Ninth Circuit Review—Reviewed:  Panels Weaponize “Standards of Review” To Launch Preemptive Strikes against Chevron, by William Yeatman

by Guest Blogger — Saturday, Nov. 9, 2019

Welcome back to Ninth Circuit Review-Reviewed, your monthly recap of administrative law before arguably “the second most important court in the land.” Let’s get straight to last month’s cases.

Chevron Step Negative Infinity

Most judicial opinions follow a template. They start with an introduction, then move on to a section that lays out the “standard of review,” which is followed by a discussion of the merits.

You’d think a circuit’s “standards of review” would be generic. That is, you’d think that similar cases would engender similar review doctrines. That’s why it’s called a *standard* of review, right?

But that’s not how these things work. In practice, courts selectively employ standards of review to shape the outcome.

Consider the Ninth Circuit’s October 10th order in California Insurance Guarantee Association (“CIGA”) v. Azar, which involved a federalism dispute over the extent to which Medicare preempts state law.  Here’s the pertinent snippet from the opinion’s “standard of review” section:

Agency regulations that reasonably interpret the statute are accorded Chevron deference when determining the statute’s preemptive effect . . . In both express and conflict preemption, when the text of a pre-emption clause is susceptible of more than one plausible reading, courts ordinarily accept the reading that disfavors pre-emption. (cleaned up)

On its face, this standard obviates Chevron. The sine qua non of binding deference is that the agency’s interpretation wins when the statute “is susceptible of more than one plausible reading.” Yet the panel introduces Chevron, and then immediately claims that the state’s interpretation should prevail if it’s “plausible.” Simply put, the panel’s preemption framework negates its Chevron framework.

To be sure, there are outstanding questions about how federalism factors into the Chevron doctrine. But the CIGA panel dodged this debate. Instead, the panel adopted a nonsensical standard of review that guts Chevron without explanation. Not coincidentally, the government lost.

Next, consider the Ninth Circuit’s Halloween order in Los Angeles v. Barr, a case regarding the extent to which the Justice Department may condition law-enforcement grants on the Trump administration’s preferred immigration policies. The statutory question pertained to a 2006 amendment extending the Attorney General’s authority to “include[e] placing special conditions on all grants.”

Unlike the Third and Seventh Circuits, a majority on the Ninth Circuit panel held that the 2006 amendment reflects an implicit delegation of authority to the Justice Department. Of course, the Chevron doctrine is based precisely on this sort of presumed congressional intent; accordingly, under black letter administrative law, the Chevron framework should apply in Los Angeles v Barr.

But that’s not what happened. Indeed, the majority made nary a mention of Chevron in ruling against the government.

Stranger still, here’s how the panel introduced its standard of review for interpreting statutes:

When an agency is charged with administering a congressional statute, both its power to act and how it is to act are authoritatively prescribed by Congress. An agency literally has no power to act . . . unless and until Congress confers power upon it. (cleaned up)

In the first sentence from the above paragraph, the panel quotes City of Arlington v. FCC, a famous case where the Supreme Court held that Chevron deference applies even when the agency interprets its own authority. That is, City of Arlington is strongly pro-Chevron. And yet, in Los Angeles v. Barr, the Ninth Circuit’s standard of review quoted City of Arlington for the principle of anti-deference. This sleight of hand wouldn’t be terribly problematic, but for the fact that a majority on the panel ultimately disagreed with two other circuits in holding that the statute entailed an implicit delegation, which, again, is widely understood to trigger the Chevron framework. Overall, the panel’s approach makes no sense.

As a general matter, I’m a critic of “reflexive deference,” so I’m prone to agree with the results in CIGA v. Azar and Los Angeles v. Barr. Nevertheless, I’m disturbed by the means to achieve these otherwise welcome ends.

There are legitimate reasons to believe that deference doctrines should be curtailed, especially in circumstances such as those presented by these two cases. But the Ninth Circuit seems uninterested in performing the hard work of doctrinal change. Rather, the court manipulates its standards of review in order to wave away Chevron when the framework doesn’t comport with the judges’ desired outcome.

Respectfully, I think these panels did a disservice to the craft of judging.

LULAC Update: “Comeback” Status Likely Reflects Competition between Separated Powers

I’ve reported before on LULAC v. Wheeler.

