Until recently, the domain of administrative records under the Administrative Procedure Act of 1946 was viewed by most as a peripheral issue to litigation challenging executive branch actions. The landscape shifted in June 2019 when the Supreme Court decided Department of Commerce v. New York, which considered whether the U.S. Census Bureau lawfully added a question to the impending 2020 census that asked respondents whether they are U.S. citizens. The Court addressed the composition of the administrative record in APA litigation for the first time in decades. The majority concluded that the trial court had prematurely ordered supplementation of the record, but held that the order was justified in hindsight. This teleforum examines the domain of APA administrative records following Department of Commerce and its effects on administrative law.
Prof. Aram A. Gavoor, Professorial Lecturer of Law, The George Washington University Law School
Brett A. Shumate, Partner, Jones Day
Moderator: Prof. Adam J. White, Assistant Professor and Executive Director of The C. Boyden Gray Center for the Study of the Administrative State, Antonin Scalia Law School, George Mason University
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Operator: Welcome to The Federalist Society's Practice Group Podcast. The following podcast, hosted by The Federalist Society's Administrative Law & Regulation Practice Group, was recorded on Tuesday, October 29, 2019, during a live teleforum conference call held exclusively for Federalist Society members.
Wesley Hodges: Welcome to The Federalist Society's teleforum conference call. This afternoon's topic is on “The Future of Administrative Records after Department of Commerce v. New York.” My name is Wesley Hodges, and I am the Associate Director of Practice Groups at The Federalist Society.
As always, please note that all expressions of opinion are those of the experts on today's call.
Today, our moderator for the discussion is Professor Adam J. White, who is Assistant Professor and Executive Director of the C. Boyden Gray Center for the Study of the Administrative State at the Antonin Scalia Law School at George Mason University. After our speakers have their remarks today, we will have time for audience Q&A, so please keep in mind what questions you have for them or for this topic in general. Thank you very much for sharing with us today. Adam, the floor is yours.
Prof. Adam White: Well, thanks, Wesley. And thanks, everybody, for joining us today. It’s my honor and pleasure to moderate the discussion on “The Future of Administrative Records after Department of Commerce v. New York.” Now, this case, the Department of Commerce case, was decided on June 27, 2019. Obviously, it attracted the most attention for the subject matter of the case, namely the addition of the citizenship question to the upcoming census.
But no less important for a question to the administrative state is the more fundamental question the Court raised and answered about the nature of judicial review of agency action because, of course, since 1971, the Supreme Court has stressed that judicial review of agency action is limited primarily to the administrative record that’s created by the agency in making its decision and the basis on which the agency disclosed the basis of its action. And the Court stressed in 1971 that the Court can’t reject an agency’s stated reasons for acting simply because the agency might have had other unstated reasons.
But, the Court observed, there was an exception, a narrow exception they said in the Department of Commerce case, an exception to the general rule against inquiring into the mental processes of administrative decision makers on a strong showing of bad faith or improper behavior. Only in those limited circumstances might extra-record discovery be warranted. And that, of course, became the crux of the case. It’s also the crux of today’s discussion.
Today’s discussion centers in large part around an article written recently by one of our speakers, Aram Gavoor, an article titled “Administrative Records and the Courts.” His article was cited by Justice Thomas in his opinion in the Commerce case, which Justice Gorsuch and Kavanaugh joined. Professor Gavoor will be putting the case in the context of the issues he raised in that article and in the context of broader questions of the administrative state and judicial review. Professor Gavoor is a Professorial Lecturer of Law at the George Washington University Law School where he teaches administrative law, federal courts, and national security law.
And he’s joined in this conversation by Brett Shumate. Brett is a Partner at Jones Day focusing on high stakes regulatory litigation involving the government, notably in the telecommunications and tech sectors. He joined Jones Day after serving in the U.S. Department of Justice where he served as Deputy Assistant Attorney General for the Civil Division’s Federal Programs Branch from 2017 to 2019.
Again, it’s my pleasure to get to moderate this discussion, so let me turn it over to Professor Gavoor.
Prof. Aram Gavoor: Thank you so much, Adam. Thanks to The Federalist Society for putting on this teleforum. So I think to tee off our conversation for today in the main, I’m going to spend some time describing the law of Administrative Procedure Act, administrative records, essentially from Overton Park through Department of Commerce. And then Brett and I will talk about the consequences of Overton Park and Department of Commerce and the various ambiguities that lead to litigation. And then Brett will continue on with remarks regarding some of the more present cases.
For the audience that is somewhat unsteeped in the subject matter, speaking at a broad level and moving into nuance, the Administrative Procedure Act of 1946, which many of us are familiar with, was really designed to introduce greater uniformity of procedure and standardization of administrative practice among the diverse agencies whose customs had really departed widely from each other. And with the APA, Congress established procedures by which the executive branch agencies conduct their business and created a key check on final agency action on reasonably delayed, agency inaction outright, as well as final agency actions that the regulated American public disagreed with. And that was in the form of judicial review broader than what had been traditionally available.
The APA makes agency actions presumptively reviewable, which was a big departure from an earlier era in which it was much more difficult for individuals to obtain redress for agency wrongdoing. In terms of its traditional review standards of final actions, the APA has a particularly narrow and deferential standard of review, permitting courts to hold unlawful and set aside agency actions, findings, and conclusions found to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law, or those formal adjudications that are unsupported by substantial evidence.
