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State Farm’s “hard look” review standard

State Farm’s “hard look” review standard.

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State Farm’s “hard look” review standard

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  1. State Farm’s “hard look” review standard • 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. In reviewing that explanation, we must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment. • Normally, an agency rule would be 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.

  2. Operationalizing “hard look” review • Identify the statutory goal the agency is trying to implement • Identify the method used to implement statutory goal • I.e., regulation, directive, etc. and what they require • Ask if there are alternatives to the agency’s chosen method • Ask whether the agency adequately justified its method over alternatives • Did agency ignore evidence or arguments of others? • Does evidence support/contradict agency’s choice? • Did agency consider things that are irrelevant (per statutory mandate)? • Does agency’s explanation make sense in light of everything considered?

  3. Applying “hard look” review in State Farm • 1st issue: Rescission of the airbags requirement • DOT/NHTSA’s rescission of the airbags requirement failed “hard look” review because the agency never considered the possibility of an “airbags-only” option. • This could have responded to agency’s concern that the then-current reg (giving manufacturers an option) would not increase safety because they would choose seatbelts which people would detach • Note that reasons put forward in statement accompanying rescission do deal some w/ airbags but are effectively just conclusions (and some are irrelevant) and not clear that agency explored the issue in any real depth • SCT also refuses to accept other arguments agency raises during trial/appeal (re problems w/ installing airbags in small cars & adverse public reaction). • Why?

  4. Applying “Hard Look” Review in State Farm -- cont’d • 2nd issue: Automatic seatbelts • Application of Hard Look Review • Does the agency give a reason for its decision not to require automatic seatbelts? • Why does the SCT reject the agency’s decision?

  5. Politics and “hard look” review • Could the agency in State Farm have successfully justified the revocation of the passive restraint regulations by saying “we are revoking the regs because Reagan promised in the 1980 presidential election that we would”? • If not why not? • How would Justice Rehnquist answer this question?

  6. Massachusetts v. EPA - facts • CAA § 202(a)(1) – EPA administrator shall “by regulation” prescribe and occasionally revise standards applicable to “emission of any air pollutant” from new motor vehicles that “in his judgment cause, or contribute to, air pollution, which may be reasonably anticipated to endanger public health or welfare” • CAA § 7602(g) defines “air pollutant” as “any air pollution agent or combination of such agents, including any physical, chemical, biological, radioactive . . . substance or matter which is emitted into or otherwise enters the ambient air.” • CAA § 7602(h) defines “welfare” as, among other things, “effects on . . . weather . . . and climate.”

  7. Massachusetts v. EPA – more facts • 10/99 – private organizations petition EPA to initiate a rulemaking to regulate greenhouse gas emissions from motor vehicles under § 202(a)(1) • They claim greenhouse gases are “air pollutants” • EPA initiates public comment in early 2001 • WH seeks guidance on certainties and uncertainties of science of climate change (during comment period) from NRC • NRC Report concluded that greenhouse gases were accumulating and contributing to rising temperatures • 9/03 – EPA issues order denying rulemaking petition because • (1) CAA did not authorize issuance of mandatory regs re global climate change • (2) even if it had that authority, EPA believed it was “unwise” to enact such regs at that time.

  8. Issue 1 – Does EPA have statutory authority to enact regs? • This is basically a Chevron issue – EPA has interpreted the statute and claims it doesn’t give them legal authority. • What approach does the EPA use to argue that it does not have the statutory authority to regulate global climate change? • How does the majority respond? • Does Justice Scalia (although he disagrees with the majority) take a different approach?

  9. Issue 2 – Is EPA’s “judgment” not to enact a rule “arbitrary and capricious?” • EPA: Even if we have statutory authority, we think it is “unwise” to enact a regulation of greenhouse gases now. • Why does this reasoning fail “hard look” review?

  10. Massachusetts v. EPA – Judicial review of agency inaction • Conventional wisdom = it is VERY difficult to convince a court to review agency inaction (i.e., decision NOT to do something – enact a regulation, refusal to enforce rule). • SCT notes that agency refusals to initiate enforcement actions are essentially UNREVIEWABLE • These are actions committed to agency’s discretion (MORE LATER) • BUT decision not to enact a rule may be reviewable – received “hard look” review in Mass. v. EPA • As a practical matter – courts are likely to be pretty deferential to agency’s discretionary decision not to enact a rule • BUT when the enabling statute specifically MANDATES that an agency regulate & the agency’ responds that it can’t or won’t or shouldn’t, it’s action is going to get scrutinized to make sure it’s rational

  11. Summary of Hard Look Review • What kind of rigor? • Although the Court reversed the agency in State Farm & Mass. v. EPA, courts often uphold agency action under this standard. • Critical question – did agency engage in reasoned decision-making? • If so, court will uphold. • If not, court will simply remand back to the agency. Agency can decide to enact the EXACT same rule and court will uphold on a subsequent challenge as long as it believes that the agency’s decision was well-reasoned. Often, the agency will tweak the rule as a result of the first litigation because it didn’t account for something. • The cases we’ve seen reflect why courts will find action arbitrary & capricious: • Complete failure to consider an obvious alternative (State Farm) • Failure to act on statutory mandate (Mass. v. EPA) • Hasty and poorly thought out action that is overly broad (BP moratorium litigation from first week of class)

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