D.C. Circuit overturns 25 years of practice, holding that NLRA does not authorize the NLRB to award costs and attorneys fees to prevailing unions or the NLRB general counsel in cases of bad faith bargaining by employer

In Unbelievable, Inc. v. National Labor Relations Board, --- F.3d ---- (D.C. Cir. 1997), the court by a split decision held that the longstanding practice of the NLRB to award litigation costs to the prevailing party in cases of egregious bad conduct by the losing side was not authorized by the National Labor Relations Act. For the first 35 years of its existence the NLRB did not attempt to assess litigation costs against bad faith bargainers, because it believed its role to be solely remedial and not punitive, but upon the suggestion of the D.C. Circuit that it could make such awards, the NLRB changed its stance in 1972 and adopted the practice of awarding litigation costs in certain circumstances. This practice was affirmed by the D.C. Circuit shortly thereafter. In 1975, however, the Supreme Court decided Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, reaffirmed the presumption of the American Rule and held that "the circumstances under which attorney's fees are to be awarded and the range of discretion of the courts in making those awards are matters for Congress to determine," and that absent "clear support" on the face of a statute or in the legislative history, the presumption would apply. This case, the D.C. Circuit decided, changed the legal landscape of its previous opinions, and it could not find such clear support in the NLRA. The court was not moved by the argument that in all the Supreme Court decisions upholding the American Rule, all had involved a court awarding attorneys fees, not an agency. Here, as Judge Wald pointed out in dissent, the NRLB had awarded the litigation costs under its authority in the NLRA to issue an "order requiring [the losing party] to take such affirmative action . . . as will effectuate the policies of [the Act]." The NRLB had found that awarding the litigation costs here, to create a disincentive to persons to engage in bad faith bargaining, was necessary to effectuate the policies of the Act, and the court did not take issue with that conclusion. Rather it concluded that such general language did not provide clear support for the agency to award litigation costs, inasmuch as it would not be clear enough to authorize courts to deviate from the American Rule.

Fourth Circuit applies Darby v. Cisneros to eliminate judicial discretion to waive exhaustion requirements in APA cases

In Darby v. Cisneros, 509 U.S. 137 (1993), the Supreme Court for the first time concluded that Section 704 of the APA codified the exhaustion of administrative remedies requirement with respect to cases subject to the APA. There, the result was that the private party did not need to exhaust the remedies provided by the agency, because the agency's remedies did not meet the requirements that Section 704 establishes to require exhaustion. In Volvo GM Heavy Truck Corp. v. Dept. of Labor, 118 F.3d 205 (4th Cir. 1997), the shoe was on the other foot, with the agency arguing that Volvo GM had failed to exhaust its administrative remedies as required by Section 704, and the private party arguing that it need not do so because equitable concerns required the court to waive any exhaustion requirement. Volvo GM was the subject of an Office of Federal Contract Compliance investigation in 1989, but the government essentially did nothing with the case for about five years, at which point the Department of Labor actually began enforcement proceedings. Volvo GM then sued in district court to enjoin the enforcement action on the grounds that the delay violated various laws and Due Process, but the district court dismissed the case on the grounds that Volvo GM had failed to exhaust its administrative remedies (i.e., it had not yet defended its action before the agency). The Fourth Circuit affirmed. Prior to Darby, courts would weigh the individual's interest in achieving judicial review against the agency's interest in not interfering with ongoing proceedings or in allowing the agency to make the initial decision on the subject. That discretion, the court concluded, was eliminated in APA cases by Darby's determination that Section 704 codified the law to be applied in APA cases, divesting courts of any discretion inconsistent with its terms. Thus, Volvo GM's arguments for waiving exhaustion based on equitable considerations were unavailing, except with respect to its constitutional claims, which did not rely on the APA for a cause of action. Even here, however, the court concluded that exhaustion was proper.

