(PDF) Nonacquiescence by Federal Administrative Agencies

The

Yale

Law

Journal

Volume

98, Number

4,

February

1989

Article

Nonacquiescence

by

Federal

Administrative

Agencies

Samuel Estreichert

and Richard

L.

Revesztt

INTRODUCTION

681

I.

DEFINING

THE PROBLEM

684

t

Professor of

Law,

New

York

University.

if

Associate

Professor of

Law,

New York

University.

This Article

grew

out of

a

report prepared

at

the

request

of the Administrative Conference

of the United States

(ACUS).

It

represents

only

the

views of

the

authors

and

has

not been adopted

or

approved

by

the Conference

or

any

of its

committees.

We

appreciate

the extensive

suggestions

of

our

colleagues

Norman

Dorsen,

Eleanor

Fox,

Thomas

Franck, James Jacobs,

Lewis

Kornhauser, Nancy

Morawetz,

William

Nelson,

Burt

Neuborne,

Law-

rence

Sager,

and

Linda

Silberman,

and of

Vicki

Been,

Michael

Broyde,

Herbert

Estreicher,

Richard

Fallon, Jerry

Mashaw,

Richard

A.

Merrill,

Eben

Moglen,

Glen 0.

Robinson, Joshua

Schwartz,

and

Peter Strauss.

We have also benefited from interviews

with high-level

officials

at the Social

Security

Administration,

National Labor Relations Board,

Internal

Revenue

Service, Occupational

Safety

and

Health

Administration,

Occupational

Safety

and

Health

Review

Commission,

and

Environmental

Protection

Agency,

and

from

the comments

filed,

both

from

within

and

outside

the

government,

in

response

to

the Conference's

draft recommendation.

We thank

Amy

Berman,

Richard

Epstein,

Eliza-

beth

Grisaru, Jonathan

Mothner,

and

Greta

Swanson

for their

research assistance.

The

generous

financial

support

of

the Filomen

D'Agostino

and

Max E.

Greenberg

Research

Fund at

the New York

University

School of

Law

is

gratefully

acknowledged.

679

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680

The Yale Law Journal [Vol. 98:

679

A.

The

Relationship

Between

Nonacquiescence

and

Nonmutual

Collateral

Estoppel 684

B.

categories

separately.

First, an

agency

engages in

intercircuit

nonacquiescence

when it

refuses

to

follow,

in its

administrative

proceedings, the

case

law of a

court

of

ap-

peals

other

than the

one that

will

review the

agency's

decision.

Second, an

agency

engages

in

intracircuit

nonacquiescence

when

the relevant

venue

provisions

establish

that

review will

be to a

particular

court of

appeals

and

the

agency

nonetheless

refuses to

follow,

in

its administrative

proceed-

ings,

the

case law of

that

court.80

The third

category is

defined by

reference to

venue

choice.

Here, the

agency

refuses to follow

the

case law of a court of

appeals

that

has re-

jected its

position, but

review

may be had either in that

court or in one

that has not

rejected

the

agency's position. Broad venue

choice is

fairly

common,

since

the

Clayton

Act's venue

provision,

on

which

many

other

provisions

are based,81

provides for

review in

any circuit

in which a

party

aggrieved

by agency

action

"transacts business."83

In

the case of

national

actors,

practically

any

one of

the regional

circuits may be

appropriate.

Normally,

under

conditions

of

venue

choice,

the

identity

of the

review-

ing

court will

be

uncertain

at

the time the

agency

makes its decision.33

Such

uncertainty

is

not

eliminated

simply

because the

agency

has a basis

for

predicting

which

circuit

will

hear the case.

Only

where all

uncertainty

is

removed-for

example, because

all

courts

of

proper

venue have

adopted

positions

contrary to the

agency's

policy-does

an

agency's

continued

nonadherence to

circuit

law become intracircuit

nonacquiescence.

None of

these three

categories

is

implicated

when an

agency

attempts

in

good

faith,

and

with

reasonable basis in fact and

law,

to

distinguish

an

adverse

decision of a court of

appeals.

Nonacquiescence

arises

only

where

the

agency,

unable

to

invoke

such a

distinction,

nevertheless declines

to

be

bound

by

the

adverse

circuit rule.

