In directing courts to set aside only agency actions that are “arbitrary, capricious…or otherwise not in accordance with law,” the Administrative Procedure Act’s section 706 sets forth a deferential default standard for judicial review of agency fact-finding and decision making. From a perspective of institutional power, arbitrariness review of agency decisions “embodies the difficult and persistent question in American public law or ‘who decides’ issues of law or policy.” Louis J. Virelli III, Deconstructing Arbitrary and Capricious Review, 92 North Carolina L. Rev. 721, 723 (2014). Simply put, Congress delegated policymaking authority to Article II agencies, not to Article III courts, and the whole point behind deferential arbitrariness review is to ensure that a court does not substitute its judgment for that of the agency.
Answering “who decides?” is straightforward when Congress delegates policymaking authority to a single administrative agency within the federal government. Yet this question becomes much more difficult to satisfy when Congress splits a delegation of lawmaking authority between federal and state sovereigns. For many regulatory programs, including healthcare provision and environmental policymaking, Congress relied on our federalist structure to achieve its policy ends. These “cooperative federalism” regulatory schemes normally entail a division of labor, whereby states implement the program subject to federal oversight.
According to Yale Professor Abbe Gluck, this complexity is under-recognized by courts, and in particular by deference doctrines employed by the courts. As to why this is the case, Prof. Gluck presents a provocative two-part thesis in an outstanding paper, Our (National) Federalism (123 Yale L.J. 1996 (2014)).
First, she argues that “federalism now comes from federal statutes.” Before the New Deal, the qualities inherent to sovereignty provided the referent for federalism and its jurisprudence. However, in the post-New Deal era, a state’s policymaking authority in many issue areas has emanated from Congress—rather than that state’s innate sovereign power—in the form of federal statutes that assign states a role in a cooperative federalism regulatory program. As a result, much of modern day federalism “is a question, and feature, of federal statutory design.”
Prof. Gluck’s second point flows from the first. “National Federalism” is a relatively new phenomenon, and legal frameworks have not caught up. She argues that existing doctrines of jurisprudence are based on the old model of sovereignty-centric federalism; they do not reflect the current reality of statutory-based federalism. The result, Professor Gluck argues, is doctrinal confusion when courts address disputes between state and federal government over the implementation of statutes that rely on cooperative federalism.
In a post this week for Notice & Comment, I demonstrate the doctrinal confusion posited by Prof. Gluck with respect to “arbitrary & capricious” deference within the cooperative federalism regime created by the Clean Air Act. My thesis is that the Supreme Court erred when it addressed this matter in a 2004 opinion, Alaska Department of Environmental Conservation v. EPA. It is further my belief that this illogical opinion has confused lower courts, which have muddied the waters in a way that shortchanges state authority and expertise.
Read the whole post here.
Below, I’ve added some supplemental information on the matter, including an elaboration on the Alaska Department of Environmental Conservation (ADEC) fallout in the U.S. Courts of Appeals, which is referenced in the Notice & Comment post. Reader, beware! The material below only makes sense if you’ve read the Notice & Comment post.
Supplemental Material to Notice & Comment Post
The Fallout from ADEC Is Killing Cooperative Federalism under the Clean Air Act
In reviewing all U.S. Courts of Appeals opinions that resolve these types of Clean Air Act cooperative federalism controversies with reference to ADEC—i.e., a federalism disagreement over a decision that the Act delegates to the states, subject to EPA review–I found five such disputes.
- Arizona ex rel. Darwin v. U.S. E.P.A., 815 F.3d 519 (9th Cir. 2016);
- Nebraska v. U.S. E.P.A., 812 F.3d 662 (8th Cir. 2016);
- Phoenix Cement Co. v. U.S. E.P.A., 647 F. App’x 702 (9th Cir. 2016);
- North Dakota v. U.S. E.P.A., 730 F.3d 750 (8th Cir. 2013);
- Oklahoma v. U.S. E.P.A., 723 F.3d 1201 (10th Cir. 2013).