Now, germane to today’s conversation and juxtaposed against the breadth and proscriptive richness of other authorities that govern federal civil litigation such as the Federal Rules of Civil Procedure and the Federal Rules of Appellate Procedure, Federal Rules of Evidence, etc., the APA’s evidentiary scheme is distinctly different. Part 10(e) of that statute, now codified as Section 706, sets the textual lodestar to what is now known as the record rule, and it’s 16 words. “The court shall review the whole record or those parts of it cited by a party.” Section 706 of the APA implies both a maximum of what will be reviewed, the whole record, and a minimum, those parts that have been cited by a party. The phrase “the whole record” is also used in reference to setting agency action, findings, and conclusions which implies that the record is created and used by agencies and is the basis for its actions, findings, and conclusions. So the record for APA review purposes aligns with the type of action that agencies engage in.
So the APA’s positive procedures for engaging in such action and the agency’s organic statute really play a significant role. And as many of us know, there are positive procedures for rulemaking, both of the legislative, otherwise known as notice and comment rulemaking, informal rulemaking, formal rulemaking, non-legislative rulemaking such as the subregulatory policy statements, interpretative rules, etc., as well as formal adjudication. But it’s very important to keep in mind that the APA is largely silent, with the exception of Section 555(e), and only in recent D.C. Circuit opinion that leaves out any positive procedures for informal adjudication. So therefore, the APA’s textual implications and the brevity of the phrase “the court shall review the whole record or those parts of it cited by a party” is subject to substantial judicial interpretation.
So now to Overton Park, a 1971 case. The principal case from the Supreme Court’s era at this time dealing with administrative records jurisprudence did not issue until 25 years after the APA was enacted. And although Overton Park had been cursorily validated by other Supreme Court cases since, the Court really had not grappled with this issue since 1990 and then again this summer. In Overton Park, citizens of Memphis sued the Secretary of Transportation, challenging his decision to build an interstate highway through a park. The only evidence in the judicial record that supported the secretary’s decision was affidavits that he submitted after litigation commenced. And the Court held that this was insufficient as a contemporaneous record was necessary to evaluate the propriety of the agency’s actions.
The Court remanded to the district court to discern the secretary’s reasoning at the time through the consideration of either contemporaneous documents or documents created after the fact that shed light on the decision making process of the agency. The Court encouraged the lower courts to further remand to the agency to produce an acceptable record but suggested that courts could, if truly necessary, fact-find themselves. So in terms of the significance of Overton Park in Department of Commerce, keep this in mind.
Overton Park offers a few lessons on the record rule, and they’re really complicated by conclusory and unelaborated dicta. In part, the Court concluded that the full administrative record that was before the agency at the time it made its decision is significant. The decision also emphasized that unless required by the APA or another statute, formal findings were unnecessary, and that full administrative record that was before the secretary at the time of his decision, and only that record, could be reviewed. But the Court created an exception to that rule that was neither presented by the facts of the case nor briefed by the parties or relied by the Supreme Court in terms of the holding of the case, so it was really just dictum. And that was presented in Department of Commerce.
So in Overton Park, the Court stated that a petitioner could avoid the record rules and limitations upon a, quote, “strong showing of bad faith or improper behavior,” end quote. And though the Court did not explain what would arise at that level, it ruled against the Secretary of Transportation—this was in Overton Park—because the bare record he presented obstructed judicial review. And by remanding for an examination of what the record could be or should be, the Court cast the problem as a record problem, not necessarily as a merits problem as it could have. So the opinion in announcing its remedy permitted certain judicial civil discovery to fill the gaps but admonished that the preferred approach is to remand further to the agency for an explanation.
Two years later, the Supreme Court provided a little bit more information in terms of its viewpoints on the record rule in Camp v. Pitts in 1973, reiterating, quote, “The focal point of judicial review should be the administrative record already in existence, not some new record made initially in existence, not some new record at all.” The Supreme Court also indirectly addressed the record rule in Vermont Yankee Nuclear Power Corporation v. Natural Resources Defense Council in 1978, holding that courts cannot add to the procedures set by the APA, here again at statute in the Constitution. But ultimately, later on, in Pension Benefit Guarantee Corporation v. LTV in 1990, the Court also concluded that the Vermont Yankee’s prohibition on judicially imposed procedures really did not apply to the record rule because the record rule was derived from the APA.
So now we fast-forward over 30 years to this summer’s Department of Commerce v. New York case. Adam did an excellent job of describing the case, the holding. Just to provide a little bit more information, it is very important to note that the headlines really focused on the case’s political implications, whether the U.S. Census Bureau’s intended addition of a citizenship question to the 2020 census was lawful.
But for administrative law, there’s really two significant aspects of the holding, one of which is for today’s conversation. One of those aspects is the potential addition to pretext, pretextual decision making as a basis to set aside agency behavior that would otherwise be covered under the arbitrary and capricious standard. Some have indicated that the addition of pretext essentially establishes a harder look review under State Farm standards from the 1980s, and some would also say that it perhaps sits outside based on the location of the pretext holding in the opinion of the traditional arbitrary and capricious review.
In addition to that, totally germane to today’s conversation, the Court opined and rendered into holding this dictum from Overton Park in 1971, concluding that there was mismatch between the information provided, the explanation given that relates to the pretextual decision making, but also finding that the district court was able to establish post hoc after improperly ordering traditional discovery supplement to record that there was a significant showing of bad faith. So that bad faith dictum in Overton Park, which has very questionable provenance in my view because it was not part of the case argued by any of the parties not present in oral argument, is now part and enshrined in stare decisis and was dispositively utilized in this particular case.