All

three

categories are

agency-centered. They

each look

to the

posture

30. Of

course, in the

case of a court

of national

jurisdiction, or one

that reviews

agency

action

pursuant

to an exclusive

venue provision,

the only

relevant category

will be that of

intracircuit

nonacquiescence.

31. See

infra text

accompanying notes

378-81.

32. 15

U.S.C. ? 22

(1982).

33. For

a discussion

of the factors

contributing to

venue uncertainty,

see infra note

305.

34.

Cases

on remand

are somewhat more

difficult to

characterize. The

"law

of the

case," as

articulated

by the court of

appeals, would

seem to apply.

See Morand Bros.

Beverage Co. v.

NLRB,

204

F.2d

529, 532 (7th

Cir.), cert. denied,

346 U.S. 909

(1953); NLRB v.

Jamaica Towing,

Inc., 632

F.2d 208,

211-12 (2d Cir.

1980).

However, unless the

first court retained

jurisdiction, the

agency's

order on

remand would be

reviewable in

accord with the

organic statute's

venue provisions and could

be

reviewed elsewhere

(although it is in

fact likely that it

would ultimately

be transferred back to

the

court that had

remanded

the

case).

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688

The Yale Law

Journal

[Vol.

98:

679

of

the case at

the time of the

administrative

decision, rather than

at the

time

of

the

judicial decision.

Such a focus

is

particularly important

in

the

venue choice

category. There

will be times when the

agency's

action will

be

reviewed in

a circuit that

previously had

rejected

the

agency's position.

From the

perspective of that

court, the case will look

like

one of

intracir-

cuit

nonacquiescence,

since

the

court

will be

reviewing

an

administrative

decision that

was

inconsistent,

even at the time it was

made,

with

circuit

law. But when the

agency

decided the

case,

by definition,

the

range

of

possible

venues

precluded

certain

prediction

that

the case would be re-

viewed in that

court, rather

than in a court

that had not

rejected

the

agency's position.

Because

the

purpose of our

study

is

to

devise

standards

for

agency

conduct, only

an ex ante

perspective, specifying

what

conduct

may

be

realistically expected

of

the

agency

at

the

time of

its

decision,

is

appropriate.

C.

Components

of

a

Nonacquiescence

Policy

In

considering

whether

an

agency engages

in

nonacquiescence,

it

is a

mistake

to focus

exclusively

on the actions of the

agency's

top

deci-

sionmakers.

Consider a hypothetical

multi-member agency, headed

by

commissioners,

that develops

policy

primarily through

adjudication.3"

While the

commissioners'

decisions are

undoubtedly

the most

visible,

non-

acquiescence at

other levels of the

administrative structure will also affect

regulated

parties or claimants.

Assume that

the hypothetical

agency

is

or-

ganized

as follows.

The enforcement

staff

files

complaints

citing

violations

of

regulations

promulgated

pursuant to the

governing statute.

A

cited

party

that

contests

such

a

complaint

is

accorded a

hearing

before an

ad-

ministrative

law

judge

(ALJ).

The

ALJ's

decision

can be reviewed

by

the

agency's

commissioners

sua

sponte, or upon a

petition for

review filed by

the

recipient of the

citation or

the agency's

enforcement

staff. The com-

missioners have

discretionary

jurisdiction and

thus can

decline petitions

for

review.

The

agency's

orders are not

self-enforcing; the

agency

must

seek

enforcement

in a court of

appeals under

a statutory

scheme in which

proper venue

was

ascertainable at the

time of the

administrative

proceedings.

This

hypothetical agency's

acquiescence

policy has several

components.

The

first

concerns the

actions

of

the

agency's

commissioners in

adjudicat-

ing

cases.

Two

additional

components are the

behavior of the

enforcement

staff

and

of

the ALJs. The

fact that many

citations by the

enforcement

staff

will

not be

contested and

that many

ALJ

decisions will not be

ap-

35.

Nonacquiescence

typically occurs

when the agency

makes policy through

administrative adju-

dication.

It can

also

occur, however,

with

respect

to

rulemaking and purely

prosecutorial decisions,

when

an

agency

must

go

to court to

bring

an enforcement

proceeding in the federal

district court. Our

Article

focuses

primarily

on

the

adjudicatory context.

