Depoliticizing Judicial Review of Agency Rulemaking

• Publication year: 2021

DEPOLITICIZING JUDICIAL REVIEW OF AGENCY RULEMAKING

Scott A. Keller(fn*)

Abstract: Administrative law doctrines for reviewing agency rulemaking, such as the Supreme Court's dicta in Motor Vehicle Manufacturers Ass'n v. State Farm Mutual Automobile Insurance Co.(fn1) and the D.C. Circuit's hard look doctrine, give judges significant discretion to invalidate agency rules. Many commentators recognize that this discretion politicizes judicial review of agency rulemaking, as judges appointed by a president of one political party are more likely to invalidate agency rules promulgated under the presidential administration of a different political party. Unelected judges, though, should not be able to use indeterminate administrative law doctrines to invalidate agency rules on the basis that they disagree with the policy decisions of a presidential administration.

This Article argues that the Supreme Court's recent decision in FCC v. Fox Television Stations, Inc(fn2) implicitly eliminated State Farm's dicta and the D.C. Circuit's hard look doctrine. In place of these paternalistic doctrines, courts should establish a doctrine for reviewing agency rulemaking that examines only the agency's purpose in regulating and the means used by the agency to achieve that purpose-instead of giving courts leeway to impose additional procedures on agencies and to nitpick rulemaking records. Constitutional doctrines for reviewing legislation already focus on a government actor's purpose and means, so these doctrines should also be used for reviewing agency rules, which are legislative-like pronouncements that are binding with the force of law.

Ultimately, this Article proposes that courts should review agency rulemaking under the standard for reviewing legislation known as "rational basis with bite." Rational basis with bite would require the agency, at the time it promulgates a rule, to articulate its actual statutory purpose in promulgating the rule and explain how the rule is rationally related to that purpose. Not only would rational basis with bite significantly limit the ability of judges to invalidate agency rules based on policy disagreements, but the standard fits well with the Supreme Court's precedents on APA arbitrary and capricious review.

INTRODUCTION................................................................................420

I. THE SUPREME COURT'S EVOLVING DOCTRINE FOR JUDICIAL REVIEW OF AGENCY RULEMAKING................427

A. Equating Agency Rulemaking with Legislation.................429

B. Recognizing the Differences Between Agency Rulemaking and Legislation...............................................431

C. Analyzing Judicial Review of Agency Rulemaking Without Reference to Doctrines for Judicial Review of Legislation..........................................................................437

1. The D.C. Circuit Replaced "Arbitrary and Capricious" with "Hard Look"....................................438

2. The Supreme Court's Reaction to the D.C. Circuit's Hard Look Doctrine...................................................... 441

a. Vermont Yankee Rejected Procedural Hard Look.. 442

b. State Farm Lists Criteria for Invalidating Agency Action, Without Addressing Quasi-Procedural or Substantive Hard Look....................444

c. Chevron Creates a Large Exception to State Farm .......................................................................450

3. FCC v. Fox Television Stations, Inc. Implicitly Rejects the D.C. Circuit's Hard Look Doctrine and Eliminates State Farm' s Criteria for Invalidating Agency Action.............................................................. 452

II. COURTS REVIEWING AGENCY RULEMAKING SHOULD USE THE DOCTRINES FOR JUDICIAL REVIEW OF LEGISLATION.....................................................457

A. The Tiers of Scrutiny for Reviewing Legislation...............459

B. Judicial Review of Agency Rulemaking Should Be Based on the Tiers of Scrutiny...........................................463

III. COURTS REVIEWING AGENCY RULEMAKING UNDER THE APA SHOULD USE THE RATIONAL BASIS WITH BITE STANDARD ...................................................................... 469

A. Rational Basis with Bite Should be Used in Reviewing Agency Rulemaking-Instead of Minimum Rationality, Intermediate Scrutiny, or Strict Scrutiny............................470