And I think that’s a good inflection point for Brett’s comments.
Brett Shumate: Well, thanks, Aram. I think that was a great summary and background discussion of where we are today. Just to shift gears a little bit, I’d like to talk now a little bit about the consequences of Overton Park and the Supreme Court’s decision in the Commerce case, and then shift gears a little bit later and talk about impacts from those decisions on the executive branch and on the courts. And feel free to chime in when we talk about some of these consequences.
The threshold point I want to make is that ambiguities in the case law and in the text of the statute have really led to litigation. I think Overton Park, as Aram said, was a case that was decided 25 years after the APA was enacted. And then we had a handful of cases from the Supreme Court after that, but really, there has not been a ton of litigation or Supreme Court cases by the Justices that really expand on these issues about what does the whole record mean in the context of the APA? I think those ambiguities have led to litigation, and you wouldn’t have a case like the Department of Commerce case without these ambiguities in the text of the statute and in the case law.
So what are the ambiguities? I think Aram has touched on a few of them. First, what did Congress mean by the whole record? A number of courts have interpreted that to say an agency decision maker should produce for the record anything that they directly or indirectly considered in the decision making process. Well, what does it mean for an agency had to directly consider something? More difficult is what does it mean for an agency had to indirectly consider something? Does that mean you gather up the materials considered by all the subordinates? If so, how far beyond the secretary do you go? It’s a question of degree.
There’s also ambiguity over what does it mean for there to be bad faith or improper behavior? As Aram mentioned, this was dictum from the Overland Park case applied by the Supreme Court in the Commerce case. But as the Supreme Court, I think, made quite clear in the Commerce case, this was a unique case with unique facts. So how is that going to be applied in the future?
There’s also ambiguity in the types of claims that are subject to the record review rule. Certainly APA claims under Section 706 are subject to the record review rule. A claim, for example, that the agency’s decision is arbitrary and capricious would be clearly subject to the record review rule, but what about constitutional claims? There’s some ambiguity there about whether those types of claims are subject to the record review rule at all. The government takes a strong position that constitutional claims are mentioned in Section 706 of the APA, therefore they’re subject to the record review rule. Plaintiffs, on the other hand, are often in the position of arguing that constitutional claims aren’t separate and distinct, and that they are therefore entitled to discovery rather than being confined to litigation subject to the administrative record.
So those are all some ambiguities that I think have been a consequence of Overton Park, manifested itself in the Commerce decision, and I think these ambiguities are going to lead to more litigation over the scope of the administrative record after the Department of Commerce case when Supreme Court essentially blessed the lower courts’ decisions to allow extra-record discovery beyond the administrative record.
And this is a topic that Don McGahn and I recently discussed in a National Law Journal article that talks about recent trends in regulatory litigation. This is one of them, I think. A trend that we’re going to see after the Department of Commerce decision is more litigation over the scope of the administrative record, extra-record discovery, and these types of issues.
Prof. Aram Gavoor: Yeah, I think that’s very well stated, Brett. What I would also add is that in the Department of Commerce opinion, now that we’re in the nuance and away from the general, the Court did not enunciate the domain of the record rule. It just applied it and then expanded upon it in terms of the bad faith exception. What’s also important that the method of its expansion, the application of Overton Park dictum, did not include with it any explication of what in the record precisely qualified as a, quote, “strong showing of bad faith or improper behavior,” end quote.
So given that there is an exception now to the record rule is strong motivation for plaintiffs to seek traditional tools of discovery and possibly even district judges and jurisdictions that do not prevalently feature Administrative Procedure Act challenges being used to traditional discovery that, at least in my view, and my coauthor’s view for a follow-up piece that we wrote that will be published in the Administrative Law Review in March of 2020, means that this issue is just going to continue growing. And perhaps the Supreme Court may need to very well address it to identify some limiting principles to what it set forth in Department of Commerce.
Brett Shumate: I think that’s a great point. And just to make it more concrete and practical, this is not just a pointy-headed administrative law issue that is just the subject of law review articles. It is actually manifesting itself in litigation, and it’s having real impacts on the executive branch and the courts.
So let me explain a little bit about the impacts. First, on the executive branch, really, the impact on the executive branch and the Department of Justice and the White House from extra-record discovery really can’t be understated. First, it significantly impacts the line attorneys that are litigating these cases that are familiar with record review and can rely on the agency to compile the record and produce it for the court and its normal summary judgement litigation in the norm.
But in a case where there’s a litigation over the scope of the administrative record and the court allows extra-record discovery, it really does have an impact on executive branch resources. The number of people that you need to add to a case to litigate a case involving discovery, it really does stress and impose constraints on the Department of Justice to add a number of different people and to litigate a case where there’s extra-record discovery. It’s just a different animal.
It’s also a significant distraction to senior political appointees at the agencies. If there’s a threat that additional evidence is going to be revealed beyond the scope of the administrative record, that is something that political appointees, high level ones, will pay attention to, not just at the Department of Justice, but also throughout the executive branch. So any time you’ve got a threat of extra-record discovery or supplementation of the administrative record, it’s going to have an impact on the executive branch, both career attorneys and political appointees.
