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Notes :: Administrative Procedures Act

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"APA is the principal law governing how agencies make rules.9 The law prescribes uniform standards for rulemaking, requires agencies to inform the public about their rules, and provides opportunities for public participation in the rulemaking process. Most federal rules are promulgated using the APA-established informal rulemaking process, also known as "notice and comment" rulemaking.10 APA outlines a multistep process to initiate and develop rules and includes provisions for parties to challenge them, which FCC must follow. Many steps require agencies to provide public notice of proposed or final actions as well as provide a period for interested parties to comment on the notices-hence the "notice and comment" label.11 APA does not generally address time frames for informal rulemaking actions, limits on contacts between agency officials and stakeholders, or requirements for "closing" dockets." - FCC Should Take Steps to Ensure Equal Access to Rulemaking Information, GAO-07-1046, p. 8 (Sept 2007)

APA: Govt Wide Procedure

• Rulemaking ad agency procedures are governed by the Administrative Procedures Act, 5 USC s 500 et seq.  Key sections are § 552. Public information; agency rules, opinions, orders, records, and proceedings; § 552a. Records about individuals; § 552b. Open meetings;
• § 553. Rule making.   Most agencies will have implemented this law with their own regulations detailing how they as an agency comply. APA. APA.

Two Different Regulatory Functions: Legislative (rules) and judicial (orders)

• Rule: "the whole or part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency." 5 USC s 551(4)
• Order: "the whole or a part of a final disposition whether affirmative, negative, injunctive, or declaratory in form, of an agency in a matter other than rule making but including licensing." 5 USC s 551(6).

Notice and Comment

• Required any time agency is making a policy decision
  • 5 U.S.C. § 553(b)(3).
  • “Since the public is generally entitled to submit their views and relevant data on any proposals, the notice must be sufficient to fairly apprise interested parties of the issues involved, but it need not specify every precise proposal which [the agency] may ultimately adopt as a rule.” Action for Children’s Television v. FCC, 564 F.2d 458, 470 (D.C. Cir. 1977)
  • Not required for administrative decisions
• How does the rulemaking get started?
  • Petition from public
  • FCC acts pursuant to its own motion
    • informal industry contacts
    • numerous complaints
    • notice of inquiry
  • Legislative (Congress) mandate
    • Biennial review pursuant to statutory requirement
    • New law, the implementation of which must be created
  • Proceedings
    • Petition for a declaratory ruling
      • Petition from public asking for clarification of existing policy
    • Notice of Inquiry
      • Agency asks questions without giving notice of tentative conclusions.  Because of this, agency cannot come to a final decision but must first give notice of tentative conclusion.
    • Notice of proposed rulemaking
      • Agency gives notice of tentative conclusion on policy issue and invites comment. This can result in a final determination but only on the subject matter that the notice concerns.
    • How to Tell Your NOIs from Your NPRMs [ text version | WordPerfect version

