An Introduction to Judicial Review of Federal Agency Action

Summary

The U.S. Constitution vests the judicial power in the Supreme Court and any inferior courts established by Congress, limiting the power of federal courts to the context of "cases" or "controversies." Pursuant to constitutional and statutory requirements, courts may hear challenges to the actions of federal agencies in certain situations. This report offers a brief overview of important considerations when individuals bring a lawsuit in federal court to challenge agency actions, with a particular focus on the type of review authorized by the Administrative Procedure Act (APA), perhaps the most prominent modern vehicle for challenging the actions of a federal agency.

Whether judicial review of agency action is available in federal court turns on a number of factors. Courts must possess statutory jurisdiction to adjudicate a lawsuit, and plaintiffs must generally rely on a cause of action that allows a court to grant legal relief. Disputes must also present "cases" or "controversies" that satisfy the requirements of Article III of the Constitution. Finally, a suit must be presented to a court at the proper time for judicial review.

The APA directs reviewing courts to "compel agency action unlawfully withheld or unreasonably delayed" and to "hold unlawful and set aside agency action, findings, and conclusions" that violate the law or are otherwise "arbitrary and capricious." This review is limited, however, to "final agency action" that is not precluded from review by another statute or legally committed to the agency's discretion.

Pursuant to this mandate, courts are authorized to review agency action in a number of contexts. First, courts will examine the statutory authority for an agency's action and will invalidate agency choices that exceed these limits. In addition, a court may examine an agency's discretionary decisions, or discrete actions with legal consequences for the public. Finally, courts may also review an agency's compliance with statutory procedural requirements, such as the notice-and-comment rulemaking procedures imposed by the APA. This report provides a broad overview of the issues that may be relevant to any number of present and future challenges to agency action in federal court.

Congress has created numerous federal agencies charged with carrying out a broad array of delegated statutory responsibilities.¹ Agencies administer their delegated authority in a variety of ways, including by promulgating rules and regulations that bind the public,² advising regulated parties of an agency's enforcement priorities via guidance documents,³ bringing enforcement actions against private individuals or corporations for violation of a statute or regulation,⁴ and determining whether to grant a benefit⁵ or license.⁶ These agency actions, in turn, often generate questions about the legitimacy of an agency's decision. Individuals affected by an agency decision can sometimes challenge that action in federal court as violating a legal requirement.

The U.S. Constitution vests the judicial power in the Supreme Court and any inferior courts established by Congress,⁷ limiting the power of federal courts to the context of a of a "case" or "controversy."⁸ Pursuant to this authority, Congress has established federal courts below the Supreme Court of the United States to hear a variety of cases, both criminal and civil.⁹ Federal legislation authorizes courts to adjudicate challenges to actions taken by government officials and agencies in a variety of contexts.¹⁰ Federal courts are, however, courts of limited jurisdiction—they must adhere to limits placed on their authority by Congress and the Constitution.¹¹ The circumstances under which a federal court will review the actions of a U.S. government agency or official thus involve complicated questions of statutory and constitutional law. This report offers a brief overview of some of the most important issues arising when individuals bring suit in federal court to challenge agency actions.

The Administrative Procedure Act (APA) is perhaps the most prominent modern vehicle for challenging the actions of a federal agency.¹² Enacted in 1946 following the New Deal era, during which the size of the administrative state was expanded, the statute represents the first government-wide attempt to "systematize" requirements on the actions of federal agencies.¹³ The APA functions as the most prominent authorization of judicial review of agency action, including for agency compliance with substantive legal requirements—such as an agency's "organic," or authorizing, statute.¹⁴ In addition, the APA imposes various procedural requirements on federal agencies and authorizes courts to review agency's compliance with these requirements. Accordingly, the focus of this report is largely centered on judicial review of agency actions under the APA.

The report opens with a discussion of the circumstances in which federal courts are empowered to review agency actions¹⁵ and follows with a look at the scope of review authorized by the APA.¹⁶ It then continues by describing the mechanics of a federal court's review of an agency's statutory authority,¹⁷ as well as the standards employed in the review of an agency's discretionary decisions.¹⁸ The report concludes with a brief examination of judicial review of agency compliance with statutorily prescribed procedural requirements.¹⁹

Not every agency action is necessarily subject to judicial review. Whether judicial review of agency action is available in federal court turns on a number of factors, including constitutional,²⁰ prudential,²¹ and statutory²² considerations. Courts must possess statutory jurisdiction to adjudicate a lawsuit, and plaintiffs must generally rely on a cause of action that allows a court to grant legal relief. Disputes must also present "cases" or "controversies" that satisfy the requirements of Article III of the Constitution. Finally, a suit must be presented to a court at the proper time for judicial review.

