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Chapter 5
Judicial Review*
PART I. ACCESS TO REVIEW
During the last term, the Supreme Court issued opinions of note on thirdparty standing, preclusion of review, displacement of § 1983 actions, and
sovereign immunity. In addition to discussing these Supreme Court opinions,
this subpart will also highlight some of the more notable opinions the circuit
courts have issued on standing and sovereign immunity.
A. Standing
1. Third-Party Stinginess
The Supreme Court stressed its general disfavor of third-party standing
in Kowalski v. Tesmer, in which the Court rejected efforts by attorneys to
contest a Michigan statute and related practice that denies appellate counsel to
indigent defendants who have pled guilty. Originally, this § 1983 case had
been brought in federal district court by three indigents who had been denied
counsel, as well as by two attorney-plaintiffs. The district court issued an
injunction compelling Michigan state judges to grant appellate counsel to
indigents notwithstanding their guilty pleas. Subsequently, a panel of the
Sixth Circuit invoked Younger abstention to reverse as to the indigent plaintiffs. After concluding that the attorney-plaintiffs had third-party standing,
the circuit court reversed on the merits, holding that the statute in question
This chapter was written by Richard Murphy, Associate Professor, William
Mitchell College of Law, Lisa Schultz Bressman, Professor, Vanderbilt University Law School, and Keith Rizzardi, Trial Attorney, U.S. Department of
Justice, Wildlife and Marine Resources Section (all Committee Vice-Chairs).
It was compiled and edited by William Jordan, Professor, University of
Akron School of Law (Committee Chair).
1. 125 S. Ct. 564 (2005).
*
77
78
Developments in Administrative Law and Regulatory Practice
was constitutional. Later the en banc court reversed on the merits, ruling the
statute unconstitutional.
Most recently, the Supreme Court, in a 6-3 decision, determined that the
attorney-plaintiffs lacked third-party standing, and reversed and remanded
the case. The Court observed that a party seeking third-party standing is
required to demonstrate: (a) that the party has a "'close' relationship with the
person who possesses the right," and (b) that some "hindrance" interferes
with "the possessor's ability to protect his own interests."2 The Court added
that it has applied these criteria in a "forgiving" manner in First Amendment
litigation and also "when enforcement of the challenged restriction against
the litigantwould result in the violation of third parties' rights."3 After carving out these zones of forgiveness, the Court noted, in language that may
prove influential, "[bjeyond these examples-none of which is implicated
here-we have not looked favorably upon third-party standing."'
The Court refused to find third-party standing under this test, and expressed concerns about the implications of granting standing. First, the Court
quickly rejected the notion that the attorney-plaintiffs had a "close" relationship with the indigent defendants on the basis of an attorney-client relationship that the Court characterized as "hypothetical."' Second, although the
Court conceded that an indigent defendant would find an attorney "valuable"
in the course of challenging the constitutionality of the Michigan statute, the
fact remained that some pro se prisoners had mounted such challenges in the
past, and the Court did not "think that the lack of an attorney .. . is the type
of hindrance necessary to allow another to assert the indigent defendants'
rights."6 In addition, the Court expressed its concern that permitting the attorney-plaintiffs to enjoy third-party standing in the federal § 1983 case would
2. Id. at 567.
3. Id. at 568 (emphasis in original). Cf id. at 572 n.1 (Ginsburg, J., dissenting)
("Our decisions confirm ... that a plaintiff's exposure to an enforcement
action is not essential to an injury-in-fact determination.").
4. Id.
5. Id. at 568 (emphasis in original). Cf id. at 572 (Ginsburg, J., dissenting)
(citing cases where third-party standing permitted plaintiff to assert rights
of "potential" or "prospective" customers).
6. Id. at 569. Cf id. at 573-74 (Ginsburg, J., dissenting) (noting that the Court
has applied the "hindrance" requirement with "elasticity" in the past; contending that depriving indigent prisoners of counsel would hinder their
efforts to assert their own rights given complexity of issues and procedures
as well as prisoners' generally low educational levels).
Chapter 5: JudicialReview
79
allow the indigent defendants to escape the force of Younger abstention channeling them back to state court.
2. Procedural Standing Hodgepodge
The Supreme Court made a brief, and rather curious reference to procedural standing in Town of Castle Rock, Colorado v. Gonzales.' In this very
sad case, the plaintiff sued the defendant municipality and police officers for
failure to enforce a domestic abuse restraining order against her husband,
claiming that this failure had led to the deaths of the couple's children. As the
Court styled it, the question in this case was "whether an individual who has
obtained a state-law restraining order has a constitutionally protected property interest in having the police enforce the restraining order when they have
probable cause to believe it has been violated."' The Court answered this
question in the negative by a 7-2 vote. Part of its analysis addressed whether
a Colorado statute mandating police enforcement of restraining orders granted
the plaintiff a "property interest" in enforcement protected by the Due Process clause. The majority noted that:
[t]he dissent, after suggesting various formulations of the entitlement in question, ultimately contends that the obligations under the
statute were quite precise: either make an arrest or (if that is impractical) seek an arrest warrant. The problem with this is that the seeking of an arrest warrant would be an entitlement to nothing but
procedure-whichwe have held inadequateeven to supportstanding,
see Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) . . . .o
Recall that in Lujan, the Court had indicated that a violation of a procedural right may support standing if that procedural right was granted to the
litigant to protect some "concrete" interest." Thus, a person living next to a
proposed dam might contest a defendant's failure to prepare a proper environmental impact statement. 12 By contrast, a generalized, abstract interest in
7. Id. at 569-70.
8. 125 S. Ct. 2796 (2005). This case is also discussed herein in Adjudication
(supra at 5-8) and Constitutional Law and Separation of Powers (supra at
27-30).
9. Id. at 2800.
10. Id. at 2808 (footnote and internal citations omitted).
11. Lujan v. Defenders of Wildlife, 504 U.S. 555, 573 nn.7, 8 (1992).
12. See id.
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ensuring that the government obeys procedural requirements cannot support
standing; thus, a person with no concrete connection to the area near the dam
would lack standing to contest its supporting environmental impact statement." Given this Lujan construct, it seems odd to suggest that a procedural
right requiring the police to seek an arrest warrant would face a standing
problem as this procedure would seem designed to protect the plaintiff from
violence-which one might think as "concrete" a right as they come.
If nothing else, this Castle Rock dictum confirms Lujan's observation
that procedural rights raise "special" standing concerns. A spate of recent
opinions from the D.C. Circuit provides further confirmation. The first of
4
these cases, Electric Power Supply Association v. FERC,1
was relatively
straightforward. It addressed a challenge by a national trade association (EPSA)
to regulations adopted by FERC that exempted private "market monitors"
from the restrictions § 557(d) of the APA places on ex parte contacts between
an agency and interested persons during formal agency proceedings. All agreed
that EPSA sought to protect a "procedural" right. FERC contended that this
procedural right could not support standing because EPSA could not show
that it would suffer "concrete and particularized harm" due to the marketmonitor exemptions." The D.C. Circuit rejected this argument out of hand:
As regular participants in contested FERC hearings, EPSA and its
members have a right, protected by the Sunshine Act's proscription
against ex parte communications, to "fair decisionmaking" by the
Commission. This, not the financial interests of EPSA and its members, is the right directly protected by § 557(d) and impaired by the
market monitor exemption. In complaining that the market monitor
exemption violates the Sunshine Act, EPSA is seeking to enforce
procedural requirements designed to protect EPSA's concrete interest in the outcome of hearings to which EPSA is a party. That being
the case, EPSA's standing is not defeated by the fact that it cannot
show, with any certainty, that its or its members' financial interests
will be damaged by the operation of the market monitor exemption.
"[I]n cases involving alleged procedural errors, 'the plaintiff must
show that the government act performed without the procedure in
13. See id.
14. 391 F.3d 1255 (D.C. Cir. 2004). This case is also discussed herein in Adjudication (supra at 14) and Energy (infra at 253-54).
15. Id. at 1262.
Chapter 5: JudicialReview
81
question will cause a distinct risk to a particularized interest of the
plaintiff."' EPSA has done this."6
It bears noting that, in EPSA, the D.C. Circuit stated that "risk" to a
particularized interest can be sufficient for standing-an assertion that seems
like it should be uncontroversial-at least on some level."
