Defining Final Agency Action for APA and CRA Review

Defining Final Agency Action for APA and CRA Review

April 24, 2023
Defining Final Agency Action for APA and CRA Review
Executive branch action may be subject to both judicial and
and the District of Columbia, as well as—for most
congressional review. Two federal statutes authorizing such
purposes—certain military authorities. Courts have held the
review are the Administrative Procedure Act (APA), which
exclusions of Congress and the courts also exclude
generally governs judicial review of agency action, and the
legislative- and judicial-branch agencies such as the
Congressional Review Act (CRA), which provides an
Government Publishing Office and the United States
avenue for Congress to review agency rules. Both statutes
Sentencing Commission. The Supreme Court has also ruled
only authorize review of final actions taken by agencies.
that the APA does not apply to the President, although
This In Focus discusses these two requirements for APA or
lower courts have held that 5 U.S.C. § 551 can sweep in
CRA review.
some entities within the Executive Office of the President,
as discussed below. GAO has similarly concluded that the
Background: APA and CRA Review
CRA does not encompass presidential actions such as
The APA outlines the procedures agencies usually must
executive orders.
follow when they promulgate rules, adjudicate cases, or
take other actions. For instance, for certain types of agency
5 U.S.C. § 551 does not define an “agency” as being
rules known as substantive or legislative rules, the APA
located within a specific executive-branch department, and
generally requires agencies to offer public notice and
thus the term may include independent establishments.
opportunity to comment on the rule. These requirements are
Cases have addressed whether entities like the Smithsonian
often referred to as notice-and-comment procedures. The
Institution or advisory committees fall within the definition.
APA also provides an avenue for injured parties to
challenge final agency actions in court. For more
To resolve these challenges, courts have asked whether the
information on judicial review under the APA, see CRS
entity exercises “substantial independent authority.” Soucie
Report R44699, An Introduction to Judicial Review of
v. David, 448 F.2d 1067, 1073 (D.C. Cir. 1971). The first
Federal Agency Action, by Jared P. Cole.
piece of this inquiry asks whether an entity exercises
substantial authority. Logically, “for an entity to be an
The CRA requires agencies to submit most rules to
authority of the government it must exercise some
Congress for review. The law establishes procedures to
governmental authority.” Dong v. Smithsonian Inst., 125
enact a joint resolution of disapproval that will render a rule
F.3d 877, 881 (D.C. Cir. 1997). Applying this standard, for
ineffective if passed in both houses and signed by the
example, one federal appeals court concluded that the
President. Unlike the APA, the CRA applies only to agency
Smithsonian Institution did not qualify as an agency
rules, excluding orders and other nonrule actions. In
because it did not perform any regulatory functions or
addition, the CRA is a tool for congressional oversight,
control the allocation of federal dollars. In another ruling, a
requiring the submission of rules to Congress and the
trial court highlighted two key ways an entity may exercise
Government Accountability Office (GAO). In contrast to
substantial authority: “investigative power and authority to
the APA, the CRA explicitly bars judicial review and in
make final and binding decisions.” Elec. Privacy Info. Ctr.
practice, GAO has become the arbiter of certain legal
v. Nat’l Sec. Comm’n on Artificial Intelligence, 466 F.
questions under the CRA. Notwithstanding these
Supp. 3d 100, 109 (D.D.C. 2020).
differences, the CRA incorporates certain language from
the APA. The CRA adopts the APA’s definition of
The second aspect of the inquiry looks to independence.
“agency” and references the APA’s definition of “rule.”
The question of independence has come up, for example,
GAO has thus concluded that the CRA also only applies to
when courts evaluate whether advisory committees are
final agency actions. For more information on the CRA, see
independent of the President, or whether they fall within the
CRS Report R43992, The Congressional Review Act
APA’s presidential exemption. Courts look to whether a
(CRA): Frequently Asked Questions, by Maeve P. Carey
committee merely advises and assists the President, or
and Christopher M. Davis.
whether it performs significant nonadvisory functions. As
part of this inquiry, courts may use a three-factor analysis
“Agency” Action
that looks to “how close operationally the group is to the
Both the APA and CRA apply to actions of “agencies,” a
President, what the nature of its delegation from the
term defined in 5 U.S.C. § 551. (The Freedom of
President is, and whether it has a self-contained structure.”
Information Act also uses this definition, while some other
Meyer v. Bush, 981 F.2d 1288, 1293 (D.C. Cir. 1993). GAO
federal laws use other definitions to determine their scope.)
has adopted this analysis to determine whether agency
The APA definition of “agency” is relatively broad,
actions are attributable to the President and therefore
encompassing “each authority of the Government of the
excluded from the scope of the CRA. GAO has also looked
United States.” However, the definition expressly excludes
to whether the governing statute expressly grants authority
Congress, courts, and the governments of U.S. territories
to the President. See Safer Federal Workforce Task Force—
https://crsreports.congress.gov