The controversy in LULAC pertain[s] to chlorpyrifos, which is the most widely used conventional insecticide in the country. In September 2007, environmental groups submitted a petition to the EPA . . . demanding that the agency pull the insecticide from the market. In November 2015, the EPA proposed to grant the groups’ petition. The agency, however, failed to finalize its proposal before the White House changed hands from the Obama administration to the Trump administration. In early 2017, under new political management, the EPA denied the environmental groups’ petition. On the same day these groups sought an administrative appeal, they also filed for judicial review.

Before the Ninth Circuit, the government rested its entire defense on a jurisdictional claim involving administrative exhaustion. A split panel disagreed and concluded that the case was indeed ripe [and proceeded to the merits] . . . Long story short: the court gave greater credence to the agency’s 2015 proposal and 2016 risk assessment than it did to the agency’s 2017 final determination . . . Based on these conclusions, the court granted the petition for review and remanded to the EPA with directions to revoke all tolerances and cancel all registrations for chlorpyrifos within 60 days.

Subsequently, the full court agreed to re-hear LULAC. I’ve already blogged on the results of that en banc panel:

In an en banc order issued on 19th April, the Ninth Circuit modified the split panel’s decision in LULAC v Wheeler . . .  In so holding, the en banc court sub silentio followed the advice I had provided in this blog—namely, to give the agency the opportunity to [exhaust the administrative process] while employing the oft-used TRAC doctrine to ensure the agency doesn’t drag its feet.

Late last July, the agency complied with the en banc court’s order and exhausted the administrative appeal by issuing a final denial of the environmental groups’ petition. The EPA then moved to dismiss the original suit (over the agency’s failure to finalize a response to the groups’ petition). At the same time, the environmental groups filed new petitions for review of the agency’s now-final action (to deny their rulemaking petition).

In an order published on October 16th, the en banc court granted the EPA’s motion to dismiss the original case. But with respect to the environmental groups’ petitions for review of the final agency action, the court did something interesting.

Specifically, the court invoked Ninth Circuit General Order 3.6(b) to accept LULAC as a “comeback case”—that is, the controversy will return to the original three-judge panel that heard the environmental groups’ first complaint over administrative exhaustion.

Judge Carlos Bea, joined by Judge Mark Bennett, objected to the en banc court’s decision to treat LULAC as a comeback case. According to their dissenting opinion, the environmental groups’ complaints are sufficiently different so as to warrant a new three-judge panel to perform judicial review on the substance of the EPA’s action.

For my part, I strongly suspect that this dissent implicates an unstated competition between the Ninth Circuit and the EPA, which is going on behind the scenes. As I’ve before observed, the original LULAC panel was extraordinarily aggressive. Indeed, a majority on that panel imposed a nationwide ban on the most widely used conventional insecticide in the country. By sending it back to the original panel, the EPA faces an uphill climb.

Now that President Trump has filled all the vacant active seats on the Ninth, it bears keeping in mind that the court’s “liberal” judges still hold a three-judge majority (16 – 13).

“Respecting the Denial of Rehearing” [*NOT* a dissent]: How Senior Status Judges Play the En Banc Game

Due to its size, the Ninth Circuit hears more en banc cases than her sister circuits. Also due to its size, the Ninth Circuit has more than twice as many active judges than does the average circuit court. The combination of these factors threatens to strain administrative efficiency. If all 29 active judges had to hear every en banc rehearing, then such proceedings would occupy too much of the court’s time.

To avoid (further) slowing the wheels of justice, the Ninth Circuit has adopted unique en banc procedures in the court’s Circuit Rules and General Orders. While other circuits employ their full roster of active judges on an en banc panel, the Ninth Circuit normally uses only a subset of judges. Under Circuit Rule 35-3, the typical en banc panel consists of the Chief Judge and ten additional judges drawn by lot from the active judges of the court.

For a fascinating demonstration of the Ninth Circuit’s idiosyncratic process, consider the court’s October 22nd denial of an en banc re-hearing in Dai v. Barr, which involved an asylum controversy. Setting aside any discussion of the merits, the original panel split in ruling against the government; Judge Stephen Trott, who is on senior status, wrote a forceful dissent. Then the government timely sought an en banc rehearing.

