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In late May, Judge James Boasberg of the U.S. Court for the District of Columbia held that the U.S. Department of Agriculture violated the Administrative Procedures Act (APA) because it failed to explain why it ordered a small lumber company pay a tax to fund a private industry marketing program (known as a “check-off order.”) The court concluded that USDA’s determination was arbitrary and capricious because the agency did not show a “rational connection between the facts found and the choice made.” 

In Resolute Forest Products v. USDA, the lumber company asked USDA to explain why small companies (normally exempt from such orders) were included in the tax demand. Amidst a housing crisis, the softwood-lumber trade association sought a checkoff order that would require manufacturers who produce or import more than 15 million board feet of lumber per year to pay a mandatory assessment. The marketing order programs are controversial because they are compulsory programs administered by government essentially benefitting private parties.

Despite being provided two opportunities to show its work, USDA could not produce evidence justifying why it chose 15 million as a cutoff point. According to Judge Boasberg, “the little data [USDA] presented in its rulemaking notices was patently misrepresentative, and after two remands it has not provided a more reliable source.” Indeed, USDA contradicted itself through the rulemaking process, either suggesting that “the agency is either uncertain about why it made its decision, or else is simply making it up as it goes along.” Strong words from a judge.

The decision follows a laudable and growing reluctance of judges to extend deference where it isn’t due, and to hold agencies accountable for their decisions.  The U.S. Supreme Court recently put more teeth in the APA in two cases argued by Pacific Legal Foundation, Sackett v. EPA and Army Corp of Engineers v. Hawkes, in which the Court made it easier for aggrieved plaintiffs to get judicial review of dubious agency decisions. And in 2015, the Supreme Court held that another type of marketing order—arising out of the raisin industry—effected a taking of private property without compensation. Judge Boasberg has previously taken another federal agency—the IRS—to task for violating the APA in Loving v. IRS. In that case he found that the IRS had acted beyond its statutory authority in attempting to license tax return preparers. The decision was affirmed by the D.C. Circuit in 2013.

Requiring agencies to provide evidence to justify their decisions, insisting that they act within the bounds of their statutory authority, and ensuring that suffering plaintiffs have access to meaningful judicial review are hallmarks of good judging. Those of us concerned to hold administrative agencies accountable to the law can only hope the trend continues.