All of them pertained to disagreements over source-specific state determinations pursuant to the Regional Haze program to improve visibility. Only three circuits have weighed in—the U.S. Courts of Appeals for the Eighth, Ninth, and Tenth Circuits. In each case, the panel of judges accorded “arbitrary & capricious” deference to the EPA. The reasonableness of the state’s decision was not a subject of direct review; rather, the state’s actions were reviewed only through the prism of the federal government’s review of the state’s behavior.
For example, here’s how the Ninth Circuit reasoned:
In sum, [the statutory provision at issue] gives states substantial responsibility in determining appropriate…controls. EPA may not disapprove reasonable state determinations that comply with the relevant statutory and regulatory requirements. That is, as ADEC put it, EPA may not “second guess” reasoned, legally compliant state decisions. But Congress intended that EPA, not the states alone, ultimately ensure that state determinations as to regional haze comply with the Act, and so authorized EPA to disapprove state analysis that is neither reasoned nor moored to the [Act’s] provisions. Once the federal agency has done so, our role as the reviewing court remains what it always is when substantively reviewing agency action under the APA—deciding, with appropriate deference to the federal agency, whether the agency’s action was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” Arizona ex rel. Darwin v. U.S. E.P.A., 815 F.3d 519, 532 (9th Cir. 2016) (citations and quotations omitted) (formatting added).
I formatted the crucial clause. Basically, the court is saying, “EPA shouldn’t second guess States, but we’re not going to check.” That is, EPA alone received the benefit of arbitrariness review. Below, the Ninth Circuit put the above reasoning into practice:
As part of its [Best Available Retrofit Technology] analysis, a state must analyze the degree of improvement in visibility which may reasonably be anticipated to result from the use of alternative control technologies…EPA found Arizona’s interpretation of the visibility modeling for all three plants “problematic.” The problems, EPA contends, resulted in Arizona understating the visibility benefits associated with installing [the EPA’s preferred controls]. We conclude that EPA’s assessment of Arizona’s visibility analysis considered the appropriate factors rationally, and so defer to its conclusions. Arizona ex rel. Darwin v. U.S. E.P.A., 815 F.3d 519, 535 (9th Cir. 2016) (citations and quotations omitted).
The upshot is that the court recognized that the underlying question is the reasonableness of the state’s action, but the subject of review before the panel wasn’t the reasonableness of Arizona’s decision-making; instead, it was the reasonableness of the EPA’s “contentions” and “findings” regarding the reasonableness of Arizona’s decision-making.
The Eighth and Tenth Circuits took a similar, but more alarming tack. In three opinions, panels of these courts expressly reasoned that when state experts disagree with federal experts, the court must defer to the federal experts.
- In both Oklahoma v. U.S. E.P.A., 723 F.3d 1201, 1216 (10th Cir. 2013) and Nebraska v. U.S. E.P.A., 812 F.3d 662, 668 (8th Cir. 2016), the courts stated: “Left to evaluate the arguments of the parties’ experts, we must give deference to the EPA…. we cannot adopt [petitioners’] analysis given that the EPA was aware of, and provided explanations contradicting, petitioners’ comments.”
- North Dakota v. U.S. E.P.A., 730 F.3d 750, 766 (8th Cir. 2013) (“When specialists express conflicting views, an agency must have discretion to rely on the reasonable opinions of its own qualified experts even if, as an original matter, a court might find contrary views more persuasive”) (quoting Marsh v. Oregon Natural Resources Council, 490 U.S. 360, 377 (1989)).
I call this reasoning “alarming” because it seems to obviate state expertise. If the EPA’s expert always receives deference in the face of opposing arguments from the state’s experts, then the state is very much subject to “second guessing,” despite the fact that the state is the recipient of the congressional delegation of decision-making authority, and that states have no less (and likely more) expertise than the EPA when it comes to implementing the Clean Air Act.