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1989]

Nonacquiescence 689

pealed," coupled

with

the limited

decisional

capacity

of the

commission-

ers, may effectively make the

enforcement staff and

the

ALJs the final

decisionmakers

for

the vast

majority

of

parties

to

the

agency's proceedings.

Thus,

if

there

is

nonacquiescence

on the part of these actors,

the

agency's

policy will be effectively one of

nonacquiescence,

even

though

the commis-

sioners would actually acquiesce

in the law

of

the circuit

if

an

appeal

were

taken to them.

With

respect to

the

enforcement

staff and the

ALJs, nonacquiescence

can take one of three forms. The staff

and

the

ALJs may

be instructed

to

ignore

the

law of the reviewing

circuit in

making

their

respective

deci-

sions.87 Alternatively, they may be

given

no

guidance

on the

issue, but

independently decide to nonacquiesce.8

Or they may

be oblivious to

cir-

cuit law and nonacquiesce

unknowingly.

A fourth

component concerns the manner

in which

the

commissioners

exercise their discretionary

jurisdiction. The commissioners may view

lower-level

nonacquiescence as a factor

pointing strongly

toward

review;

alternatively, however, they may

view it as

a

neutral factor or even as one

counseling against review.

A

is

whether

the

commission-

ers

consider

nonacquiescence by

the

lower echelons to

be a

strong

reason

for

invoking

their sua

sponte jurisdiction.

In

setting

out the

preceding

four components,

we

implicitly assumed

that

it is

easy for

each

actor

within the agency to

tell

when

the

agency's

policy

is

inconsistent with

the

case law of

the

courts of

appeals.

If that

were the

case, the enforcement

staff could simply be instructed not to issue

citations that would be

defective

under the

rulings

of the

appropriate

court

of

appeals.

But

it

is

extremely

inefficient for each of the

agency's prosecu-

tors to

study

the

volumes of the

Federal

Reporter

and ascertain

possible

conflicts with

the

instructions

manuals that

govern

their tasks. As a

prac-

tical

matter, an acquiescence

policy requires charging another branch

within the

agency,

which

we shall call

an

acquiescence

review

board

(or

perhaps

a

unit of the General

Counsel's

office

itself),

with

the function

of

36.

Parties may well contest only a small percentage of complaints or appeal only a small percent-

age of

ALJ

decisions. For example, at a meeting with representatives of the Solicitor of Labor and of

the

Occupational

Health

and Safety Administration (OSHA) on July 17, 1987, we

were told

that

only about

three

percent of OSHA's citations are

contested.

There

are

a

number of reasons for this phenomenon. First, the cited party may not be sufficiently

sophisticated to understand that, if it challenged the citation or

ALJ

decision, it might ultimately

obtain relief from

the commissioners. Second, the party might

know that relief is

possible

but

might

not have the resources to mount the necessary legal challenge. Third, the party might decide that the

cost

of

mounting such a challenge could be so high in relation to the expected payoff

that

compliance

with the citation or

ALJ

decision would prove less onerous. An economically rational party will

challenge a citation or appeal an

ALJ

decision if it estimates that the benefits of prevailing, discounted

by the probability of not prevailing, are greater than the costs of mounting the necessary challenge.

37. This is true of SSA in the absence of an explicit instruction by the agency heads to acquiesce

in a

particular ruling. See infra text accompanying notes 92-94.

38.

Apparently,

this is the

case

with

the Occupational Safety

and Health Review Commission

(OSHRC). Conversation between Professors Estreicher

and

Revesz, and

Earl

Ohman,

General Coun-

sel, and Arthur Sapper, Deputy General Counsel, OSHRC (June 18, 1987).

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690

ihe

Yale

Law

Journal

[Vol. 98:

679

screening the relevant cases decided by

the courts of appeals and

translat-

ing them into instructions for the enforcement

staff.

The task of identifying conflicts

between legal principles

is neither

mechanical nor wholly objective. Whether

there

is a conflict

depends on

whether distinctions between two cases

justify different

results.

In

turn,

whether a difference is legally significant

must be assessed by

reference to

the

agency's substantive policy.