• How Notice and Comment Process Works
  • Notice Publish notice in the Federal Register describing agency's proposal
    • Notice may also be given on agency website and agency publication (the FCC produces the daily publication "Daily Digest".  Other agencies simply use occasional press releases)
  • Public is given an opportunity to comment
    • Anyone can comment
    • Comments and replies due by date specific
    • Look for the ability to comment online at the agency's website
    • You need the proceeding number (docket number)
      • FCC Wireless Bureau How to File Comments with the FCC
      • Now It's Your Turn: How to Comment [ text version | WordPerfect version ]
      • File Comments with the FCC's Electronic Comment Filing System
      • FCC Search for Filed Comments
    • Comment Style Guide
      • Be succinct
      • Be polite and courteous
      • Answer the question asked - that is the scope of the proceeding
      • Give an executive summary
      • Assume the reader is unfamiliar with what you are talking about
      • Provide as much support (evidence) as possible, but unsupported statements, allegations, innuendos, accusations, and pontifications are all permissible
      • State exactly what it is you are asking for
      • The proceeding is an open record.  Everyone can see what you say; you can see what everyone else says.
        • Subject to the Freedom of Information Act
      • Do not forget to visit the agency in person
    • After comment deadline, further input may be provided through ex parte presentations.  Whether ex parte's will be permitted is agency and proceeding specific.
      • FCC permits ex parte presentations
        • "any presentation which: (1) if written, is not served on the parties to the proceeding; or (2) if oral, is made without advance notice to the parties and without opportunity for them to be present.
        • A presentation is any communication directed to the merits or outcome of a proceeding.
        • FCC Rulemakings are "permit but disclose"
        • FCC Extensive use of the ex parte process in rulemakings
          • FCC's Ex parte Rules
      • During "Sunshine period" presentations are prohibited
        • Sunshine Act : Open Meetings 5 USC 552b
        • Commissioners (those agencies that are structured with commissioners) can only meet to discuss the outcome in a public meeting for which a sunshine notice has been given
  • Comments are reviewed by agency
    • All comments read
    • Agency's final decision must reflect consideration of these comments
    • Agency must give a rational response to all arguments
    • (Agency's love consensus)
• Narrow exceptions to notice & comment
  • Interpretative rules, policy statements
  • Procedural rules
  • Good cause

Adoption of Rules

• Commissions vote on order adopting rule
• Order explains why rules adopted and why other suggestions were rejected
  • Rational explanation must be provided
    • Agency provided reason
      • Our evaluation of the agency's reasons for its change in policy is confined to the reasons articulated by the agency itself. See State Farm, 463 U.S. at 50 ("[C]ourts may not accept appellate counsel's post hoc rationalizations for agency action. It is well-established that an agency's action must be upheld, if at all, on the basis articulated by the agency itself." (internal citation omitted)); Yale-New Haven Hosp., 470 F.3d at 81 ("Generally speaking, after-the-fact rationalization for agency action is disfavored."). -- Fox v FCC, Docket No 06-1760-ag, slip p. 23 (2nd Cir. June 4, 2007)
  • Rule Revision: Must provided a reasoned analysis for the departure from the previous analysis
    • Agencies are of course free to revise their rules and policies. See Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 863 (1984) (“An initial agency interpretation is not instantly carved in stone.”). Such a change, however, must provide a reasoned analysis for departing from prior precedent. As this court has explained:

      [W]hen an agency reverses its course, a court must satisfy itself that the agency knows it is changing course, has given sound reasons for the change, and has shown that the rule is consistent with the law that gives the agency its authority to act. In addition, the agency must consider reasonably obvious alternatives and, if it rejects those alternatives, it must give reasons for the rejection, sufficient to allow for meaningful judicial review. Although there is not a “heightened standard of scrutiny . . . the agency must explain why the original reasons for adopting the rule or policy are no longer dispositive.” Even in the absence of cumulative experience, changed circumstances or judicial criticism, an agency is free to change course after reweighing the competing statutory policies. But such a flip-flop must be accompanied by a reasoned explanation of why the new rule effectuates the statute as well as or better than the old rule.

