Some Perspectives on Environmental Decision-Making in the Administrative Process

Frederick R. Anderson, Jr., Executive Director, Environmental Law Institute

The Special Committee on Environmental Law of the American Bar Association held its annual meeting in April, 1974, at Airlie House in the foothills of Virginia's Blue Ridge Mountains. The conference focused on the capacity of the federal administrative process to deal with environmental issues.This month, ELR is pleased to present a selection of the participants' remarks, beginning with an overview by Frederick R. Anderson, Executive Director of the Environmental Law Institute.

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Three years ago in this same room, at the end of one of the conferences sponsored by the Special Committee, a sharp exchange occurred between a senior member of the Bar present and a much younger one. The younger man wanted the Association to form an environmental law section, although he admitted it would overlap with the Natural Resources Section and its myriad of committees, the Special Committee itself, and the environmental law committees that had been set up in practically every one of the other 23 sections. The senior attorney stated that in his opinion — and he began to warm to the subject — there was no need for yet another Association group focused on environmental law. Environmental law had no right to separate existence, he said, because it consisted of nothing but concepts which it had pirated from the other branches of the law. The younger man took the challenge. His heated response was that the truth was just the opposite; environmental law was not a part of corporation law, administrative law, torts, and the like. The environment, in fact, was all embracing and comprehended all the physical and social world that we live in, and thus in fact all the branches of law were really subdivisions of environmental law, and until the Bar faced that fact it couldn't possibly hope to cope with the problems our society is facing today.

He may have exaggerated slightly. But in his rhetoric he does make a valid point about the vast dimensions of any study of decision-making where environmental factos must be taken into account. This topic spans many fields of law and raises fundamental questions about how our institutional processes function under the challenges of social change brought about by technological growth.

This morning I will try to be faithful to the Chairman's charge. Rather than provide detailed analysis or suggest answers for problems, I will try to set the stage for the panels which follow by providing a general perspective on the problems that the administrative process faces today, including judicial review of that process as it functions in the environmental area. Events in that area have tended of late to generate dissatisfaction with the administrative agencies and to catalyze change in institutional processes, and so it is appropriate that a committee focused on environmental law should take up the institutional problems we face.

In speaking broadly about "the administrative process" I primarily have in mind state and federal agencies and regulatory commissions which adjudicate, engage in formal and informal rule making, manage public resources, and generally plan, organize, and set standards in the environmental area. Obviously few administrative entities escape this broad definition. Practically every federal agency has prepared lengthy guidelines governing its compliance with the National Environmental Policy Act, for example. But this definition does stress APA-type and prospective, management-type decisions that are being reviewed by the courts with a new readiness, rather than government contracting, grant-making, research, and like governmental functions.

Before going further I would like to touch again upon why there is ferment and dissatisfaction about how the administrative process is functioning. I think it is important to go back repeatedly to the roots of this concern because we as lawyers may lose sight of the substantial changes occurring today in the real world. The legal abstractions of the discussion for the rest of today can be traced to real world roots in a most direct way. I am reminded of Professor Paul Freund's informal remark at a Harvard seminar on the effect on social institutions of new medical technologies, such as cardiac pacemakers, respirators and organ transplantation. He said that among the institutions of society the law rarely is a leader. In his phrase, the law "waits to be informed" by the variety and novelty of new events and changes of direction in society. His observation is applicable to the environmental changes that are altering the framework within which our society solves its problems.

The administrative process appears to be entering a period of change brought about by a quite important shift in public mood. Like all social change, the change in public sentiment is difficult to describe, but I sense mounting public anxiety over an apparently endless series of threats to intensely personal interests in life, health and safety, which I take to be key environmental concerns. We might add to these, but with a different regard for the [4 ELR 50124] type of public concept expressed, loss of the aesthetic experiences which day-to-day make life richer and more worth living. Hand in hand with the benefits of pesticides and power generation, wonder drugs, synthetic materials, radiation, detergents, and the like, go vexing side effects which in many instances involve high risk of injury to the public. The risks in question are difficult for the nonscientist to appreciate because they are uncertain in effect and for any one individual are apparently quite low. Yet the types of injuries threatened are disturbing, such as chronic respiratory disease, cancer, and genetic damage. Furthermore, the injury threatened may reach the entire population. Scientists say that in some instances the effects may be irreversible.