It became controversial, however, in Center for Law and Education v.
Departmentof Education," which involved a challenge brought by a parent
with a child in the public schools to the composition of a negotiated
rulemaking committee assembled by the DOE to propose regulations to
implement the No Child Left Behind Act (NCLBA). The parent had claimed
standing on the ground that, after the DOE received input from the improperly composed committee, it had issued final rules that gave states excessive discretion to implement the NCLBA, and that the state of Illinois had
used this authority to create rules that increased the risk of improper evaluation of its schools, which in turn raised the possibility that the daughter's
school would be improperly deprived of federal funding, thus harming the
daughter (and her parent).' 9
Given such a characterization, it should come as little surprise that the
court rejected this claim to standing on causation grounds. 20 The majority
then proceeded, however, to use its opinion as a vehicle for narrowing the
scope of the "increased risk" as injury-in-fact. It conceded that causation in
procedural-rights standing is relaxed in the sense that a plaintiff need not
demonstrate that a claimed procedural violation had a real impact on a final
agency action that affected some concrete interest of the plaintiff. For instance, returning to Lujan's example, a plaintiff complaining of a dam's defective environmental impact statement (EIS) need not prove that, if the EIS
had been done right, the agency would not have approved the dam. Rather, a
court will "assume[] the causal relationship between the procedural defect
and the final agency action."2 1 This assumption does not, however, relieve the
16. Id. at 1262 (citations omitted; emphasis to "risk" added).
17. See, e.g., Friends of the Earth, Inc. v. Gaston Copper Recycling Corp., 204
F.3d 149, 160 (4th Cir. 2000) (collecting authority for the proposition that
threatened or increased risk of harm can constitute injury-in-fact).
18. 396 F.3d 1152 (D.C. Cir. 2005). This case is also discussed herein in Housing and Urban Development (infra at 380-81).
19. See id. at 1160-61.
20. See id. at 1161.
21. Id. at 1160.
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Developments in Administrative Law and Regulatory Practice
plaintiff of the burden of "demonstrat[ing] a causal relationship between the
final agency action and the alleged injuries." 22 In other words, a plaintiff
complaining that a dam's EIS was defective must still demonstrate that the
dam has injured (or will injure) her.
In Centerfor Law and Education, the plaintiff parent had claimed that
procedural violations in the composition of the rulemaking committee tainted
the final rules that were subsequently issued. Even if one assumed a causal
connection between the method for composing the committee and the ultimate final rules, however, the plaintiff could not demonstrate that these rules
had actually caused her injury beyond vaguely claiming that they had created
an "increased risk" to her interests, which the court held insufficient for an
injury-in-fact:
Appellants allege direct injury styled as "increased risk," in the form
of giving the States the opportunity to injure Appellants' interests.
This so-called "injury" is insufficient for standing.
Outside of increased exposure to environmental harms, hypothesized "increased risk" has never been deemed sufficient "injury."
And even if "risk" were sufficient injury for standing in the nonenvironmental context, Lindsey would have to show that the challenged conduct has created a "demonstrably increased risk" that
"actually threatens the plaintiff's particular interests." Here, Lindsey
has hypothesized that the final agency rules have increased the risk
to her interests, but she has offered this Court no actual demonstration of increased risk.
Indeed, were all purely speculative "increased risks" deemed injurious, the entire requirement of "actual or imminent injury" would
be rendered moot, because all hypothesized, non-imminent "injuries" could be dressed up as "increased risk of future injury." 23
The preceding passage's assertion that a claim of injury due to "increased
risk" must be based on more than rank speculation is obviously correct. Its
more interesting claim is that "increased risk" has never been considered
sufficient injury for standing outside the environmental context-a claim
rejected by Judge Edwards in a concurrence that relied on the treatment of
risk in EPSA:
22. Id.
23. Id. (footnote and citations omitted).
Chapter5: JudicialReview
83
I also disagree with the statement in the majority opinion suggesting
that, in procedural rights cases, "[o]utside of increased exposure to
environmental harms, hypothesized 'increased risk' has never been
deemed sufficient 'injury' to satisfy standing requirements. In my
view, this statement is not consistent with the applicable case law.
Most recently, in Electric Power Supply Ass'n v. FERC, we held that
. . . EPSA . . . had standing "to enforce procedural requirements
designed to protect [its] concrete interest in the outcome of hearings
to which it is a party." Specifically, EPSA had standing to challenge
FERC's new exemptions regarding ex parte communications even
though there was no guarantee that impermissible ex parte contacts
would in fact materialize. ... 24
Judges of the D.C. Circuit disagreed sharply over the scope of procedural
standing once again in Shays v. Federal Election Comm'n.25 Members of
Congress challenged FEC regulations implementing the Bipartisan Campaign
Reform Act (BCRA). Among other injuries, the plaintiffs claimed that, due
to FEC's inadequate regulations, they faced a "'strong risk' that opponents
would use improper soft money spending against them."26 Relying in part on
EPSA, the majority held that the "procedural rights" line of precedent supports the broad principle that "when regulations illegally structure a competitive environment-whether an agency proceeding, a market, or a reelection
race-parties defending concrete interests (e.g., retention of elected office)
in that environment suffer legal harm under Article III."27 The majority's
analysis prompted a strong dissent from Judge Henderson, who contended
that, in the past, courts have granted procedural standing only to contest
agency decisions that deprive a litigant of a procedural right "that the Congress intended to protect in proceedings before the same agency."2 8 For instance, the FERC regulations at issue in EPSA would have permitted ex parte
24. Id. at 1166-67 (Edwards, J., concurring) (citations omitted).
25. 414 F.3d 76 (D.C. Cir. 2005). This case is also discussed herein in Elections
(infra at 240).
26. Id. at 85.
27. Id. at 87. The court's extensive discussion of standing also concluded that
its "competitor standing" precedents supported the congressmen's claim.
Id.
28. Id. at 117 (Henderson, J., dissenting) (emphasis in original).
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Developments in Administrative Law and Regulatory Practice
contacts in FERC's own proceedings. By contrast, the right to "fair" re-election fights asserted by the plaintiffs had no connection with any FEC proceeding. As Judge Henderson saw the matter, the majority's "unprecedented
reliance on a right independent of any agency proceeding turns the procedural rights doctrine on its head and creates a wholly new and insupportable
theory of standing." 29
For some relief from the D.C. Circuit, consider now the Seventh Circuit's
treatment of procedural standing in Bensman v. United States Forest Service," in which the court considered and rejected the argument that violation
of a procedural right granted to a specific set of interested persons can suffice
for injury-in-fact. The plaintiffs in this case had filed appeals of U.S. Forest
Service ("Service") project decisions regarding various national forests. Unfortunately, they filed their appeals one day late because, alas, they had made
the mistake of relying on the Service's own statement of the applicable due
date. Notwithstanding its error, the Service refused to consider the appeals
because of the missed deadline. The plaintiffs responded by bringing an action in district court to force the Service consider their appeals. The district
court dismissed the claim of one plaintiff (Donham) on standing grounds and
rejected the claims of the other plaintiff (Bensman) on the merits.
The Seventh Circuit addressed whether either plaintiff had suffered an
injury-in-fact on a procedural-rights theory due to the Service's refusal to
hear their appeals. The source of the claimed procedural right was a provision of the Appeals Reform Act (ARA) that granted appeal rights to persons
who have participated in the comment process for a Service project." The
Service, of course, claimed that this procedural right could not by itself support standing under Lujan. The court distinguished Lujan, however, on the
ground that the plaintiffs had a "personal" right under the ARA of a sort that
the Lujan plaintiffs had lacked. Recall that in Lujan, the plaintiffs had relied
upon the Endangered Species Act's (ESA's) grant of a cause of action to "any
person" to contest the government's failure to follow the ESA's required
procedures. 3 2 By contrast, the ARA granted a right to appeal not just to "any
person," but rather only to persons who had participated in the comment
29. Id. at 118.
30. 408 F.3d 945 (7th Cir. 2005). This case is also discussed herein in Environmental and Natural Resources Regulation (infra at 291-92).
