No Reasoned Explanation

The United States Court of Appeals for the District of Columbia Circuit reversed the District Court’s dismissal of a case brought challenging an edict changing the conflicts of interest policies for Environmental Protection Agency scientific boards.

The prior policy was in line with standards adopted by the Office of Government Ethics

Consistent with OGE’s uniform standards, EPA has long allowed individual recipients of EPA grants to serve on its scientific advisory committees, provided they do not address matters related to their individual grants. As a 2013 report from EPA’s Office of the Inspector General illustrates, the agency generally “d[id] not consider a prospective or current member’s receipt of an agency or other federal research grant to create the basis for a financial conflict of interest.” Office of the Inspector General, EPA, EPA Can Better Document Resolution of Ethics and Partiality Concerns in Managing Clean Air Federal Advisory Committees 9–10, https://www.epa.gov/sites/ production/files/2015-09/documents/20130911-13-p-0387.pdf (2013).

That changed in October 2017, when then-EPA Administrator Scott Pruitt issued a directive titled “Strengthening and Improving Membership on EPA Federal Advisory Committees.”

The court noted that

Several environmental statutes require EPA to ground its decision-making in scientific evidence.

The directive failed to provide a “reasoned explanation.”

This EPA did not do. Regardless of whether the Directive’s references to “improving” and “strengthening” Committee independence might have been sufficient to acknowledge EPA’s change in policy, the Directive and its accompanying Memorandum failed to “provide a reasoned explanation for the change.” Id; see also State Farm, 463 U.S. at 43 (requiring agencies to “articulate a satisfactory explanation for its action”). The Memorandum announces that individuals “in direct receipt of EPA grants while serving on an EPA [Federal Advisory Committee] can create the appearance or reality of potential interference with their ability to independently and objectively serve as a FAC member,” Memorandum at 3 (emphasis added), yet nowhere even hints that EPA and OGE—the agency tasked with defining conflicts of interest—had previously reached exactly the opposite conclusion: that grantees could, in fact, ethically serve.

Thus

The Administrator’s failure to address OGE and EPA’s contrary conclusions is especially glaring given that the prior regime existed, in part, for the very purpose of facilitating the critical role played by EPA’s scientific advisory committees.

Judicial review

EPA has one more argument up its sleeve. Even were it required to comply with the OGE process, it argues, failure to do so cannot form the predicate for an APA challenge because of a disclaimer contained in the OGE regulations stating:

A violation of this part or of supplemental agency regulations, as such, does not create any right or benefit, substantive or procedural, enforceable at law by any person against the United States, its agencies, its officers or employees, or any other person. 5 C.F.R. § 2635.106(c).

EPA interprets this language to preclude judicial review of any failure to comply with OGE’s process. We disagree.

The disclaimer applies only to individuals seeking to enforce “rights or benefits” created by the regulations; it has nothing to say about challenges brought under the Administrative Procedure Act. Nor could it. A properly promulgated regulation, standing alone, cannot thwart judicial review otherwise available under the APA.

Circuit Judge Tatel authored the opinion. (Mike Frisch)