A recent decision by the U.S. Court of Appeals for the Fifth Circuit is a reminder to important federal agencies that they must take care to adhere to the requirements of the Administrative Procedure Act (APA) when they issue not only new rules, but also other regulatory documents as well, and that the federal courts can, in appropriate cases, step into a controversy at an early stage. On June 27, the Fifth Circuit ruled, in a 2 to 1 opinion, that a 2012 Equal Employment Opportunity Commission (EEOC) Enforcement Guidance, entitled “Enforcement Guidance on the Consideration of Arrest and Conviction Record in Employment Decisions Under Title VII of the Civil Rights Act of 1964” was a final action, and the lower court erred in dismissing a declaratory judgment action filed by the State of Texas. The case is State of Texas v. Equal Opportunity Commission.
Texas argued that this document is a binding substantive interpretation of Title VII, and it was adopted in violation of the APA. The Fifth Circuit held that Texas had standing to bring this lawsuit, and that this document is a final action that can be reviewed in the federal courts, citing the Supreme Court’s recent decision in U.S. Army Corps of Engineers v. Hawkes Co., Inc., which applied a pragmatic approach to resolving a question whether an administrative determination was a final action for purposes of APA review. Accordingly, the case was remanded to the trial court. Judge Higginbotham dissented, stating that this controversy does not, in his mind, “meet Article III’ s demand of ripeness, injury and adversarial engagement.”