I think one important feature to remember here is when we’re talking about expanding the record, we’re often talking about what materials are privileged. The executive branch takes a very hard line when it comes to deliberative process privilege, attorney-client privilege, and other privileges, and they jealously guard those privileges. So any time we’re talking about adding documents to the record that might be disclosed, the executive branch is going through a very thorough process in terms of deciding whether to assert privilege, what lines to draw. Those are difficult questions. They take time, and they impose burdens on executive branch officials.
There’s also some ambiguity in the case law, and different district courts take different approaches about whether privileged documents need to be put on a privilege log and provided to plaintiffs. That can become very burdensome if you have an extensive record and an extensive back and forth with an agency about attorney-client privileged communications, work product communications, that can also have a significant impact on the executive branch.
And I think it also impacts the courts as well, so if you have a district court authorize extra-record discovery, that is often something that cannot be reviewed later in the case. The executive branch DOJ has to make a decision right away as to whether to comply with that order or whether to seek judicial review in the court of appeals. And so oftentimes, the only way to get relief from a discovery order is through mandamus, and that is a very high standard. Oftentimes, courts of appeal don’t look favorably on mandamus petitions. The current administration has sought mandamus in a number of cases which we can talk about. The Commerce case was one of them.
But one of the impacts on the courts is when there is a mandamus petition filed in a case, it goes up to the court of appeals. The court of appeals often has to make a prejudgment about the merits of the case in the context of reviewing and deciding the mandamus petition. Whether to allow the discovery to go forward or whether to block it involves an analysis of the overall case, and so that can often stymie proceedings in the district court if the government tries to seek a stay in the lower courts while the mandamus petition plays itself out in the court of appeals.
So just to wrap up, I think this is not something that is just an academic dispute. This is having real impacts on the executive branch and on the courts when district courts go beyond the administrative record and allow supplementation of the record.
Prof. Aram Gavoor: I think that’s right. A few other points that I’d want to add is first, Brett identified the question of whether the record rule applies to constitutional claims. That’s a very important question, and in part because there are certain strata of claims of administrative agency malfeasance that are otherwise not reviewable under the Administrative Procedure Act but still potentially subject to constitutional challenge.
So under Webster v. Doe and its progeny, there may be certain agency actions that may be precluded from judicial review for APA purposes under Section 701(a)(1) or (a)(2) for preclusion or discretion but may nonetheless be challenged and lodged in a constitutional context. So for that circumstance, that’s a particularly good question. As to whether non-APA constitutional claims that relate to actions that are otherwise precluded from review under the APA, nonetheless, require the APA’s record rule as a rule of evidence.
Brett Shumate: That’s a good point. So maybe this is a good point for me to talk about two specific cases just to give a little bit more detail about what’s happened in those cases and examples where extra-record discovery has been authorized and the Trump administration has sought mandamus to block those efforts. I think the way these cases develop at the lower courts is quite interesting. I think it provides some practical insights. So I’ll first briefly mention the census case again, and then I want to talk about the DACA case in a little bit more detail.
But the census case arose because the plaintiffs in that case at the district court level argued that the record produced by the Department of Commerce was incomplete. They also asked for discovery outside the administrative record because they alleged that there was bad faith an improper behavior. The district court in New York—and other courts as well, but we’ll focus on the New York case—the district court in New York authorized both forms of discovery, both record completion and extra-record discovery or record supplementation. As part of the discovery in that case, the district court allowed depositions and regular civil discovery.
The government sought mandamus to block some of the extra-record discovery, including the depositions. The government stipulated to the record completion, so that was not at issue in the Supreme Court. But the Supreme Court did block the deposition of the Secretary of Commerce, allowed other depositions to go forward, and allowed the extra-record discovery to be completed. Meanwhile, the litigation continued in the district court. A trial was held in New York, and ultimately, the district court entered a final judgement and relied on the extra-record discovery.
So what’s interesting to me about the case at the Supreme Court is the Court did grapple with the extra-record discovery, blessed that part of the district court’s order, although it said that the district court allowed that extra-record discovery prematurely. In hindsight, the Court said the extra-record discovery was justified in light of what had come out in terms of the supplementation.
So anything you want to add to that discussion or that whole thing?
Prof. Aram Gavoor: Yeah, I think that’s right because with the conjunction of the nonidentification of the particular facts that established bad faith, the strong showing of bad faith, and then the construction of the holding that concludes, first, that the district court erred, at least in Department of Commerce, in ordering extra-record discovery, but that that error was harmless because the court’s assumption was correct at the end leads to what I would view as a high risk of interdecisional inconsistency among the lower courts. There are relatively few limiting principles to guide and constrain the courts, and there’s just the maximalist application of discretion.
Brett Shumate: I think what’s interesting also about the census case is you had a trial in an APA case. This is a very rare thing, and that hadn’t happened in the Trump administration during the first two years. But the census case was the first time a district court had said, “We’re going to allow extra-record discovery, and we’re actually going to have trial over an APA claim.” There was also a constitutional claim in the case. The census case did not result in a Supreme Court opinion at the mandamus stage over the extra-record discovery. We had to wait until the final decision to hear what the Supreme Court had to say about the extra-record discovery.
But in the DACA litigation, there actually was an opinion from the Supreme Court on the extra-record discovery question. That case is now at the Supreme Court on the merits. But in 2017, there was a mandamus petition that reached the Supreme Court, and the Supreme Court issued a per curiam opinion creating a stay of the discovery in that case, the record supplementation and completion.
