In recently holding that the Federal Communications Commission's subscriber limit for cable operators was "arbitrary and capricious," a panel of United States Court of Appeals for the District of Columbia Circuit engaged in an important and longstanding debate about the role of the judiciary in supervising agency actions. Comcast Corp. v. Federal Communications Comm'n, D.C. Cir. No 08-1114 (August 28, 2009). All three members of the panel ultimately agreed that the subscriber limit should be vacated, but Judges Ginsburg and Kavanaugh reached this decision only after weighing the discretionary factors set forth in Allied Signal, Inc. v. U.S. Nuclear Regulatory Comm'n, 988 F.2d 146, 150 (D.C. Cir. 1993). In contrast, Judge Randolph viewed such a weighing exercise as both unnecessary and inappropriate, contending that vacatur of the subscriber limit should flow automatically from the finding that the limit was "arbitrary and capricious."
The Comcast decision -- and, in particular, Judge Randolph's concurring opinion -- highlighted the common and questionable judicial practice of remanding rules and other agency actions held to violate the standards of the Administrative Procedure Act without vacating them. The effect is to leave deficient rules and other decisions in place and give the agency an open timetable for considering potential further regulatory action.
Judge Randolph's Position
Judge Randolph's concurring opinion was very straightforward. He contended that vacatur was required upon a finding that the agency's action was arbitrary and capricious:
Section 706(2)(A) of the APA could not be clearer: a court faced with an arbitrary and capricious agency rule or order "shall hold unlawful and set aside" that agency action. "Set aside" means vacate, according to the dictionaries and the common understanding of judges, to whom the provision is addressed. And "shall" means "must." I see no play in the joints.
Slip op. at 18.
As a related consequence, Judge Randolph objected to the analysis in the majority opinion, which, despite having concluded that the subscriber limit was arbitrary and capricious, nevertheless weighed whether to vacate the Commission's limit: "[t]he decision whether to vacate depends on the seriousness of the [rule's] deficiencies (and thus the extent of doubt whether the agency chose correctly) and the disruptive consequences of an interim change that may itself be changed." Slip op. at 15 (quoting Allied Signal, 988 F.2d at 150-51).
Judge Randolph noted that any particularly compelling reasons for leaving an unlawful agency action in place during a remand could be addressed on a motion to stay the Court of Appeals' mandate while the agency repaired the damage. A stay motion would allow vacatur and related remedial issues to be addressed directly, in contrast to most situations where such issues are seldom a principal focus while the merits are still being briefed and argued. Moreover, if a stay were granted, an appropriate time limit on the stay would incentivize the agency to address remand issues promptly. Finally, Judge Randolph noted that such an approach would "properly allocate the burdens among the parties. The losing party -- the agency -- would have the burden of convincing the court that the unlawful regulation should continue to govern the winning party while the agency responds to the court's ruling." Slip op. at 21.
History of the Issue
The dueling opinions in the Comcast case renew a longstanding judicial debate within the D.C. Circuit. Judge Randolph first staked out his position fifteen years ago in a separate opinion in Checkosky v. Securities and Exchange Comm'n, 23 F.3d 452 (D.C. Cir. 1994), and has sustained debate on the issue ever since. The Checkosky decision involved a situation somewhat different from Comcast, insofar as a majority of the panel in Checkosky was not prepared to find that the SEC's action was arbitrary and capricious. Instead, Judge Silberman felt the SEC had not adequately explained its reasoning and he was therefore uncertain as to the agency's full rationale. In such a circumstance, Judge Silberman contended that it was appropriate to remand without vacating in order to allow the agency to elaborate on the reasoning for its action. 23 F.3d at 462.  Judge Randolph argued that such a "get further elaboration" remand was an impermissible approach; he contended that the inability to determine the basis on which the SEC had acted, in itself, established that the SEC's action was improper: "When Judge Silberman states that the Commission not only neglected to spell out what standard it had applied, but also neglected to reconcile this case with its past decisions, he is saying -- despite his disclaimers -- that the Commission acted arbitrarily and capriciously within the meaning of § 706(2)(A)." 23 F.3d at 490-91. Further, Judge Randolph foreshadowed his Comcast opinion by stating that "[o]nce a reviewing court determines that the agency has not adequately explained its decision, the Administrative Procedure Act requires the court . . . to vacate the agency's action." 23 F.3d at 491.
There is No Basis for Overly Lenient Mandates
Judge Randolph seems to have the stronger position on this issue. First, as a matter of statutory interpretation, he is obviously correct that the APA appears to dictate vacatur. The statute provides that the reviewing court "shall . . . hold unlawful and set aside agency action, findings, and conclusions found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A).
Moreover, as the foregoing passage reminds us, the APA defines the relationship and responsibilities between the agency and the reviewing court. While federal appellate courts may utilize flexible mandates that can be tailored to provide guidance, assert direction or otherwise shape ultimate judgments in their relationship with district courts, they do so because they exercise general supervisory powers over those courts. The relationship with an agency is different. The Administrative Procedure Act sets out the requirements that agencies are to follow in agency proceedings and also sets out the standards that reviewing courts are to use in reviewing agency actions.
As a policy matter, Judge Randolph's position also appears to be the better result. Agencies already are entitled to Chevron deference (with respect to interpretations of their governing statute) and Auer deference (with respect to their governing regulations). To add the concept of a "flexible" or "lenient" mandate as a standard practice when reviewing agency actions, thereby allowing the agency additional opportunities to attempt to provide a proper basis for an action, all while keeping the agency's improper action in place, concedes too much power to both the agency and the reviewing court.
As Judge Randolph notes in Comcast, if the agency perceives particularly compelling reasons why a rule or order that has been determined to be unlawful should nevertheless remain in place during a remand, the agency can present its reasoning on a motion to stay the mandate. If the agency can prevail, so be it. Otherwise, the party that appealed the unlawful agency action should be able to enjoy the benefits of its appellate victory and should not be burdened by continuation of improper agency action that it has successfully challenged.