The federal courts are courts of limited jurisdiction.²³ Their authority is restricted to matters entrusted to them by Congress.²⁴ Consequently, in order to adjudicate a case, a statute must bestow subject matter jurisdiction in a federal court over a particular claim.²⁵ In addition, suits against the United States are barred absent a statutory waiver of sovereign immunity.²⁶

In addition to the requirement that a court exercise jurisdiction pursuant to the terms of a federal statute before adjudicating a case, the doctrine of sovereign immunity shields the United States from suits unless immunity has been waived by statute.³⁴ Absent such a waiver, federal courts lack jurisdiction over lawsuits against the United States.³⁵ A waiver of sovereign immunity will not be implied from legislative history or the background context of a statute; rather, it must be clearly expressed in the statutory text.³⁶ Three primary statutes waive sovereign immunity, thereby permitting lawsuits against the United States in federal court under certain circumstances.³⁷ First, the APA was amended in 1976 to permit individuals aggrieved by agency action to bring suit in federal court against the United States and government employees in their official capacity.³⁸ However, this statutory waiver does not authorize money damages as a remedy.³⁹ Second, the Federal Tort Claims Act (FTCA) permits suits to be heard in federal court for certain torts committed by agency employees in the course of their employment.⁴⁰ In these cases, the United States is substituted as a defendant for the employee who allegedly committed the tort.⁴¹ Unlike the APA, the FTCA permits money damages as a remedy.⁴² Third, the Tucker Act permits suits against the United States for breach of contract and certain other monetary claims that do not arise in tort.⁴³

Assuming a federal court has jurisdiction over a suit challenging an agency action, in order to challenge the actions of a federal agency, a plaintiff must also demonstrate that he or she posesses a legal right to seek judicial redress.⁴⁴ A plaintiff will have a "cause of action" if he or she "is a member of the class of litigants that may, as a matter of law, appropriately invoke the power of the court."⁴⁵ Various statutes explicitly provide such causes of action to enforce legal requirements against federal agencies.⁴⁶ Absent a specific statutory framework creating a cause of action, the APA provides a general cause of action for individuals aggrieved by a "final agency action" if "there is no other adequate remedy in a court."⁴⁷

There are other, less common bases for challenges to agency actions. In very limited situations, even lacking an express statutory cause of action, individuals may seek "nonstatutory" review of a agency action that is "ultra vires."⁴⁸ In addition, when a federal official owes a plaintiff a "clear nondiscretionary duty,"⁴⁹ federal district courts⁵⁰ and appellate courts⁵¹ may issue mandamus relief, which is an order compelling an official "to perform a duty owed to the plaintiff."⁵² However, the remedy is to be invoked only in "extraordinary circumstances"⁵³ when "no adequate alternative remedy exists."⁵⁴ Finally, the Supreme Court in Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics recognized a common law cause of action against federal officers for damages resulting from violations of constitutional rights.⁵⁵ This remedy does not apply to federal agencies.⁵⁶

In addition to statutory prerequisites for judicial review, certain constitutional and prudential considerations limit when courts will entertain a suit in a case challenging agency action. Plaintiffs must demonstrate that they have standing to challenge a federal agency's action and must also bring a lawsuit at the appropriate time.

Article III of the Constitution defines the proper scope of the federal court jurisdiction as limited to adjudicating "cases" and "controversies."⁵⁷ The Supreme Court has articulated several legal doctrines emanating from Article III, as well as various prudential considerations, that further limit the circumstances under which the federal courts will adjudicate disputes respecting federal agencies, such as standing, ripeness, and mootness.⁵⁸ In particular, the doctrine of standing is a frequent barrier to plaintiffs challenging agency action.⁵⁹ The Supreme Court has noted the important separation of powers principles that underlie the doctrine, emphasizing that while the judiciary is authorized to say what the law is,⁶⁰ invalidation of congressional legislation or actions of the executive branch should not be taken lightly.⁶¹ Courts must, of course, vindicate individual rights, but the judicial power may not be harnessed into a monitoring role over federal agencies that should be conducted by Congress.⁶²