Even though Judge Trott participated on the original panel and penned a powerful dissent, he was ineligible to vote on the petition for rehearing because only active judges are permitted to vote for whether the court should hear a case en banc. See 28 U.S.C. § 46(c); Fed. R. App. P. 35(a).

Judge Trott was not, however, entirely silenced. General Order 5.5(a) permits judges on senior status to participate in discussions of en banc proceedings. Most often, ineligible judges exercise this participatory privilege by filing opinions “Respecting the Denial of Rehearing En Banc.”

Judge Trott filed multiple such quasi-dissents in last month’s denial of the government’s petition in Dai. On his own behalf, he filed an opinion “respecting” the denial, which was joined by (active) Judge Ryan Nelson. In addition, Judge Trott joined fellow senior-status Judge Diarmuid O’Scannlain in “respecting” denial. Their one-sentence opinion merely announced agreement with the dissent filed by (active) Judge Consuelo Callahan.

Judge Callahan’s dissent, in turn, was joined by nine other active Judges (Jay Bybee, Carlos Bea, Milan Smith, Sandra Ikuta, Mark Bennett, Ryan Nelson, Bridget Bade, Daniel Collins, Kenneth Lee).

Finally, Judge Daniel Collins filed a separate dissent, which was joined by six other active judges (Jay Bybee, Carlos Bea, Sandra Ikuta, Ryan Nelson, and Bridget Bade).

I don’t have the space to give this curious case the discussion it deserves, but I’d be remiss if I failed to make a couple observations:

  • Under the court’s Advisory Committee Notes to Circuit Rule 35, these vote tallies are supposed to be kept secret. Here, however, the sheer volume of signatories makes secrecy impossible. When the full court denied an en banc rehearing in Dai (October 22nd) there were 28 active judges on the Ninth Circuit, of whom twelve were appointed by Republican presidents. Judge Eric Miller, a Trump appointee, was recused. Of the remaining eleven “conservative” judges, ten either wrote or joined dissents. The only exception was the newest member of the court—Judge Daniel Bress—who received his judicial commission on July 26th, 2019. New judges are allowed a “transition period,” during which they don’t have to vote on whether to proceed to an en banc rehearing (see General Order1(a)(3)); I don’t know if Judge Bress availed himself of this option in Dai. In any case, the vote demonstrates a stark partisan divide.
  • All told, twelve judges (ten active) wanted to rehear the case. And the government’s petition still failed. Perhaps it’s just me, but I find this outcome to be amazing. After all, the average circuit court (excluding the Ninth Circuit) has about twelve judges.

Given the unusual degree of opinion-writing and opinion-joining in this case, it’s one to keep an eye on if, as seems likely, the government petitions for certiorari.

Practical Dimension of Debate over Nationwide Injunctions

Recently, Notice & Comment hosted a fantastic backandforth discussion between Professors Mila Sohoni & Sam Bray over the propriety of nationwide injunctions. In California v. Little Sisters of the Poor, which was delivered on Oct. 22nd, a Ninth Circuit panel addressed a practical matter attendant to this ongoing academic debate—namely, does the existence of a nationwide injunction moot suits in other circuits that seek the same ends?

Little Sisters of the Poor centered on a multi-agency rule to exempt religious employers from the Affordable Care Act’s requirement that group health plans cover contraceptive care without cost sharing. On September 30th, a federal district court in California issued a preliminary injunction barring the enforcement of the rule in the thirteen plaintiff states. In Little Sisters of the Poor, the government sought to lift this injunction.

There was, however, a complicating factor. Before the government appealed the September 30th preliminary injunction for the thirteen plaintiff states, a federal district court in Pennsylvania had issued a nationwide preliminary injunction for the same rule. Because Article III courts always have a duty to ensure their own jurisdiction, the Little Sisters of the Poor panel called for supplemental briefing as to whether the intervening nationwide injunction served to moot the controversy in the Ninth Circuit.

After first acknowledging the court was in “uncharted waters,” a split panel determined that the nationwide injunction did not foreclose percolation in other circuits. In holding that the case was not mooted, the majority based its reasoning on the “limited duration” of the Pennsylvania case’s preliminary injunction. Because the other court’s injunction came with an expiration date, the panel assumed that the controversy remained live in the Ninth Circuit.

As such, it remains to be seen how a permanent nationwide injunction affects justiciability. Stay tuned.