But I think that the facts and the way that that case developed is interesting and worth mentioning. So in that case, this is a challenge to the Department of Homeland Security’s recision of the 2012 DACA policy. And the government in that case produced an administrative record of 256 pages that were mostly public documents, including court decisions that undergirded the acting secretary’s decision to rescind the DACA policy.
And so the plaintiffs argued, “This record is incomplete. Certainly, the government can’t justify a policy like this on just a series of public documents.” And so a number of district courts authorized the plaintiffs to pursue record completion. And specifically, the District Court in the Northern District of California entered an order that ultimately was the subject of a mandamus petition and went up to the Supreme Court. I think it’s interesting just to identify the categories of documents that the district court ordered the government to include in the administrative record. And I think you could see how this would impose significant impacts on the executive branch.
So number one, the district court ordered the government to produce, quote, “all DACA-related materials considered by persons anywhere in the government who thereafter provided Acting Secretary Duke with written advice or input regarding the actual or potential recision of DACA,” end quote. So just think of that. Anybody in government who provided input to the acting secretary, those materials had to be included in the administrative record. That could be anybody she talked to in the White House, at the Department of Justice, at DHS. That imposed a significant burden on the government to identify and compile those records.
Another category is, quote, “all DACA-related materials considered by persons anywhere in the government who thereafter provided Acting Secretary Duke with verbal input regarding the actual or potential recision of DACA,” end quote. So again, here, we have the court going beyond just written materials, but actual verbal input to the acting secretary. And that could include anybody in government, anybody in the White House. Those individuals would have had to have their records reviewed for DACA-related material and would have had to then include it in the administrative record.
Another category was “all comments and questions propounded by Acting Secretary Duke to advisors or subordinates or others regarding the actual or potential recision of DACA in their responses,” end quote. So again, here, a category that the court crafted to try to identify comments and questions asked by the secretary to try to fill out the record. This imposed a huge burden on the executive branch. The Department of Justice sought mandamus to try to block that discovery order. The Ninth Circuit, over the dissent of one judge, allowed the discovery to go forward -- the record completion, rather.
Ultimately, the Supreme Court granted a stay, issued an opinion that said a couple of very important things that I think we need to be aware of when we’re talking about this discussion. First, the Court said this discovery order was likely overbroad. But more importantly, the Court said that the district court should have stayed the record completion order while it considered the government’s threshold arguments in the case.
So in the DACA case, the government has argued the plaintiffs lack standing. The recision of DACA is not reviewable under Section 701 of the APA. Those threshold arguments, if accepted by the district court, would obviate the need to engage in all of this record discovery. And so what the district court should have done is consider those threshold issues, and then address the issue of what the scope of the record should be and what should be in it, and the district court should strongly consider certifying threshold issues for interlocutory appeal.
That’s ultimately what happened. The district court on remand from the Supreme Court addressed the threshold issues, denied the government’s motion to dismiss, granted the preliminary injunction, and issued a final order on the scope of the administrative record but stayed it. The government then sought appeals from the threshold rulings, including the preliminary injunction. Those are the issues that are now presented in the Supreme Court case.
So I don’t think you’ll see the Supreme Court opine on the scope of the record in the DACA case that’s before the Court this term. I think those issues have largely been stayed. The plaintiffs are now content to litigate the scope of the case on the present record, and that was the record on which the district courts entered the preliminary injunction. So I think those are two good examples from the Trump administration of how this issue has impacted the executive branch and the courts as well.
Prof. Aram Gavoor: Thank you, Brett. Some additional thoughts that I’d like to pose -- this draws from my scholarship. One is that when courts are engaging this type of record question, at least as my co-author and I propose, there should really be two viewpoints. One is completion. So if the government provides an incomplete record, that’s an absence of some aspect of everything that the government considered directly and reasonably indirectly to some limiting principle, and contemporaneous to the decision making itself, that is a circumstance where the government typically to remand it if necessary through traditional methods of discovery would need to get to complete, which is really a binary question. Is it complete, or is it not?
Once the record is complete, other aspects that go into, let’s say, the unstated preferences of the agency decision makers, oral conversation transcripts, things like that, that really goes to supplementation, which is in excess of completion and therefore in excess of the authority, the role of Congress that laid out the record rule, the whole record. This is textually inappropriate, and it also risks modifying what is the narrow and deferential standard of review itself because that evidentiary input into the arbitrary and capricious standard is itself, almost as you would look at a looking glass with two different lenses, the level of arm’s length review that the Congress wished for courts to engage in of agency behavior, and distorting that viewpoint by providing additional evidentiary inputs that are in excess of the whole record is actually entirely inappropriate.
Moreover, the question of evidence, especially when it comes to—and this is really a tactical viewpoint as well as a legal interpretation one—is that if parties are in a circumstance, plaintiffs, where they truly, truly believe that the government has not provided enough information, that might just very well be a merits question because if the government provides what it styles and certifies as an administrative record, and it appears to be facially incomplete, that might just be a good circumstance where the plaintiffs can just move for summary judgement and win their case because if the government’s record cannot establish a rational connection between the facts found and the decision made, or that it considered the correct factors, or that it did not consider the incorrect factors, or any of the other standards set forth in State Farm or in other relevant arbitrary and capricious review cases, then the plaintiffs can just go for the kill.
