Agencies running from agency discretion.

• Author: Ruhl, J.B.
• Position: Abstract into III. Institutional Symptoms of Agency Discretion Aversion A. The Agencies - Trade-Offs and Gaming, p. 97-140

ABSTRACT

Discretion is the root source of administrative agency power and influence, but exercising discretion often requires agencies to undergo costly and time-consuming predecision assessment programs, such as under the Endangered Species Act (ESA) and National Environmental Policy Act (NEPA). Many federal agencies thus have argued strenuously, and counter-intuitively, that they do not have discretion over particular actions so as to avoid such predecision requirements. Interest group litigation challenging such agency moves has led to a new wave of jurisprudence exploring the dimensions of agency discretion. The emerging body of case law provides one of the most robust, focused judicial examinations of the nature and scope of agency discretion available in modern administrative law, but agency discretion aversion and the concerns it raises have gone largely unaddressed in legal scholarship. And yet the discretion aversion syndrome is primed only to expand as climate change implicates a broadening span of agency programs as having environmental impacts.

This Article is the first to comprehensively describe and assess the discretion aversion trend and to extract what it has to say not only about agencies, courts, and statutes, but also about agency discretion in general. Part I describes the origins and features of the ESA and NEPA assessment programs leading to agency discretion aversion.

Part II identifies the strategies agencies use to escape the ESA and NEPA assessment programs by disclaiming discretion. Part III probes institutional concerns for agencies, courts, and the statutes that arise from the discretion aversion syndrome, including agency gaming behavior, judicial conflicts regarding when nondiscretion exists, and compromised statutory purposes. Before turning to solutions, Part IV steps back to assess what questions the ESA and NEPA nondiscretion case law raises for the conceptualization of agency discretion writ large, identifying discretion's "negative space" as the source of tension between agencies and courts. Part V then circles back to reexamine the ESA and NEPA nondiscretion doctrines, evaluating alternative measures to deflate agencies' discretion aversion impulse while promoting the statutes' purposes. We conclude that the most effective reform will be to eliminate discretion as the litmus test for the ESA and NEPA, replacing it with criteria more responsive to the statutes' twin purposes of improving agency decisions and providing information to other political institutions and the public.

TABLE OF CONTENTS INTRODUCTION I. THE SOURCES OF AGENCY DISCRETION AVERSION A. The Endangered Species Act B. The National Environmental Policy Act II. AGENCY STRATEGIES FOR AVOIDING THE ESA AND NEPA A. Expired Discretion B. Dormant Discretion C. Nonenvironmental Discretion D. No Discretion III. INSTITUTIONAL SYMPTOMS OF AGENCY DISCRETION AVERSION A. The Agencies--Trade-Offs and Gaming 1. Blatant Arbitrage 2. Fuzzy Lines 3. Decision Disaggregation 4. Firewalls B. The Courts--Applying Clear Tests with Incoherent Results C. The Statutes--Undermined Information-Production Purposes IV. MAPPING DISCRETION'S NEGATIVE SPACE A. The Temporal Dimension of Discretion 1. When Does Agency Discretion Begin? 2. When Does Agency Discretion End? 3. When Is Agency Discretion Perpetual? B. The Spatial Dimension of Discretion 1. Can Discretion Be Compartmentalized? 2. Does "If Find" Discretion Matter? C. Institutional Discretion over Discretion 1. Do Agencies Have Discretion to Abdicate Discretion? 2. Must Courts Defer? V. EVALUATING REMEDIES FOR THE DISCRETION AVERSION SYNDROME A. Tightening--Discretion as a Toggle Switch B. Smoothing--Discretion as a Dial C. Decoupling--Discretion as the Wrong Question 1. Proposal 2. Virtues 3. Objections CONCLUSION INTRODUCTION

The law may be said to give an agency discretion when under clear facts the agency may make more than one choice. If, however, on undisputed facts the law permits only one choice, then the agency is said to have no discretion. (1) If only it were that simple.