In order to satisfy the constitutional requirement of standing, a plaintiff must "demonstrate that he has suffered 'injury in fact,' that the injury is 'fairly traceable' to the actions of the defendant, and that the injury will likely be redressed by a favorable decision."⁶³ A plaintiff must assert more than a generalized interest in governance shared by all citizens and instead must have suffered an injury in fact or invasion of a legally protected interest that is (1) concrete and particularized and (2) actual or imminent.⁶⁴ In addition, a "causal connection" between the alleged injury and challenged conduct is required, such that the injury is "fairly traceable to the challenged action of the defendant."⁶⁵ Finally, it must be likely, rather than "merely speculative, that the injury will be redressed by a favorable decision."⁶⁶ The doctrine of standing often operates to bar suits challenging agency action, for example, when plaintiffs seek to vindicate the public interest but have not suffered a concrete injury traceable to an agency action.⁶⁷

A variety of factors also influence when it is proper for a federal court to adjudicate a challenge to agency action. Foremost among these are statutory deadlines and the doctrines of ripeness, mootness, and exhaustion. Many statutes authorizing judicial review of particular agency actions also impose filing deadlines for such challenges.⁶⁸ Absent a specific statutory deadline, civil actions against the United States must be filed within six years of when the claim accrued or originated.⁶⁹

A controversy must also be "ripe" for a federal court decision.⁷⁰ The doctrine of ripeness derives from Article III limitations on the judiciary's authority, as well as prudential considerations.⁷¹ By avoiding the adjudication of suits prematurely, the doctrine aims to protect courts "from entangling themselves in abstract disagreements over administrative policies, and also ... protect[s] the agencies from judicial interference until an administrative decision has been formalized and its effects felt in a concrete way by the challenging parties."⁷² In deciding whether a case is ripe, a court considers whether the issues presented in the case are ready for a judicial decision and whether a delay would cause hardship to the parties in the case.⁷³ For example, a court may require a party to show that an agency's action has "adverse effects of a strictly legal kind" or requires the party to adjust their behavior in some way.⁷⁴ In the context of a challenge to an agency rule, for example, the promulgation of a regulation can make a judicial challenge sufficiently ripe when the rule requires parties to comply with new restrictions or risk serious penalties.⁷⁵ In contrast, if a regulation does not require parties to alter their day-to-day conduct, judicial review may be more appropriate in the future after application of a rule to parties in a concrete way.⁷⁶ Likewise, if "further factual development would 'significantly advance [a court's] ability to deal with the legal issues presented,'" the issue may not be ripe for review.⁷⁷

Federal courts may also decline to hear a case if it is moot.⁷⁸ A case is moot if the controversy initially existing at the time the lawsuit was filed is no longer "live" due to a change in the law or in the status of the parties involved;⁷⁹ an act of one of the parties that dissolves the dispute can render the case moot as well.⁸⁰

Finally, a court might deny review because a party failed to exhaust its administrative remedies before suing in federal court.⁸¹ Among other things, the doctrine of exhaustion seeks to avoid unnecessary litigation by requiring the full development of a record before a court examines a case.⁸² However, the Supreme Court has held that in suits brought under the APA, federal courts lack the power to require parties to exhaust their administrative remedies if no statute or agency rule requires such exhaustion.⁸³ Nonetheless, where the APA does not apply, exhaustion requirements could preclude immediate challenges to federal agency action.

The APA permits judicial review of final agency actions. However, the statute sets important limits on particular matters and entities that qualify for judicial examination under its terms.

As discussed above, the APA contains a waiver of the sovereign immunity of the United States under certain circumstances,⁸⁴ providing a cause of action for individuals aggrieved by agency actions to seek judicial review of an agency's decision.⁸⁵ The APA directs reviewing courts to "compel agency action unlawfully withheld or unreasonably delayed" and to "hold unlawful and set aside agency action, findings, and conclusions" that are:

(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;

As a result, courts are generally authorized to direct an agency to comply with the law and can invalidate actions that are inconsistent with the agency's statutory authority. Courts may also review an agency's compliance with statutory procedural requirements, such as notice-and-comment rulemaking procedures imposed by other provisions of the APA.⁸⁸ In addition, a court may examine an agency's discretionary decisions, such as a denial of a rulemaking petition, and invalidate actions that are arbitrary or capricious.⁸⁹

Judicial review under the APA is limited to examining final agency action that is not committed to agency discretion or precluded from review by a different statute.⁹⁰ Consequently, defining terms such as "agency," "action," "final," and "committed to agency discretion" is important in understanding when courts will hear a challenge to the decisions of a federal agency.