I am not saying these things to be an alarmist. I simply do not know how great the risks are and what damage might be caused. I am genuinely uninformed, as I believe even a large number of scientists are, about the dimensions, scope and timing of the risks that I have just described. Yet while I am not sounding an alarm, I do hear an alarm sounding, and for better or worse the public is responding to it.

Public concern is beginning to be reflected directly in the administrative process. When the first agency, the Interstate Commerce Commission, was set up 87 years ago its purpose, which it shared with many sister agencies which followed its creation, was to regulate the industrial economy. Economic regulation of course continues. The change in public mood, however, is illustrated by the shift in attention to the last agency to join the ranks, the Environmental Protection Agency, whose purpose is to control some of the environmental excesses of an expanding, technology-intensive society. EPA is now center stage. Hardly a day passes that Administrator Train does not announce another poisonous calamity that requires removal from the market of a substance thought the day before to be innocuous, or announce a new standard of performance that would, some always allege, bankrupt American industry. I do not want to get into a discussion of whether economic issues are more or less important than environmental ones, or whether the distinction between economic and environmental issues is even valid. The important thing is that much of the public thinks that agencies like EPA which administer statutes affecting life, health and safety have a very immediate impact upon the quality of life and must be held to a high standard of accountability.

Events illustrating the fundamentally different world we now live in occur daily. I will mention two which over time have struck me as particularly illustrative of our predicament. The first was discussed in a New York Times editorial (March 16, 1972) entitled "Hexachlorophene Dilemma." The editorial was directed at the furor over soap containing hexachlorophene, which is an anti-bacterial agent. The soap was used in hospitals to bathe newborn babies. It wasn't so long ago that Paul de Kruif was writing about the marvelous advances of medical technology in overcoming infant and maternal mortality. Now we find the New York Times editorializing because one of the agents which makes these advances possible may, if it penetrates an infant's skin, ultimately lead to brain damage. The editorial took up the problem of the government's responsibility. It said the key problem is that we do not know enough: To what extent does brain damage take place in infants bathed routinely with hexachlorophene preparations? To what extent are babies threatened with staphylococcal illness or even death if hexachlorophene is not used to bathe them? What are the alternatives to hexachlorophene for control of staph infections and how effective are they? The government, said the editorial, "can contribute to wise action by providing the essential information so that the nature of the gains and losses resulting from the available alternatives may be more clearly understood."

This conclusion is of course good advice. But it is naive in the extreme, given the administrative process as it exists today. Agencies, at least as I know them, would find it very difficult to be open, candid and clear about the risks of our lack of knowledge, especially if a matter is as sensitive as the protection of newborn infants.

The other example that I want to share with you is the Liquid-Metal Fast-Breeder Reactor (LMFBR) research and development program of the Atomic Energy Commission. That program seeks to produce a full-scale technology of nuclear fission reactors to meet part of the energy demand expected to occur near the end of this century. The LMFBR promises some decided advantages — efficiency, self-refueling, and minor environmental impacts in normal operation. But plutonium, which fuels the reactor, is one of the deadliest substances known to man. Inhalation of trace quantities, even a millionth of a gram, appears to be sufficient to cause lung cancer. Total containment of tons of radioactive wastes from the reactor will have to be successfully maintained for at least 200,000 years. The world's oldest governments have survived only a tiny fraction of the tens of thousands of years involved.

The LMFBR was put to the test of benefit-cost analysis in the ordinary course of governmental decision-making. The analysis showed that the reactor's dollar advantages outweighed its dollar disadvantages. But at least one thoughtful practitioner of benefit-cost analysis, Dr. Allen Kneese, has asked whether this common governmental decision-making technique can be of much help at all in evaluating a technology so unkind as to burden mankind with continuous monitoring and containment, essentially forever. (Allen Kneese, "The Faustian Bargain," Resources, Newsletter of Resources for the Future, September, 1973). He feels that the decision whether to proceed with the LMFBR program is deeply ethical in character and should not be resolved through the conventional policy making techniques of the existing administrative process. Certainly we may wonder whether that process should be modified where decisions of [4 ELR 50125] such importance may be submerged merely because they are cast in the conventional language of benefit-cost analysis.