And in terms of the government, the government very, very strongly through behavioral observation has significant interest in not engaging in traditional discovery for APA cases. And at worst, as Brett was describing it, significantly can adversely affect the operation of the agencies themselves because they are then reorienting themselves for discovery purposes instead of the original purpose that the organic statute and their funding authorize, which is to engage in their work.
Prof. Adam White: Well, thanks. It’s been a very interesting discussion. I have to admit, this case, while somewhat overshadowed by a lot of cases last year, might turn out to be the most significant administrative law case that was decided last year, maybe even more significant than Kaiser v. Wilkie, depending on the way the courts actually implement this decision going forward, could have huge ramifications. In fact, if you’d told me a year ago there was going to be a decision opening agencies up to extra-record discovery and regulatory appeals, I probably would have assumed it was a case brought by the Institute for Justice or something against some sort of state regulatory commissioner instead of a case brought by people challenging this administration.
You raised so many nuances. I’ll be fascinated to hear what the listeners and others have to say about it. It may just turn out that this, as the saying goes, hard cases make bad law. And perhaps a lot of the nuances that you’ve highlighted, the questions that the Court raised but didn’t answer, they were spurred by the particular presentation of the agency’s decision by Secretary Ross. And perhaps there were some major missteps in there, and the courts are now going to grapple with how to apply these very tough standards in more mundane cases.
I just have one question before we open it up to the audience. I guess my question is maybe this case is about the facts of the case and Secretary Ross’s approach to the issue, or maybe it does just fit in with the slow but steady reconsideration of the Court’s deferential approach to judicial review. We did see Kaiser v. Wilkie where the Court moved slightly towards less deference on what used to be called Auer deference; now, I suppose Kaiser deference. And we’ve seen calls to reform Chevron deference and other things. And so how do you two see this case fitting or not fitting into the broader trends of administrative law right now?
Brett Shumate: Thanks, Adam. I think that’s a great question, and Don McGahn and I actually, I think, touched a little bit on this question in the regulatory trends article we published a few weeks ago. I do see a trend of courts being less deferential to the executive branch, certainly with respect to Chevron issues, Auer deference. And then the census case, I think, is another example where the Court did not just accept the explanation given but really took a hard look at the explanation and allowed a pretext claim not only to go forward but accepted the pretext claim.
I think that will encourage plaintiffs to be aggressive in bringing those types of claims in the future to try to get a very hard look by district courts and courts of appeals of agency action. So I do think this is probably part of a larger trend of courts taking their role of judicial review seriously, not just reflexively deferring to the executive branch, but also imposing a hard look in terms of reviewability, deference doctrines, and the actual APA claims as well.
Prof. Aram Gavoor: In terms of my thinking on that, I think Brett states it very well. I would also add that Section 704 review, as in what is a final agency action, is something that we’ve already seen an expansion of slowly but surely with Sackett and then Hawkes, and then also at the district and the D.C. Circuit level with Rhea Lana. So this is something that appears to be methodologically and consistently expanding in one direction, which is a viewpoint of expanded opportunities for Article III review, and then also a diminution in deference to agency interpretations of law.
Brett Shumate: I think the Supreme Court by now is certainly aware of what’s going on in the lower courts with respect to discovery of the executive branch. The Solicitor General has raised that issue in a number of cases, most notably in the census case. The Supreme Court is aware of that trend, and they have not shut it down. They expressly allowed the extra-record discovery in the census case. I think that is going to encourage more plaintiffs and more district courts to allow more discovery and more hard look of executive branch decision making because the Supreme Court blessed the pretext claim, they blessed the extra-record discovery, and they have not shut it down.
Had the Supreme Court shut down extra-record discovery, we’d be having a different discussion today, but I think what we’re facing now and going to see in the future is more extra-record discovery, more litigation over the scope of the record, until the Supreme Court steps in and provides some definitive guidance about what is the whole record, what does it mean to directly or indirectly consider documents, and what is bad faith specifically because right now, we only have a handful of fact specific cases applying that exception. There hasn’t been any development of that standard since Overton Park.
Prof. Adam White: Or it could be that the D.C. Circuit will, since it hears so many agency appeals, have to take a lead on refining the standard. Do you think this case, this kind of issue will return to the Supreme Court any time soon?
Prof. Aram Gavoor: My viewpoint is that in the next few years, it may need to, depending on how significant it presents at the district and circuit level and certainly if a circuit split is created.
Brett Shumate: Yeah, I think that’s probably right. The DACA case could have been a case where this issue could have been presented. I don’t think it will be in this term. I think, certainly, the Supreme Court’s decision encourages plaintiffs to continue to be aggressive at the district court level. It also incentivizes district courts to allow extra-record discovery if they deem it appropriate. So we’ll have to see. The way this gets teed up for the Supreme Court is likely going to have to be a mandamus petition challenging an interlocutory order that otherwise is not appealable. And that’s a very difficult standard for the government to meet, and we’ll jut have to wait and see, but certainly could.
Prof. Adam White: Well, the audience has been very patient. Do we have time for audience questions?
Wesley Hodges: So it looks like we do have two questions right out of the gate. Adam, here is our first caller.
Bob Fitzpatrick: Hi. This is Bob Fitzpatrick here in D.C. I guess I have probably more comment than question, if I may. I debated in my head whether this is a one-off because the administration made such a mess of the record in this case that it turned the Chief, or is this as you guys discussed, the Court looking at the administrative state and maybe looking at the process in this whole record issue? And seems to me that they’ll pretty quickly probably come on out of DDC and then up to the circuit. They’ll have a rule that there’s got to be some significant indicia of pretext before you get into the supplementation game, and I would think it’s going to be a rare day in you-know-where that coming right out of the box, plaintiffs are going to get supplementation.