The scope of review authorized by the APA is limited. The statute imposes restrictions on the types of actions courts may review. For example, a federal court is limited to reviewing the actions of a federal agency, which is defined as an "authority of the United States."⁹¹ This definition generally includes all executive branch agencies, including the independent regulatory agencies, but specifically excludes Congress and the judiciary,⁹² as well as courts martial, military commissions, and military authorities in times of war or in the field.⁹³ Notably, the Supreme Court has held that the definition of agency in the APA does not encompass the President,⁹⁴ although lower courts had held that entities within the Executive Office of the President may qualify as agencies.⁹⁵

Review under the APA is also limited to agency action. Agency "action" is defined as "the whole or a part of an agency rule, order, license, sanction, relief, or the equivalent or denial thereof, or failure to act."⁹⁶ Courts thus may review a wide variety of issues, including agency rules, denials of licenses and permits, and sanctions issued against private parties.⁹⁷ However, it is important to note that this definition is not comprehensive—courts will deny review if the agency's challenged conduct does not fit within the statutory definition.⁹⁸ For example, some courts have denied requests for review of agency publications and press releases, as those documents do not necessarily qualify as rules, orders, or sanctions within the meaning of the APA.⁹⁹

Review under the APA is also limited to final agency action.¹⁰⁰ The Supreme Court has articulated two requirements for an agency's action to qualify as final. First, the action may not be tentative or interlocutory in nature, but must represent the "'consummation' of the agency's decisionmaking process."¹⁰¹ Second, it must be an action "by which 'rights or obligations have been determined,' or from which 'legal consequences will flow.'"¹⁰² This principle limits the judicial review of a variety of agency "actions" that do not have a final, legally binding consequence. For example, this restriction may bar judicial review of an agency's recommendation to the President to take certain actions, at least as long as that recommendation does not legally bind the President.¹⁰³ The finality requirement can also, at times, serve to shield certain agency guidance documents from judicial review if such guidance does not legally bind the public.¹⁰⁴ On the other hand, individuals are not necessarily required to wait for an enforcement action to be brought against them to challenge an agency's determination. Some actions, such as the issuance of binding regulations, may qualify as final agency action that is subject to judicial review before an enforcement action is brought against a third party.¹⁰⁵

Judicial review of agency action under the APA is unavailable in two important situations: (1) when a statute precludes review and (2) when the agency's action is legally comitted to an agency's discretion. The Supreme Court has interpreted the APA as establishing a "basic presumption of judicial review" of agency decisions absent another statute that clearly precludes review in federal court.¹⁰⁶ Some statutes expressly preclude judicial review of agency actions.¹⁰⁷ In other situations, review may be precluded by implication.¹⁰⁸ Determining whether another statute precludes review under the APA may include an examination of that statute's "express language[,] ... the structure of the overall statutory scheme, its objectives, its legislative history, and the nature of the administrative action involved."¹⁰⁹ In some cases, judicial review may be precluded because it would contradict congressional intent, such as by disrupting or impeding the intended swift operation of a complex regulatory framework.¹¹⁰ However, in the context of lawsuits alleging constitutional violations, courts have read preclusion provisions narrowly to preserve a federal court's role of reviewing constitutional claims.¹¹¹

Finally, review under the APA is unavailable if the agency's action is legally committed to the agency's discretion.¹¹² The Supreme Court has noted that an agency's action is committed to its discretion when a statute's terms are so broad that there simply is "no law to apply" in evaluating its requirements.¹¹³ In other words, if "the statute is drawn so that a court would have no meaningful standard against which to judge the agency's exercise of discretion," then judicial review is unavailable.¹¹⁴ A prominent example of a matter usually committed to an agency's discretion is the decision not to initiate an enforcement action against a third party.¹¹⁵ The Supreme Court has noted that the decision to initiate an enforcement action involves a "complicated balancing of a number of factors which are peculiarly within [an agency's] expertise" and is "generally committed to an agency's absolute discretion."¹¹⁶ Similarly, the Court has held that an agency's decision to allocate funds from a lump-sum appropriation is committed to an agency's discretion, because the whole purpose of such an appropriation is to grant the agency flexibility to spend funds.¹¹⁷ Likewise, the Court has held that the decision by the Director of the Central Intelligence Agency (CIA) to discharge an employee for reasons in the "interests of the United States" is committed to agency discretion, a ruling based in part on the overall structure of the relevant statute directing the CIA to gather and protect intelligence sources.¹¹⁸

Once a court finds that it has jurisdiction to hear a challenge to an agency's action, one relevant consideration will be whether the challenged action complies with the law. The APA authorizes courts to "set aside" agency action that is "in excess of statutory jurisdiction, authority, or limitations, or short of statutory right" or otherwise "not in accordance with law."¹¹⁹ Courts thus must often interpret the meaning of statutory provisions to determine if the agency's actions accord with its statutory authority or contradict a legal mandate. This means that courts will invalidate agency actions that contravene the meaning of a governing statute.¹²⁰