31. See id. at 949 n.3 (quoting 16 U.S.C. § 1612(c) (2000) note); 951 (identifying source of claimed procedural right).
32. See id. at 951 (discussing the citizen suit provision at issue in Lujan).
Chapter 5: JudicialReview
85
process. Thus, the plaintiffs sought "to correct the Service's deprivation of
[a] personal right, not rectify, as in Lujan, a government misstep that affects
them no more than it affects the rights of all other citizens."3 3 But, having
noted this distinction, the court deemed it immaterial-in essence, the fact
that the plaintiffs asserted a "personal" right did not make this right "substantive" rather than "procedural" in the Lujan sense; therefore the plaintiffs still
had to connect violation of this "personal" procedural right to a threat to a
"concrete" interest to enjoy standing.34
3. Informational Deprivation as Injury-in-Fact
Two interesting circuit court cases addressed informational deprivation
as a ground for standing. In the Bensman case just discussed, plaintiffs claimed
standing to contest the Service's refusal to hear their appeals on the theory
that this refusal deprived them of information that the administrative appeals
process itself might generate. The Seventh Circuit rejected this claim in the
absence of any statutory or regulatory indication that the administrative appeals process granted the plaintiffs a right to information as opposed to a
right to participate in the decision-making process.35
Those seeking a generous approach to informational deprivation as a
basis for standing need look no further than the Sixth Circuit's opinion in
American Canoe Ass'n, Inc. v. City of Louisa Water & Sewer Comm'n, in
which the plaintiff environmental groups claimed that they had suffered informational injury due to the defendants' failure to monitor and report discharges of pollutants as required by the Clean Water Act. The court concluded
that an entity suffers injury-in-fact sufficient for standing so long as: (a)
"Congress has provided a broad right of action to vindicate [an] informational right"; and (b) the defendant has, by disobeying the law, violated the
plaintiff's informational right by depriving the plaintiff of information it
"desire[s] and allegedly need[s].""
Before reaching its broad conclusion, the court considered the leading
case on informational deprivation as a basis for standing, Federal Election
33. Id. at 952.
34. See id. at 952-53.
35. See id. at 957-60.
36. 389 F.3d 536 (6th Cir. 2004).
37. Id. at 546 (citing Cass R. Sunstein, Informational Regulation and Informa-
tional Standing: Akins and Beyond, 147 U. PA. L. REv. 613 (1999)).
86
Developments in Administrative Law and Regulatory Practice
Comm'n v. Akins,"8 in which the Supreme Court held that voters had standing
to contest the FEC's failure to enforce statutory requirements that a political
committee disclose information. The Sixth Circuit conceded that Akins can
be read to require that a plaintiff have some favored reason for needing
information in order for its deprivation to rise to the level of injury-in-fact
sufficient for standing.3 9 The court rejected this reading of Akins, however, as
inconsistent with the Court's approach to claims brought under the Freedom
of Information Act or Federal Advisory Commission Act, in which the only
event needed for standing was a rebuffed request for information.4
In the alternative, the Sixth Circuit concluded that any Akins-based requirement that a plaintiff need information for some favored reason was so
weak as to be easily met on the facts of the case before it. As the court styled
the matter, in Akins the plaintiffs sought information they needed to become
"better informed voter[s]." 4 1 The plaintiffs in American Canoe claimed that
access to information the Clean Water Act required defendants to report would
enable the plaintiffs to carry out their organizational function of "proposing
legislation" related to water quality. If the voter-information interest asserted
in Akins was sufficiently concrete and particularized for standing, then, as far
as the Sixth Circuit was concerned, so was the legislative-proposal interest of
the American Canoe plaintiffs.4 2
Just as in the Centerfor Law and Education and Shays cases discussed
above, the majority analysis in American Canoe prompted a strong dissent.
Judge Kennedy asserted the Supreme Court cases finding sufficient informational injury for standing "involved statutes that specifically granted individuals and groups the right to the information they sought."43 The Clean Water Act,
although it required public disclosure as part of the permit compliance process,
"focuses instead on environmental protection, not on creating broad rights to
38. 524 U.S. 11 (1998).
39. See American Canoe, 389 F.3d at 545-46 (quoting Akins, 524 U.S. at 24-25
("We conclude that
. the informational injury at issue here, directly
related to voting, the most basic of political rights, is sufficiently concrete
and specific such that the fact that it is widely shared does not deprive
Congress of constitutional power to authorize its vindication in the federal
courts.")).
40. See American Canoe, 389 F.3d at 545-46 (discussing, inter alia, Pub. Citizen v. U.S. Dep't of Justice, 491 U.S. 440, 449 (1989)).
41. Id. at 545.
42. See id. at 546.
43. Id. at 549 (Kennedy, J., dissenting in part).
Chapter5: JudicialReview
87
information."" By failing to honor this distinction, the majority had created a
situation in which any entity claiming any passing environmental concern could
obtain standing, effectively eviscerating the injury-in-fact requirement in contravention of Supreme Court cases such as Lujan.
B. Preclusion of Review-Spy Game
In Tenet v. Doe,45 the Supreme Court reaffirmed a one-hundred-andtwenty-nine-year-old precedent, Totten v. United States,46 blocking plaintiffs
from suing the Government based on secret agreements to conduct espionage. The respondents in this case, the Does, claimed that the CIA had reneged on a promise to provide "financial and personal security for life" in
exchange for Mr. Doe's espionage work for the United States during the Cold
War. Among other claims, the Does contended that the CIA's conduct had
violated their procedural and substantive due process rights; lower courts also
treated the Does' complaint as raising an estoppel theory.
In Totten, the Court had disposed of a similar claim brought by the estate
of a Civil War veteran in sweeping language, with remarks such as: "[P]ublic
policy forbids the maintenance of any suit in a court of justice, the trial of
which would inevitably lead to the disclosure of matters which the law itself
regards as confidential."4 7 Notwithstanding such language, in Doe, a divided
Ninth Circuit held that Totten did not require dismissal because its rule: (a)
was limited to breach-of-contract actions and did not reach the Does' constitutional and estoppel claims; and (b) amounted to an evidentiary "state secrets" privilege rather than a jurisdictional bar.
The Supreme Court reversed with a ringing endorsement of the vitality
and scope of Totten as a categorical bar to judicial review of efforts to enforce claims based on the provision of secret espionage services. The most
significant part of its opinion-at least for those without many spies for
clients-was the expeditious way in which the Court rejected the respondents' attempt to rely upon another case that dealt with judicial review of
intelligence activities, Webster v. Doe.4 8 In that case, the Court had held that §
102(c) of the National Security Act of 1947 did not preclude review of a
44. Id.
45. 125 S. Ct. 1230 (2005).
46. 92 U.S. 105 (1876).
47. Id. at 107.
48. 486 U.S. 592 (1988).
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Developments in Administrative Law and Regulatory Practice
former CIA employee's constitutional claims alleging discrimination, in part
to avoid the "serious constitutional question that would arise if a federal
statute were construed to deny any judicial forum for a colorable constitutional claim."49 The Supreme Court rejected the attempt to analogize Webster
and Tenet with the curt observation that:
there is an obvious difference, for purposes of Totten, between a suit
brought by an acknowledged (though covert) employee of the CIA
and one filed by an alleged former spy. Only in the latter scenario is
Totten's core concern implicated: preventing the existence of the
plaintiff's relationship with the Government from being revealed."o
The bottom line was that the public policy concern to keep secret intelligence matters from being revealed in the courts seemed to eliminate any trace
of concern that preclusion of review of the Does' constitutional claims might
raise a "serious constitutional question."
C. Preclusion of a Sort-Displacing § 1983
In City of Rancho Palos Verdes, California v. Abrams,'
the Supreme
Court held that where Congress establishes a private judicial remedy for violations of a given federal statute, the "ordinary inference" is that this remedy
is exclusive and displaces section 1983.52 This case arose after the defendant
city denied the plaintiff, an amateur radio operator, a permit to build a radio
tower on his property. A provision of the Telecommunications Act of 1996
(TCA) imposes various limits on state and local regulation of antenna towers
and further provides that:
Any person adversely affected by any final action or failure to act by
a State or local government or any instrumentality thereof that is
inconsistent with this subparagraph may, within 30 days after such
action or failure to act, commence an action in any court of competent jurisdiction."
