DC Circuit was reversed. Notably, no mention of Chevron deference was made.

Here are some notable ancillary decisions of the D.C. Circuit.

  • Greater Boson Television Corporation v. FCC, 444 F. 2d 841 (1971). In resolving a long and contentious dispute over the renewal of a television broadcast license, the court noted that the agency has satisfied its burden if it has given a “hard look” at the evidence and the contentions made by the parties.
  • American Mining Congress v. EPA, 824F. 2d 1177 (1987). Applying the new Chevron doctrine, the court held that EPA’s promulgation of a new definition of solid waste was at odds with the text of the Solid Waste Disposal Act, requiring the agency to continue working on this issue.
  • Shell Oil v. EPA, 950 F. 2d 741 (1991). EPA promulgation of new categories of hazardous waste was reversed because the Notice of Proposed Rulemaking failed to provide adequate notice of the agency’s intentions. Appalachian Power Company, et al. v. RPA, 208 F. 3d 1015 (2000). The court held that a Guidance document the agency was using in Clean Air Act determinations was in fact a rule that should have been subject to the APA notice and comment requirements. Judge Randolph’s opinion includes a classic description of the perils of governing by guidance documents.
  • Finally, two cases discussing the perils of ex parte communications in informal rulemaking proceedings: Home Box Office v. FCC, 567 F.2d. 9 (1977)—a pay television controversy involving the broadcast of The Sound of Music, and Sierra Club v. Costle, 657 F.2d 298 (1981)—a challenge to EPA’s sulfur dioxide rules forced the court to weigh in on the ex parte communications between the EPA staff and members of Congress and the Executive Branch. Apparently, informal rulemakings are not subject to restrictive APA rules against such communications, but the agencies have adopted a practice of having these communications made part of the rulemaking docket.

Conclusions
The APA, as enacted by Congress and interpreted by the courts, has been in effect for over 75 years. No serious effort has been made to amend or replace the Act, which indicates a reasonably high satisfaction with a system that requires a careful approach to most new regulation, and the need to build a strong administrative record that will withstand the rigors of review. It is a slow process, which may have an enduring appeal to most participants and observers.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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