Remand Without Reversal: An Unfortunate Habit

Frank H. Wu and Denisha S. Williams

Frank H. Wu is Associate Professor, Howard University School of Law. Denisha S. Williams is a third-year law student at Howard.

[30 ELR 10193]

In a recent case involving environmental policies, the U.S. Court of Appeals for the D.C. Circuit continued on its course of remanding administrative agency actions while neither reversing nor vacating them, in order to allow bureaucrats to explain decisions that otherwise cannot be sustained. This practice is unfortunate. It contravenes due process requirements that agency choices be evaluated on the actual record generated below instead of post-hoc litigation rationalizations and is based on a dubious extrapolation of precedent.

The D.C. Circuit, which is responsible for most of the judicial review of federal regulations, used the remand-only route in a March 1999 decision, Sierra Club v. EPA.¹ The Sierra Club case arose from the 1990 Amendments to the Clean Air Act (CAA).² The 1990 Amendments had directed the U.S. Environmental Protection Agency (EPA) to set emissions limitations for medical waste incinerators (MWIs).³ EPA was to have balanced the benefits of maximum reduction of air pollutant emissions with the costs of achieving the reduction, along with other health, environmental, and energy factors.⁴ The statute set minimum stringency (or maximum emissions) levels, but authorized EPA to exceed such levels if they were "achievable."⁵ The Sierra Club and the Natural Resources Defense Council challenged the ensuing EPA rulemaking.⁶

The court accepted only some of their arguments. It agreed with their assertion that EPA, in developing its methodology for determining the performance of the top 12 percent of facilities, had neglected to offer a rationale for its calculations. The court was remarkably critical of EPA's actions while expressing confidence about its potential. With respect to what the agency had done, the panel wrote that "with these numbers, EPA's method looks hopelessly irrational" and on a specific point of contention declared "EPA has never explained why it made sense to use the highest of its test run data to make up the gap."⁷ With respect to what the agency could do, the panel added, "nonetheless, we do not vacate the standard. It is possible that EPA may be able to explain it . . . ."⁸

The juxtaposition of sentiments is understandable. Sierra Club followed Checkosky v. Securities & Exchange Commission,⁹ which has become the leading case establishing remand without reversal. It would be unfortunate if Sierra Club also followed Checkosky in the sequence of events after the remand, because of the results in the latter. In Checkosky, the issue was whether the U.S. Securities and Exchange Commission (SEC) had applied an appropriate standard for "improper professional conduct" in a disciplinary action against accountants. The three-judge panel of the D.C. Circuit wrote a two-sentence per curiam opinion and three incompatible individual opinions in the initial 1994 phase of the case (Checkosky I).

Judge Laurence H. Silberman observed: "I cannot determine from the order just what the Commission is using as its standard." He urged remand without reversal because he was "unsure of the agency's reasoning."¹⁰ He wished to have "an improved opinion."¹¹ Judge A. Raymond Randolph disagreed, stating that "the remand-only disposition . . . is contrary to law."¹² He said: "It rests on thin air."¹³ If the agency decision is vague, Judge Randolph reasoned, it is therefore "arbitrary and capricious" and hence deserving of reversal. He argued that the bulk of precedent established a directive that "'agency action must be set aside'" if it is "'arbitrary and capricious,'" or "'if the action failed to meet statutory, procedural, or constitutional requirements.'"¹⁴ Judge Randolph noted that the remand approach forced the affected accountants "to serve out their suspensions while [30 ELR 10194] the Commission ponders its unlawful order."¹⁵ Judge John W. Reynolds, a senior district judge sitting by designation, would have approved the agency action on its merits.¹⁶

The Checkosky case was unusual. Even the member of the panel most inclined to remand, Judge Silberman, observed that the situation involved an ambiguous agency action—as distinguished from a facially erroneous decision. Judge Silberman acknowledged the fundamental rules of judicial review over administrative agencies, writing that "but, of course, we cannot credit an agency counsel's presentation of a position not clearly adopted by the agency. . . . This principle, grounded in the teachings of SEC v. Chenery . . . requires that courts adjudicate agency actions based solely on the grounds relied upon by the agency."¹⁷

Oddly, each of the judges spoke to the statutory interpretation issue that the agency had faced though they did not reach any consensus. Thus, the agency and the public had the benefit of what were essentially separate advisory opinions.