The work of such a board

will

certainly

be

affected by such factors

as the instructions

under which

it

operates,

the

resources that it can command, and

the status that

it

enjoys

within

the

agency. Thus,

the manner in

which

an acquiescence

review

board

is

con-

stituted,

and

more generally

the method by which

the

agency

ascertains

the

existence of adverse circuit law

and communicates

it

to

the relevant

decisionmakers,

is a fifth

component

in

an

agency's acquiescence policy.

One

might question why

an

agency

that is committed

to

acquiescence

at

its top

level

would not instruct

its

lower-level

actors to acquiesce

as well.

There are

several reasons why

the commissioners

might

not wish to

ex-

tend

an acquiescence policy to

the entire

agency. The agency may

view a

split policy as a convenient compromise

between

its

desire to

enforce

a

uniform interpretation of the law and

a concern with openly challenging

the

courts of appeals. The actions of

the commissioners

will receive

the

most attention, and acquiescence on their

part

will

be widely equated

with

acquiescence at all levels. At the same

time, most parties

will be affected

primarily by the actions of lower-level

agency actors, and, to a large

ex-

tent, the agency will be able to enforce

a uniform policy through

lower-

level

nonacquiescence.8

On

a

less Machiavellian

plane,

the commissioners might

view

acquies-

cence at

all levels as a desirable but

unnecessary luxury. It might, for

example,

be

onerous to instruct the agency's

enforcement staff on the law

of the

different circuits. The staff

might

be centrally trained, supervised

and

evaluated, operate throughout

the country under a single set of

in-

structions,

and lack

the skills to navigate

a multi-tiered instructions man-

ual.40

To bring the law of each circuit

to the level at which it can be

applied by

the

agency's typically non-lawyer

enforcement personnel

could

well

require

the

establishment of

a

special

unit within the agency. More-

over,

the

cost

of updating instruction

manuals in each circuit would natu-

39.

Of course, an

acquiescence policy

limited to the agency heads

poses serious distributional

consequences by having a

more favorable body of

law-that which

results from

acquiescence-apply

disproportionately to

parties with greater litigation

resources. As we

discuss below,

this is

the

central

cost

of nonacquiescence at

any level. See infra

text accompanying notes

325-26.

40.

Referring to the

difficulty of

nonuniformity in the initial

administrative process, the IRS

notes

that

"[tlhe

tax return

forms and the instruction

booklets issued to the

more than 100,000,000

taxpay-

ers all

contain a uniform

instruction. Most

computer programs and

processing

procedures are

designed

with

that

uniformity

in

mind." Letter

from James J.

Keightley, Associate

Chief Counsel

to

Mary Candace Fowler at

3 (May 9, 1988)

(public comment on draft

ACUS policy). The IRS

notes

that

it

is far easier for

appeals officers at higher

levels to consider

adverse circuit court law.

Id.

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1989]

Nonacquiescence

691

rally be far

higher than

that of maintaining

nationally

uniform

instructions."

A split acquiescence

policy

will be particularly

likely in agencies

in

which

the

commissioners

are committed

only to

a limited acquiescence

practice under

which they

generally follow

adverse circuit

law

but

reserve

the right to

relitigate issues

of particular

importance to

the agency.42 It

would

be impossible for

the commissioners to nonacquiesce,

and

thereby

force the relitigation of

an

issue,

if the enforcement

staff

does

not

file cita-

tions

that would be proper

under the agency's

policy,

though defective

under the

law of the court

of appeals.

In such circumstances,

the

agency

will never have the opportunity

to

ask the court to

reexamine

adverse

circuit

precedent.43

Acquiescence

by

the ALJs would also

make

relitigation

difficult.

It

is

true

that if the ALJs acquiesced

but the enforcement

staff

did

not,

the

enforcement

staff could still

file a petition

for review of the

ALJ

decision.

Under such an arrangement,

however,

the commissioners

would have

to

grant

review to make relitigation

possible.

In

contrast,

if the ALJs nonac-

quiesced,

relitigation could

follow

the

denial

of discretionary

review by the

commissioners.

Given the commissioners'

limited

decisional capacity,

this

difference could

be

significant.