Discretion is the root source of administrative agency power and influence and thus a ubiquitous presence in the modern administrative state. (2) Agencies wield their statutorily delegated discretion through rulemaking, adjudication, licensing, enforcement, and policy setting to choose what gets done and who wins and who loses. Discretion also pays some incidental dividends for agencies: mandamus is unavailable for agency actions that are discretionary; tort liability does not lie against agencies exercising discretionary functions or against agency officials exercising discretionary authority; judicial review is unavailable for acts entirely committed by law to agency discretion; and even acts not committed to agency discretion in that absolute sense are usually reviewable only for abuse of discretion. (3) With all these benefits flowing from the power to exercise discretion, one might reasonably assume that agencies soak discretion up like sponges and that it takes a hard squeeze for them to give back even a drop.

So why in 2013 did the U.S. Army Corps of Engineers--the agency responsible for building and maintaining much of the nation's water resources infrastructure--loudly proclaim that it possesses not a scintilla of discretion over carrying out "the responsibility to maintain Civil Works structures so that they continue to serve their congressionally authorized purposes"? (4) That is a lot of authority for an agency to squeeze out of its discretion sponge. Yet the Corps is not alone in aggressively eschewing discretion, as the Environmental Protection Agency, Navy, Bureau of Land Management, Interstate Commerce Commission, Department of Agriculture, Federal Emergency Management Agency, Bureau of Reclamation, Coast Guard, and a host of other federal agencies have also insisted they have no or limited discretion over particular actions within their jurisdiction. (5) Although some of the actions for which agencies have disavowed discretion are admittedly mundane, such as small-scale land exchanges, others lie at or near the core of vast agency regulatory domains, including issuing national flood insurance, approving mining on public lands, regulating pesticides, approving federal delegation of pollution control programs to states, operating major dam systems, and allocating irrigation water in the arid West. (6)

What is leading these and other federal agencies to run from agency discretion? One possible explanation is that the agencies are hoping to avoid the political heat that comes with the power to decide. At one time, for example, the EPA, for largely political reasons, took the position that it had no discretion to regulate greenhouse gas emissions under the Clean Air Act, a position the Supreme Court rejected--albeit by a narrow majority. (7) But shying away from hard politics is not what is behind the wave of discretion aversion that led the Corps to shed maintaining water resources infrastructure from its inventory of discretionary functions. Rather, discretion comes with plenty of process baggage in the modern administrative state. In a broad range of settings, when agencies exercise discretion, they also must jump through procedural and substantive hoops requiring them to produce a litany of studies and findings before moving forward with a final decision about how to exercise their discretion, and even then they face rounds of litigation over whether they jumped through the hoops the right way. (8) The perverse "ossification" effects of these decision-making prerequisites on agency behavior have been well documented and debated in legal scholarship. (9) What is taking on an increasingly larger, and surprising, role in this dynamic is that agencies now think twice about claiming discretion at all, even going so far in many contexts as to actively claim nondiscretion over a particular action or class of actions. (10)

A primary driver behind this form of discretion aversion has been the combined effect of two environmental laws: the Endangered Species Act (the ESA) (11) and the National Environmental Policy Act (NEPA). (12) Section 7 of the ESA requires federal agencies to consult with the Secretaries of the Departments of Interior and Commerce to ensure actions they carry out, fund, or authorize do not jeopardize the continued existence of species designated under the ESA as endangered or threatened. (13) NEPA requires federal agencies to prepare statements assessing the environmental impacts of their proposed actions. (14) Often applying to agency decisions in tandem, these two processes impose costly and time-consuming impact assessment procedures, ensnare agencies in potentially years of litigation over the adequacy of their assessments, and in practical effect can substantially alter an agency's proposed action, if not flat-out kill it. (15)

But there is a way out of the ESA and NEPA assessment requirements for agencies: pursuant to judicial and administrative interpretations, the two programs do not apply to actions over which an agency has no discretion. (16) Indeed, since the Supreme Court's 2007 decision in National Ass'n of Home Builders v. Defenders of Wildlife, in which the Court upheld an administrative policy that agency discretion over an action is necessary to trigger ESA consultation requirements, (17) agencies have been aggressively attempting to wiggle out of ESA and NEPA assessment requirements by claiming nondiscretion. (18) The Corps's declaration of non-discretion over maintaining its water infrastructure projects, for example, was made in the context of a policy statement regarding the agency's approach to ESA section 7 consultations. (19)

This phenomenon is far from a trivial niche problem of environmental law. The scope of the ESA and NEPA is immense--they capture all actions federal agencies authorize, fund, or carry out. The only thing trivial is...