CHAPTER 9 APA LITIGATION: PROCEDURAL MECHANISMS THAT FOCUS ENVIRONMENTAL CONTROVERSIES

• Jurisdiction: United States

Natural Resources Development and the Administrative State: Navigating Federal Agency Regulation and Litigation
(Feb 2019)
CHAPTER 9
APA LITIGATION: PROCEDURAL MECHANISMS THAT FOCUS ENVIRONMENTAL CONTROVERSIES
Varu Chilakamarri
Appellate Attorney, Environment & Natural Resources Division
U.S. Department of Justice
Washington, D.C. ¹

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VARU CHILAKAMARRI is an appellate attorney in the Environment and Natural Resources Division of the U.S. Department of Justice. She handles complex civil and criminal environmental appeals involving a broad range of issues, including questions concerning justiciability, statutory interpretation, constitutional law, and the Administrative Procedure Act. She also serves as the Division's Counselor for Animal Welfare Matters, where she has assisted in the development of the Division's animal welfare litigation program. Varu previously served as the Acting Chief of Staff to the Assistant Attorney General for the Division from 2015-2016. Prior to that, she served on detail to the Office of the Associate Attorney General, as well as the White House Counsel's Office. Varu joined the Justice Department in 2006 through the Attorney General's Honors Program as a Trial Attorney in the Civil Division's Federal Programs Branch. Varu clerked for Judge R. Guy Cole in the U.S. Court of Appeals for the Sixth Circuit and Judge Timothy B. Dyk in the U.S. Court of Appeals for the Federal Circuit. Varu graduated with honors from Georgetown University Law Center, where she was an Articles Editor for the Georgetown Law Journal. She earned degrees in Environmental and Political Science from the Ohio State University.

What is the fair scope of your controversy? Many of the hotly contested issues litigated in environmental cases under the Administrative Procedure Act (APA)² can be distilled down to this single question. In practice, this question gets dissected. It gets muddled. And it often reemerges under the guise of multiple point headings in briefs, many rounds of discovery requests, and in some cases, repeated mandamus petitions. But stepping back from the typical litigation morass to consider how any given controversy "ought" to be confined is a useful way of viewing many of the recurring themes in APA litigation--after all, it is a foundational question that often underlies judicial decision-making in this arena.

Before exploring recent permutations of this question, this paper provides an overview of the basic threshold issues confronting those seeking to challenge agency action in federal court, including finality, exhaustion, ripeness, standing, and mootness. This paper will then consider how debates over the substantive scope of a controversy have come to infuse three key areas in environmental litigation under the APA: (1) issue exhaustion, where litigants bear some burden in shaping the controversy even before litigation starts; (2) the administrative record, where formulation of the record can itself limit or expand the scope of the controversy; and (3) judicial remedies, where the scope of the relief that a court believes it is empowered to render often serves as a backstop for confining the breadth of the challenge.

I. Threshold Issues in APA Litigation

For over 70 years, the APA has served as the primary legislation that polices the relationship between federal agencies and those whom they regulate or otherwise affect.³ The Act governs the process by which agencies typically establish regulations and it provides for judicial oversight of agency action. But it contains numerous "compromises and generalities and, no doubt, some ambiguities."⁴ As the Supreme Court graciously put it shortly after the Act was passed: "Experience may reveal defects."⁵ If nothing else, the Court's premonition should be of some comfort to new and experienced practitioners who struggle to apply the APA's text to the dynamic decision-making processes of the modern administrative state.

So what role does the APA play in litigation? In short, it allows the public to challenge some agency actions. The APA creates a "basic presumption of judicial review for one suffering

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legal wrong because of agency action."⁶ Many types of agency actions can be challenged under the APA, ranging from rulemakings, to permit and licensing decisions, to fines and penalty orders. Mechanically, the APA packs in several affirmative grants to those seeking to challenge agency action (or inaction), by:

• Creating a federal cause of action to challenge agency conduct. ⁷

• Waiving the United States' sovereign immunity for non-monetary claims. ⁸

• Providing the familiar standard of review that courts use in evaluating agency action. ⁹