      N.Y. Council, Ass'n of Civilian Technicians v. Fed. Labor Relations Auth., 757 F.2d 502, 508 (2d Cir. 1985) (second emphasis added; internal citations omitted); see also State Farm, 463 U.S. at 41-42 ("A settled course of behavior embodies the agency's informed judgment that, by pursuing that course, it will carry out the policies committed to it by Congress. There is, then, at least a presumption that those policies will be carried out best if the settled rule is adhered to." (internal quotation marks omitted)); Huntington Hosp. v. Thompson, 319 F.3d 74, 79 (2d Cir. 2002) ("While an agency is not locked into the first interpretation of a statute it embraces, it cannot simply adopt inconsistent positions without presenting 'some reasoned analysis.'"); Mr. Sprout, Inc. v. United States, 8 F.3d 118, 129 (2d Cir. 1993) ("When the Commission departs from its own settled precedent, as here, it must present a 'reasoned analysis' that justifies its change of interpretation so as to permit judicial review of its new policies."). An agency's "failure to come to grips with conflicting precedent constitutes an inexcusable departure from the essential requirement of reasoned decision making." Ramaprakash v. FAA., 346 F.3d 1121, 1125 (D.C. Cir. 2003) (internal quotation marks omitted). Accordingly, agency action will be set aside as arbitrary and capricious if the agency fails to provide a reasoned explanation for its decision. See, e.g., Massachusetts v. EPA, 127 S. Ct. 1438, 1463 (2007) ("EPA has offered no reasoned explanation for its refusal to decide whether greenhouse gases cause or contribute to climate change. Its action was therefore arbitrary, capricious, ... or otherwise not in accordance with law.") (ellipses in original; internal quotation marks omitted); State Farm, 463 U.S. at 34 (agency's rescinding of rule requiring passive restraints in automobiles was arbitrary and capricious for failure to provide a reasoned explanation justifying revocation); see also Yale-New Haven Hosp. v. Leavitt, 470 F.3d 71, 72 (2d Cir. 2006) (agency action based on new rule governing Medicare reimbursement was arbitrary and capricious "because the Secretary did not satisfactorily explain his reasons" for changing historical practice); ANR Pipeline Co. v. Fed. Energy Regulatory Comm'n, 71 F.3d 897, 901 (D.C. Cir. 1995) ("[W]here an agency departs from established precedent without a reasoned explanation, its decision will be vacated as arbitrary and capricious."). -- Fox v FCC, Docket No 06-1760-ag, slip 21-23 (2nd Cir. June 4, 2007)

