ACUS’s recommendation on judicial review of federal regulations provides much-needed clarity.
In which court or courts should battles over the legality of federal regulations be fought? The Administrative Conference of the United States (ACUS) aimed to tackle this daunting challenge this year. And after study and debate, ACUS issued Recommendation 2024-1, which provides some guidance on both the structure of judicial review of agency rulemaking and the statutory language that will best accomplish it.
Although the Administrative Procedure Act (APA) provides that most federal agency rules can be challenged in federal court, it does not specify in which federal court a challenge should be brought.
The vast majority of federal lawsuits, including most cases challenging federal administrative action, begin their journey through the federal courts in district court, with an appeal available to a three-judge panel of the regional federal court of appeals.
However, in hundreds of statutory provisions sprinkled throughout the U.S. Code, Congress vested jurisdiction over challenges to specified agency actions in the courts of appeals, bypassing the district courts entirely. But, unless Congress specifies otherwise explicitly, the default two-tier pathway controls.
Even the best written of the hundreds of statutes governing judicial review of agency regulations include ambiguities. Congress has used many different word choices through the decades, forcing courts to confront repeatedly the difficult question of whether a particular lawsuit falls within a grant of direct jurisdiction to the court of appeals.
For example, one common issue is whether statutory language providing for direct review of agency “orders” in the courts of appeals includes challenges to agency rules. Most courts say it does, but that is at least arguably in tension with the APA, which defines “order” to exclude “rulemaking” explicitly. Going forward, ACUS recommends that, if Congress intends a jurisdictional statute to prescribe jurisdiction over challenges to rules, it say so directly.
A more difficult question is when Congress should vest jurisdiction directly in the courts of appeals. If writing on a clean slate, as I have argued before in a prior essay and elsewhere, the case for direct appellate court review is equivocal at best. This issue has been debated by ACUS before, and nearly 50 years ago, ACUS adopted a position generally favoring direct review by appellate courts for many challenges to significant agency action.
From my perspective, ACUS’s position creates a bit of a stare decisis effect, placing a higher burden on those who argue in favor of departing from the long-standing recommendation. Ultimately, as my report sets forth, the burden of departing from the general logic of direct court-of-appeals review had not been made. With Recommendation 2024-1, ACUS agreed.
The arguments in favor of vesting review directly in the court of appeals center on efficiency and expediency. The reasoning goes: If a case is going to be appealed eventually, why not cut out the district court altogether? This approach spares the district judge’s efforts, which will be redone on de novo review, and it speeds up the process by sending the case directly to the presumptively final arbiter.
These efficiency and speed motivations are not without considerable force—indeed, they carried the day in the end—but they are subject to formidable caveats. To start, the arguments from efficiency depend on being able to identify reliably those categories of cases destined to be appealed beyond the district court. After all, thousands of rules are published every year, and only a few challenges make it to the courts of appeals. Every case vested directly in the courts of appeals commits the resources of three judges, while a case that starts and ends in the district court requires just one judge’s time—a bargain in judicial resources.
More fundamentally, the federal courts do not pursue speed or efficiency at all costs—as anyone who has ever litigated there can surely attest—and built into the argument from efficiency is a discounting of the value that district court review provides even in those cases that eventually go up on appeal. True, challenges to agency rules will typically be based on an administrative record, making the district court’s superior power to gather and process evidence less important.
But factual issues involving Article III standing, constitutional claims, and other issues arise with some regularity in challenges to agency rulemaking, and courts of appeal have no ready way to resolve these factual disputes.
Adding another layer of review has other benefits. The extra round gives the parties more opportunity to focus and refine their arguments. A case with another layer of judging comes to the appellate court with the benefit of a district court opinion helping to sort through complicated issues of the case and cut through the clutter and noise generated by the adversarial contest.
Indeed, there is something paradoxical about singling out the very class of cases that are likely the most impactful on society and giving them less judicial treatment than the two layers the most modest mine-run case is entitled to.
How one might weigh these considerations depends on empirical assumptions, such as likelihood of eventual appeal or frequency of factual issues, and value judgments, such as weighing increased efficiency or increased process. Reasonable minds can differ. But with ACUS precedent establishing a default rule generally favoring direct circuit court review, there was not enough evidence to depart from that position.
However, ACUS previously took the position that rules issued through notice-and-comment rulemaking should be channeled directly to the court of appeals only in certain circumstances: “whenever: (i) an initial district court decision respecting the validity of a rule will ordinarily be appealed; or (ii) the public interest requires prompt, authoritative determination of the validity of the rule.” This guidance was indeterminate and provided minimal practical assistance.
After considerable debate, ACUS drew a clearer line between rule-review cases that get the default district court review and those that get direct appellate court review based on the process that the agency used: Every rule issued by notice-and-comment rulemaking should “ordinarily” be challenged only in the court of appeals.
Basing jurisdiction simply on whether the agency used notice-and-comment provides a relatively clear line, and the notice-and-comment process guarantees a sufficiently robust administrative record to facilitate appellate court review. The report and ACUS’s recommendations will hopefully provide guidance to Congress as it legislates judicial review of agency rulemaking in the future.
The views expressed are those of the author and do not represent the views of the Administrative Conference of the United States or the federal government.
This essays is part of a series, titled “Seeking Continuous Improvement to the Administrative Process.”