49.
50.
51.
52.
Id. at 603.
125 S. Ct. at 1237.
125 S. Ct. 1453 (2005).
See id. at 1459.
53. 47 U.S.C. § 332(c)(7)(B)(v) (2000).
Chapter 5: Judicial Review
89
The plaintiff sought injunctive relief pursuant to this TCA remedy but
also sought money damages and attorney's fees under sections 1983 and 1988.
The Court began its analysis with the observation that determining whether
a plaintiff may bring a section 1983 action for violation of a federal law
involves a two-step inquiry. First, the plaintiff, by establishing that "the federal statute creates an individually enforceable right in the class of beneficiaries to which he belongs," can create a "rebuttable presumption that the right
is enforceable under § 1983."54 Second, "[t]he defendant may defeat this
presumption by demonstrating that Congress did not intend that remedy for a
newly created right."" All parties conceded that § 332(c)(7) had created an
individually enforceable right. Therefore, the question before the Court was
whether Congress meant for § 332(c)(7)'s judicial remedy to be exclusive
and displace section 1983 with its opportunities for money damages and
attorney's fees.
The government, as amicus, contended that the Court should adopt a
bright-line rule that "the availability of a private judicial remedy is not merely
indicative of, but conclusively establishes, a congressional intent to preclude
section 1983 relief."" The Court did not accept this invitation, but came
close. Surveying the case law, it conceded that, indeed, "the existence of a
more restrictive private remedy for statutory violations has been the dividing
line between those cases in which we have held that an action would lie under
section 1983 and those in which we have held that it would not."57 It added,
however, that "[t]he ordinary inference that the remedy provided in the statute is exclusive can surely be overcome by textual indication, express or
implicit, that the remedy is to complement, rather than supplant, § 1983.""
The TCA lacked any such indication; in particular, there was no reason to
think that Congress intended to saddle local governments with liability "for
the (often substantial) legal expenses of large commercial interests for the
misapplication of a complex and novel statutory scheme." 9 Therefore, the
TCA's remedy supplanted rather than complemented section 1983.
54. 125 S. Ct. at 1458.
55.
56.
57.
58.
Id.
Id. at 1459.
Id. at 1458.
Id.
59. Id. at 1460. It bears noting that five Justices signed on to concurrences that
took issue with either the lead opinion's method for determining congressional intent or its standard for finding displacement of § 1983. Justice Breyer,
writing for four Justices, stressed that "context, not just literal text, will often
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Developments in Administrative Law and Regulatory Practice
D. Of Sovereign Immunity
A discussion of sovereign immunity in a developments chapter must, in
the interest of completeness, take note of the fact that the Supreme Court
issued a brief, unanimous opinion on this topic in Orffv. United States.60 The
petitioners, California farmers, contended that they were third-party beneficiaries of a 1963 contract between the United States and a water district and
joined a suit to enforce it. They contended that sovereign immunity did not
bar this contract claim because the United States had waived this defense in
1982's Reclamation Reform Act, which provides:
Consent is given to join the United States as a necessary party defendant in any suit to adjudicate, confirm, validate, or decree the contractual rights of a contracting entity and the United States regarding
any contract executed pursuant to Federal reclamation law.61
The Court held that the petitioners' attempt to evade sovereign immunity
"founders on the principle that a waiver of sovereign immunity must be
strictly construed in favor of the sovereign."62 In light of this principle, the
waiver provision at issue should be interpreted to mean what it seems to
say-i.e., that this provision authorizes joinder of the United States to a
preexisting suit but does not authorize a party to sue the United States as a
sole defendant.63
Two circuit court opinions on sovereign immunity were more interesting. In one of them, Simmat v. United States Bureau of Prisons,64 a federal
prisoner sued prison dentists, in their official capacity, for violating his Eighth
lead a court to Congress' intent in respect to a particular statute." Id. at
1460. In a solo concurrence, Justice Stevens added that courts should also
examine legislative history for relevant evidence of legislative intent and
that he did "not believe that the Court has properly acknowledged the
strength of our normal presumption that Congress intended to preserve,
rather than preclude, the availability of § 1983 as a remedy for the enforcement of federal statutory rights." Id. at 1463-65.
60. 125 S. Ct. 2606 (2005). This case is also discussed herein in Environmental
and Natural Resources Regulation (infra at 278).
61. 43 U.S.C. § 390uu (2000).
62. 125 S. Ct. at 2610.
63. See id.
64. 413 F.3d 1225 (10th Cir. 2005).
Chapter 5: JudicialReview
91
Amendment rights. Judge McConnell noted that a state prisoner making such
a claim would rely on section 1983 but that, "[i]n the case of federal prisoners, surprisingly, the vehicle is not clear" and that "clarification would be
useful."65 He first explained that a Bivens action cannot work in this context
because it can only lie against an official operating in his or her individual
capacity.66 He concluded, however, that a federal prisoner may obtain injunctive relief or relief in the nature of mandamus in an official capacity suit."
Along the way to this conclusion, Judge McConnell concisely explained the
historical and current jurisdictional basis for injunctive relief in the federal
courts; the scope of sovereign immunity as a defense to an action for injunctive relief; the curious history and current availability of mandamus as a
remedy; and the inapplicability of the sovereign immunity defense to an
action seeking mandamus relief.68
We save the most intriguing case for last. In McMellon v. United States,69
a split Fourth Circuit, sitting en banc, invoked separation of powers to
justify its conclusion that the Suits in Admiralty Act (SIAA) contains an
implicit discretionary function exception to its waiver of sovereign immunity. By way of background, the Federal Torts Claims Act (FTCA) waives
sovereign immunity for torts committed by government employees, but is
subject to various exemptions. Two are important here. First, the statute
exempts from waiver those claims "based upon the exercise or performance
or the failure to exercise or perform a discretionary function or duty on the
part of a federal agency or an employee of the Government."7 0 Second, the
FTCA does not apply to claims which are covered by the SIAA, which
waives sovereign immunity to tort actions in admiralty." Unlike the FTCA,
however, the SIAA does not contain an express discretionary function exemption. This difference leaves open the anomalous possibility that the
waiver of sovereign immunity in SIAA actions in admiralty is considerably
broader than in FTCA actions.
The plaintiffs in McMellon were jet-skiers who brought an action against
the United States under the SIAA claiming that the government's negligent
65. Id. at 1227-28.
66. Id. at 1231.
67. See id.at 1235.
68. See generally id. at 1231-36.
69. 387 E3d 329 (4th Cir. 2004) (en banc), cert. denied, 125 S. Ct. 1828 (2005).
70. 28 U.S.C. § 2680(a).
71. 28 U.S.C. § 2680(d).
92
Developments in Administrative Law and Regulatory Practice
failure to warn had caused them to ski over a dam. The government moved to
dismiss, contending the SIAA contains an implicit discretionary function
exemption to its waiver of sovereign immunity and that it blocked the plaintiffs' suit. Both the district court and the appellate panel followed a Fourth
Circuit precedent, Lane v. United States,72 in rejecting this contention.
The en banc court overruled Lane and reversed. By doing so, it joined
ten other circuits that have held that there is a discretionary function exception to the SIAA sovereign immunity waiver.73 How the Fourth Circuit got to
this result was the remarkable part. According to the court, the government's
argument proceeded in two parts: (a) that Congress did not intend in the
SIAA to waive immunity for discretionary acts; and (b) that separation-ofpowers principles required a discretionary functions exception to the SIAA
waiver in any event. 74
After a detailed analysis, the court rejected the government's legislative
intent argument. Indeed, the court went so far as to observe that the "plain
language of the SIAA seems to reflect a Congressional intent that discretionary acts not be excluded from the waiver of sovereign immunity,"7 5 and that
the waiver was "clear and unequivocal."76 Given this clarity, the canon of
construction that waivers of sovereign immunity should be strictly construed
in favor of the sovereign was of no use to the government's cause.77
Having rejected the government's legislative-intent argument, the court
then proceeded to hold that "separation-of-powers principles require us to
read into the SIAA's waiver of sovereign immunity a discretionary function
exception." 78 A core idea behind the court's analysis leading up to this conclusion was that the discretionary function exception protects the executive
branch from improper judicial second-guessing of its policy judgments and
that, without such an exception, "the executive branch's ability to 'faithfully
execute[]' the law . . . would be substantially impaired." 79
Of course, there is nothing surprising in a court relying on the familiar
doctrine of constitutional avoidance to justify reading an ambiguous statute
72.