 

William Yeatman is a research fellow at the Cato Institute.

Cite As: Author Name, Title, 36 Yale J. on Reg.: Notice & Comment (date), URL.

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5 thoughts on “Ninth Circuit Review—Reviewed:  Panels Weaponize “Standards of Review” To Launch Preemptive Strikes against Chevron, by William Yeatman

  1. El roam

    Interesting, but you claim that:

    ” In practice, courts selectively employ standards of review to shape the outcome”

    And as illustration, you bring the ” CIGA” case. But, the standard of review is a given one. Should be based among others on ” Chevron”. Now, the district court, has based his ruling, also on Chevron, but, has reached the opposite conclusion. That is to say, that even if one would prove, that standard of review, not sufficiently discussed, yet, it should serve the ” on merits ” issue, and not vice versa.

    But concretely, the court has mentioned the right relevant standard. Because one had to look at it, in only one of both ways:

    Whether the pre – emption doctrine should be implied or not. The district court, based on the same standard has reached one conclusion, and the circuit the opposite one. So, that was the core of the issue, both courts did it right. The reasoning is more than reasonable and coherent. How could it be otherwise ? I quote the circuit:

    the five decades of Congressional and agency inaction regarding insurer insolvency schemes further suggests that their omission from the Medicare statute and regulations was deliberate. Other parts of the Medicare statute confirm that Congress did not intend to disrupt state laws governing insurer solvency.

    End of quotation:

    So, all relevant and correct factors, have been taken and analyzed. They can’t start each ruling, analyze Chevron or other jurisdictional issues from scratch de novo each time.There wasn’t in that case, any specific explicit statutory provision concerning pre – emption doctrine in that issue.So, nothing substantial, has been either ignored here.

    So, with all due respect, I couldn’t find nothing wrong here.

    Thanks

    Reply
    1. William M Yeatman

      Hi El Roam, I’m not 100% following. I took the paragraph you quote as being part of the court’s unstated Step one analysis. The court was never clear on what it was doing, but it seemed to be saying: ‘the statute unequivocally does not mean what the government says it means.’ Any discussion of ambiguity is swept into last paragraph on the merits, when the court basically says: ‘even if the statute is ambiguous, our preemption standard of review requires that an ambiguity be resolved in favor of states.’ I’m left wanting more. I suspect we disagree on this one. Best, w

      Reply
  2. El roam

    William, as stated by you indeed, statute is ambiguous indeed. So, there was a vacuum had to be filled. Lower court had done it in one way, the circuit reversed it , and done in another way.

    But, both, haven’t ignored nothing substantial indeed it seems, unless they had to discuss ,little relevant to that case, lengthy discussion on Chevron.

    Thanks

    Reply
    1. William M Yeatman

      Hi El Roam, I agree statute is indeed ambiguous, but the court seems to disagree. The court spends many words/paragraphs on what seems to be an unacknowledged Step One–i.e., an analysis of whether the statute is ambiguous. In this fashion, the court seems to hold that the statute unambiguously doesn’t mean what the government said (rather than saying: “this is what statute unambiguously means.”). After all that, the court spent exactly one paragraph suggesting that, in the alternative (I think), if the statute is ambiguous, then the state would win (due to the court’s preemption std of review), without any mention of Chevron. That’s bad practice, imho, & I don’t think anything is going to change my mind here. The opinions speak for themselves, as I read them. Best, w

      Reply
      1. El roam

        OK, William, but finally, the issue, on merits, was whether CIGA is a primary plan or insolvency insurer of last resort.So, I can’t see how lengthy discussion on Chevron, could really impact or project on such issue in substantial terms. The reasoning of the court, was coherent, well founded , and reasonable. And as stated by the court:

        Finally, even if CIGA could be construed as a workers’compensation law or plan, and hence a primary payer, a contrary interpretation is more than plausible. Well established preemption principles favor upholding state law if it can plausibly coexist with the federal statute. See Altria Grp., 555 U.S. at 77.

        End of quotation:

        So, the court was aware to the ambiguous state here, and reconciled it with Chevron.Too many times, it is so. With or without the right standard review even, lower court , may reach reasonable conclusion, and the appellate court may reverse it, and reach opposite conclusion, but both in sum, are finally reasonable.

        Thanks

        Reply

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