I give these two examples — hexachlorophene and the Liquid-Metal Fast-Breeder Reactor — because I think they are particularly illustrative of the dilemma that the administrative process faces. Along with the benefits of modern technology sometimes come insidious side-effects which reveal the true extent of the harm they may cause years after wide-spread use of the technology has begun. As in the case of hexachlorophene, identifying these potential harms, recognizing the economic interests that may be prematurely curtailed, and keeping the public informed of what is and is not known about impacts on life and safety pose tremendous challenges to the administrative process. The LMFBR illustrates how serious the "side effect" may be. What if the AEC's program is successful? In a few years we may lament the failure to create a decision-making process that sufficiently stressed the extreme toxicity and long life of plutonium and its byproducts, but by then the burden of radioactive wastes will have already been created. Society did not present problems of this kind, or at least not so frequently, in the era in which the administrative process was created in this country.

Others may explain the stresses on the administrative process in different terms. The environmental constituency, they might argue, is not sufficiently organized to focus its attention in dollars on getting its way in governmental processes. Lobbying is forbidden to citizens' groups that have tax exempt status, a requirement that has not been matched by a prohibition on the deductability of the lobbying expenses of businesses. Environmental harm is often very diffuse. For example, each person carries in the fatty tissues of his body a very small trace quantity of DDT that has, some say, a potential for causing cancer. Yet his interest in the DDT in his body is not sufficiently large or definite for him to spend much time or money on the problem. Certainly the funds available to advance the focused corporate interests on the other side are much easier to mobilize.

Although these views have merit, I think that even if money were freely available and environmental interests fully represented, many decisions facing the agencies would still create dilemmas like those posed by hexachlorophene and the LMFBR. My point is that the roots of the problem penetrate deeply into our assumptions about how the administrative process should function, and consequently effective solutions may fundamentally alter the process itself.

At this point I must remind myself that I am to provide a general perspective on the fied which the Special Committee proposes to study, and not a critical commentary on the viability of the administrative process. The panelists who follow are well equipped to provide such commentary. Perhaps the most useful function I can perform now is to describe three perspectives on the administrative process and judicial review, each of which has a significant following today.

The Status Quo View. The status quo view holds that the administrative process is still performing reasonably well and doing the job it has done since its inception of rescuing an active industrial society from the inadequate decision-making processes of Congress and the courts. Some of the best minds of the 1930's are now busily at work showing how this is so. It is no accident that Professor Jaffe — and I do not mean to taint him by association — defines the administrative process as judicial decision-making when it is not done by the courts, and legislative decision-making when it is not done by the legislature. The implication is that neither of these are quite adequate to handle certain classes of problems. A generation ago it was quite forward thinking to be the apologist for this point of view. I am not so sure that this is still true today.

Those who defend the status quo do not deny that there are problems. They would say, first, that discontent with the administrative process stems from the lack of legislative direction. This is the Congress-should-define-the-problem-school. Any lack of specificity in legislation, and any dilemma that the world has brought upon us should be attacked by an explicit call to Congress to do a better job, to shoulder its burdens, and to give the agencies clear mandates so that they can carry them out.

A second argument is that judicial meddling has caused a lot of problems. The courts really do not understand the administrative process anymore. The courts have imposed inconsistent rules upon the agencies. Faced with specific fact circumstances, different review proceedings and odd procedural postures, the courts have developed impractical requirements for agency decision-making, particularly informal decision making. The answer is to cut back the scope of judicial review.

