Judicial Review of Administration Actions - Module 5 of 5

Module 5: Judicial Review of Administration Actions 

Unless specifically precluded by law, the actions of federal agencies are subject to judicial review by the federal courts. [1] For purposes of judicial review, “agency action” covers a range of agency functions, including issuing rules and orders and granting licenses, sanctions or relief. Likewise, the denial of a request for any of these and an agency’s failure to act are considered agency actions subject to judicial review.[2] A failure to act means a failure to engage in one of the recognized functions which fall under the definition of agency action.[3]

Scope of Judicial Review

The Administrative Procedures Act recognizes two primary categories of exceptions to the general reviewability of agency actions. First, Congress may preclude review of specific agency decisions by statute.[4] However, since judicial review plays a critical role in limiting and overseeing the power of agencies, the courts have held that agency actions are reviewable unless there is clear and convincing evidence that Congress intended to preclude such review in the statute.[5]

The APA also recognizes an alternative narrow exception to the applicability of judicial review, when “agency action is committed to agency discretion by law.”[6] This has been interpreted to mean that the courts may not review agency decisions when the law provides no meaningful standards for a court to review an agency decision for abuse of discretion. Examples of agency actions recognized to be unreviewable under this narrow qualification are decisions concerning whether to prosecute someone and whether the CIA may discharge an employee without stating a cause.[7]

When a federal court reviews the actions of an administrative agency, it does not simply take the place of the agency and re-decide the matter from scratch. Instead, courts employ standards of review, which determine the extent to which the court will defer to the findings of the agencies and the basis on which they may overturn agency decisions.

For purposes of judicial review, courts distinguish between the standard of review applicable to agency determination of facts, and the standard applicable for an agency’s interpretation of the law. When it comes to the determination of facts, a court reviewing agency action will ask only whether the agency finding was supported by substantial evidence.[8]  This standard has been understood to mean that the court must accept the agency’s findings with regard to facts as long as the evidence for the findings is such that a “reasonable mind might accept as adequate to support a conclusion.”[9]

To make this determination, the court will examine the evidence from both sides of the case, and not simply make a judgment as to the reasonableness of agency actions based on the evidence that supports such actions.[10] If the court finds that the substantial evidence test has been met, the court will accept the findings of fact as determined by the agency, even if the court itself may consider an alternative finding of fact to be more reasonable.

Note that findings of fact include inferences made by an agency based on factual findings. This means that a court will defer to the agency’s inferences of fact, such as the determination of motives, as long as such inferences are reasonable.[11] In this way, unless the agency action is deemed unreasonable, the courts will defer to agencies, and specifically to agency policy-makers and adjudicators, who often have developed an expertise in the areas over which they preside. Deferring to the agency also promotes uniform standards on the part of the agency, rather than the court substituting its own judgement for those cases under review.

When allowed judicial review, courts are empowered to provide various remedies for improper agency actions. Some statutes specify the remedies which a court may grant if the court determines that agency actions are inappropriate or unlawful. In the absence of such statutory remedies, the APA provides for any applicable form of legal action as remedies available under judicial review.[12]

Generally, petitioners ask courts to issue declaratory judgments establishing that the agency action was unlawful and/or seek injunctions to prevent actions from moving forward. Another remedy, though one not commonly used, is a writ of mandamus. A court will order a writ of mandamus to compel a federal officer, up to and including the head of an agency, to perform a duty owed to the petitioner before the court. The writ may be issued, on the discretion of the court, when the plaintiff has a clear and indisputable right to relief, and when doing so can correct an abuse of discretion by the agency.[13] Finally, when the government restricts the freedom of an individual, he can seek a writ of habeas corpus to secure release from detention.[14]

Review of Interpretations of Law

Agency adjudication and rulemaking also require determinations on the part of the agency as to the meaning and scope of legal authority. This is true when the agency makes a binding legal decision and when agencies adopt substantive and interpretive rules. Such determinations of law are reviewable by courts as part of the power of judicial review.

