Circuits take different approaches to citizen attempts to intervene on the government's side in third party suits against the government

In Coalition of Arizona/New Mexico Counties for Stable Economic Growth v. Department of the Interior, 100 F.3d 837 (10th Cir. 1996), a group of counties sued the Department of Interior challenging the listing of the Mexican Spotted Owl as a threatened species. Dr. Robin Silver, a commercial wildlife photographer and amateur biologist, who had been instrumental in having the owl listed and its critical habitat designated, filed an application to intervene as of right. The plaintiffs and the government opposed the intervention, and the district court denied it. On appeal, the Tenth Circuit reversed and remanded, directing the court to grant the intervention.

The first issue was whether Dr. Silver had a direct, substantial and legally protectible interest in the listing of the owl. The court noted that Dr. Silver had been the original petitioner seeking to have the owl listed; he had pressed for the Fish and Wildlife Service to make its listing decision, threatening a lawsuit if they did not comply with their statutory deadlines; and he had sued to compel the FWS to designate the critical habitat for the owl. Moreover, Dr. Silver photographed the owl in the wild. These facts, the court concluded, evidence "a direct and substantial interest in the listing of the Owl." Inasmuch as the Endangered Species Act provides a citizen suit provision to enforce the Act's provisions, the court held that Dr. Silver's interest was a legally protected interest. The court suggested that inasmuch as Dr. Silver would satisfy Article III standing requirements, and those requirements "are more stringent than those for intervention," his interests were sufficient for intervention.

The second issue in the case, then, was whether the government would adequately represent Dr. Silver's interests. The court acknowledged that when an applicant for intervention and an existing party have the same ultimate objective, there is a presumption of adequate representation. Here, however, the court said that the government's interest in protecting the public interest was not necessarily the same as Dr. Silver's "particular interest in the protection of the Owl in the habitat where he has photographed and studied the Owl."

In applying these tests, the court stressed that its precedent suggested "a somewhat liberal line in allowing intervention" and that the tests were aimed at "involving as many apparently concerned persons as is compatible with efficiency and due process."

The Seventh Circuit took a different approach in Solid Waste Agency of Northern Cook County v. United States Army Corps of Engineers, 101 F.3d 503 (1996). There, Judge Posner, writing for the court, affirmed the denial of intervention as of right to a citizens group. The citizens had sought intervention to support the Corps of Engineers' denial of a permit to locate a municipal landfill on a 500-acre site adjacent to their town's border. The court agreed that the citizens had the requisite interest to support intervention. This court also looked to the law of standing for guidance and concluded that the citizens would have standing to bring a lawsuit against the Corps if it granted the permit. The court then, however, in essence, equated the test for standing and the interest test for intervention, saying "[the interest] formula is best understood as meaning that, because intervention can impose substantial costs on the parties and the judiciary, not only by making the litigation more cumbersome but also (and more important) by blocking settlement, the would-be intervenor will not be permitted to push out the already wide boundaries of Article III standing."

This left the adequacy-of -representation issue. After an introduction stressing that allowing intervenors can impede settlement, the court stated that, where "there is no conflict of interest" between the applicant for intervention and the original party, "adequacy of representation is presumed." Here, the Corps and the would-be intervenors have the same interest, the court said, "to defeat [plaintiffs'] effort to invalidate the denial of the permit." The court dismissed the idea that, because the Department of Justice, the Corps' lawyer, has additional interests stemming from its role as lawyer for the entire government, there was a divergence in interests. "More is needed than a presumption of inadequacy based on the diversity of the Department's interests." If this were enough, the court recognized, then the government could never resist intervention on the basis that it would adequately represent someone's interests.

As may be seen, the thrust of the two cases is definitely in tension, and the Seventh Circuit's unwillingness to presume a diversity of interests merely because the government represents the public interest and the would-be intervenor has particular interests is at odds with the Tenth Circuit. Judge Posner went on in his opinion to suggest a procedural means by which would-be intervenors might protect themselves in these circumstances by filing a "standby or conditional application for leave to intervene" that would not be triggered until the government actually took some action inconsistent with the would-be intervenor's interests.