    • Analysis
      • We cannot accept this argument as a reasoned basis justifying the Commission's new rule. First, the Commission provides no reasonable explanation for why it has changed its perception that a fleeting expletive was not a harmful "first blow" for the nearly thirty years between Pacifica and Golden Globes. More problematic, however, is that the "first blow" theory bears no rational connection to the Commission's actual policy regarding fleeting expletives. As the FCC itself stressed during oral argument in this case, the Commission does not take the position that any occurrence of an expletive is indecent or profane under its rules.7 For example, although "there is no outright news exemption from our indecency rules," Remand Order, at ¶ 71, the Commission will apparently excuse an expletive when it occurs during a "bona fide news interview," id. at ¶ 72-73 (deferring to CBS's "plausible characterization" of a segment of The Early Show interviewing a contestant on its reality show Survivor: Vanuatu as news programming and finding expletive uttered during that part of the show not indecent or profane). Certainly viewers (including children) watching the live broadcast of The Early Show were "force[d]...to take the 'first blow'" of the expletive uttered by the Survivor: Vanuatu contestant. Yet the Commission emphasized during oral argument that its news exception is a broad one and "the Commission has never found a broadcast to be indecent on the basis of an isolated expletive in the face of some claim that the use of that language was necessary for any journalistic or artistic purpose." The Commission further explained to this court that a broadcast of oral argument in this case, in which the same language used in the Fox broadcasts was repeated multiple times in the courtroom, would "plainly not" be indecent or profane under its standards because of the context in which it occurred. The Commission even conceded that a re-broadcast of precisely the same offending clips from the two Billboard Music Award programs for the purpose of providing background information on this case would not result in any action by the FCC, even though in those circumstances viewers would be subjected to the same "first blow" that resulted from the original airing of this material. Furthermore, the Commission has also held that even repeated and deliberate use of numerous expletives is not indecent or profane under the FCC's policy if the expletives are "integral" to the work. See Complaints Against Various Television Licensees Regarding Their Broadcast on November 11, 2004, of the ABC Televison Network's Presentation of the Film "Saving Private Ryan", 20 F.C.C.R. 4507, at ¶ 14 (2005) ("Saving Private Ryan") (finding numerous expletives uttered during film Saving Private Ryan not indecent or profane because deleting the expletives "would have altered the nature of the artistic work and diminished the power, realism and immediacy of the film experience for viewers"). In all of these scenarios, viewers, including children who may have no understanding of whether expletives are "integral" to a program or whether the interview of a contestant on a reality show is a "bona fide news interview," will have to accept the alleged "first blow" caused by use of these expletives. Thus, the record simply does not support the position that the Commission's new policy was based on its concern with the public's mere exposure to this language on the airwaves.8 The "first blow" theory, therefore, fails to provide the reasoned explanation necessary to justify the FCC’s departure from established precedent.-- Fox v FCC, Docket No 06-1760-ag, slip 25-26 (2nd Cir. June 4, 2007)
      • For decades broadcasters relied on the FCC's restrained approach to indecency regulation and its consistent rejection of arguments that isolated expletives were indecent. The agency asserts the same interest in protecting children as it asserted thirty years ago, but until the Golden Globes decision, it had never banned fleeting expletives. While the FCC is free to change its previously settled view on this issue, it must provide a reasoned basis for that change. Cf. State Farm, 463 U.S. at 42 ("[A]n agency changing its course by rescinding a rule is obligated to supply a reasoned analysis for the change beyond that which may be required when an agency does not act in the first instance.") (emphasis added). The FCC's decision, however, is devoid of any evidence that suggests a fleeting expletive is harmful, let alone establishes that this harm is serious enough to warrant government regulation. Such evidence would seem to be particularly relevant today when children likely hear this language far more often from other sources than they did in the 1970s when the Commission first began sanctioning indecent speech. Yet the Remand Order provides no reasoned analysis of the purported "problem" it is seeking to address with its new indecency policy from which this court can conclude that such regulation of speech is reasonable. See, e.g., United States v. Playboy Enter. Group, Inc., 529 U.S. 803, 822-23 (2000) (rejecting indecency regulation of cable television in part because "[t]he question is whether an actual problem has been proved in this case. We agree that the Government has failed to establish a pervasive, nationwide problem justifying its nationwide daytime speech ban."); Turner Broad. Sys. v. FCC, 512 U.S. 622, 664 (1994) (remanding for additional fact finding to determine whether speech regulation justified because government had failed to demonstrate "that the recited harms are real, not merely conjectural, and that the regulation will in fact alleviate these harms in a direct and material way"); Quincy Cable TV, Inc. v. FCC, 768 F.2d 1434, 1463 (D.C. Cir. 1985) (invalidating FCC regulation because "the Commission has failed entirely to determine whether the evil the rules seek to correct 'is a real or merely a fanciful threat'"); Home Box Office, Inc. v. FCC, 567 F.2d 9, 36 (D.C. Cir. 1977) ("[A] regulation perfectly reasonable and appropriate in the face of a given problem may be highly capricious if that problem does not exist." (internal quotation marks omitted)). The Commission has similarly failed to explain how its current policy would remedy the purported "problem" or to point to supporting evidence. -- Fox v FCC, Docket No 06-1760-ag, slip 29-30 (2nd Cir. June 4, 2007)

   

• Rules are published and companies are generally given at least 30 days to comply