Courts have developed a number of doctrinal tests for conducting this inquiry, with varying amounts of judicial "deference" given to an agency's interpretation of the relevant statute. When reviewing a challenge to an agency's interpretation of a statute that it administers and has the force of law, courts apply the two-step framework outlined by the Supreme Court in Chevron U.S.A., Inc. v. Natural Resources Defense Council.¹²¹ Pursuant to that rubric, at "step one," courts examine "whether Congress has directly spoken to the precise question at issue."¹²² If so, "that is the end of the matter," and courts must enforce the "unambiguously expressed intent of Congress."¹²³ In the case of silence or ambiguity in the statute, however, "step two" requires courts to defer to a reasonable agency interpretation, even if the court would have otherwise reached a contrary conclusion.¹²⁴ This deference is appropriate in certain circumstances because Congress has delegated "authority to the agency to elucidate a specific provision of the statute"¹²⁵ and an agency may possess significant expertise concerning the law's administration.¹²⁶ Some commentators have noted that agency statutory interpretations are more likely to be upheld if the doctrine applies, particulary if the court reaches Chevron's second step.¹²⁷

In addition to sanctioning an agency interpretation that may depart from a court's reading of a statute, the Chevron doctrine permits agencies to shift their interpretations over time, provided that its new interpretation is a reasonable construction of the statute.¹²⁸ While a judicial finding that Congress clearly spoke to an issue "displaces a contrary agency construction," a finding of ambiguity, in contrast, may permit an agency to alter its interpretation as a result of changed circumstances.¹²⁹

Chevron does not apply to every agency interpretation of a statute. The Supreme Court has noted that the Chevron doctrine applies where Congress has delegated to the agency the authority to "speak with the force of law" and the relevant interpretation was "promulgated in the exercise of that authority."¹³⁰ An important factor in determining whether the doctrine applies—an inquiry sometimes referred to as Chevron "step zero"¹³¹—is the formality of the procedures used when issuing the interpretation. The Court has explained that if an agency has been conferred the power to engage in formal adjudications¹³² or notice-and-comment rulemaking, this likely evidences congressional intent to delegate the authority to speak with the force of law.¹³³ In contrast, "interpretations contained in policy statements, agency manuals, and enforcement guidelines, all of which lack the force of law," are generally not accorded Chevron deference.¹³⁴ However, an agency's interpretation may sometimes warrant Chevron deference in circumstances with less procedural formality than that used in notice-and-comment rulemaking.¹³⁵ Courts may examine the "interstitial nature" of the issue, the agency's expertise, "the importance of the question to the 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" to determine whether Chevron supplies the appropriate lens through which to review the agency's interpretation.¹³⁶

In addition, the Court has declined to apply Chevron deference in certain cases that present "extraordinary" questions. For example, in King v. Burwell, the Court upheld the Internal Revenue Service's determination¹³⁷ that the Affordable Care Act "allows tax credits for insurance purchased on any Exchange created under the Act."¹³⁸ The Court noted that Chevron deference is predicated on the theory that a statute's ambiguity constitutes an implicit delegation from Congress to the agency to fill in statutory gaps.¹³⁹ But the Court noted that whether such tax credits were available was a question of "deep 'economic and political significance'" that was "central to th[e] statutory scheme."¹⁴⁰ If Congress had wanted to delegate that determination to the agency, the Court explained, it would have done so explicitly.¹⁴¹ Because the statute did not expressly delegate that decision to the agency, the Court gave no deference to the agency's interpretation and analyzed the statute independently of the agency's position.¹⁴² The Court's opinion reaffirms a principle enunciated in a prior case, FDA v. Brown & Williamson.¹⁴³ In that case, the Food and Drug Administration (FDA), after years of "having expressly disavowed any such authority since its inception," asserted for the first time in 1996 jurisdiction to regulate tobacco products.¹⁴⁴ In reviewing the agency's interpretation, the Court noted that "[i]n extraordinary cases ... there may be reason to hesitate before concluding that Congress has intended" to implicitly delegate authority to an agency to fill in statutory gaps.¹⁴⁵ The Court noted that the FDA asserted jurisdiction to regulate an industry constituting a significant portion of the American economy and concluded that "Congress could not have intended to delegate a decision of such economic and political significance to an agency" without doing so expressly.¹⁴⁶