D.C. Circuit distinguishes between "presidential" and "deliberative process" privilege and extends the former beyond communications directly with the President

In United States v. Nixon, 418 U.S. 683 (1974), the Supreme Court first recognized a privilege for presidential communications, while a privilege based on the "deliberative process" is well recognized under the Freedom of Information Act and has common law origins. In In re Sealed Case, 116 F.3d 550 (D.C. Cir. 1997), the court in a scholarly opinion authored by Judge Wald essayed the difference between the two in the context of a subpoena duces tecum issued by a grand jury at the instance of an Office of Independent Counsel to the White House Counsel's Office for documents related to a White House investigation of then Secretary of Agriculture Espy. All of the withheld documents qualified for the deliberative process privilege, but none of the documents had been seen by the President. The court, indicating that the term "executive privilege" had often been loosely used without distinction between different bases for the privilege, concluded that the natures of the deliberative process privilege and the presidential privilege differ, the former being more easily outweighed by governmental interests. In particular, the deliberative process privilege does not protect purely factual information, while the presidential privilege does, and the deliberative process privilege only protects pre-decisional documents, while the presidential privilege is not so limited. Also, the deliberative process privilege is generally unavailing when the information sought relates to alleged government misconduct. Under Nixon, of course, even the presidential privilege is not absolute by any means, but can be outweighed by the need for evidence in a criminal case. The court considered the various argument for and against extending the presidential privilege beyond communications directly with the President and decided that the balance favored a limited extension to reach "communications authored or solicited and received by those members of an immediate White House advisor's staff who have broad and significant responsibility for investigating and formulating advice to be given the President on the particular matter to which the communications relate." The court also said that "the privilege should not extend to staff outside the White House in executive branch agencies." It is not clear in the opinion whether communications, which are solicited and received by White House staff but from executive branch agency personnel, are within the presidential privilege or not. The court did make clear that its decision only related to demands for such information in a judicial proceeding and did not relate to executive/congressional disputes. The question then becomes: what is the effect of this presidential privilege in the face of a grand jury subpoena? The court decides that the standard articulated in Nixon v. Sirica, 487 F.2d 700 (D.C. Cir. 1973), also a grand jury subpoena case, should govern application of the privilege in this case: in order to overcome the privilege so as to require in camera court review of the particular documents the grand jury must demonstrate that it has an important need for the information and that it is practically unavailable from other sources. Once that standard is met, the district court must review the particular documents in camera merely to assure that they are reasonably relevant to the grand jury's investigation. Hence, the privilege really only has force to avoid in camera review at all.

Tenth Circuit reaches different conclusion from Eleventh Circuit with respect to reviewability of decisions by the Secretary of the Interior to take land into Indian trust status

The Secretary of Interior is authorized to place land upon request into Indian trust status. One of the effects of being in trust status is that the land is taken off state and local tax roles, so it is not uncommon for Indians to request land they own to be placed in such status or for states and localities to object to such actions. In McAlpine v. United States, 112 F.3d 1429 (10th Cir. 1997), the Secretary had refused to take certain land into trust status, and the Indian owner challenged that refusal under the APA. The government defended on the basis that the decision was committed to agency discretion by law and hence was not subject to judicial review under the APA, 5 U.S.C. § 701(a)(2). The Eleventh Circuit had already so held in Florida Dept. of Business Regulation v. United States Dept. of the Interior, 768 F.2d 1248 (1985), a case involving a challenge to a decision to take land into trust status. The Tenth Circuit, however, did not find the Eleventh Circuit's decision persuasive. It relied on the Supreme Court's oft-repeated statement that the § 701(a)(2) exception to judicial review only occurs "in those rare circumstances" where there is no legal standard to apply. Here, while arguably the statute did not create a legal standard to apply, the agency by regulation had established seven factors the Secretary is required to consider in making his decision. These provided law to apply, at least to assure that the Secretary did in fact consider these factors. Upon applying these factors, however, the court found that the Secretary's decision was not arbitrary, capricious, or an abuse of discretion and, therefore, upheld his decision.