Notice & Comment

Section 706 of the Administrative Procedure Act Does Not Call for Universal Injunctions or Other Universal Remedies, by John Harrison

The Supreme Court recently granted certiorari in Trump v. Pennsylvania,11.No. 19-454 (U.S). agency regulations under the Affordable Care Act. The district court granted, and the Third Circuit affirmed, a universal injunction: the court ordered the agencies not to enforce the regulation as to anyone, not just the plaintiffs. In support of the universal scope of the injunction, the Third Circuit relied on 5 U.S.C. 706, part of the Administrative Procedure Act. The government’s petition for certiorari objected to the universal scope of the injunction.22.Petition for Writ of Certiorari, Trump v. Pennsylvania, No. 19-454 (U.S.), at 32-35. That objection is in keeping with litigation guidelines issued by the Attorney General in 2018. Those guidelines say that universal remedies are inappropriate, and that the APA does not authorize the universal vacatur of agency regulations.33.Memorandum from the Attorney General, United States Department of Justice, Litigation Guidelines for Cases Presenting the Possibility of Nationwide Injunctions (Sept. 13, 2018), at 7. 

Section 706 says that courts conducting judicial review are to “hold unlawful and set aside” agency action that fails the tests it sets out, like agency action that is arbitrary or capricious. In approving the universal injunction, the Third Circuit found that when section 706 tells courts to set aside agency action, it means that they are to give a remedy that renders the action wholly inoperative. Appellate courts issue such orders when they reverse or vacate the judgments of lower courts; the appellate court’s order causes the lower court’s judgment to become legally inoperative. According to the Third Circuit, when a regulation is challenged and found to be unlawful, section 706 instructs the reviewing court to “vacate” it in that sense.44. “(Our) APA case law suggests that, at the merits stage, courts invalidate—without qualification—unlawful administrative rules as a matter of course, leaving their predecessors in place until the agencies can take further action. See, e.g., Prometheus Radio, 652 F. 3d at 453-54 & n.25 (vacating procedurally defective rule and leaving the prior rule in effect); Council Tree Commc'ns, Inc. v. FCC, 619 F. 3d 235, 258 (3d Cir. 2010) (same). Congress determined that rule-vacatur was not unnecessarily burdensome on agencies when it provided vacatur as a standard remedy for APA violations. See 5 U.S.C. sec. 706(2) (“The reviewing court shall ... hold unlawful and set aside agency action” that is outside an agency's authority, or “without observance of procedure required by law,” among other things).” Commonwealth of Pennsylvania v. President, United States, 930 F. 3d 543, 575 (3d Cir. 2019).

The view that section 706 directs that courts give a remedy that sets aside agency action appears to be quite common. That view is wrong. Section 706 operates at a point in the court’s decision process before the remedy is considered. When that provision tells courts to set agency action aside, it instructs them not to decide the case according to that action. The court is to put the agency action off to the side, in a manner of speaking. The remedial consequences of not deciding the case according to the agency action depend on the form of proceeding for judicial review being used in the case. In an enforcement proceeding, setting the agency action aside means treating it as legally ineffective, so that it does not impose any obligations on the defendant. In a proceeding in which the court acts like an appellate tribunal with respect to the agency, setting the action aside may entail rendering it wholly ineffective. The Third Circuit erred in Trump v. Pennsylvania by attributing one of the possible remedial consequences of section 706 to that provision itself. Section 706, however, applies in every form of proceeding for judicial review and does not call for any specific remedy. Questions of remedy come up, not under section 706, but under section 703.

That conclusion follows from the text of section 706 and the structure of the APA’s provisions for judicial review. “Set aside” can refer to more than one step a court can take. When an appellate court reverses or vacates a lower-court judgment, the appellate court sets the judgment aside in the sense of causing it to be inoperative, where before it was operative. A court sets aside a statute on constitutional grounds in a different sense. When a court concludes that the statute is contrary to the Constitution and inoperative, it disregards the statute in deciding the case. Both ways of using “set aside” were known at the time of the APA and are known today.55.For example, Chief Justice Hughes referred to setting aside an unconstitutional state law in his opinion for the Court in Home Building & Loan v. Blaisdell, 290 U.S. 398, 432 (1934) (explaining that in an earlier case, Von Hoffman v. City of Quincy, 71 U.S. 535 (1867), a state statute found to be unconstitutional and invalid was “set aside”). Justice Roberts used “set aside” in the same sense in his dissent in Erie. Erie Railroad Co v. Tompkins, 304 U.S. 64, 87 (1938) (Roberts, J., dissenting) (warning of the “grave consequences liable to result from erroneous exertion of (the Court’s) power to set aside legislation”). Congress used “set aside” in that sense in the 1937 legislation expanding the use of three-judge district courts in constitutional cases. Act of August 24, 1937, ch. 754, sec. 3, 50 Stat. 751,752 (providing that only three-judge district courts were to issue any “interlocutory or permanent injunction restraining the enforcement, operation, or execution of, or setting aside, in whole or in part, any Act of Congress upon the ground that such Act or any part thereof is repugnant to the Constitution of the United States”) (emphasis added). All those usages reflected the orthodox view of judicial review, according to which the Constitution itself causes unconstitutional statues to be invalid, and courts implement that invalidity by disregarding such statutes.