When Chevron does not apply in a case, courts may give statutory interpretations by agencies less deference.¹⁴⁷ This is not to say, however, that agency interpretations necessarily receive no weight at all. The Court indicated in Skidmore v. Swift & Co. that when an agency interprets a "highly detailed" "regulatory scheme" and the agency has "the benefit of specialized experience,"¹⁴⁸ then the court accords the agency's interpretation "a respect proportional to its 'power to persuade.'"¹⁴⁹ In other words, a court applying Skidmore deference accords an agency's interpretation of a statute a certain amount of respect or weight correlated with the strength of the agency's reasoning.¹⁵⁰ Courts will give consideration to the agency's interpretation, the "weight" of which "will depend upon the thoroughness evident in [the agency's] consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade."¹⁵¹ At bottom, Skidmore deference recognizes an agency's "power to persuade" based on its "body of experience and informed judgment," but it does not require that agency interpretations be "controlling on the courts."¹⁵²

Finally, when courts review the legal interpretations of an agency regarding its compliance with statutes it does not administer or the Constitution, such review can be more stringent: Courts sometimes review such matters de novo, or without any deference at all to the agency's interpretation.¹⁵³ For example, judicial review of an agency's compliance with the APA's procedural provisions,¹⁵⁴ certain Freedom of Information Act provisions,¹⁵⁵ and the Constitution¹⁵⁶ may be conducted de novo because those legal requirements are not entrusted to the discretion of any particular agency.

In addition to statutory review of agency actions, another important basis for judicial review under the APA concerns an agency's factual determinations and certain discretionary decisions. Courts are authorized to "hold unlawful and set aside agency actions, findings, and conclusions found to be arbitrary, capricious, [or] an abuse of discretion."¹⁶⁹ This "catch-all" provision of the APA applies to factual determinations made during "informal" proceedings,¹⁷⁰ such as notice-and-comment rulemaking,¹⁷¹ and most other discretionary determinations an agency makes.¹⁷²

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.¹⁷⁶

Given the broad scope of federal agency actions that are subject to judicial review, whether an agency decision is arbitrary and capricious is largely a situation-specific question. Importantly, the Supreme Court has clarified that it is not arbitrary and capricious for agencies to change their policies. In FCC v. Fox Television Stations, Inc., the Supreme Court held that review under the arbitrary-and-capricious standard is not heightened or more stringent simply because an agency's action alters its prior policy.¹⁷⁷ An agency must acknowledge such change when it occurs, but so long as the agency's action is permissible under its authorizing statute and supported by good reasons, agencies are not required to show that new policies are better than old ones.¹⁷⁸ In other words, an agency may be authorized to pursue a range of policy outcomes under its statutory authorization, and courts may not scrutinize such change more strictly than other agency decisions.¹⁷⁹

In general, the arbitrary-and-capricious standard requires an agency to demonstrate that it engaged in reasoned decisionmaking when reaching its determination.¹⁸⁰ Importantly, courts "must judge the propriety of [an agency's] action solely by the grounds invoked by the agency," and they may not create their own justifications to support an agency's decision beyond the reasons presented by the agency.¹⁸¹ Further, courts require agencies to provide the "essential facts upon which the administrative decision was based"¹⁸² and explain what justifies their determinations with actual evidence beyond a "conclusory statement."¹⁸³ An agency's failure to provide an adequate explanation for its decision will typically result in remand or invalidation of its decision.¹⁸⁴ Among other things, this requirement plays an important role in judicial review of agency regulations. Thus, an agency's failure to explain its reasoning in response to significant comments raised during notice-and-comment rulemaking will be considered arbitrary and capricious.¹⁸⁵

Beyond those circumstances in which courts find that an agency failed to provide an adequate explanation for its decision, courts may also find the decision itself to be arbitrary and capricious.¹⁸⁶ For example, courts will invalidate agency actions that are the product of "illogical"¹⁸⁷ or inconsistent reasoning.¹⁸⁸ In addition, courts will find an agency action to be arbitrary and capricious if the agency simply failed to consider an important factor relevant to its action, such as the policy effects of its decision¹⁸⁹ or vital aspects of the problem in the issue before it.¹⁹⁰ Likewise, courts may invalidate or remand a determination to the agency if the agency decision failed to consider regulatory alternatives that would similarly serve the agency's goals¹⁹¹ or provide "less restrictive, yet easily administered" options.¹⁹² It bears mention that courts are particularly deferential to agencies' expertise when making predictive judgments based on scientific or technical determinations.¹⁹³

