What constitutes the agency record on challenges to rulemakings?

1. What constitutes the agency record on challenges to rulemakings? • In Choc Mfrs & NSFP – procedural defects resulted in challenges to agency action - what does a reviewing court look to in order to resolve those challenges? • Remember Overton Park & Chenery I: • A court can only review agency action based upon a record that reflects contemporaneous agency decision-making (rather than post-hoc rationalizations) • With formal rulemakings/adjudications – identifying the record is easy: • Sec. 556(e) – “The transcript of testimony and exhibits, together with all papers and requests filed in the proceeding, constitutes the exclusive record for decision in accordance with section 557 of this title . . .” • There is no similar definition of record for Sec. 553 rulemakings.

2. Sec. 553 rulemakings – the agency record on review • NPR • Final rule & SBP • Written comments during comment period • Oral comments during comment period (if oral hearing held and transcript available) • Other materials that the agency might have consulted? YES • Scholarly articles, Agency manuals, Staff reports, Consultant studies • How can/should agency refer to these in the RM so they become part of the record ? • Can it just say “we relied on other things” or incorporate them as part of its “expertise” without specifically mentioning? • Must the agency specifically refer to these even if they aren’t scientific and technical data (as required in NSFP)? • If the agency was heavily influenced by the material it should probably mention it specifically in NPR &/or SBP and then make available to court in record on review

3. Sec. 553, the record & ex parte contacts • Consider the role that ex parte communications play in trials vs. legislation: • Why are they considered improper in trials but not in the legislative process? • Switch gears to agencies: • In FORMAL adjudications/rulemakings, certain ex parte contacts are explicitly prohibited. See Sec. 557(d) – more on this later • Does Sec. 553 prohibit ex parte contacts between agency officials and others during the rulemaking process? • Are suchcontacts likely to occur during that process? • Why does the HBO court seem concerned about them?

4. HBO’s rule • Even after HBOex parte contacts are not completely prohibited • ONLY ex parte contactsduringthe rulemaking process are prohibited. Contacts before the NPR is posted are not • Court’s remedy: • Agency official/employee who is or reasonably could be expected to participate in RM decision process should not have ex parte contacts • But if they do, introduce a memo summarizing list of your contacts and related documentary evidence into the rulemaking record. • How useful is this remedy?

5. The aftermath of HBO • The ACT decision (p. 446 n. 5) retreats rapidly from HBO and refused to require a summary of ex parte contacts in a Sec. 553 rulemaking proceedings. • Why – are the two cases distinguishable or is this just a turn in a different direction? • ACT court claims that HBO case involved “competing claims to a valuable privilege” – what does that mean? • Generally in cases governed by Sec. 553 requirements, courts won’t follow the HBOroute and prevent ex parte contacts unless the situation is REALLY egregious as in that case. • But many agencies adopt rules prohibiting ex parte contacts or organic statutes may prohibit them.

6. Hybrid rulemaking by Congress • Hybrid rulemaking: When an entity (Congress, agency or courts) requires agency to use procedures beyond the minimal procedures of ' 553 • E.g., – oral hearing requirement w/ opportunity for cross exam of persons making statements or req’mt that all contacts be identified in the docket • Example – Magnus Moss Act & Clean Air Act (pp. 474 -75) • Why might Congress (or an agency) want to add procedural requirements onto agency rulemakings in particular circumstances? • Some agency rulemakings may be subject to greater industry bias/capture • Some rules may require more significant vetting due to technical data • Some rules may be subject to more challenges • What happens when courts try to impose these additional procedures?

7. Vermont Yankee v. NRDC – the adjudications • AEC granted VY a construction license after a formal adjudicatory hearing in 1967. • Congress enacted NEPA in 1969, which required that all agencies file an EIS regarding possible effect on the environment of any agency action. • At the 1971 adjudication for VY’s operating license, NRDC argued that NEPA required consideration of the environmental effects associated with the nuclear fuel cycle – including spent nuclear fuel. • AEC found that NEPA required it to account for transportation of spent nuclear fuel but not disposal, storage or reprocessing – thus, it gave ZERO value to the impact of spent nuclear fuel in the cost benefit analyses required for licensing • VY got its operating license and AEC appeal board eventually affirmed in 1972.

8. Vermont Yankee v. NRDC – the rulemaking • 11/72 - AEC began informal rulemaking proceedingsto explore the “environmental effects associated with the uranium fuel cycle in the individual cost-benefit analyses for light water cooled nuclear power reactors” in licensing proceedings. • 2 options proposed– (1) No consideration of the impact because the effect of spent fuel was slight OR (2) provide specified numeric values of the cost of waste disposal to take into consideration in cost benefit analysis in licensing decisions • At the end of the rulemaking, AEC concluded that the environmental effects of the fuel cycle, including waste disposal, were “relatively insignificant.” BUT AECshould still take them into account in licensing decisions. • Adopted a rule tracking option 2 above – used numerical values representing the impact of spent nuclear fuel on the environment • BUT AEC refused to apply the new rule retroactively to the Vermont Yankee operating license

9. Procedures during the Vermont Yankee rulemaking • Is there a contention that the agency didn’t meet the textual requirements of Sec. 553? Did it actually go beyond those requirements? • Why weren’t the procedures used sufficient as far as the NRDC was concerned?What about this situation makes the NRDC want those procedures? • What is the statutory source of the NRDC’s complaint that the AEC/NRC had an obligation to provide more in the way of procedural protection? • NEPA? APA Sec. 553? APA Sec. 706’s “whole record” requirement?

10. Vermont Yankee – the courts • D.C. Circuit’s ruling: • Is its ruling about the substantive defects of the ruleor the procedural defects in the proceeding? • How does the Supreme Court characterize the D.C. Circuit’s ruling – as one involving substantive or procedural inadequacies of the rulemaking? • How does the SCT respond to such judicially-imposed “hybrid rulemaking”? • What is it concerned about?

11. Even Vermont Yankee recognizes that agency hearing procedures may be inadequate although they meet the requirements of '553: • For example: • When there is a constitutional due process violation • If the rulemaking would be an adjudication for constitutional purposes • When an agency’s action is an unjustified departure from well-settled agency procedures of longstanding use • Remember Morton v. Ruiz – agencies might have to follow informal policies if the public has come to have an “expectation” that they will follow those policies

12. Are Vermont Yankee, Choc. Mfrs & NSFP consistent? • In Choc. Mfrs & NSFP – appellate courts grafted on significant requirements to the notice & SBP requirements of Sec. 553 rulemakings • How can they do this in the face of Vermont Yankee’s proscription on hybrid rulemaking? Does this mean those decisions are not good law? • Conventional Wisdom: No – courts use all three decisions all the time. How to reconcile: • Choc. Mfrs & NSFPrequire the NPR/SBP to contain material that clarifies what agency relied on in it’s decision-making processor that show relationship between final/proposed rule. This aids the courts in ensuring that the record is adequate on review – that’s okay • Vermont Yankee SCTviewed lower court as requiring additional procedures during the comment period simply for “fairness” sake. L • Lower court was not requiring additional procedures to aid review. Sec. 553 contains all the procedures needed to be FAIR and courts can’t add additional ones absent the circumstancesin the previous slide.