Thus,

the

simplest way

to

preserve

the

commissioners'

option to

engage

in

selective

nonacquiescence

is

to

re-

quire-or

tolerate-nonacquiescence

on

the

part of

both the enforcement

staff and the

ALJs.

Some

agencies

may

also be reluctant

to

decide what position

they

will

take

on a question immediately

after a

court of appeals

has issued

an

adverse

decision.

The

commissioners

may

prefer

to make

such determina-

tions

in

adjudicatory

proceedings

rather than

by issuing

prospective

in-

structions. Indeed, some agencies

have opted

for an administrative

struc-

ture

that confines policymaking

by the

commissioners to

the vehicle

of

case-by-case

adjudication."

Thus,

the

primacy

of the commissioners'

role

as decisionmakers is enhanced

by having

the agency's lower-level

compo-

41. These problems are exacerbated in agencies

with regional offices that do not match the

geo-

graphic jurisdictions of the courts of appeals. For example, twelvele

of

the

[NLRB's]

33

regional

offices straddle two different circuits, three

more operate within three circuits, and one office,

Region

5 in Baltimore, operates within four circuits."

Letter from Rosemary Collyer, General Counsel,

NLRB to Mary Candace Fowler at 8 (April

29, 1988) [hereinafter Collyer

Letter]

(public comment

on draft ACUS policy).

42. For this reason, SSA adopted a split

acquiescence policy

under Office

of Hearings

and Ap-

peals, Interim Circular No. 185 (June 3, 1985)

[hereinafter Interim

Circular].

See infra

text accom-

panying notes 68-94.

43. For example, in those cases in which

SSA made its acquiescence policy applicable at

all ad-

ministrative levels,

it

effectively relinquished the

ability to relitigate the issues covered by the policy

in

the circuits

that rendered the adverse rulings.

See infra text accompanying notes 92-93.

44.

See infra note

142

(discussing NLRB's

resistance to making policy through rulemaking).

The

Supreme Court has made clear that, absent

contrary directives in its organic statute, an agency

has

unlimited

discretion

in

deciding whether to

use adjudication or rulemaking as the vehicle

for

poli-

cymaking. See

NLRB

v.

Bell

Aerospace Co.,

416 U.S. 267 (1974); SEC

v.

Chenery Corp., 332

U.S.

194

(1947).

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692

The Yale Law Journal [Vol. 98:

679

nents

pursue a

somewhat

broader

nonacquiescence policy

than

that

fol-

lowed

by the

commissioners

themselves.

In

summary,

in

addition

to

the

adjudicatory

decisions of the commis-

sioners, an agency's

acquiescence policy will

depend

upon

the

commission-

ers'

case-selection

decisions,

the actions

of both the

enforcement staff and

the

ALJs, and the

internal

mechanisms

for

identifying

and

transmitting

adverse

circuit

court decisions.

Clearly,

not

all

agencies

are

organized

like

the

hypothetical

agency that

forms the

basis of

this discussion.45 But in

almost

all cases,

the extent

to which

the agency

engages in

nonacquies-

cence

cannot

be

determined

solely by

reference to the actions of the

agency's

top

decisionmakers.

II. A DESCRIPTION OF AGENCY

PRACTICES

We

discuss in this section the

nonacquiescence

practices

of

SSA under

its

disability

program and

of the

NLRB-two

agencies

that have pro-

voked

considerable reaction

from

courts and

commentators.

These two

case

studies raise

most of

the

important issues

relevant to an

analysis of

nonacquiescence,

and

therefore provide

a useful

background for the re-

mainder of this

Article. In

addition, to

illustrate

the

pervasiveness

of non-

acquiescence, we summarize

the

results of

our

survey

of the

practices

of

over

fifty major

administrative agencies.

A.

Social

Security

Administration

1.

General

Description

of the

Agency

Within

SSA,

nonacquiescence has

been most

prevalent

under the disa-

bility

program."'