Because of the wide range of statutory authorities and agency missions, what counts as a relevant factor that must be considered by an agency when reaching a decision can be context specific. An illustrative case is Judalong v. Holder, where the Supreme Court found the Board of Immigration Appeals' (BIA's) policy for deciding whether resident aliens may apply for relief from removal to be arbitrary and capricious.¹⁹⁴ The Court noted that the relevant factors for the BIA to consider were the "purposes of the immigration laws or the appropriate operation of the immigration system."¹⁹⁵ Because the agency failed to root its determination in consideration of such factors and instead based its policy on an "irrelevant comparison between statutory provisions" unconnected to the merits of a removal decision or the administration of immigration laws, the Court held that the agency's determination was arbitrary and capricious.¹⁹⁶

Other examples¹⁹⁷ of agency actions found to be arbitrary and capricious include

• failing to consider circumstances that "warrant different treatment for different parties";¹⁹⁸
• reaching a conclusion that contradicts the underlying record;¹⁹⁹
• justifying "its decision on a premise the agency itself has already planned to disrupt";²⁰⁰
• taking rulemaking action that undercuts another simultaneous rulemaking by the same agency;²⁰¹
• "fail[ing] to provide any coherent explanation for its decision";²⁰²
• contradicting the "expert record evidence" without explanation;²⁰³
• failing to consider a relevant and important factor in making a decision;²⁰⁴
• issuing a rule that was based on "pure political compromise, not reasoned scientific endeavor";²⁰⁵
• failing to "exercise sufficiently independent judgement" by deferring to private parties;²⁰⁶ and
• utilizing a model for studying risk that was inconsistent with the underlying data.²⁰⁷

Importantly, agency actions can be challenged for failing to comply with "procedure[s] required by law."²¹⁷ Consequently, assuming that a court is otherwise authorized to adjudicate a case,²¹⁸ individuals aggrieved by agency conduct may challenge an agency's failure to comply with the procedures mandated by the APA or another statute.

For example, before engaging in "informal" rulemaking under Section 553 of the APA, agencies must provide the public with advance notice and an opportunity to meaningfully comment on the proposed rule.²¹⁹ Such regulations are often referred to as "legislative rules."²²⁰ However, "nonlegislative" rules, such as interpretive rules and policy statements, are exempt from this requirement.²²¹ Federal courts will thus remand or invalidate an agency document issued without notice-and-comment procedures if a court concludes that it qualifies as a legislative rule.²²² Courts doing so will sometimes review the issue de novo, refusing to grant any deference to the agency because Congress has not granted the agency authority to administer the APA.²²³ In addition, the APA's "good cause" provision permits agencies to bypass these requirements if compliance would be "impracticable, unnecessary, or contrary to the public interest."²²⁴ For example, in 2004, the D.C. Circuit upheld on security grounds the Federal Aviation Administration's rule, promulgated without notice and comment, covering the suspension and revocation of pilot certificates.²²⁵ The court accepted the agency's contention that the regulation was necessary to protect the public against security threats, ruling that the "legitimate concern over the threat of further terrorist acts involving aircraft in the aftermath of September 11, 2001," supported the good cause finding.²²⁶ Nonetheless, the appropriate standard of review for determining what constitutes "good cause" under the APA is unsettled.²²⁷

Similarly, parties may challenge the procedures used in agency adjudications. When conducting "formal" or "on the record" adjudications, agencies must provide trial-type procedures during the hearing before the agency.²²⁸ While agencies are generally free to choose between utilizing rulemaking or adjudications to set policy,²²⁹ certain legal requirements nevertheless apply to adjudications.²³⁰ Formal adjudications require trial-like procedures and must be conducted before an administrative law judge (ALJ) or agency head; informal adjudications have fewer procedural requirements and need not take place before an ALJ.²³¹ An agency's choice to adjudicate an issue with informal procedures rather than formal ones may be challenged as violating the APA.²³²

Importantly, the Supreme Court has consistently ruled that courts may not add to the procedural requirements imposed on agencies in the APA.²³³ Agencies enjoy discretion to develop and apply their own procedures that supplement the APA's requirements, but courts lack authority to impose additional requirements upon agencies.²³⁴ In the past, lower federal courts had required agencies to adopt additional procedures not spelled out in the text of the APA.²³⁵ In the context of informal rulemaking, the Supreme Court's 1978 decision in Vermont Yankee Nuclear Power Corporation v. Natural Resource Defense Council, Inc. ruled that courts may not require agencies to utilize additional procedures beyond those mandated by the APA's notice-and-comment requirements.²³⁶ Likewise, the Court's 2015 decision in Perez v. Mortgage Bankers Association held that courts may not require agencies to undergo notice-and-comment rulemaking if the APA exempts the agency action from those requirements.²³⁷ In other words, the APA "sets forth the full extent of judicial authority to review executive agency action for procedural correctness."²³⁸