73.
74.
75.
76.
77.
78.
79.
529 F.2d 175 (4th Cir. 1975).
See McMellon, 387 F.3d at 338 (collecting cases).
See id. at 338-39.
Id. at 339.
Id. at 340.
See id.
Id. at 343.
Id. at 342 (quoting U.S. CONST., art. II, § 3).
Chapter 5: JudicialReview
93
in a way that avoids serious constitutional questions. The jarring bit here is
that the court in McMellon used constitutional concerns to justify construing
the SIAA waiver provision in a manner contrary to what the court apparently
deemed the provision's "clear and unequivocal" meaning.8o
The majority opinion prompted several strong dissents, with the longest
and sharpest coming from Judge Luttig. To give you the idea, here is how he
began:
The separation-of-powers analysis on the strength of which the majority judicially engrafts upon the . . . SIAA . . . a discretionary
function exception is one of the most far-reaching and obviously
illegitimate (as a matter of established constitutional doctrine) of
any separation-of-powers analysis that I have encountered during
my time on the federal bench. It is plain that, in judicially forbidding the "clear and unequivocal" waiver of sovereign immunity that
both the Congress and the Executive agreed upon in the SIAA, the
court fundamentally misunderstands the principle of separation of
powers, mistakenly equating liability of the United States with infringement on the Executive's power to execute the laws. Indeed,
the level of misunderstanding in this regard is breathtaking."
Recognizing that this brief summary cannot possibly do justice to the
seven opinions issued by the en banc court, we will rely on Judge Luttig's
broadside to pique your interest enough to read through them yourself. 82
PART II. SCOPE OF REVIEW-MOSTLY MEAD (AGAIN)
Last term, the Supreme Court issued two decisions concerning Chevron
deference. In Smith v. City of Jackson," the Court debated the propriety of
extending Chevron deference to an EEOC interpretation. More significantly,
in National Cable & Telecommunications Assn. v. Brand X Internet Ser-
80. Id. at 340;
avoidance
holds, the
cal"').
81. Id.at 362
cf id. at 365 (Luttig, J., dissenting) (observing that "the canon of
is not applicable here, however, because, as the majority itself
SIAA's waiver of sovereign immunity is 'clear and unequivo(Luttig, J., dissenting).
82. They run only 54 pages in the West reporter.
83. 125 S. Ct. 1536 (2005).
94
Developments in Administrative Law and Regulatory Practice
vices,84 the Court held that a prior judicial interpretation of a statute does not
trump a subsequent agency interpretation otherwise entitled to Chevron deference.
But the 800-pound gorilla in scope of review continues to be United
States v. Mead Corp." Justice Breyer and Justice Scalia used Brand X as an
occasion to replay their disagreement about Mead. During that interchange,
Justice Breyer offered as clarification of Mead the idea that the delegation
and exercise of notice-and-comment rulemaking authority is not sufficient
for Chevron deference on "unusually basic legal questions." What Justice Breyer
meant by this is not entirely clear. But lower courts, including one recently,
have read Mead in somewhat similar fashion to demand an express delegation of interpretive authority for agencies to resolve scope-of-authority or
jurisdictional questions, even through notice-and-comment rulemaking.
Beyond the issue of jurisdictional questions, lower courts continue to
grapple with Mead's main event-the status of informal procedures. By now,
lower courts realize that the Court has provided two seemingly distinct tests
for determining the Chevron eligibility of interpretations issued through informal means: one from Mead itself and one from the later case, Barnhart v.
Walton.86 The Court has not clarified the relationship between the Mead and
Barnhartanalyses, and lower courts now appear simply to choose one or the
other based on the interpretive procedure before them.
Looking past Mead, lower courts-and the D.C. Circuit, in particularhave invalidated a number of agency rules under the arbitrary-and-capricious
test or Chevron step Two for failure to contain a reasoned explanation. These
cases are notable more for their sheer volume than for any particular analysis.
A. Differing Views on Chevron Deference
In Smith v. City of Jackson," the Supreme Court concluded 8-0 (Chief
Justice Rehnquist did not participate) that the plaintiffs' disparate-impact age
discrimination case under the Age Discrimination in Employment Act (ADEA)
would have to be dismissed. Although unanimous in result, the Justices exhibited very different approaches to the question of whether the ADEA permitted disparate-impact claims, and in particular, whether the EEOC's
84.
85.
86.
87.
125
533
525
125
S. Ct. 2688 (2005).
U.S. 218 (2001).
U.S. 212 (2002).
S. Ct. 1536 (2005).
Chapter 5: JudicialReview
95
interpretation to that effect was entitled to Chevron deference. Even the five
Justices who agreed that the ADEA authorized such claims split 4-1 on the
reasoning.
The plurality, Justice Stevens writing for himself and Justices Ginsburg,
Souter and Breyer, concluded that the ADEA supported disparate-impact claims
based on the text of the statute, referring to the EEOC's interpretation only
for confirmation. The plurality compared the ADEA to Title VII of the Civil
Rights Act of 1964, noting that "when Congress uses the same language in
two statutes having similar purposes, particularly when one is enacted shortly
after the other, it is appropriate to presume that Congress intended that text to
have the same meaning in both statutes."" Griggs v. Duke Power Co.,89 in
which the Court had unanimously interpreted the language of Title VII to
allow disparate-impact claims, therefore was controlling as to the comparable language of the ADEA. At the very end of its analysis, the plurality
noted that "both the Department of Labor, which initially drafted the legislation, and the EEOC, which is the agency charged by Congress with responsibility for implementing the statute have consistently interpreted the ADEA to
authorize relief on a disparate-impact theory."90
Justice Scalia concurred in the judgment to argue that the EEOC's interpretation was entitled to Chevron deference. He stated that "[tihis is an absolutely classic case for deference to agency interpretation," because the EEOC
was clearly delegated rulemaking authority, had promulgated after notice and
comment a regulation concerning prohibited employment practices, had published along with that regulation a statement supporting disparate-impact
claims, and had defended that interpretation in numerous court cases.91 He
therefore concluded that, even under the strict standard for Chevron deference established in Mead, the EEOC's interpretation passes muster.
Justice O'Connor, joined by Justices Kennedy and Thomas, concurred in
the final judgment dismissing the case for failure to state a claim, but disagreed with the plurality's conclusion that the ADEA allowed disparate-impact claims and Justice Scalia's conclusion that the EEOC's interpretation
deserved Chevron deference. Based on the text, legislative history, and structure of the ADEA, Justice O'Connor contended that "[t]he drafters of the
ADEA and the Congress that enacted it understood that age discrimination
88.
89.
90.
91.
Id. at 1541.
401 U.S. 424 (1971).
125 S. Ct. at 1544.
Id. at 1546 (Scalia, J., concurring).
96
Developments in Administrative Law and Regulatory Practice
was qualitatively different from the kinds of discrimination addressed by
Title VII, and that many legitimate employment practices would have a disparate impact on older workers."92 Moreover, she found that the EEOC's
contrary interpretation deserved no deference because it came from a 1968
Labor Bulletin and a 1981 EEOC policy statement, neither of which focused
directly on the disparate-impact question. Thus, Justice O'Connor concluded
that the EEOC "has not actually exercised its delegated authority to resolve
any ambiguity in the relevant provision's text, much less done so in a reasonable or persuasive manner.""
This case shows that different Justices may view the same agency interpretation differently-as confirmatory, conclusive, or inapt. Chevron deference is in the eye of the beholder, perhaps especially after Mead.
B. Decisive Clarification on Stare Decisis
In Nat'l Cable & Telecommunications Assn. v. Brand X Internet Services,94 the Court delivered a surprise for those expecting a telecommunications decision when it instead announced an administrative law decision, one
that clarified the scope of Chevron deference rather than the scope of the
Communications Act of 1934. Specifically, the Court, 6-3, Justice Thomas
writing, held that a prior judicial construction of an ambiguous statutory
provision does not foreclose Chevron deference to a subsequent agency interpretation of that provision.