Recourse

• Upset parties may petition for reconsideration or file for court review
  • petitioners’ burden is to show that the Order is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” see 5 U.S.C. § 706(2)(A). [Nuvio Slip at 7, Sec. II]
• Court Review
  • Agency decisions can be appealed
  • Agency is considered expert, entitled to deference (this is known as the Chevron Doctrine)
    • Supreme Court
      • In Chevron, this Court held that ambiguities in statutes within an agency’s jurisdiction to administer are delegations of authority to the agency to fill the statutory gap in reasonable fashion. Filling these gaps, the Court explained, involves difficult policy choices that agencies are better equipped to make than courts. 467 U. S., at 865– 866. If a statute is ambiguous, and if the implementing agency’s construction is reasonable, Chevron requires a federal court to accept the agency’s construction of the statute, even if the agency’s reading differs from what the court believes is the best statutory interpretation. Id., at 843–844, and n. 11. -- NCTA v. BrandX, No. 04-277, 545 U.S. 8, Slip at (S.Ct. June 27, 2005)
      • Chevron established a familiar two-step procedure for evaluating whether an agency’s interpretation of a statute is lawful. At the first step, we ask whether the statute’s plain terms “directly addres[s] the precise question at issue.” 467 U. S., at 843. If the statute is ambiguous on the point, we defer at step two to the agency’s interpretation so long as the construction is “a reasonable policy choice for the agency to make.” Id., at 845. The Commission’s interpretation is permissible at both steps. -- NCTA v. BrandX, No. 04-277, 545 U.S. __, Slip at 14-15 (S.Ct. June 27, 2005)
      • Some of the respondents dispute this conclusion, on the ground that the Commission’s interpretation is inconsistent with its past practice. We reject this argument. Agency inconsistency is not a basis for declining to analyze the agency’s interpretation under the Chevron framework. Unexplained inconsistency is, at most, a reason for holding an interpretation to be an arbitrary and capricious change from agency practice under the Administrative Procedure Act. See Motor Vehicle Mfrs. Assn. of United States, Inc. v. State Farm Mut. Automobile Ins. Co., 463 U. S. 29, 46–57 (1983). For if the agency adequately explains the reasons for a reversal of policy, “change is not invalidating, since the whole point of Chevron is to leave the discretion provided by the ambiguities of a statute with the implementing agency.” Smiley v. Citibank (South Dakota), N. A., 517 U. S. 735, 742 (1996); see also Rust v. Sullivan, 500 U. S. 173, 186–187 (1991); Barnhart v. Walton, 535 U. S. 212, 226 (2002) (SCALIA, J., concurring in part and concurring in judgment). “An initial agency interpretation is not instantly carved in stone. On the contrary, the agency . . . must consider varying interpretations and the wisdom of its policy on a continuing basis,” Chevron, supra, at 863– 864, for example, in response to changed factual circumstances, or a change in administrations, see State Farm, supra, at 59 (REHNQUIST, J., concurring in part and dissenting in part). That is no doubt why in Chevron itself, this Court deferred to an agency interpretation that was a recent reversal of agency policy. See 467 U. S., at 857– 858. We therefore have no difficulty concluding that Chevron applies. -- NCTA v. BrandX, No. 04-277, 545 U.S. __, Slip at 9-10 (S.Ct. June 27, 2005)
      • A court’s prior judicial construction of a statute trumps an agency construction otherwise entitled to Chevron deference only if the prior court decision holds that its construction follows from the unambiguous terms of the statute and thus leaves no room for agency discretion. This principle follows from Chevron itself. Chevron established a “presumption that Congress, when it left ambiguity in a statute meant for implementation by an agency, understood that the ambiguity would be resolved, first and foremost, by the agency, and desired the agency (rather than the courts) to possess whatever degree of discretion the ambiguity allows.” Smiley, supra, at 740–741. Yet allowing a judicial precedent to foreclose an agency from interpreting an ambiguous statute, as the Court of Appeals assumed it could, would allow a court’s interpretation to override an agency’s. Chevron’s premise is that it is for agencies, not courts, to fill statutory gaps. See 467 U. S., at 843–844, and n. 11. The better rule is to hold judicial interpretations contained in precedents to the same demanding Chevron step one standard that applies if the court is reviewing the agency’s construction on a blank slate: Only a judicial precedent holding that the statute unambiguously forecloses the agency’s interpretation, and therefore contains no gap for the agency to fill, displaces a conflicting agency construction.

          A contrary rule would produce anomalous results. It would mean that whether an agency’s interpretation of an ambiguous statute is entitled to Chevron deference would turn on the order in which the interpretations issue: If the court’s construction came first, its construction would prevail, whereas if the agency’s came first, the agency’s construction would command Chevron deference. Yet whether Congress has delegated to an agency the authority
        to interpret a statute does not depend on the order in which the judicial and administrative constructions occur. The Court of Appeals’ rule, moreover, would “lead to the ossification of large portions of our statutory law,” Mead, supra, at 247 (SCALIA, J., dissenting), by precluding agencies from revising unwise judicial constructions of ambiguous statutes. Neither Chevron nor the doctrine of stare decisis requires these haphazard results. -- NCTA v. BrandX, No. 04-277, 545 U.S. __, Slip at 11 (S.Ct. June 27, 2005)