Agency regulation setting deadline for the agency to issue certain rules not judicially enforceable

The Occupational Safety and Health Administration adopted a rule in 1980 that specifies the timing for certain actions with respect to regulating carcinogens. In particular, it sets specific deadlines after the conclusion of a rulemaking comment period in which the agency must either adopt a standard or determine that none is called for. In 1994, OSHA instituted a rulemaking with regard to second-hand smoke in the workplace, but it failed to either adopt a standard or determine none was necessary within the deadlines imposed by its own regulations. The organization, Action on Smoking & Health, brought suit in the nature of a petition for mandamus, to force the agency to take action. Despite the plain language of the regulation stating that the agency "shall issue" the requisite decision, the agency argued and the court accepted that the deadlines were "aspirational only." Action on Smoking & Health v. Department of Labor, 100 F.3d 991 (D.C. Cir. 1996). The court noted that OSHA had never, ever met the deadlines set in the regulations. Moreover, the statute under which OSHA operates itself contains a statutory timetable, but the D.C. Circuit had earlier held that the existence of the statutory deadline did not deprive the agency of all discretion, and non-compliance with the deadline did not in itself constitute an abuse of discretion. Consequently, the court did not think it was a reasonable interpretation of the regulations to eliminate that discretion. Finally, the court said that, even if it viewed the regulations as imposing a mandatory duty, it would not issue mandamus. Rather, it would apply the test articulated in TRAC v. FCC, 750 F.2d 70 (D.C. Cir. 1984), which would counsel against judicial intervention.

Agency suspension of loan restructuring "final agency action" subject to judicial review

Mrs. Chamblee was a widow in default on unsecured loans to her and her late husband from the Farmers Home Administration. In accordance with its regulations, the FmHA sent her materials so that she could apply for restructuring of her loan. The purpose of restructuring under the statute is to ensure that the borrowers are able to continue farming and the government can avoid or minimize losses. She applied for the restructuring, and in the course of meetings on the restructuring, the FmHA discovered that Mrs. Chamblee's husband's estate was not yet discharged and that it included the property the Chamblees had farmed. FmHA responded by suspending Mrs. Chamblee's application for restructuring and by filing against the estate for the assets therein. In order to satisfy that claim, the estate would have to sell the property. Mrs. Chamblee sought an administrative appeal of the suspension of her loan restructuring, but it was denied as untimely -- the application had only been suspended, not denied, so there was nothing to appeal. Mrs. Chamblee sued in district court under the APA. The FmHA defended on the grounds that there was no "final agency action," because the application had only been suspended, not denied. The district court accepted the FmHA argument. In Chamblee v. Espy, 100 F.3d 15 (4th Cir. 1996), the court reversed the district court and ordered the FmHA to hear the administrative appeal. The court looked to Franklin v. Massachusetts, 505 U.S. 788 (1992), with its two-part test for finality: that the agency have completed its decisionmaking process and that the result is one that will directly affect the parties. In applying this test, however, the court said that it should consider the practical effect of the agency action. Here the practical effect of the suspension was to finally terminate the application for restructuring, because if the agency files for the assets in the estate, the farm will be sold to satisfy that claim, and there will be no farm left for Mrs. Chamblee to continue farming under a restructured loan. In these circumstances, the suspension was final agency action and met that agency's regulation for what could be administratively appealed.

Statute of limitations is not tolled on challenge to interest rate regulation; challenge would have been ripe at the time of the regulation's adoption, even though it would not yet have been applied

Pennsylvania's Department of Public Welfare and the Department of Health and Human Services had a dispute over a debt. HHS notified Pennsylvania of the debt in 1991, and Pennsylvania paid the debt in 1993. HHS then charged Pennsylvania interest on the debt for the period between notification and payment. The rate of this interest was the current rate of private consumer debt (15.25%), not the rate charged to states under most federal programs, the federal funds rate (8%). In October, 1994, Pennsylvania sought judicial review of the interest rate. One of the claims was that the regulation establishing this rate of interest had been adopted without the required notice-and-comment procedures. However, the regulation was adopted in January, 1987, almost eight years before suit was brought, and the statute of limitations for violations of the APA is six years. Pennsylvania argued that the statute should be tolled because it could not have brought the case until it was assessed interest under the regulation, in 1993. The reason it could not have brought the suit, the argument went, was because the suit would not yet have been ripe under the standards of Toilet Goods Assn. v. Gardner, 387 U.S. 158 (1967). In Pennsylvania v. United States Department of Health and Human Services, 101 F.3d 939 (3d Cir. 1996), the court rejected this argument, holding on the one hand that Pennsylvania had waived it by making only conclusory allegations and on the other hand that the argument failed on its merits. First, the court noted a general reluctance to engage in retroactive ripeness claims. Nevertheless, it found the ripeness question easy to answer here. The challenge would only have involved legal issues, so the issues would have been fit for judicial resolution -- half the test enunciated in Abbott Laboratories v. Gardner, 387 U.S. 136 (1967). The other half -- the relative hardship to the parties -- the court also thought would have militated in favor of review at the time of adoption of the interest rate regulation. Even though Pennsylvania did not have any debt to HHS at that time, so the interest rate regulation would not have directly applied to it yet, the court analogized Pennsylvania to a credit-card holder informed that his bank is raising the interest rate on his credit card. The court said that "the customer will have to change his behavior at the time he is informed of the rate hike in order to avoid the risk of having to pay the higher interest rate and hence will suffer a direct hardship at the time of the rate hike." The court then cited several cases in which regulations that necessarily would result in certain future effects were deemed to have present impact for purposes of determining ripeness.