The adverse consequences of remand without reversal became glaringly obvious after four years. The litigation returned to the Court of Appeals in Checkosky II.¹⁸ Following the remand, and without any reversal (that at least would have identified the wrong choice), the administrative agency had been left at a loss about how to proceed. The matter was still pending, without any prospect for resolution.

The parties as well as the public had been prejudiced. It was the agency's fault, but the D.C. Circuit had condoned the situation. Although they were reluctant to do so, a new panel of the D.C. Circuit—Judges Harry T. Edwards, Stephen F. Williams, and Karen LeCraft Henderson—concluded:

In view of the Commission's inability to make any progress toward offering a single interpretation [of the statutory issue], and signs that the Commission is unlikely soon to make such progress, we are driven to the remedy reserved for rare cases of an agency's persistent failure to explain itself, and remand the case with instructions to dismiss the proceedings.¹⁹

Since then, the D.C. Circuit has admitted that Checkosky merely raised an issue without resolving it. One panel dropped a footnote to indicate that because the parties before it had not challenged the remand without reversal, "we do not reach the question raised and left undecided in Checkosky as to the validity of this precedent."²⁰

Notwithstanding the status of Checkosky, in only five years, the D.C. Circuit has transformed the expediency of remand without reversal into standard operating procedure. It arose from a split panel decision (Checkosky I) that did not even cite the U.S. Supreme Court precedent (Florida Power & Light Co. v. Lorian²¹) that would retroactively be deemed central to its reasoning, and which had to be countermanded by another panel (Checkosky II). It was "the issue discussed but not decided" for a short while,²² but it then became "a longstanding practice"²³ and even one of the "bedrock principles of administrative law" through just a few more decisions.²⁴

Remand without reversal, however, lacks Court approval. It is true that, in its 1985 decision of Florida Power & Light, the Court had mentioned in dicta that:

If the record before the agency does not support the agency action, if the agency has not considered all relevant factors, or if the reviewing court simply cannot evaluate the challenged agency action on the basis of the record before it, the proper course, except in rare circumstances, is to remand to the agency for additional investigation or explanation.²⁵

Yet the Florida Power & Light precedent, which held that federal court of appeals enjoyed jurisdiction over administrative agency decisions not to have hearings, increased rather than decreased the scope of judicial review. The Court reversed a D.C. Circuit decision in which the appellate court had, sua sponte, dismissed a case for lack of subject matter jurisdiction. The Court did not accept the D.C. Circuit's reasoning that denial of a citizen petition without a hearing did not constitute an "order" from a "proceeding." The Court specifically stated that, "we address only the question whether initial subject-matter jurisdiction is properly located in the court of appeals or the district court. That is the only question on which we granted certiorari, and it is the only question that the parties have briefed and argued before this Court."²⁶

Hence the facts presented by Florida Power & Light bear virtually no resemblance to those of either Sierra Club or Checkosky. The inapplicability of Florida Power & Light may be easily inferred from Checkosky, because Florida Power & Light was not cited, much less relied upon, in Checkosky. Incidentally, though the different procedural posture of all these cases might be regarded as significant, as some arise out of adjudication of contested cases, others from agency decisions to not hold hearings, and others from rulemaking, these distinctions do not appear to have been important to the outcomes.

The American Bar Association (ABA) has proposed a policy that would end the confusion, preserving the equitable powers of the courts to remand without reversal, but making the maneuver more of an exception than a norm. In August 1997, the ABA House of Delegates recommended in its Report 107B that courts be allowed to "exercise discretion" in that area, with the proviso that "a reviewing court should normally strike the balance in favor of vacating the agency's action."²⁷ The ABA suggested that if the remand without reversal were used, a reviewing court "give serious consideration to specifying a time frame within which the [30 ELR 10195] agency is to comply," that it maintain the status quo in the interim, and that it "encourage parties to address remedial issues."²⁸

Even the procedure established by Checkosky offers parties aggrieved by administrative agency actions some recourse. Most importantly, even under the Checkosky progeny, it remains true that an administrative agency decision should be remanded only if "'an agency's failure to state its reasoning or to adopt an intelligible decisional standard is [not] so glaring that we can declare with confidence that the agency' erred."²⁹ In addition, upon returning after a Checkosky-style remand without reversal, an administrative agency decision "that arrives at substantially the same conclusion as an order previously remanded by the same court" will be subjected to "a somewhat greater degree of scrutiny" out of recognition of the possibility of lack of genuine reconsideration.³⁰

Therefore, an administrative agency judgment may turn out to be so flawed that it must be rejected. Moreover, an administrative agency cannot simply come to the same conclusion, substituting reasoning that can be sustained but which is not sincere. Without these minimal safeguards, an administrative agency (especially in high-volume areas such as public entitlements) could paper over abuses of discretion that rose to the level of illegality.