A third response of this school of thought is that the agencies have injured themselves by implementing cumbersome and inconsistent procedures, especially in licensing. In this view, agency responses to current challenges have simply been maladroit. It is the agencies' own fault; there is nothing wrong with the basic approach of the administrative process; it just needs to be properly implemented. Fourth, reorganization is often mentioned. Resources are mismanaged; therefore, we need a Department of Natural Resources. Environmental concerns are mismanaged; therefore we needed the Environmental Protection Agency.

I'd like to illustrate the status quo school of thought in what may be a surprising way. I think it will show just how deep and pervasive the status quo view of administrative agencies runs. Although it was created to tackle new problems in an era of skepticism about administrative performance, the Environmental Protection Agency was carefully patterned on the time-honored model of an administrative agency.Senator Muskie had very clear in his mind that what he wanted was a mission-oriented [4 ELR 50126] agency, only with the "good guys" in charge, which would pursue its mission as zealously as any agency and play the game just like it should be played, only better.

The "New Era" View. The second major point of view, which I think is the one that the Special Committee probably would have to focus a lot of attention upon in its proposed study, can be called the "new era" view. Perhaps I should read the credo of the new era from the opinion that launched it, which is a D.C. Circuit opinion, Environmental Defense Fund v. Ruckelshaus, 439 F.2d 584 (D.C. Cir. 1971). There Judge Bazelon said:

We stand on the threshold of a new era in the history of the long and fruitful collaboration of administrative agencies and reviewing courts. For many years, courts have treated administrative policy decision with great deference, confining judicial attention primarily to matters of procedure…. Courts occasionally asserted, but les often exercised, the power to set aside agency action on the ground that an impermissible factor had entered into the decision, or a crucial factor had not been considered. Gradually, however, that power has come into more frequent use, and with it, the requirement that administrators articulate the factors on which they base their decisions.

Strict adherence to that requirement is especially important now that the character of administrative litigation is changing…. Courts are increasingly asked to review administrative action that touches on fundamental personal interests in life, health, and liberty. These interests have always had a special claim to judicial protection, in comparison with the economic interests at stake in a ratemaking or licensing proceeding.

To protect these interests from administrative arbitrariness, it is necessary, but not sufficient, to insist on strict judicial scrutiny of administrative action. For judicial review alone can correct only the most egregious abuses. Judicial review must operate to ensure that the administrative process itself will confine and control the exercise of discretion. Courts should require administrative officers to articulate the standards and principles that govern their discretionary decisions in as much detail as possible. Rules and regulations should be freely formulated by administrators, and revised when necessary. Discretionary decisions should more often be supported with findings of fact and reasoned opinions. When administrators provide a framework for principled decision-making, the result will be to diminish the importance of judicial review by enhancing the integrity of the administrative process, and to improve the quality of judicial review in those cases where judicial review is sought. 439 F.2d 597-98.

This decision, as Judge Leventhal has now pointed out ["Environmental Decision Making and the Role of the Courts," 122 U. Pa. L. Rev. 509, 512 (1974), presaged the opinions in Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402 (1971), and Camp v. Pitts, 411 U.S. 138 (1973).

The Overton Park case, with which I am sure you are familiar, resulted in a Supreme Court decision sending a secretarial decision back to the district court for full development of the administrative record concerning the placement of a highway through Overton Park in Memphis. There was virtually no contemporaneous administrative record compiled. Litigation affidavits were prepared which tried to illuminate the secretary's decision-making processes, but they did not satisfy the court. Some have thought that the Overton Park decision marked a great watershed and turning point in review of informal agency decision-making. Some hoped that reviewing courts might send back to district courts for de novo trials cases where agencies had compiled a record which was insufficiently detailed. Once that happens you can imagine just how close judicial review of decision-making might become.

In Camp v. Pitts the Court backed away from ordering a de novo trial, but consolidated the position it took in Overton Park. Comp v. Pitts involved review of a decision by the Comptroller of the Currency to deny a national bank charter.Plaintiff asked for a de novo trial on the merits, but the Court ruled that the proper course of action was not a remand to the district court for a trial, but a remand to the agency for preparation of a full record along the lines sketched out in Overton Park.