The fairness of the analogy is doubtful. Pennsylvania had no idea at the time the interest rate regulation was adopted that it might someday be deemed in default of a payment, giving rise to interest obligations. Moreover, the cases cited by the court were wholly distinguishable, because none involved an effect that would occur in the future only if the regulated entity took some discretionary action. Indeed, the court ignored the Toilet Goods case, which seems strangely on point.

NCUA board members may be removed by the President absent cause when they hold office after expiration of their statutory terms under a provision that lets the member remain until a successor has been appointed and confirmed

Members of the board of the National Credit Union Administration are appointed by the President with the advice and consent of the Senate. They are appointed to six year terms, but the statute provides that they may remain in office until a successor is appointed and confirmed. No more than two of the three members can be of the same political party. The statute does not, however, contain a "for cause" removal restriction. Swan was a member whose term expired, but whose replacement had not yet been confirmed. President Clinton dismissed him and made a recess appointment. Swan sued to regain his position, arguing that the President could remove him only for cause. The court rejected this claim in Swan v. Clinton, 100 F.3d 973 (D.C. Cir. 1996). The majority discusses at some length whether NCUA board members have "for cause" protection during the term of their appointment, suggesting that they do, but that after that term the reasons underlying "for cause" protection are not as strong. Judge Silberman concurred in the judgement but noted that the D.C. Circuit has never held that members of boards appointed to fixed terms necessarily have "for cause" protection.

Committee used to prepare advice to Congress as well as agency subject to FACA

The California Forestry Association was not happy with the results of a study produced by the Sierra Nevada Ecosystem Project (SNEP) suggesting the proper management of certain old growth forests. It sued to enjoin the United States Forest Service from using that study on the grounds that the SNEP was a federal advisory committee that had ignored the requirements of the Federal Advisory Committee Act in producing the study. The USFS defended on the ground that SNEP was created for the purpose of providing a report to Congress, and indeed the origin of SNEP was a letter from members of Congress calling for a study to be provided to Congress. It relied on Sofamor Danek Group, Inc. v. Gaus, 61 F.3d 929 (D.C. Cir. 1995), in which the court held that a group was not "established in the interest of obtaining advice and recommendations for one or more agencies" if its product was used by the Executive Branch only incidentally and subsequently. The D.C. Circuit, however, concluded that SNEP was subject to FACA, reversing the district court's contrary decision, California Forestry Ass'n v. U.S. Forest Service, 102 F.3d 609 (D.C. Cir. 1996). The court noted that whatever the origin of the group, its workproduct was always intended to be used (and in fact was used) by the Forest Service as well as by Congress. Moreover, in Sofamor Danek there was a statute that specified the use to be made of the study there, which was not use by a federal agency. Here, however, the only indication of the intended use of the report by Congress was contained in a letter signed by 12 congressmen. Accordingly, the court held that the Sofamor Danek analysis did not apply, and FACA did. Nevertheless, the court was unwilling to enter injunctive relief, remanding that issue to the district court to determine the factual predicates for injunctive relief. It noted that the circuits have split over the availability of injunctive relief for violations of FACA, and the court opined that injunctive relief might be appropriate in some cases. It then indicated, however, that here the Forest Service had already expended millions of dollars in this study that presumably would have to be duplicated if the injunction were issued, which would not further FACA's purposes of reducing government waste. Moreover, the court also noted that the Forest Service had made efforts to involve the public during the preparation of the study, so that the need for injunctive relief "may be reduced where, as here, there has been at least some attempt to ensure public accountability."

En Banc D.C. Circuit finds voters had a form of informational standing sufficient to bring case and then denies Chevron deference is appropriate to agency's interpretation of Supreme Court's interpretation of the agency's statute

Six voters filed a complaint with the Federal Election Commission alleging that the American Israel Public Affairs Committee (AIPAC) was a "political committee" under the Federal Election Campaign Act (FECA) and, therefore, was subject to various campaign reporting and disclosure requirements, as well as contribution and expenditure limits. The FEC investigated but concluded that AIPAC was not a political committee, and the voters sued, challenging that conclusion.