• Empowering courts to remedy unlawful agency action by either setting that action aside or compelling particular action when warranted. ¹⁰

But these grants contain broad exceptions, reminding us that the APA is a statute of general review that does not neatly fit every regulatory scheme. In this vein, the courts cannot review agency action under the APA where another statute precludes judicial review.¹¹ And, perhaps less obvious, courts cannot review agency action that "is committed to agency discretion by law."¹² Even where an agency's action is of the sort that might be reviewable, the timing of litigation and the remedy sought can often pose serious hurdles for litigants. For example, Section 704 of the APA limits challenges to "final" agency action.¹³ This same section also limits judicial review to claims "for which there is no other adequate remedy in a court."¹⁴

Litigants under the APA must also be particularly mindful of threshold defenses, as many of these doctrines can pose unique challenges in the administrative context, where litigation is often used as a vehicle for broad policy opposition to agency actions. Concepts of finality, ripeness, and exhaustion, as well as standing and mootness considerations, each serve to filter the legal challenges that will be considered by reviewing courts.

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A. Finality, Exhaustion, and Ripeness

The doctrines of finality, exhaustion, and ripeness are closely related and sometimes employed interchangeably or simultaneously by the courts and litigants.¹⁵ Generally, "the finality requirement is concerned with whether the initial decisionmaker has arrived at a definitive position on the issue," while the exhaustion requirement refers to the administrative steps the injured party must follow before seeking review,¹⁶ and the ripeness doctrine involves whether the controversy is itself fit for review.¹⁷ Each of these rules works in slightly different ways to screen out controversies that are not quite ready for the judicial spotlight.

1. Finality

The APA only permits judicial review of "final agency action."¹⁸ The Supreme Court has explained that finality requires that two conditions must generally be satisfied:

First, the action must mark the consummation of the agency's decisionmaking process--it must not be of a merely tentative or interlocutory nature. And second, the action must be one by which rights or obligations have been determined, or from which legal consequences will flow. ¹⁹

As to the former requirement--that the action mark the consummation of the agency process-- courts generally look to whether the challenged decision provides the "definitive statement" of the agency's position and whether there is any "entitlement" to further agency review.²⁰ As to the latter requirement--that legal consequences flow from the challenged action--courts look at several factors, including whether the action has a direct and immediate effect on day-to-day

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operations or conduct of the party seeking review and whether that party is expected to comply immediately with the agency's order.²¹

The finality requirement can serve as a significant limitation on the ability to challenge an agency's general findings, policy statements, and guidance documents--even where these agency "decisions" could be used to subsequently inform agency action. Take, for example, the D.C. Circuit's decision in National Mining Association v. McCarthy, when the court evaluated a Final Guidance document issued by the Environmental Protection Agency (EPA) regarding Clean Water Act permits for coal mining.²² Writing for the court, then-Judge Kavanaugh noted that, "[o]ne might think that an agency memo entitled 'Final Guidance' would be final. But that would be wrong, at least under the sometimes-byzantine case law."²³ The Final Guidance instructed EPA staff to recommend limitations on state-issued permits for mining projects.²⁴ The court concluded that the guidance was merely a "general statement of policy" not itself challengeable because it did "not impose any requirements in order to obtain a permit or license."²⁵ And even though, as a practical matter, the states and regulated parties may "feel pressure to voluntarily conform their behavior because the writing is on the wall about what will be needed to obtain a permit," that alone could not render the Guidance a "final" agency action.²⁶

This same result sometimes is seen in cases challenging agency compliance with the National Environmental Policy Act (NEPA), when a plaintiff's critique is directed solely at the agency's Environmental Impact Statement (EIS). The EIS is a document that an agency prepares when considering certain actions that will affect the environment. The EIS informs both decision-makers and the public by providing a "full and fair discussion" of the significant environmental impacts of the proposed action and reasonable alternatives that would avoid or minimize those impacts.²⁷ While the ultimate action chosen by the agency may be challenged under the APA, the courts have explained that the EIS itself is subject to challenge only insofar as it underlies a final agency action that consummates the agency's decision-making process.²⁸ Thus, a party may not...