If section 706 uses “set aside” in the appellate-review sense, it directs courts to give a remedy. If it uses “set aside” in the constitutional-review sense, it gives an instruction about courts’ reasoning process: they are not to follow what the agency has done. A court can follow the latter instruction in different kinds of cases. When it is acting as an appellate tribunal with respect to an agency, a court can decide the case without following what the agency has done by reversing or vacating the agency decision. In an enforcement proceeding, a court can decide the case without following what the agency has done by treating the agency action as legally ineffective, so that no sanction is imposed on the defendant.

Section 706 must be read along with section 703. Unlike the former provision, the latter does deal with different kinds of judicial review proceedings and the remedies appropriate to them. Section 703, titled “Form and venue of proceeding,” provides: “The form of proceeding for judicial review is the special statutory review proceeding relevant to the subject matter in a court specified by statute or, in the absence or inadequacy thereof, any applicable form of legal action, including actions for declaratory judgments or writs of prohibitory or mandatory injunction or habeas corpus, in a court of competent jurisdiction. . . . Except to the extent that prior, adequate, and exclusive opportunity for judicial review is provided by law, agency action is subject to judicial review in civil or criminal proceedings for judicial enforcement.”

One mode of judicial review contemplated by section 703, enforcement proceedings, does not produce any affirmative remedy at all. If a private defendant argues successfully that a regulation should have been promulgated with notice and comment but was not, the defendant prevails but the court gives no affirmative remedy. If section 706 directs courts to give a remedy of setting aside, it cannot operate in enforcement proceedings. But section 706 deals with the scope of judicial review generally, and must operate in all the proceedings referred to by section 703.

Some of the other modes of judicial review contemplated by section 703 do involve an affirmative remedy, but not one that sets agency action aside the way an appellate court sets a judgment aside. A successful petitioner in habeas obtains an order of release from custody, but nothing else. A private plaintiff who obtains an injunction against the institution of enforcement proceedings, and thereby anticipates the defense that would be available were the regulation enforced, obtains the injunction but no more. In neither of those modes of judicial review does the court give an affirmative remedy making the agency action inoperative. If section 706 directs courts to give such orders, it cannot apply in habeas or anti-enforcement proceedings.66.Trying to apply a directive from the APA to make agency action ineffective would be especially non-sensical in an anti-enforcement proceeding. A court can give an injunction against enforcement only after it has concluded that the agency action was legally ineffective. But if the agency action is legally effective until the courts makes it ineffective, as lower-court judgments are binding until reversed or vacated, the court cannot give the remedy of an injunction until it has already given another remedy that it is not able to give in that kind of case.

If by “set aside” section 706 means, put to the side in deciding the case and so do not follow the agency action, section 706 provides a principle that can be applied in all the modes of judicial review contemplated by section 703. In an enforcement proceeding, not deciding according to the agency action means deciding in favor of the defendant. In habeas and anti- enforcement proceedings, it means giving affirmative relief that follows from the principle that the agency action is not legally binding, which follows from not deciding according to it. In appellate-type proceedings, deciding not according to the agency action means overturning the action, if the court is authorized to do so by the applicable special review statute.

The reading of section 706 adopted by the Third Circuit in Pennsylvania v. Trump is not compatible with the APA because it is not compatible with section 703. The reading according to which section 706 does not address remedies, but rather addresses the proper treatment of agency action in the court’s reasoning process, is compatible with section 703 and thus the structure of the APA.

Section 706 does not instruct or authorize reviewing courts to give a remedy that operates on the effectiveness of the agency action under review. Any instruction or authorization along those lines must come from the form of proceeding applicable pursuant to section 703. Judges, lawyers, and administrative law scholars may have become so used to appellate-type proceedings that they have forgotten that section 706 is not written exclusively for that kind of suit.77.The court of appeals seems to have missed this point in Trump v. Hawaii. The cases it cited in support of its reading of section 706 arose under a special review statute, but the case before it did not. See, supra n. 5. It is more general than that, however, and applies in proceedings in which the court is not called on to set agency action aside in the way in which an appellate court sets a judgment aside.88.This conclusion about section 706 has implications for the debate about the controversial practice of remanding agency action without vacating it. It undermines both the standard arguments in favor of and against that way of proceeding. On balance, understanding section 706 the way I suggest counts against the practice, but I will not further explore the issue here. 

John Harrison is the James Madison Distinguished Professor at the University of Virginia School of Law. A longer version of this piece by Professor Harrison is on our Bulletin and can be found here.

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