B. Applying Rational Basis with Bite to Recent Court of Appeals Cases Reviewing Agency Rulemaking ................ 482

CONCLUSION .................................................................................... 488

INTRODUCTION

The Obama Administration's largest impact on federal policy may very well come from institutions that are not usually on the public's radar screen: administrative agencies. Federal agencies create a substantial majority of the country's new laws,(fn3) and "[t]here is going to be a huge amount of action in the regulatory arena after years of deregulation under President Bush."(fn4) Weeks into office, President Obama directed the Environmental Protection Agency (EPA) to reconsider two Bush Administration decisions: (1) preventing states from setting auto emission and fuel efficiency standards that are more stringent than federal standards,(fn5) and (2) adopting less stringent controls on mercury pollution from power plants.(fn6) Similarly, as soon as President Obama took office, the Food and Drug Administration (FDA) approved "the world's first test in people of a therapy derived from human embryonic stem cells"-a clinical trial that had been rejected by the Bush Administration.(fn7) Moreover, the Obama Administration's Interior Department reversed the Bush Administration's plan to allow offshore oil drilling.(fn8) Some also believe that the Federal Communications Commission (FCC) under the Obama Administration could reinstitute the controversial "fairness doctrine."(fn9)

The Bush Administration anticipated that the Obama Administration would overhaul the country's administrative regulations, so in the final months of President Bush's tenure, his Administration took a series of administrative actions to deregulate various consumer and environmental industries.(fn10) Most would assume that the administrative actions of an outgoing president could be overturned by an incoming presidential administration that wants to reverse course on federal regulatory policy. After all, the electorate holds presidents accountable for their actions, and presidential administrations react to the public's perception of the administration's regulatory policies.(fn11)

But administrative law doctrines for judicial review of agency rulemaking have become a "judicially created obstacle course"(fn12) that gives judges far too much leeway to reach results based on their partisan policy preferences.(fn13) This, in turn, allows unelected judges to prevent many shifts in regulatory policy favored by an incoming president. President Bush therefore could have expected that his final deregulatory acts would "be difficult for his successor to undo."(fn14)

Of course, this is nothing new for modern presidential administrations. President Reagan campaigned on a major shift in federal regulatory policy,(fn15) but the deregulatory changes his Republican administration enacted were met with staunch resistance by the courts- which were freshly packed with judges appointed by Democratic President Carter.(fn16) Indeed, the administrative law doctrines adopted in the late 1970s and early 1980s allowed judges to use their policy preferences to invalidate agency action.(fn17) These doctrines are still used today, and they could prevent the Obama Administration from shifting regulatory policy as President Obama has promised.(fn18) Like President Reagan, President Obama will have to get his regulatory changes through courts that are full of judges who were appointed by his predecessor.(fn19)

It would be a mistake, however, for judges to continue using indeterminate administrative law doctrines to invalidate agency rules on the basis that they disagree with the policy decisions of a presidential administration.(fn20) This argument does not turn on the prudence of the Obama Administration's policies; rather, it is driven by the Constitution's requirement for the separation of powers and the need to respect institutional competence. The courts can just as easily invalidate the agency rulemaking of a Democratic President as a Republican President. For example, even in President Bush's final year of office, courts struck down his administration's regulations related to global warming and to the broadcast of indecent material.(fn21) Quite simply, administrative law doctrines need to be modified to prevent unelected judges from using their policy preferences to invalidate agency rulemaking.

The Supreme Court's recent decision in FCC v. Fox Television Stations, Inc.(fn22) may be the watershed precedent that charts a new course for administrative law. The doctrinal culprits that have allowed judges to use their policy preferences to invalidate agency rulemaking are the Supreme Court's dicta on the Administrative Procedure Act's (APA) arbitrary and capricious standard of review in Motor Vehicle Manufacturers Ass'n v. State Farm Mutual Automobile Insurance Co.(fn23) and the D.C. Circuit's hard look doctrine. While Fox Television did not...