Defining Final Agency Action for APA and CRA Review
Applicability of the Congressional Review Act to COVID-
general policy statements can never qualify as final action
19 Workplace Safety: Guidance for Federal Contractors
because they are not legally binding.
and Subcontractors, B-333725 (Mar. 17, 2022).
Other cases seem to indicate, in contrast, that informal
“Final” Action
pressure to conform to agency standards can sometimes
In 5 U.S.C. § 704, the APA states that judicial review is
constitute final action. A later case from the same federal
available for “final agency action.” The statute does not
appeals court concluded that where “the writing was . . . on
define when an agency action qualifies as “final,” but the
the wall” about how an agency would act, an agency’s
Supreme Court has said a final action must satisfy two
findings could be treated as final. Safari Club Int’l v.
criteria: “First, the action must mark the consummation of
Jewell, 842 F.3d 1280, 1289–90 (D.C. Cir. 2016). A
the agency’s decisionmaking process—it must not be of a
different federal appeals court also held that general policy
merely tentative or interlocutory nature. And second, the
statements can qualify as final agency action. Texas v.
action must be one by which rights or obligations have been
Biden, 20 F.4th 928 (5th Cir. 2021), rev’d on other
determined, or from which legal consequences will flow.”
grounds, 142 S. Ct. 2528 (2022).
Bennett v. Spear, 520 U.S. 154, 177–78 (1997) (cleaned
up). As one example, an agency notice of proposed
In addition, a number of cases suggest courts should look to
rulemaking will generally not be reviewable, but the final
a decision’s “practical effect.” Nat’l Org. of Veterans’
rule an agency adopts after notice-and-comment procedures
Advocates v. Sec’y of Veterans Affairs, 981 F.3d 1360, 1380
will be subject to review. A document’s label as “final” will
(Fed. Cir. 2020). For example, one opinion held that “an
not necessarily be dispositive, though. Courts look to the
interpretive rule . . . can constitute final action” if an agency
substance of an agency action.
treats it as binding, “even though, standing alone,” the rule
does not have the force of law. POET Biorefining, LLC v.
Outside of the notice-and-comment rulemaking process, it
EPA, 970 F.3d 392, 406 (D.C. Cir. 2020). Agencies’ legal
can sometimes be difficult to determine which agency
interpretations may “occasion sufficient ‘legal
action represents a decision’s consummation. One factor is
consequences’ to make them reviewable” even if they are
whether a statement was issued by a subordinate official
“not directly binding” on regulated entities, depending in
and subject to additional administrative review. Even if an
part on the authoritativeness of the interpretation. Air Brake
agency head issued a document, though, its conditional or
Sys. v. Mineta, 357 F.3d 632, 641 (6th Cir. 2004). (For a
tentative nature can override this factor. Agency
similar approach, see Philip Morris USA Inc. v. U.S. FDA,
recommendations usually will not be considered final to the
202 F. Supp. 3d 31 (D.D.C. 2016).)
extent they are merely advisory and preliminary. However,
the mere possibility of later agency revision of a decision
In contrast to this ambiguity under the APA, GAO has
does not render an action nonfinal.
clearly ruled that nonbinding guidance documents,
including general policy statements, can qualify as rules
Even if an agency action is not subject to further agency
subject to the CRA. See Office of the Comptroller of the
review, it will only be “final” under 5 U.S.C. § 704 if it also
Currency, Board of Governors of the Federal Reserve
determines rights or obligations or has legal consequences.
System, Federal Deposit Insurance Corporation—
For example, the Supreme Court concluded an agency
Applicability of the Congressional Review Act to
determination was final where the agency agreed it was
Interagency Guidance on Leveraged Lending, B-329272
binding, and the determination prevented the agency from
(Oct. 19, 2017). The CRA uses a broad definition of “rule”
acting and created a partial safe harbor from liability. U.S.
that encompasses both substantive rules and guidance. As
Army Corps of Eng’rs v. Hawkes Co., 578 U.S. 590 (2016).
such, by design, the CRA applies to rules without the force
of law. Following the structure of the statute, GAO has
This second aspect of the test for finality has sometimes led
concluded that although the CRA only applies to final rules,
courts to conclude they cannot review guidance documents.
it includes rules that are nonbinding. GAO has said, for
The APA distinguishes substantive rules from guidance
instance, the CRA includes “coercive” guidance documents
documents, as it expressly excludes interpretive rules and
that induce regulated entities to “exercise rights or
general policy statements from notice-and-comment
obligations in a certain way.” Federal Highway
rulemaking proceedings. To determine whether a rule is
Administration—Request for Reconsideration—Policy on
substantive and must go through notice-and-comment
Using Bipartisan Infrastructure Law Resources to Build a
procedures, courts ask whether the agency statement binds
Better America, B-334032.2 (Apr. 5, 2023).
private parties or the agency itself with the force of law. By
definition, then, under APA classifications, guidance
For more information on guidance documents, see CRS
documents are not legally binding. Accordingly, one federal
Legal Sidebar LSB10591, Agency Use of Guidance
appeals court held that a document labeled “Final
Documents, by Kate R. Bowers; and CRS Report R44468,
Guidance” was not a final agency action reviewable in
General Policy Statements: Legal Overview, by Jared P.
court. Nat’l Mining Ass’n v. McCarthy, 758 F.3d 243 (D.C.
Cole and Todd Garvey. For more information on the
Cir. 2014). The guidance document recommended that
applicability of the CRA, including a discussion of
states impose stricter conditions on certain Clean Water Act
guidance documents, see CRS Report R45248, The
permits. Nonetheless, the court concluded that state
Congressional Review Act: Determining Which “Rules”
permitting authorities were free to ignore the guidance
Must Be Submitted to Congress, by Valerie C. Brannon and
without facing any legal consequences. The opinion said
Maeve P. Carey.
https://crsreports.congress.gov

Defining Final Agency Action for APA and CRA Review

IF12386
Valerie C. Brannon, Legislative Attorney

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