These developments in the Supreme Court have caused quite a furor among practitioners and critics of administrative law. Irwin Schroeder, a Justice Department lawyer writing in the Lands and Natural Resources Division Journal 120 (May, 1973) examined Overton Park, the NEPA cases, and Camp v. Pitts, and came to the conclusion that lawyers for the government who had to defend agency decisions carried a heavy burden to make sure that contemporaneous documents justified the action, that alternatives were considered, that reasons for decision making were carefully articulated, and so on. This has led to the suggestion that agencies prepare a new kind of impact statement that goes far beyond the environmental area. Thus we may yet see Overton-Pitts statements on all manner of administrative decision-making. Already the Environmental Protection Agency has started preparing what their lawyers sometimes call Kennecott statements, i.e., statements which tend to provide the kind of detailed substantiation of rule making that is called for in Kennecott Copper v. EPA, 462 F.2d 846 D.C. Cir. (1972), another in the series of "new era" cases.

Judge Leventhal has recently restated the "new era" doctrine with the benefit of hindsight on the cases which I have just discussed. Leventhal, "Environmental Decision Making and the Role of the Courts," 122 U. Pa. L. Rev. 509 (1974). The author reaches back to his 1970 D.C. Circuit opinion, where he sought to delineate the "requirements of the Rule of Law, as established by Administrative Law Doctrine." Greater Boston Television Corp. v. FCC, 444 F.2d 841, 850 D.C. Cir. (1970). He concentrates on the supervisory function of the courts, which "… begins with enforcing the requirement of reasonable procedure, fair notice, and opportunity to the parties to present their case, and … includes examining the evidence and fact findings to see both that the evidentiary [4 ELR 50127] fact findings are supported by the record and that they provide a rational basis for inferences of ultimate fact." Leventhal, supra, 511.

He concludes his discussion by emphasizing that courts must take a "hard look" at the agency's reasoning processes and by saying the entire process combines "… judicial supervision with the salutary principle of judicial restraint. It is conducted with an awareness that agencies and courts together constitute a partnership in furtherance of the public interest, and that the two are collaborative instrumentalities under which the court is in a real sense a part of the total administrative process and not a hostile stranger to the office of first instance." Id. at 512.

The Pessimistic View. The third view regarding the administrative process stands in sharp contrast to both the "status quo" and "new era" views. The pessimistic view is best stated by Professor Joseph Sax, who has often pointed out the deficiencies of administrative and judicial processes. He has recently written a short piece about NEPA and airports, in which he makes clear that his views have not changed. "The (Unhappy) Truth About NEPA." 26 Okla. L. Rev. 239 (1973). To show you how succinctly he separates himself from even the "new era" school of thought, let me read to you from the first paragraph of his article. He quotes at length precisely the same words I quoted from Judge Bazelon in EDF v. Ruckelshaus as the credo of the "new era" school. He quotes the language about how the administrative process will confine and control the exercise of discretion, that findings of fact and reasoned opinions should be given, that administrators should provide a framework for principled decision-making, the result of which will enhance the integrity of the judicial and administrative processes. Then he says, "I cannot imagine a more dubious example of wishful thinking. I know of no solid evidence to support the belief that requiring articulation, detailed findings, and reasoned opinions enhances the integrity or propriety of administrative decisions. I think the emphasis on the redemptive quality of procedural reform is about nine parts myth and one part coconut oil." at 239.

In these few words Professor Sax dismisses "new era" reforms as largely mythical and palliative. Professor Sax says that "until the society addresses the behavioral realities of the real forces that drive institutional beasts hither and thither we will only have bland sermonizing" of the kind he sees in the D.C. Circuit, and that we must draw conclusions that are in fact relevant. In the conclusion of his article he states what he thinks those are: (1) Don't expect hired experts to undermine their employers; (2) Don't expect people to believe legislative declarations of policy. The practical working rule is that what the legislature will fund is what the legislature's policy is; (3) Don't expect agencies to abandon their traditional friends; (4) Expect agencies to back up their subordinates and professional colleagues; and (5) Expect agencies to go for the least risky option, (where risk means chance of failing to perform their mission).