The D.C. Circuit practice may be improving despite itself. In Sierra Club, the appellate court gave the administrative agency guidelines. The panel stated, "we outline the problems that need to be resolved on remand,"³¹ and it then proceeded to engage in lengthy analysis of the substantive issues. Ironically, in Sierra Club as in Checkosky, the full extent of the remand without reversal doctrine may not be evident: it is only when appellate courts not only remand without reversal, but also do so with cursory opinions, that they fail to perform the function of judicial review.

The D.C. Circuit did not take the opportunity presented in Sierra Club to repudiate remand without reversal. It will be presented with the chance again.³²

1. 167 F.3d 658, 29 ELR 20645 (D.C. Cir. 1999).

2. 42 U.S.C. §§ 7401-7671q, ELR STAT. CAA §§ 101-618.

3. Id. § 7429(a)(1), ELR STAT. CAA § 129(a)(1).

4. Id. § 7429(a)(2), ELR STAT. CAA § 129(a)(2). This is the familiar "maximum achievable control technology" (MACT) level of control. For a new source, a MACT may not be less stringent than the level of control that is actually achieved in practice by the best controlled similar source. For existing facilities, the MACT must be at least as stringent as the average level of performance of the "best performing" 12 percent of existing sources (not including facilities that have complied with Lowest Available Emission Rate (LAER) requirements).

5. Id.

6. For a discussion of the "guidelines" for existing units, 40 C.F.R. pt. 60, subpt. Ce, and the New Source Performance Standard, 40 C.F.R. pt. 60, subpt. Ec, see John H. Turner, Medical and Infectious Wastes, in ENVIRONMENTAL. LAW PRACTICE GUIDE (1999 Supp.).

7. Sierra Club v. EPA, 167 F.3d 658, 664, 29 ELR 20645, 20647 (D. C. Cir. 1999).

8. Id. at 664, 29 ELR at 20647.

9. 23 F.3d 452 (D.C. Cir. 1994).

10. Id. at 462, 464 (Silberman, J.).

11. Id. at 465.

12. Id. at 490 (Randolph, J.).

13. Id.

14. Id. at 492.

15. Id. at 467.

16. Id. at 493-96 (Reynolds, J.).

17. Id. at 460 and 460 n.9 (citation omitted).

18. Checkosky v. Securities & Exch. Comm'n, 139 F.3d 221 (D.C. Cir. 1998).

19. Id. at 222.

20. American Med. Ass'n v. Reno, 57 F.3d 1129, 1135 n.4 (D.C. Cir. 1995).

21. 470 U.S. 729 (1985).

22. American Water Works Ass'n v. EPA, 40 F.3d 1266, 1273 n.1, 25 ELR 20335, 20338 n.1 (D.C. Cir. 1994).

23. American Med. Ass'n, 57 F.3d at 1135 n.4.

24. County of Los Angeles v. Shalala, No. 98-5254a, 1999 U.S. App. LEXIS 24284, at *54 (D.C. Cir. Oct. 1, 1999).

25. Florida Power & Light, 470 U.S. at 744.

26. Id. at 735 n.8.

27. James T. O'Reilly, Recommendation of the American Bar Association Administrative Law and Regulatory Practice Section, Rpt. 107B (1997) (Presented at the ABA House of Delegates, Annual Meeting, San Francisco, Cal., Aug. 5-6, 1997).

28. Id.

29. Norinsberg v. U.S. Dep't of Agric., 162 F.3d 1194 (D.C. Cir. 1998).

30. Greyhound Corp. v. Interstate Commerce Comm'n, 668 F.2d 1354, 1358 (D.C. Cir. 1981).

31. Sierra Club, 167 F.3d at 663.

32. The D.C. Circuit recently reheard an environmental case for the limited purpose of amending its opinion to clarify that while it would remand without vacatur, its decision to do so "'is without prejudice to the ability of any party to apply for vacatur in the future, should circumstances develop in which the presence of this standard threatens a more imminent harm.'" American Trucking Ass'n v. EPA, No. 97-1440b, 1999 U.S. App. LEXIS 28109, at *16-*17 (Oct. 29, 1999) (per curiam) (internal citation omitted).