The first issue was whether the voters had standing. The court, per Judge Silberman, held they did. Akins v. Federal Election Com'n, 101 F.3d 731 (D.C. Cir. 1996)(en banc). He first reiterated what he said was the circuit's law generally on "informational standing," that a person has a cognizable injury for standing purposes if the government fails to provide particular information to the person, when the failure impinges on the person's daily operations or makes normal operations infeasible. Here, this test was not met, because the voters were not injured in their daily activities. However, the court pointed out that they had been injured in "their ability to engage in a particular act guaranteed them in a democracy"; they were deprived of "certain specific information that Congress thought voters need ed to make an informed choice." The court, therefore, asked whether Congress had created a legal right to the information sought. The court analogized FECA's disclosure requirements to the Freedom of Information Act as an example of where Congress had created a general right to information, the denial of which constituted injury for standing purposes. The court recognized that the analogy was not perfect, but it was close enough to bring the voters' claim within that line of analysis rather than the court's general informational standing cases or the concept of a "generalized grievance," which is not sufficient for standing purposes.

On the merits, the issue was the meaning of the statutory term "political committee." The problem, however, is that this term, defined rather explicitly in the statute, was restrictively interpreted by the Supreme Court in Buckley v. Valeo, 424 U.S. 1 (1976), to avoid First Amendment concerns, and this interpretation leaves the meaning of the term somewhat in doubt. The FEC's response to this situation was to say that the Supreme Court's decision rendered the meaning of the term ambiguous, so that the D.C. Circuit should defer to its reasonable interpretation, a la Chevron. The D.C. Circuit rejected this invitation. Inasmuch as it was not the statutory language itself that was ambiguous, but the effect of the Supreme Court's decision, Chevron does not apply. "Agencies have no special qualifications of legitimacy in interpreting Court opinions." Rather, courts are "the supposed experts in analyzing judicial decisions," especially where the precedent is based upon constitutional concerns. The court then determined that the FEC had erred in its interpretation of "political committee."

Judges Sentelle and Henderson dissented. They agreed that the voters did not meet the normal test for informational standing, but they denied that they suffered any particularized injury. In their view, they suffered only a generalized grievance shared equally by all voters, that was not particularized enough to satisfy Article III. In addition, they denied that a favorable court decision would redress their injury, because a favorable court decision would not, and could not, require the FEC to proceed against AIPAC.

IRS retroactive regulation upheld

During its 1990 taxable year Snap-Drape, Inc. made contributions to its Employee Stock Ownership Plan and paid dividends on its stock held by the ESOP, which the ESOP then used to make payment on a loan it had made in order to purchase that stock. Snap-Drape deducted from its taxable income both of these amounts, as authorized by the tax laws and regulations. In computing its Alternative Minimum Tax, moreover, Snap-Drape made no adjustment in light of these contributions and dividend payments. Again this was authorized by the then regulation. However, in May 1990, after Snap-Drape made these actions, the Treasury Department proposed a regulation that would disallow the use of such deductions for purposes of computing Alternative Minimum Tax. In March 1991, Treasury finally adopted this regulation retroactive back to all taxable years after 1989. As a result, Snap-Drape owed $210,000 in Alternative Minimum Tax. Snap-Drape challenged the validity of the regulation and its retroactive application. The Fifth Circuit upheld the regulation against both challenges. Snap-Drape, Inc. v. C.I.R., 98 F.3d 194 (1996). The initial question was whether the Treasury regulation was interpretive or legislative. Because here Congress had adopted a provision directing Treasury to "prescribe regulations providing guidance" in this area, the court found the regulation legislative. The court found that the specific statutory requirement to adopt regulations suggested legislative rules, and the use of the word guidance to describe the regulations was not sufficiently indicative of an intent that the rules be interpretive to overcome that suggestion. On the merits of whether the regulation was arbitrary and capricious, the court said that in the absence of an express regulation to the contrary, Snap-Drape's arguments as to the meaning of the statute would be compelling, but given the highly deferential standard of review, Treasury's interpretation prevails. As to the retroactive application of the regulation, because 26 U.S.C. § 7805(b) authorizes the Secretary of Treasury to adopt retroactive rules and clearly implies that retroactivity is the general rule, the court stated that "regulations generally will have retroactive effect," but the failure to limit them to prospective application "is nevertheless reviewable for an abuse of discretion." The court applied the factors identified by it in Anderson, Clayton & Co. v. United States, 562 F.2d 972 (1977) for determining whether there was an abuse of discretion but found none.