Traditionally, courts had wide leeway in reviewing agency understandings and interpretations of the law. The courts could effectively substitute their own judgements for those of the agency, giving little or no deference to the agency’s own legal interpretation.[15] However, in a landmark case, Chevron v. Natural Resources Defense Council, the Supreme Court held that when Congress delegates to administrative agencies the power to interpret laws, then the courts must accept agency interpretation of an ambiguous statute. The agency’s interpretation must only be reasonable for it to be upheld. This respect that courts must give agency determinations has become known as Chevron deference, after the name of the case.[16]

In the Chevron case, a federal court reviewed an EPA rule that defined an ambiguous term in environmental legislation passed by Congress. A lower court held that, while the term was not clearly defined in the statute, the agency’s interpretation of the term was inappropriate in light of the statute’s overall purpose. The Supreme Court, however, overturned the lower court’s decision, ruling that when the language of a statute is unclear, Congress implicitly delegates the right to interpret that statute to the agency it puts in charge of enforcing that statute.  

To determine whether Chevron deference applies, courts apply a two-step analysis. First, the court asks whether the statute in question is clear on its face. If the language of the law is clear, the agency is bound to follow the clear language, and the courts need not defer to agency interpretations contrary to the clear wording of the statute. However, if the statute is ambiguous, the court will proceed to step two of the analysis, which is to ask whether the agency’s interpretation of the ambiguous terms is reasonable.[17]

Reasonability is not a high standard, and most agency legal interpretations will be upheld unless the reasoning involved is so poor or illogical that the agency’s action is considered arbitrary and capricious.[18] This approach has led to much greater deference on the part of the courts to agency rulemaking.

Note that Chevron deference only applies to official agency adjudication and rulemaking. Agencies often issue guidance documents, frequently referred to as interpretative rules, meant to inform the public and guide agency policy, but which are not legally binding. These rules, even when they involve interpretation of law, do not merit Chevron deference, as Chevron was limited to the idea that Congress delegated lawmaking power to agencies only when they engage in formal adjudication or substantive rulemaking.[19]

Agency Discretion

While courts will not review agency actions where the court has no manageable standards to use as the basis for review, courts can and do review agency actions in most cases. These include discretionary acts of an agency regarding the implementation of policy and how to apply the policy in individual cases. For example, whether the agency chooses to adopt a strict or a lenient rule or how an agency chooses to sanction someone who violates a statute is reviewable.

Still, courts may only invalidate agency actions when they are found to be arbitrary, capricious, or an abuse of discretion.[20] Courts have interpreted this standard as requiring a “hard look” by the court reviewing the agency action, in which the court engages in a substantial inquiry and a thorough, in-depth review.”[21] The court will ask whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgement.

For example, in one case, the National Highway Traffic Safety Administration adopted a rule requiring all new cars to have air bags or automatic seatbelts. A few years later, the agency rescinded the rule on the grounds that automatic seatbelts could be detached and that there was insufficient evidence to expect increased use of seatbelts under the rule.

The Supreme Court ruled that the decision to do away with the rule completely was arbitrary and capricious. The Court noted that the agency did not consider several relevant factors when deciding to rescind the existing rule. These included the continued safety contributions of air bags and evidence before the agency that seatbelt use would increase if the existing rule went into effect. Additionally, the Court pointed to reasonable alternative rules the agency could have proposed instead of striking the rule entirely, such as a rule requiring non-detachable seatbelts. Taken together, this “hard look” revealed that the agency had not properly considered relevant factors, so that the decision itself was held to be arbitrary and capricious and struck down.[22]

Sovereign Immunity

The doctrine of sovereign immunity is a common law rule which precludes lawsuits against the government unless the government waives its sovereign immunity. In the context of administrative law, this means that federal agencies cannot be sued unless the government consents.[23]

However, Congress has enacted a statute which waives the government’s immunity against lawsuits for all cases in which a plaintiff seeks non-monetary relief.[24] In addition, some tort actions for monetary damages may be brought under the Federal Tort Claims Act, which opens the government to liability for negligent or wrongful acts of government employees acting within the scope of their employment.[25]

However, immunity remains in place for damages caused by the exercise of discretion by a government official fulfilling his duties.[26] So, for example, the government was held to be immune to a lawsuit when the Federal Aviation Administration chose to spot-check manufacturer designs for new aircrafts rather than employing a more exacting method of oversight.[27]