The Constitution confers Congress with expansive authority to define the jurisdiction of federal courts, determine the types of agency actions subject to judicial review, and subject agencies to certain procedural requirements when implementing their statutory authority. Important constitutional limits also determine when a federal court may render a decision. The circumstances in which federal courts will review the actions of agencies are thus informed by complicated statutory, constitutional, and prudential considerations. Perhaps the most prominent of such statutes, the APA, subjects a broad scope of agency decisions to judicial review, subject to important limitations. Judicial interpretation of the APA's provisions consequently plays a central role in determining what types of agency actions are subject to review in federal court. These developments are, nonetheless, subject to future modification by Congress, which enjoys authority to alter the APA or any other statute to shape the contours of judicial review of agency action.

Author Contact Information

Footnotes

The Constitution creates the offices of the President and Vice President, U.S. Const. art. II, §1, the Congress, id. art. I, §1, and the Supreme Court, id. art. III, §1. Congress is authorized "[t]o make all Laws which shall be necessary and proper for carrying into Execution" the authority bestowed on these entities. id. art. I, §8, cl. 18. Pursuant to this power, Congress has established federal offices and agencies within the executive, legislative, and judicial branches. See CRS Report R43562, Administrative Law Primer: Statutory Definitions of "Agency" and Characteristics of Agency Independence, by [author name scrubbed] and [author name scrubbed].

Id. art. III, §2, cl. 1.

See infra "Requirements for Judicial Review."

5 U.S.C. §§551 et seq.

Gary Lawson, Federal Administrative Law 202 (2009).

See infra "Requirements for Judicial Review."

See infra "The Scope of Review Under the Administrative Procedure Act."

See infra "Review of Statutory Issues."

See infra "Judicial Review of Agency Factual Determinations and Discretionary Decisions."

Id. §1331.

5 U.S.C. §702.

28 U.S.C. §2679.

Id. §2679.

Id. §§1346(b), 2671-80.

Id. §1651(a).

Barnhart v. Devine, 771 F.2d 1515, 1524 (D.C.Cir. 1985).

Allen v. Wright, 468 U.S. 737, 760 (1984).

Id.

28 U.S.C. §2401.

Nat'l Park Hosp. Ass'n v. Dep't of Interior, 538 U.S. 803, 808 (2003).

Id. at 149.

Ohio Forestry Ass'n., Inc. v. Sierra Club, 523 U.S. 726, 733 (1998).

Darby v. Cisneros, 509 U.S. 137, 146-47 (1993).

See supra "Sovereign Immunity."

See supra "Cause of Action."

5 U.S.C. §553.

5 U.S.C. §551(1).

5 U.S.C. §551(13).

Id. §551(4) (defining a "rule" for purposes of the APA); id. §551(8) (defining "license") id. §551(10) (defining "sanction").

Id. at 140.

Id. at 345.

5 U.S.C. §701.

5 U.S.C. §706(2)(A), (C).

Chevron, 467 U.S. at 842.

Id. at 842-43.

Id. at 843.

Id. at 843-44.

Id. at 865.

Mead, 533 U.S. at 229-30.

135 S. Ct. 2480, 2495-96 (2015).

Id. at 160.

Mead, 533 U.S. at 235.

Id. at 235 (quoting Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944)).

Skidmore, 323 U.S. at 140.

Skidmore, 323 U.S. at 140; see generally Peter L. Strauss, "Deference" is Too Confusing—Let's Call Them "Chevron Space" and "Skidmore Weight," 112 Colum. L. Rev. 1143 (2012).

See supra text accompanying note 166.

5 U.S.C. §706(2)(A).

5 U.S.C. §553.

463 U.S. 29, 43 (1983).

Id. at 514-15.

Ass'n of Private Sector Colls. & Univs. v. Duncan, 681 F.3d 427, 449 (D.C. Cir. 2012); Int'l Union, United Mine Workers of Am. v. Mine Safety & Health Admin., 626 F.3d 84, 94 (D.C. Cir. 2010).

Id. at 485.

Id.

Petroleum Commc'ns, Inc. v. FCC, 22 F.3d 1164, 1172 (D.C. Cir. 1994).

5 U.S.C. §551(4).

Id. §551(7).

5 U.S.C. §554.

Id. §§556-57.

Id. §553.

Id. §§554, 556-57.

Id. §555.

Id. §706(2)(D).

See supra "Requirements for Judicial Review."

5 U.S.C. §553.

5 U.S.C. §553.

Id. §553(b)(3)(B).

Id. at 1180.

5 U.S.C. §§554, 556-557.