It seems to me the real game from the plaintiff’s side is this whole record completion issue, which seems very much up in the air. They say the Northern District of California’s decision was likely overbroad, but I’ve got to tell you, I look at that and I ask myself in the context I practice in employment law that if I was looking at a termination, I would want all that input.
So I’m wondering if that’s where the battle’s going to be over completion of the record and some definition by the courts of what the rulemaking process should look like, and should there be more formality to it so that you don’t have to scramble around to find that volume of records that that Northern District of California judge said had to be produced, that that stuff ought to automatically go into some administrative process that at the end of the day is the complete record. And if there’s nothing in that record that shows an indicia of pretext, game’s over for the plaintiffs.
Last thought is I assume IC’s cases are going to be in DDC. I assume there’s going to be venue transfer motions to get these cases into D.C., and I assume they’re going to be environmental, immigration, and maybe some cases coming out of DOL. So I apologize if most of that is just me bloviating rather than questions, but I hop it produces some comment by you fellows. Thanks ever so much, by the way, for your presentation. Terrific, very helpful, sparked a lot of thinking, obviously, on my part.
Prof. Adam White: Brett, Aram, does it inspire any responses?
Brett Shumate: It does. Thanks Adam. Thanks, Bob, for your question. A couple of reactions—and Aram, you can chime in here as well—I think one of your first comments was is this a one-off case in the census case. I think certainly it did have some unique facts, and you could read it as a one-off, good for one ticket, one ride kind of case. But I think it’s a more impactful decision than that for a couple of reasons. Number one, the Court blessed a pretext claim for the first time against an agency. And second, the Court blessed the extra-record discovery. I think as Adam and Aram have alluded to, those are, I think, significant holdings from the Supreme Court that will manifest themselves in lower court cases and potentially the Supreme Court again.
Your last comment was about record completion and the rulemaking process. I think it’s noteworthy here that the two cases where there have been really high profile mandamus petitions and extra-record discovery have been informal adjudications, DACA and the census cases, which were not rulemaking cases. I think you’re probably unlikely to see these types of disputes in the context of a rulemaking challenge, and Aram may have more to say about this. But in a rulemaking, you’ve got notice and comment, you’ve got the record that gets built through that lengthy rulemaking process. I think there’s probably less opportunity for a plaintiff to complain about what the record looks like in a rulemaking than in the context of an informal adjudication that took place in the DACA case and in the census case where the agency has to compile a record, and it’s not obvious what the record would look like in those types of cases’ adjudications.
Prof. Aram Gavoor: Building on Brett’s excellent insights, I would add that I think he’s totally right, and it’s what I mentioned also at the beginning of today’s teleforum is that there is an absence of positive procedures in the APA for informal adjudication. And Overton Park, Vermont Yankee, and LTV are all connected in the context that LTV sought to dispel a perceived tension between Overton Park’s rather proscriptive imposition of procedures placed on agencies such that an administrative record would be contemporaneously created for APA review, and then the broader Vermont Yankee principle of judicial restraint in terms of imposing additional procedures on agency behavior than what are enunciated in the APA. So I think he’s right that this is going to be largely in the context of informal adjudication for which the only reason why there are agency procedures is for the purposes of furnishing judicial review, and that is a really interesting and important circumstance that I think will undergird this.
I’ll also add that—and Brett is also correct on this point as well—that Administrative Procedure Act evidence issues are typically shrouded from appellate courts’ observations usually, and that’s based on the decision making at the agency level and at the district level in terms of how to litigate the case. It’s really significant that the government has to resort to mandamus relief when it needs to provide a limiting principle at an appellate level for APA evidence issues. So unless that continues to happen, and it very well might, that is something that will continue to make this issue fester.
Wesley Hodges: Very good. We do have two more questions in the queue. Let’s go ahead and go to our next caller.
John Vecchione: Hi. John Vecchione, Cause of Action. You folks have been using the term one-off. I’m going to use another term and ask this question which takes some of the bark off, but I think this decision falls in the area of what I call “Trump law,” which is I don’t think courts would have done this under any other President. And I think that Roberts thinks it’s a one-off and thinks it’s like a brushback pitch by the umpire, I guess, and that it won’t have great consequences. But as we know, it’s precedent, as you guys have made very clear. There are litigators all over the country who we never believe the government’s reason is the real reason. We’re always going to say it’s a pretext for some dark plan. So it’s going to happen all over the country.
So my question is, do you folks think that Roberts took—because he was the deciding vote—took proper notice of how the whole judicial system actually works and how lawyers work, and that perhaps his view of how much impact this case was going to have was perhaps just wrong, and that they are going to have to correct it if they don’t want tons of discovery all over the country into every administrative act? And I understand from the previous question what you’ve said, yeah, they may cabin this to the facts. Some courts might, but some courts won’t. That’s kind of my analysis. I think he thinks it’ll be not too impactful, but I think it’s going to be.
Brett Shumate: So I’m happy to take that one. Good question, John. Good observations. I think I’m not going to speculate about what’s in Roberts’ mind. I don’t think I’m qualified to do that. But I will say there is a lot of precedent being made during the Trump administration about judicial review of agency action. Those will be precedents that will be used against the next administration. So the law is going to develop and it’s going to build upon itself.
