Notice & Comment

Nationwide Relief and Acquiescence (Or Whether The Government Can Have It Both Ways)

I confess that I haven’t closely followed Arizona v. City and County of San Francisco — argued today in the Supreme Court. After reviewing the transcript from the oral argument, however, it turns out that the case may raise pretty significant questions about remedies in administrative law. The question presented is “[w]hether States with interests should be permitted to intervene to defend a rule when the United States ceases to defend.” But the case is about a lot more than just intervention.

Here is a quick, simplified summary: through notice-and-comment rulemaking, the Trump Administration issued a rule. That rule prompted a lot of litigation in different courts. While litigation was occurring, President Biden came into office, and his administration decided to acquiesce to a district court decision that had vacated the rule on a nationwide basis. With the Trump Administration’s rule gone, the Biden Administration has opened a new notice-and-comment rulemaking process on a new rule. Arizona, however, wants to intervene in those earlier cases to defend the Trump Administration’s rule. Those efforts to intervene have triggered various arguments about which case (if any) is the right one for intervention purposes, whether intervention is permissible, etc.

The intervention question is important but isn’t what caught my attention. Instead, my focus is on the United States’s argument about the relationship between nationwide relief and acquiescence by agencies to court decisions.

For what I am about to say to make sense, it is important to understand that the ordinary principle in administrative law is that once a rule has been promulgated through notice-and-comment rulemaking, that rule can only be undone through notice-and-comment rulemaking. Notice-and-comment rulemaking can be difficult, however, so agencies sometimes may resent this “symmetry” principle, especially when a new administration tries to undo what the previous administration did. (Richard Pierce, among others, has written about this dynamic.) Yet this symmetry principle has benefits of its own. Not only does it prevent arbitrary and capricious rescissions of rules, but without it, rules would have less permanency, creating more zigzagging policy.*

With that background in place, consider today’s argument. One of the topics that came up was the point that federal agencies dislike nationwide relief. Here, for example, is what the United States argued in its merits brief: “The government has long argued that the APA does not authorize district courts to vacate regulations or other agency actions on a nationwide basis because relief should be limited to what is necessary to redress the injuries of the parties before the court.” During oral argument, the Deputy Solicitor General reiterated that point:

We don’t think that the APA authorizes district courts to enter that relief. We don’t think it’s consistent with principles of equity or with Article III. And if this Court makes clear in an appropriate case that that’s not within the authority of district courts to enter, then you don’t have this problem because the government — what I take to be, everyone agrees, that the government has the ability to decide not to seek further review of district court decisions. And if you make clear that district courts do not have the authority to issue this sort of relief, then the problem goes away.

He also agreed with this observation from Justice Gorsuch:

I’m not familiar with the APA’s “set aside” language, which was supposed to adopt prior practice at the time, any prior practice in which a district court purported to be able to do more than set aside the rule with respect to the litigants in the case or controversy before it. 

The United States thus concluded that the district court — in the decision acquiesced in by the Biden Administration — erred by issuing a decision with nationwide effect.

Scholars like Sam Bray, of course, have advanced this sort of argument. Scholars like Mila Sohoni have advanced a contrary argument. This is a familiar debate that the Supreme Court may one day squarely address.

The United States, however, today also seemed to make a second argument: if an agency acquiesces in a judicial decision that declares a rule unlawful, that acquiescence is sufficient to essentially erase the rule altogether without going through notice-and-comment rulemaking. Here is the relevant exchange:

JUSTICE KAVANAUGH: I have a question about historical practice to the extent you’re aware. When a notice-and-comment rule is issued and then a court finds that that rule is unlawful and then the government chooses to acquiesce in that judgment, what then usually happens? I suppose one thing is notice and comment about a new rule, but that would be about the new rule. Another option is notice and comment about the repeal of the rule, even though it’s an acquiescence in the judgment.

A third option is just nothing happens, the old rule is just gone, and the government keeps going without any replacement rule. Do you know what the — that second thing, notice and comment about the repeal after an acquiescence, I’m not sure I’ve seen that, but I want to get your understanding of historical practice.

MR. FLETCHER: So I can’t pretend to have an exhaustive understanding of this. We have looked into it. I’m aware of cases in the first category and the third category. We have not found cases in that second category, at least where what you’re talking about is a decision that sets aside the rule or vacates the rule on a nationwide basis.

JUSTICE KAVANAUGH: That — that’s my understanding too. I think it’s odd to think about notice and comment for repeal after an acquiescence. I think there would usually be  notice and comment for the new rule, and — and that’s now started up here. And I guess you’ve looked into it and haven’t found anything either way, I guess.

MR. FLETCHER: I haven’t found any examples of it happening. And, you know, there are — there are court decisions from the D.C. Circuit, including, I think, your opinion in the EME Homer City case that say — recognized sometimes this is a thing that the government does and that it is good cause to forego notice and comment when what it’s doing is effectively compelled by a court decision. 

There is room for debate about this issue, too. If a court says that a rule is unlawful, it seems a bit odd to make the agency go through a notice-and-comment process to rescind that unlawful rule. Would comments in favor of the rule essentially just explain why the judicial decision was wrong? That seems odd, especially for a district court decision; usually, the way to correct errors in a district court decision is to appeal it (hence, the fight about intervention on appeal). On the other hand, there is some logic to requiring a notice-and-comment process to eliminate a rule even after a court says it is unlawful, especially given the ordinary symmetry principle discussed above.

But here is the key point: isn’t the United States’ first argument in profound tension with its second argument? If a judicial decision resolving a challenge to agency action only affects the parties to that litigation, then by the same reasoning, shouldn’t an agency’s decision to acquiesce to a judicial decision resolving a challenge to agency action not take the rule off the books for everyone else? Shouldn’t the rule remain in place for everyone who wasn’t a party to the litigation until the agency goes through the notice-and-comment process? I don’t see how the agency would be “compelled by a court decision” to eliminate a rule for everyone if only the plaintiffs to the litigation are entitled to benefit from their victory in court.

I do not know how the Court will resolve the intervention issue or the debate about nationwide relief. But I don’t see how acquiescence can be decoupled from nationwide relief. Can the government really have it both ways?

* For what it is worth, this is a topic I have written a fair bit about. See Sticky Regulations and Net Neutrality Restoring Internet Freedom, 71 Hastings L.J. 1208 (2020); Optimal Ossification, 86 Geo. Wash. L. Rev. 1209 (2018); Sticky Regulations, 85 U. Chi. L. Rev. 85 (2018). 

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