The case involved the substantive question of whether cable companies
that provide broadband Internet access provide "telecommunications service"
within the meaning of Title II of the Communications Act. The FCC determined, after notice-and-comment rulemaking, that such cable companies did
not and, accordingly, were exempt from mandatory common carrier regulation under Title II. The difficulty was that the Ninth Circuit already had
determined the opposite in a case that predated the FCC's rule. Thus, the
administrative law question was whether priorjudicial construction precluded
Chevron deference to subsequent agency reinterpretation, even through notice-and-comment rulemaking.
The Court held that a prior judicial interpretation of an ambiguous statutory provision does not trump a subsequent agency interpretation otherwise
92. Id. at 1552 (O'Connor, J., concurring).
93. Id. at 1559 (O'Connor, J., concurring).
94. 125 S. Ct. 2688 (2005).
Chapter 5: JudicialReview
97
entitled to Chevron deference. It reasoned that a different understanding would
produce anomalous results: "Chevron deference would turn on the order in
which the interpretations issue."9" An agency interpretation would not control
unless it came first, before any judicial interpretation. But, the Court stated,
the principles that underlie Chevron deference do not depend on timing.
Moreover, a timing rule "would prevent agencies from revising unwise judicial constructions," leading to "the ossification of large parts of our statutory
law." 96 Nothing in the principles of Chevron deference or stare decisis demands such a result.
Justice Scalia dissented on this point and others. He accused the majority of making "judicial decisions subject to reversal by Executive officers." 97 This view, he stated, was "not only bizarre . . . [but] probably
unconstitutional.""
Interestingly, the Court did not need to resolve the stare decisis issue.
Unlike the Ninth Circuit, which heard the case below, it was not bound by the
prior circuit precedent interpreting the Communications Act. Nevertheless,
the Court wanted to clarify this issue for the lower courts, and it did so.
C. Special Treatment of Jurisdictional Questions
But no good deed goes unpunished. By raising the stare decisis issue, the
Court in Brand X invited discussion of the Mead mess. In one sense, BrandX
had nothing to do with the question of procedural formality. The interpretation in the case undoubtedly reflected such formality (and undoubtedly deserved Chevron deference barring stare decisis concerns) because it was the
product of notice-and-comment rulemaking. Yet Justice Scalia seized the
opportunity, in dissent, to criticize the decision in Mead as well as the holding in Brand X. For him, the two are inextricably related. In his view, agencies lack the authority to revise judicial precedent. If that deprives agencies
of interpretive flexibility, then blame Mead, which in his view requires agencies to await the culmination of "some unspecified degree of formal process"
to interpret statutory ambiguities in the first instance. 99
95.
96.
97.
98.
99.
Id.
Id.
Id.
Id.
Id.
at 2700.
at 2719 (Scalia, J., dissenting).
at 2720 (Scalia, J., dissenting).
at 2718 (Scalia., J., dissenting).
98
Developments in Administrative Law and Regulatory Practice
Justice Breyer, in concurrence, responded to Justice Scalia's charge and
offered to clarify the meaning of Mead. On Justice Breyer's reading of Mead,
"the existence of a formal rulemaking proceeding is neither a necessary nor a
sufficient condition for Chevron deference to an agency's interpretation of a
statute." 00 "It is not a necessary condition," he stated, "because an agency
might arrive at an authoritative interpretation of a congressional enactment in
other ways."'o' As illustration, Justice Breyer referred to an example that
Justice Scalia provided involving an agency litigating position endorsed by
the agency head. It is "not a sufficient condition because Congress may have
intended not to leave the matter of particular interpretation up to the agency,
irrespective of the procedure the agency uses to arrive at that interpretation,
say, where an unusually basic legal question is at issue."'0 2 Justice Breyer
provided a "cf." citation to a case that he described as "rejecting agency's
answer to question whether age discrimination law forbids discrimination
against the relatively young." 03
It is difficult to know exactly what Justice Breyer intended with this
purported clarification of Mead. He did not explain how the agency litigating position to which he referred is distinguishable from those traditionally
excluded from Chevron deference. Furthermore, he did not specify how unusually basic legal questions are distinguishable from the myriad other questions whose answers routinely command Chevron deference.
Perhaps Justice Breyer has in mind a special rule for scope-of-authority
or jurisdiction questions, as some lower courts have had. For example, this
year in American LibraryAss'n v. FCC, 104 the D.C. Circuit refused to extend
Chevron deference to an FCC rule requiring that all new televisions and other
equipment capable of receiving a digital broadcast signal be equipped with a
"broadcast flag." The flag prevents the equipment from redistributing broadcast material. The D.C. Circuit concluded that the rule exceeded the FCC's
authority to regulate "all interstate and foreign communication by wire or
radio" because it sought to reach equipment after "communication"-that is,
after transmission and receipt. 0 Although the FCC is clearly authorized to
100.
101.
102.
103.
104.
Id. at 2712 (Breyer, J., concurring).
Id. (Breyer, J., concurring).
Id. at 2713 (Breyer, J., concurring).
Id. (Breyer, J., concurring).
406 F.3d 689 (D.C. Cir. 2005). This case is also discussed herein in
Rulemaking (infra at 135).
105. Id. at 700.
Chapter5: JudicialReview
99
issue rules with the force of law and exercised such authority in this casethe threshold test of Mead-the court read Mead to require that the agency
must have been delegated express authority with respect to the particular area
being regulated. Thus, the court effectively imposed an additional delegation
requirement for Chevron deference on scope-of-authority questions.
This special treatment of scope-of-authority issues raises many questions. First, it is not clearly attributable to Mead, which concerned implicit
delegations and accorded presumptive deference to the fruits of notice-andcomment rulemaking. Even if justified, it is not easily administered. Courts
long have recognized the difficulty of determining the precise boundary of
an agency's regulatory jurisdiction, and have deferred to the agency's construction.1 1 6 If this special treatment nevertheless is to continue, lower courts
might benefit from a frank discussion of it. Or else, the difficulty of distinguishing jurisdictional questions might well rival the task of evaluating informal procedures in the post-Mead world.
D. Alternating Tests for Informal Procedures
Of course, the task of evaluating informal procedures still remains the
central one after Mead. Lower courts now recognize, at least implicitly, that
this task is complicated by a threshold determination: whether to apply the
criteria for determining Chevron worthiness from Mead or those from Barnhart
v. Walton.'" While Mead emphasized whether an interpretation is rendered
through a format that "foster[s] [] fairness and deliberation" and "bespeaks
the type of legislative activity that naturally binds more than the parties to the
ruling,"' 0 ' Barnhartunderscored "the interstitial nature of the legal question,
the related expertise of the Agency, the importance of the question to administration of the statute, the complexity of that administration, and the careful
consideration the Agency has given the question over a long period of time.""
The Court has not clarified the relationship between Mead and Barnhart,
106. See, e.g., Riverside Bayview Homes, Inc. v. United States, 474 U.S. 121
(1985) (deferring to Corps of Engineers' assertion of jurisdiction over adjacent wetlands under the Clean Water Act because it is difficult to determine
"some point at which water ends and land begins").
107. This issue is different from the question of whether a particular interpretation satisfies the criteria from one case or the other.