Where should effort be focused so as to take realistic account of these rules? On three factors: money, legal rights and public opinion campaigns. He thinks that direct money subsidies for environmentally sound alternate programs, the grant of enforceable legal rights to the public, and extensive public opinion campaigns might begin to remedy the deficiencies that we have been discussing this morning.

If the Special Committee does begin a study of environmental decision-making in the courts and administrative agencies, one of Professor Sax's categories, the grant of enforceable legal rights, would certainly be included. The morning is slipping away, and I do not want to launch into a dry outline of topics for study. But at a minimum the Committee should examine the Michigan-type legislation that has been enacted in nine states (written by Professor Sax himself) and proposed to Congress, the environmental courts concept just reported on by the Justice Department, federal common law under Illinois v. City of Milwaukee, 406 U.S. 91 (1972), and the rather interesting recent common law cases revitalizing nuisance, strict liability, inverse condemnation, and the like. My point is that beyond judicial review, in actual environmental decision-making by courts, a good deal more is happening than might be expected.

Before I close I cannot resist observing that the "new era" cases appear to be groping toward a new standard for agency performance. Perhaps those cases should be taken further. Perhaps the standards of judicial review are shopworn and ought to be renovated to reflect the changing emphasis in administrative decision-making. One's first impulse may be conservative, because the principles that were established in Chenery, Universal Camera, and Morgan and the other leading cases defining the contours of review certainly appear adequate for the task at hand, if only the reviewing courts would implement these principles more vigorously. Perhaps the problem with Chenery and the other cases is that like Christanity they never really have been tried. Yet, we should not be too sure. As I have urged today there is a great deal of difference between regulating the securities market and establishing the levels at which air pollution poses an imminent danger to health; between awarding broadcast licenses and determining the hazardousness of a pesticide; between fixing maximum rates which can be charged for livestock and setting human health tolerances for asbestos, beryllium, and mercury; between protecting labor from retaliation by employers after a unionization campaign is mounted, and deciding just how safe flammable synthetic fabrics must be for use in children's clothes. We may find that the principles of review that were forged during the heyday of economic regulation are not entirely adequate for today's agency decisions that so vitally affect health and other personal interests. Expanding doctrines of standing and reviewability and new statutory causes of action have already become an important part of the accommodation of the law to the wider protection of these rights. Perhaps [4 ELR 50128] judicial review itself should also change. We have been told by the D.C. Circuit in Environmental Defense Fund v. Ruckelshaus, supra, that one thing to keep in mind as administrative agencies go about setting policies and deciding matters which affect life, health, and liberty is that such interests have always had a special claim to judicial protection. This is especially true when they are put in the balance with economic interests, the court says. The special claim is no less valid in the review of administrative decision making than in ordinary actions between private parties. The point is that courts are alert to do a better job when personal rights are affected, no matter how the matter is brought before them, no matter what the status of the case.

Whichever school of thought you prefer— status quo, new era, or pessimistic — I think you will agree that the administrative process is subject to an array of assaults from all sides. Very few are happy with the way the process functions. For my part, as I indicated earlier, I think the nature of the decisions up for determination by the agencies has changed sufficiently to put the administrative process under a cloud of doubt. Health and safety are threatened in new, subtle ways. Assessment of low-level, long term risks poses a particular challenge to the society at large and to the guardians of our health and safety, the administrative agencies. Writing in 1935, Thurman Arnold said this about the role of the administrative process:

The court of equity is gone, but with its disappearance arises the administrative or quasi-judicial court endowed with the freedom of action which the old court of equity had. Huge treatises are now appearing showing the compatibility of administrative justice with the law. Just as theology was not able to exist without a Redeemer, so the "law" must have its equity or its administrative law in order to save mankind from the consequences of its logical systems. The Symbols of Government 64 (1962 ed.)

Perhaps the question to ask today, short of asking for a Redeemer, is what will the new equity be? What might be an intervening force which could relieve us from disturbing uncertainties about administrative decision-making? These certainly must be among the fundamental questions posed by the Special Committee study.