Even when the government itself may be subject to lawsuits, government officials are generally immune from liability in their individual capacities for acts undertaken as part of their duties. So, if a federal employee is acting within the scope of his employment, any claims for personal injury or property damage arising from the employee’s negligence may only be brought against the government under the Federal Tort Claims Act, and not against individual federal employee.[28]

However, this immunity is only a qualified immunity. Federal officials may be liable as individuals for tortious acts performed outside of the scope of their authority.[29] Likewise, under certain conditions, individual officials may be liable for the violation of constitutional rights, such as the right to be free from unlawful searches and seizures.[30]

Standing

Not every case can be brought in federal court. Under the limits imposed by the Constitution, a federal court may only allow one with a personal stake in the outcome of the court’s decision to have one’s claims adjudicated. This personal stake is known as standing. This requirement of standing applies to those seeking judicial review of the decisions of administrative agencies.

Courts use a three-part test to determine whether a petitioner before the court has standing to press a case in federal court.[31]

First, the plaintiff must have suffered or will suffer an injury-in-fact. This means that injury is both concrete and particular and also actual or imminent. As such, courts may dismiss petitioners’ claims for lack of standing if the injury alleged is too abstract or is generalized to a broad population of people. Alternatively, if the injury has not yet occurred, the court may find that the threat of injury is too speculative to merit standing.

For example, the Supreme Court denied standing to an environmentalist group who sought to protect endangered species in a foreign country on the grounds that the harm they alleged was too speculative and not imminent. In particular, the Court rejected the group’s contention that unspecific plans to return to visit the area and enjoy the wildlife was sufficient to establish an imminent injury which gave them a personal stake in the outcome.[32] 

Under the second prong of the test for standing, the plaintiff must show a causal connection between the injury and the conduct brought before the court. This imposes a burden on those challenging administrative action to show that the harm suffered is “fairly traceable” to the administrative action in question.

Finally, it must be likely, rather than speculative, that a favorable decision by the court will redress the injury.[33] 

In addition to this Constitutional test for standing, plaintiffs must also establish that they are “within the zone of interests to be protected or regulated by the statute or constitutional guarantee in question,” to seek judicial review under the Administrative Procedures Act.[34] Under this “zone of interest test,” the court will determine whether the plaintiff is among the group whose interests the statute was intended to protect. Harms to those who are incidental to the aim of the statute do not produce standing.

In one case, court reporters sued an agency for failing to hold on-the-record hearings as required by law. The reporters sought to recover for damages due to the economic loss suffered as a result of the lost work opportunity when the agency improperly failed to hold hearings. The court opined that such injury, while real, did not pass the zone-of-interest test, as it was clear that Congress intended for parties to the adjudication to be protected by the hearing requirement, and not incidental groups such as court reporters.[35]

Even if a petitioner is deemed to have standing, the court may not hear the case if it deems that the matter has not reached the stage of the process at which the court can take up the case.  The first question the court will ask with regard to timing concerns the issue of ripeness. A matter is considered ripe for a court to adjudicate when the issue underlying the case has matured into an actual legal controversy, or when the harm alleged by the plaintiff has actually occurred. If the court assesses that claims of legal violation of harms are premature, the court will reject the case for lack of ripeness.

An example of a case dismissed for lack of ripeness involved the US Forest Service, which was sued for adopting a resource plan which envisioned the logging of large sections of a national forest. The court held the case was not ripe for trial because the Forest Service had yet to specifically authorize actual logging in designated areas, and that any such authorization would have to undergo a notice and comment period.[36]  

In administrative law, there is also a requirement that the matter before the court for review be the final action of the agency. This finality requirement means that a preliminary, procedural, or intermediate agency action is not reviewable by the courts because these are not final agency actions. Agency actions are only final when the action is the consummation of the agency’s decision-making process, and the action is one from which legal consequences will flow.[37]

Conclusion

Thank you for participating in LawShelf’s video-course on Administrative Law Structures. We hope that you now understand the structure of administrative agencies, along with their roles in the US government. We hope that you will take advantage of our other courses in government and civics and we encourage you to contact us if you have any questions or feedback.