108. United States v. Mead, 533 U.S. 218, 232 (2001).
109. Barnhart v. Walton, 535 U.S. 212, 222 (2002).
100
Developments in Administrative Law and Regulatory Practice
which do not contain obviously parallel considerations. And lower courts
have taken to applying one or the other on a case-by-case basis. Nor is there
a split in the circuits between those consistently applying Mead and those
consistently applying Barnhart.Within the same circuit, different panels apply one or the other to different interpretive procedures, without explaining
or even acknowledging their choice. Thus, Chevron deference appears to depend on whether the court evaluating a particular interpretive procedure favors Mead-style factors or Barnhart-style factors. As illustration, consider
two cases from the Second Circuit this year.'10
In De La Mota v. U.S. Dept. of Education, the Second Circuit held that
the DOE was not entitled to Chevron deference for an interpretation of the
Higher Education Act that limited the statute's provision for forgiveness of
federally-funded student loans to borrowers providing services "directly" and
"exclusively" and "only" to high-risk children from low-income communities. " The court considered the factors from Mead, observing that "an agency
lacks 'a lawmaking pretense in mind' when it makes pronouncements not
binding on third parties and not in a notice-and-comment fashion."ll 2 It found
that the DOE interpretation "did not emerge from any formal rule-making
procedures" and consisted of "ad hoc, previously unwritten rules, supplied by
a DOE staff employee" or "first surfac[ing] in a [DOE] Handbook.""' It
therefore concluded that DOE was not entitled to Chevron deference.114
Contrast Kruse v. Wells Fargo Home Mortgage,Inc., in which the Second
Circuit applied the multi-factored Barnharttest to hold that a HUD Policy
Statement was entitled to Chevron deference." The substantive question was
whether certain "markups" for settlement services violated the Real Estate
Settlement Procedure Act's prohibition on charges for services that were not
actually provided. HUD had published in the Federal Register a Policy State-
110. For a detailed discussion of this phenomenon, see Lisa Schultz Bressman.
How Mead Has Muddled Judicial Review of Agency Action, 58 VAND. L.
REV.
111.
112.
113.
114.
1443 (2005).
412 F.3d 71, 78 (2d Cir. 2005).
Id. at 79.
Id.
Id. at 80-81. It further concluded that the DOE was not entitled to Skidmore
deference because the interpretation lacked the power to persuade, not only
emanating from a staff member rather than the Secretary but emerging without substantial explanation on a tentative or advisory basis. Id. at 81-82.
115. 383 F.3d 49 (2d Cir. 2004).
Chapter5: JudicialReview
I101
ment to the effect that markups violated the statute. Applying the Barnhart
criteria, the Second Circuit held that the informal Policy Statement was entitled to Chevron deference. First, the court noted that the statute granted the
Secretary the authority "to prescribe such rules and regulations, [and] to
make such interpretations ... as may be necessary to achieve the purposes of'
the statute."' Disagreeing with a previous Seventh Circuit decision, it then
noted that the agency had considered the issue in detail and had not merely
offered a "set of off-the-cuff remarks.""' Second, the court observed that
HUD has extensive substantive expertise in the area, and that other circuits
had accorded Chevron deference to the Policy Statement with respect to a
different interpretation contained therein."'
Where does this leave lower courts? Until the Supreme Court clarifies
the relationship between Mead and Barnhart,lower courts apparently may
choose one or the other. As a result, Chevron deference may turn on a court's
immediate preference for one test over the other.
E. Multiple Invalidations for Inadequate Explanations
The lower courts-and in particular, the D.C. Circuit-invalidated a large
number of agency regulations under the arbitrary-and-capricious test and/or
Chevron step 2 for failure to contain an adequate explanation, among other
reasons." 9 These cases are notable mainly for their abundance. They remind
116. Id. at 59.
117. Id. at 61.
118. See Mylan Labs., Inc. v. Thompson, 389 F.3d 1272 (D.C. Cir. 2004) (applying Barnhart not Mead to extend Chevron deference to an FDA interpretation of the Federal Food, Drug and Cosmetic Act concerning approval of a
new drug application for a generic drug that was contained in letters issued
to a various parties).
119. See Shays v. FEC, 414 F.3d 76 (D.C. Cir. 2005) (invalidating five FEC regula-
tions implementing the Bipartisan Campaign Finance Reform Act of 2002,
two as contrary to plain meaning of the statute and two for failure to contain
an explanation that makes any sense); New York v. EPA, 413 F.3d 3 (D.C. Cir.
2005) (holding that EPA, while prevailing on certain issues, provided an
inadequate and circular explanation for a new recordkeeping and reporting
requirement under the Clean Air Act); Northpoint Tech., Ltd. v. FCC, 412
F3d 145 (D.C. Cir. 2005) (holding that the FCC's interpretation of the OpenMarket Reorganization for the Betterment of International Telecommunications Act allowing auction of digital broadcast licenses was unreasonable
Chevron step Two because "premised in part on a non-existent factor or one
102
Developments in Administrative Law and Regulatory Practice
us that, while courts may struggle with the new emphasis on procedural formality, they still care about the old requirement of reasoned decisionmaking.
In sum, this has been another year in which the courts-Supreme and
lower-have been sorting out the direct or indirect implications of Mead.
Lower courts also have attended to the application of the hard look doctrine,
taking it seriously in various cases.
PART III. ATTORNEY'S FEES AND COSTS
In cases involving claims for attorney's fees or costs based on fee shifting
statutes such as the Equal Access to Justice Act, 28 U.S.C. § 2412,m1 three
types of disputes often arise. First, the parties may disagree over whether the
plaintiffs satisfied statutory provisions authorizing attorney's fees, especially
statutes awarding fees to "prevailing parties." Second, fees may be denied
under EAJA if the federal defendant's position was substantially justified.
Third, parties often dispute the amount of fees or costs.
that results from an unexplained departure from prior Commission policy
and practice," and failed to explain critical differences between services
that it treats differently); Jupiter Energy Corp. v. FERC, 407 E3d 346 (5th
Cir. 2005) (invalidating FERC interpretation for crazy characterization of
pipeline as for "transportation" and thus within FERC's jurisdiction, when
pipeline was upstream of "gathering" pipeline not within agency's jurisdiction); Burlington N. and Santa Fe Ry. Co. v. Surface Transp. Bd., 403
F.3d 771 (D.C. Cir. 2005) (striking down Board decision for failure to adequately explain the differential treatment of a shipper and a carrier in rate
reopening decision); Waterkeeper Alliance, Inc. v. USEPA, 399 F.3d 486
(2d Cir. 2005) (striking down EPA regulations governing combined animal
feeding operations in part for failure to contain an adequate explanation);
Edison Mission Energy, Inc. v. FERC, 394 F.3d 964 (D.C. Cir. 2005) (invalidating FERC order allowing the operator of the state's bulk power transmission system to unilaterally reduce bid prices that generators and marketers
submitted to sell power in the state for failure to provide a satisfactory
explanation); Bluewater Network v. EPA, 370 F.3d I (D.C. Cir. 2004) (while
upholding EPA's interpretation of the Clean Air Act concerning snowmobile emission standards, nonetheless invalidating agency's application of
that position for failure to provide an adequate explanation).
120. The EAJA provides that a district court may award attorney's fees where (1)
the claimant is a "prevailing party"; (2) the government was not substantially justified; (3) no "special circumstances make an award unjust"; and (4)
the fee application is submitted to the court within 30 days of final judgment
and is supported by an itemized statement. 28 U.S.C. § 2412(d)(1)(A); see
Golembiewski v. Barnhart, 382 F.3d 721, 723 (7th Cir. 2004).
Chapter 5: JudicialReview
103
A. Defining "Prevailing Party"
In Buckhannon Bd. and Care Home, Inc. v. West Virginia Dept. of Health
and Human Res.,121 the Supreme Court permanently did away with the "catalyst theory" method for determining an award of attorney's fees to a prevailing party to a case. In Select Milk Producers v. Johanns,122 the D.C. Circuit
broke Buckhannon down into a three-part test. First, a claimant for attorney's
fees must show a court-ordered change in the legal relationship between the
plaintiff and the defendant. Second, the party must have received a favorable
judgment, regardless of the amount of damages awarded. Third, a claimant is
not a prevailing party merely by virtue of having acquired a judicial pronouncement unaccompanied by judicial relief.
In the context of settlement agreements, courts continue to wrestle with
Buckhannon. In A.R. v. New York City Dept. of Education,23 for example,
the Second Circuit noted that the mere fact that a case is settled, without
more, will not entitle a plaintiff to attorney's fees. But, if a party's obligation
to comply with the terms of the settlement agreement had been made part of
the order of dismissal, either by separate provision or by incorporating the
terms of the settlement agreement in the order, then the court held a party
may be a "prevailing party."
The application of Buckhannon's principles to moot cases also arose.