    • Circuit Court
      • Normally, when we review an agency's interpretation of the statute it is charged with administering, we apply the two step formula set forth by the Supreme Court in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). The reviewing court must look first to the language of the statute: "If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." Id. at 842-43. If the statute is silent or ambiguous, "the question for the court is whether the agency's answer is based on a permissible construction of the statute." Id. at 843. Where the agency's interpretation of the statute is reasonable, the court must defer. Id. -- BrandX v FCC, Sec. II, 9th Cir 10/6/2003 reversed
      • In addition to the obvious exceptions to this rule, see, e.g., In re Watts, 298 F.3d 1077, 1084 (9th Cir. 2002) (O'Scannlain, J., concurring) ("We need not convene the en banc court when the Supreme Court reverses us directly. Nor must we do so when that Court, in reviewing a case from another circuit, knocks the props out from under one of our decisions."), our circuit has provided for an exception where our precedent conflicts with a subsequent agency interpretation. In Mesa Verde Construction Co. v. Northern California District Council of Laborers, 861 F.2d 1124 (9th Cir. 1988) (en banc), we held that "if a panel finds that an [agency] interpretation of [its statute] is reasonable and consistent with the law[ ], the panel may adopt that  Interpretation even if circuit precedent is to the contrary." Id. at 1136. We immediately qualified this holding by stating that the earlier panel decision may be disregarded in favor of the agency interpretation "only where the precedent constituted deferential review of [agency] decision making." Id. "If the precedent held either that the [agency] decision was unreasonable or the only possible interpretation of the statute," then the prior court's construction trumps the agency's interpretation. Id. -- BrandX v FCC, Sec. II.C.[2], 9th Cir 10/6/2003 reversed
      • Int’l Ladies’ Garment Workers’ Union v. Donovan, 722 F.2d 795, 821 (D.C. Cir. 1983) (“Predictive judgments about areas that are within the agency’s field of discretion and expertise” are entitled to “particularly deferential” treatment.)
      • PPL Montana, LLC v. Surface Transp. Bd., 437 F.3d 1240, 1247 (D.C. Cir. 2006) (“[T]he [agency’s] attempt to distinguish its prior cases, while terse, is entitled to deference.” (quoting Inland Lakes Mgmt., Inc. v. NLRB, 987 F.2d 799, 805 (D.C. Cir.
        1993))
  • Decisions can be reviewed on following standards
    • APA: "arbitrary and capricious" standard (the rule must be rational)
      • "Courts will set aside agency decisions found to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A). As the Supreme Court has explained: “The scope of review under the ‘arbitrary and capricious’ standard is narrow and a court is not to substitute its judgment for that of the agency. Nevertheless, the agency must examine the relevant data and articulate a satisfactory explanation for its action including a ‘rational connection between the facts found and the choice made.’” Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). Agency action is arbitrary and capricious “if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.” Id. Reviewing courts “may not supply a reasoned basis for the agency’s action that the agency itself has not given.” Id. (quoting SEC v. Chenery Corp., 332 U.S. 194, 196 (1947))." -- Fox v FCC, Docket No 06-1760-ag, slip 18-19 (2nd Cir. June 4, 2007)
    • Legal:  Agency must have legal authority for its action
    • Constitutional: the regulatory initiative must not violate the Constitution

Enforcement

• After creation of rules and policy comes agency enforcement.

More

• United States Department of Justice Attorney General's Manual on the Administrative Procedure Act (1947)
• Where to Begin the Paper Chase [ text version | WordPerfect version]
• Benton Foundation's "Guide to the Paper Chase at the Federal Communications Commission"
• Making The FCC Your Business, ISP Planet 06/01/01
• ABA
• Admin Law Section
• Administrative Procedure Database
• US FDA APA
• OMB Watch APA

Books

• Alfred C. Aman, Jr. & William T. Mayton, Hornbook on Administrative Law, West Group (1993)

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