D.C. Circuit Review – Reviewed: “How to Effectively Ensure Power is Not Abused?”

by Aaron Nielson — Friday, Nov. 3, 2017@Aaron_L_Nielson

Note: This was a quiet week in the D.C. Circuit — just one nine-page opinion,* and it is about FOIA. This week’s post, accordingly, will be short.

This year I’ve spent a lot of time thinking about agency waivers. Why? Well, because I was commissioned to prepare a report on them for the Administrative Conference of the United States. And as you might expect, throughout the research and writing process, my thoughts often turned to the D.C. Circuit.

In particular, the D.C. Circuit explained in a case called NetworkIP, LLC v. FCC why waiver matters in a way that captures the tension:

[B]efore the FCC can invoke its good cause exception, it both “must explain why deviation better serves the public interest, and articulate the nature of the special circumstances to prevent discriminatory application and to put future parties on notice as to its operation.” The reason for this two-part test flows from the principle “that an agency must adhere to its own rules and regulations,” and “[a]d hoc departures from those rules, even to achieve laudable aims, cannot be sanctioned, for therein lie the seeds of destruction of the orderliness and predictability which are the hallmarks of lawful administrative action.” This basic tenet is especially appropriate in the context of filings. When an agency imposes a strict deadline for filings, as the FCC has done, many meritorious claims are not considered; that is the nature of a strict deadline. The power to waive that strict deadline is substantial, because it allows an agency to decide which meritorious claims get considered. The inverse is true too — the power to waive allows an agency to decide which otherwise liable parties are off the hook.

The criteria used to make waiver determinations are essential. If they are opaque, the danger of arbitrariness (or worse) is increased. Complainants the agency “likes” can be excused, while “difficult” defendants can find themselves drawing the short straw. If discretion is not restrained by a test more stringent than “whatever is consistent with the public interest (by the way, as best determined by the agency),” then how to effectively ensure power is not abused? The “special circumstances” requirement is that additional restraint. Otherwise, we are left with “nothing more than a `we-know-it-when-we-see-it’ standard,” and “future [parties] — and this court — have no ability to evaluate the applicability and reasonableness of the Commission’s waiver policy.”

To be sure, Network IP is an unusual waiver case; it addressed waiver of a procedural rule within a proceeding rather than, say, prospective waiver of a substantive requirement. But I think the Court’s analysis has broad applicability. Discretion is useful. But unless we are careful, it can slip its leash.

As I was drafting the report, I wondered what agencies think about the D.C. Circuit’s analysis. So, as an ACUS consultant, I decided to ask. (That’s one of the perks.) I surveyed a number of agency officials and asked them to respond to the D.C. Circuit’s analysis. And sure enough, officials shared interesting thoughts.

Here is what what officials from the Federal Motor Carrier Safety Administration had to say:

FMCSA generally agrees with the court’s view in NetworkIP …. Criteria that set forth the special circumstances where waiver of or exemption from a rule is appropriate increase the likelihood of consistent and predictable outcomes. Nonetheless, the purpose of waivers and exemptions is to give an agency the flexibility to reach an equitable result in a particular situation. It is not feasible or efficient for an agency to contemplate the multitude of circumstances that would warrant waivers and exemptions across the broad spectrum of rules it administers. While more specific waiver and exemption criteria may be feasible in limited circumstances, such as in the case of the filing deadline considered by the court in NetworkIP, in many instances the decision regarding whether to grant a waiver or exemption is more appropriately based on the totality of the circumstances, particularly when significant policy considerations are present. As long as an agency adequately articulates the special circumstances that warrant deviation from the rule at issue, future parties are on notice as to how the agency will interpret its rule and judicial review is not frustrated. Moreover, such a view is consistent with the court’s position in NetworkIP that an agency is afforded deference regarding its decision whether to waive one of its own rules.

As specifically concerns FMCSA’s waiver and exemption authority and regulatory standards for exercising that authority, we would note incidentally that the Agency’s exercise of discretion is defined by the requirement that relief from regulatory obligations in such circumstances would likely achieve a level of safety equivalent to or greater than the level that would be achieved absent the involved waiver or exemption. Accordingly, FMCSA’s waiver and exemption statutory framework and regulatory structure is constrained by a safety-related standard that is inherently more stringent than “whatever is consistent with the public interest” as referenced by the D.C. Circuit’s NetworkIP ruling.

And here is what officials from the Employee Benefits Security Administration offered:

Greater clarity on the criteria used to make waiver determinations will instill the public’s trust that its government institutions are not making decisions in an arbitrary manner. However, agencies need flexibility in applying criteria used to grant waivers in order to avoid treating all applications the same. Exemption applications submitted to EBSA are very fact-specific, and a decision whether or not to grant an exemption may turn on one small detail. A more rigid set of criteria that focuses less on the individual facts of an application may either cause EBSA to grant exemptions that it would not currently grant, or to deny applications otherwise deserving of exemptive relief.

Anyway — this is just a sample of what’s in the ACUS report. I think it’s interesting. If you don’t, well, sorry. Blame the D.C. Circuit for only giving us one opinion this week!

* In Bloomgarden v. United States Department of Justice, Judge Silberman (joined by Judges Pillard and Wilkins) determined that the Department of Justice was justified in withholding a proposed termination letter sent to a former Assistant United States Attorney. Exemption 6 of FOIA “allows the government to withhold personnel … files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.” Here, the attorney at issue was the “lead prosecutor … of crimes committed by Appellant.” That prisoner (who, as an aside, “was subsequently convicted of two murders in California state court, where he was sentenced to life imprisonment without parole”) now wants the letter, which addresses alleged “professional inadequacies” by the prosecutor. The D.C. Circuit agreed that disclosure is not required: “Even assuming arguendo Appellant is correct that Justice Department prosecutors are particularly powerful government lawyers, and that the public interest in how they are restrained is therefore significant, our examination of the letter in camera reveals only alleged unprofessionalism of a sort in which any junior attorney might engage, not allegations of prosecutorial misconduct or other abuse of a federal prosecutor’s powers.” At the same time, “the privacy interest is quite substantial,” especially because the letter “contains mere allegations; it was never tested, nor was it ever formally adopted by the deputy-attorney general’s office.”

 

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About Aaron Nielson

Professor Nielson is an associate professor at Brigham Young University Law School, where he teaches and writes in the areas of administrative law, civil procedure, federal courts, and antitrust. He currently serves as a public member of the Administrative Conference of the United States, a federal agency that studies the administrative process and makes recommendations on ways to improve it. He also co-chairs the Rulemaking Committee of the American Bar Association’s Section of Administrative Law & Regulatory Practice. Previously he chaired the Section's Antitrust & Trade Regulation Committee. Before joining the academy, Professor Nielson was a partner in the Washington, D.C. office of Kirkland & Ellis LLP (where he remains of counsel). He also has served as a law clerk to Justice Samuel A. Alito, Jr. of the U.S. Supreme Court, Judge Janice Rogers Brown of the U.S. Court of Appeals for the D.C. Circuit, and Judge Jerry E. Smith of the U.S. Court of Appeals for the Fifth Circuit. Follow him on Twitter @Aaron_L_Nielson.

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