The D.C. Circuit held, in McSally v. Rumsfeld, that if a case becomes moot
due to legislative, not judicial action, then no attorney's fees will be ordered. 124 But, in Palmetto Props., Inc. v. County of Dupage,'25 the Seventh
Circuit held that plaintiffs may be considered "prevailing parties" in cases
121. 532 U.S. 598 (2001).
122. 400 F.3d 939, 947 (D.C. Cir. 2005). See also Thomas v. Nat'l Science Found.,
330 F.3d 486, 492-93 (D.C. Cir. 2003) (also discussing Buckhannon) and
Coalition v. Fed. Transit Admin., 356 F.3d 444, 452 (2d Cir. 2004) (summarizing various circuit court decisions related to Buckhannon).
123. 407 F.3d 65, 77-78 (2d Cir. 2005); see Nathan F. v. Parkland Sch. Dist., 136
Fed. Appx. 511, 513 (3d Cir. 2005) ("[W]e have required that private settlements be judicially sanctioned in order to confer prevailing party status for
[] fee-shifting purposes.") Note that a judicially-ordered settlement agreement can justify the payment of attorney's fees for pre-complaint activities
too. T.D. v. LaGrange Sch. Dist. No. 102, 349 F.3d 469, 480 (7th Cir. 2003).
124. No. 04-5303, 2005 U.S. App. LEXIS 5679 (D.C. Cir. Apr. 8, 2005).
125. 375 F.3d 542, 551 (7th Cir. 2004) ([I]f a court waits and abstains from ruling
upon assurances from the defendant that they will take actions which will
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Developments in Administrative Law and Regulatory Practice
dismissed as moot based on voluntary cessation of conduct.
Buckhannon broadly applies to many statutes using the term "prevailing
party." 126 However, in Association of California Water Agencies v. Evans,1 2 7
the Ninth Circuit concluded that Buckhannon did not apply, and the catalyst
theory could still provide a basis for awarding attorney's fees in a citizen suit
based on the Endangered Species Act's (ESA) fee-shifting provisions. Relying on the fact that the ESA did not use the term prevailing party,12 ACWA v.
Evans held that an ESA-based attorney's fees award required only a "causal
relationship" between the litigation and the practical outcome.
B. "Substantially Justified"
In cases where the government position is "substantially justified," the
government may petition for a denial of attorney's fees. 129 But, strong language against the government's position in an opinion discussing the merits
of a key issue is evidence in support of an award of EAJA fees. As a result,
the "substantial justification" standard can prove hard to reach when a gov-
126.
127.
128.
129.
moot the case, court may still award fees because such a result is "equitable,
efficiency promoting, [and represent] a logical development in Buckhannon
jurisprudence.").
"In Buckhannon, the Supreme Court spoke broadly with regard to feeshifting statutes. While the fee requests before the Court arose under provisions of the Fair Housing Amendments Act of 1988 and the Americans with
Disabilities Act of 1990 authorizing the award of attorneys' fees to a 'prevailing party,' 42 U.S.C. §§ 3613(c)(2), 12205 (2000), the Court observed
that 'numerous federal statutes' similarly authorized fee awards and that it
has 'interpreted these fee-shifting provisions consistently."' Alegria v. District of Columbia, 391 F.3d 262, 265 (D.C. Cir.. 2004) (citing Buckhannon,
532 U.S. at 600, 603 n.4).
386 E3d 879 (9th Cir. 2004). This case is also discussed herein in Adjudication (supra at 19) and Environmental and Natural Resources Regulation
(infra at 303-04).
The ESA, 16 U.S.C. §1540(g)(4) (2000), says a court "may award costs of
litigation (including reasonable attorney and expert witness fees) whenever the court determines such award is appropriate."
The government must show that its position was grounded in: (1) a reasonable basis in truth for the facts alleged; [**5] (2) a reasonable basis in law
for the theory propounded; and (3) a reasonable connection between the
facts alleged and the legal theory propounded. United States v. Hallmark
Constr. Co., 200 F.3d 1076, 1080 (7th Cir. 2000).
Chapter 5: JudicialReview
105
ernment victory is reversed on appeal, as demonstrated by a plainly frustrated
30
Seventh Circuit in Golembiewski v. Barnhart.1
C. Amount of Fees
Nearly all cases involving attorney's fee disputes use the lodestar approach-hours multiplied by rate-to calculate a reasonable fee amount.13 '
In applying this approach, recent D.C. Circuit cases carefully scrutinized the
types of work included in a plaintiff's claims for fees, and even reduced fees
for inadequate documentation, but were less eager to second-guess the number of hours claimed.132
In EAJA cases, the hourly rate for attorney's fees is generally capped at
$125, but claimants often seek adjustments based on special factors or infla33
tion. In U.S. v. Aisenberg,1
however, the Eleventh Circuit strictly applied
EAJA's $125 per hour rate, rejected a claim for fee enhancements, and denied
any claim for interest based on principles of sovereign immunity. Other circuits may not view the rate cap so strictly,134 however, and courts have not
been receptive to government attempts to apply EAJA's rate cap where
attorney's fees are authorized by other statutes. 135
130. 382 F.3d 721, 724 (7th Cir. 2004).
131. See Hensley v. Eckerhart, 461 U.S. 424 (1983).
132. Compare In re Madison Guar. Say. & Loan (Marceca Fee Application), 366
F.3d 922, 928-929 (D.C. Cir. 2004) (denying claim for attorney's fees associated with concurrent congressional investigations, media-related activities, and "defensive monitoring" of other cases, and reducing award because
inadequate documentation "makes it impossible for the court to verify the
reasonableness of the billings"), with Lake Pilots Ass'n, Inc. v. U.S. Coast
Guard, 310 F. Supp. 2d 333, 341 (D.D.C. 2004) (holding that where case
involved relatively complex issues and a large agency record, 550 hours
over two years was reasonable, even when compared to government
counsel's 50 hours of effort).
133. 358 F.3d 1327, 1345 (11th Cir. 2004).
134. See, e.g., Al Jawad v. Barnhart, 370 F. Supp. 2d 1077, 1089 (S.D. Cal. 2005)
(discussing Ninth Circuit's three prong test to determine whether a special
factor warrants a heightened fee award, as well as describing inflationbased adjustments to the EAJA rate, as used in the Second, Fifth, Seventh
and D.C. Circuits).
135. See, e.g., U.S. v. 4,432 Mastercases of Cigarettes, 322 F. Supp. 2d 1075
(C.D. Cal. 2004) (EAJA cap does not apply to a determination of hourly
rates for attorneys' fees under Civil Asset Forfeiture Reform Act).
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Developments in Administrative Law and Regulatory Practice
Courts award partial fees for partial victories. In Thomas v. City of Tacoma,
the Ninth Circuit held that denial of attorney's fees, notwithstanding a
plaintiff's clear victory on one claim for relief, is an abuse of discretion. A
reasonable fee in such a case "is not no fee at all."' 36 Instead, awards of
attorney's fees are likely to be reduced based on the degree of success, although the adjustment may not be as simple as 50% for prevailing on one of
two claims, and deference will be granted to the district court judge upon
review.'37
D. Costs
Plaintiffs in administrative record cases should take note of Rule 54(d)(1),
F.R.C.P., allowing a prevailing defendant to recover costs for production of a
large administrative record. In FloridaKeys Citizens Coalition v. U.S. Army
Corps of Engineers,'8 the district court adopted a magistrate judge recommendation that separate awards of costs (each exceeding $10,000) be granted
to the federal agency and state agency defendant-intervenors, respectively,
for production of administrative records and other costs, other than attorney's
fees, in a case where the defendants prevailed on all claims.
136. Thomas v. City of Tacoma, 410 F.3d 644, 648-649 (9th Cir. 2005). Notably,
the Ninth Circuit rejected the district court reasoning that "granting an
award of attorney's fees to Plaintiff would be unjust because doing so would
'result in a windfall"' and that "any outside observer would easily conclude that [Plaintiff] did not obtain what [he] sought in this case." Id.
137. See, e.g., White v. Burlington N. & Santa Fe Ry. Co., 364 F.3d 789 (6th Cir.
2004) (upholding 80 percent fee award where plaintiff prevailed on one of
two claims).
138. 386 F Supp. 2d 1266 (S.D. Fla. 2005).