And so I think we see trends developing during the Trump administration with respect to extra-record discovery and deference issues that the Supreme Court has now opined in a couple of cases, and they will do that in additional cases during the Trump administration. And those cases and those precedents will be used to challenge the next administration and develop the law in ways that we can’t even predict. But I think the courts over the last few years have given a number of tools to plaintiffs to bring additional and creative claims against the government.
In terms of your last point about discovery, I think the government has to make a calculation in these cases about the burdens of discovery and whether to seek mandamus. And I think this decision by the Supreme Court to bless extra-record discovery in the census case will be an important factor in the balance for the government about whether to seek mandamus because the Supreme Court didn’t shut down extra-record discovery in that case. They did in the DACA case. So each of these cases is a data point for the government to weigh in terms of whether the burdens are so severe to go up on mandamus.
And my outsider’s view now is that the burden is ratcheting up for the government each time, and over the course of months and years for them to pull the trigger and seek mandamus. So I don’t know if you’ll see more cases going up to the Supreme Court on mandamus. You may just see district courts and courts of appeals being more aggressive in allowing discovery and that gets continued to be blessed more and more.
Prof. Adam White: Can I weigh in on the Roberts point? I think it’s good to focus in on Roberts here, obviously. I’m skeptical that he didn’t know what kind of a hornet’s nest he was kicking over, if he has kicked one over. He was one of the most accomplished federal litigators of his generation. He’s also, I think, it’s important to note, been one of the justices who’s been most vocally skeptical of deferential judicial review. We saw this in his City of Arlington dissent. We saw this even in King v. Burwell where he ruled for the government but included the biggest exception to Chevron deference that we’ve seen in 20 years.
It’s hard for me to imagine he didn’t open this door knowingly, but I think the questioner is right to say how much of this is Trump administration specific law which raises questions both about how courts are going about their review of the administration’s work, and also how the administration itself makes decisions. It might just be that Roberts thinks that future administrations will approach these issues differently, and maybe they will approach them differently. But I think it’s almost surely safe to say that whatever Roberts is doing here, he did knowingly.
Wesley Hodges: Very good. Let’s see if we can slip in this last question from the audience. Caller, you are up.
Eileen O’Connor: Hello. Thank you so much for this discussion. It’s been really, really informative. This is Eileen O’Connor. My question might be unanswerable, might be really quick. Here it is: How does the Court reconcile its reluctance to consider legislative history in interpreting legislation with its insistence on examining pre-decisional fact gathering in administrative rulemaking?
Brett Shumate: Well, to take a stab at it, I think legislative history is a question of textual interpretation of a statute, and I think there are principles that have been developed over time about how to interpret statutes, originalism, textualism. And then when we’re talking about a court reviewing an agency’s decision, the general rule has always been you just review the four corners of the agency’s decision and the rationale and explanation given by the agency and the record compiled.
Now, we’re seeing courts more aggressively look behind the agency’s explanation and by analogy, looking at the legislative history about how the sausage is made. I think the government would probably prefer that you take a hard look -- or that you don’t look behind the government’s decisions and you don’t look at the motivations for those decisions, but as we’ve seen, the courts are looking behind those decisions more frequently, and I’m not sure you can reconcile them.
Prof. Aram Gavoor: Thank you, Eileen, for your question. I think they only point I would add is that in terms of legislative history and then agencies, so to speak, legislative history, the first is the as Supreme Court implied in a footnote of Chevron, a traditional tool of statutory construction that’s been largely abrogated, and I think rightfully so. In terms of agency decision making on stated preferences, etc., that otherwise would not be contained in a record, that does fall within a different domain. It’s not about interpretation of a statute or a law, but really, it’s an evidentiary issue, which is one of fact. So I think it’s a very interesting and unique and valuable connection to make. It’s a novel one for me. But they have different originations, and that’s also important to keep in mind.
Wesley Hodges: Well, seeing that the queue is empty and our time is up, I turn the mike back to Adam to see if we have any closing thoughts from him or the panelists.
Prof. Adam White: Well, thanks. Like I said, I think that this case is extremely important, extremely significant. I’m so glad that Aram and Brett took the time to write on this and to speak on this, so I’m grateful for everything they’ve discussed. Guys, do you have any closing comments?
Prof. Aram Gavoor: All I would add is if you’re interested in longer form thoughts on this, if you go to the Social Science Research Network, my administrative law in the courts piece, which was published last year, is there, and also a forthcoming piece that I’ve co-authored that’ll be published by the Administrative Law Review in March of 2020. So that’s where you can find some longer form thought product. And also, take a look at the National Law Journal piece that Don McGahn and Brett Shumate co-authored. It’s very insightful.
Brett Shumate: Yeah, Adam, finally for me, I just think the most interesting part of this discussion is what’s going to happen next? How are plaintiffs going to react in admin law challenges? How’s the government going to react? How are the courts going to react? What’s the next big case that’s going to make it up to the Supreme Court? These are all unanswerable questions at this point. We have some guesses about how the different actors are going to react to the Commerce decision, but it’ll be a fascinating discussion, and I think Aram is on top of it and will be writing more about it.
Wesley Hodges: Well, on behalf of The Federalist Society, I would like to thank each of you for the benefit of your very valuable time and expertise today. We welcome all listener feedback by email at firstname.lastname@example.org. Thank you, everyone, for joining us for the call today. We are now adjourned.
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