The administrative structure of

this

program

contains

four

levels. A

claimant

seeking

disability benefits

applies

first to

a state

disability agency.47

State

disability

examiners

make

the

initial

determina-

tion

about

eligibility based

solely on a

paper

record.48

These examiners

also

ascertain whether

individuals

receiving

disability benefits continue

to

be

entitled to such

benefits.49

If benefits

are denied or

terminated

at the

initial level, the

claimant

may request

reconsideration by the

state disabil-

45. Our

focus

in this

Article

is on

agencies

such as

the

NLRB, Federal

Trade

Commission

(FTC),

and

Federal

Communications

Commission

(FCC)

that use

adjudication as a

principal

means

for

setting policy.

See

supra note

35.

46.

42 U.S.C.

??

401-33

(1982). For

excellent

discussions of

SSA

administrative

practices, see

J.

MASHAW,

BUREAUCRATIC

JUSTICE

(1983); J.

MASHAW,

C.

GOETZ, F.

GOODMAN, W.

SCHWARTZ,

P.

VERKUIL & M.

CARROW,

SOCIAL

SECURITY

HEARINGS

AND

APPEALS

(1978).

47.

42

U.S.C.

?

421(a)(1)

(1982).

48.

20 C.F.R.

?

404.1615(b)

(1988).

49.

42

U.S.C.

? 425

(1982); 20

C.F.R. ??

404.1588-99

(1988).

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1989]

Nonacquiescence

693

ity agency.60

Additional

paper

evidence can be

presented

at this

second

level."'

A

claimant denied benefits

at

the reconsideration level

can

seek a hear-

ing

before

an

ALJ

employed

directly by

SSA.62

At

this

hearing,

the

claim-

ant

may appear

in

person,

submit new evidence, examine

the evidence

used

in

making the decision

under review, and present and question

wit-

nesses.63 Claimants can be

represented by counsel at

the

hearing, but SSA

is not

separately represented. The

ALJ

both adjudicates and

develops

the record.

Thus, Social

Security ALJs play a

role

somewhat akin

to

that

of

judges in civil law

inquisitorial systems.66

The fourth level of

administrative consideration is review of an

ALJ's

decision

by

the SSA

Appeals

Council,

either

at the claimant's

request,

which the

Appeals

Council has

the discretion to

deny,

or on its own

mo-

tion.66 When the

Appeals

Council accepts review of a case,

it

may

con-

sider evidence beyond that

which was before the

ALJ

and may hear

oral

argument in significant cases.67 A

decision on

the

merits by the

Appeals

Council,

or the

AL's decision itself

if

it is

unreviewed,

constitutes

a final

agency

decision.

Claimants can

challenge

such

decisions

in the district courts.

A

district

court

has the

power

to

"affirm[], modify[],

or

revers[e]

the

decision

of the

Secretary,

with or

without

remanding the cause for rehearing.""" The

agency's

factual

findings are

reviewed under the "substantial evidence"

standard.6" Either the

Secretary or the claimant can appeal, as of

right,

to

the court of

appeals.

There is

very little

uncertainty of venue concerning petitions for

review

of

SSA

decisions.

The

Act provides

for

review

in

the district court for the

district "in

which

the

plaintiff resides

or

has

his

principal place

of

busi-

50.

20

C.F.R. ? 404.907

(1988).

51.

Id.

?

404.913(a).

52. Id. ?

404.929.

53. Id. ?

404.950.

54. SSA's

nonacquiescence may be

caused in part

because the

agency is not

separately

represented

and

therefore

cannot mold the

record in a

way that

would make the

agency more

likely to withstand a

challenge under

the

standards of the

reviewing

court

of appeals. For several

years,

SSA tested

a

program under

which, in

certain hearings,

SSA would

be represented

by special

personnel known as

"SSA

Representatives." 47

Fed. Reg. 36,117

(1982).

After having been

enjoined

by the

U.S. District

Court for

the Western

District of Virginia

and after

it became the focus of

negative reactions

in

Congress, the

program was

terminated on

May 7,

1987. See 52

Fed. Reg.

17,285 (1987).

For

an

analysis of the

program, see

Social

Security

Administration, Office

of Hearings

and Appeals,

SSA

Representation

Project: Interim

Report

(June

1986).

55. See

Richardson v.

Perales,

402 U.S.

389,

410

(1971) (rejecting due

process

challenge

to

ALJ's

"advocate-judge-multiple-hat"). Where the

claimant is

not represented

by counsel,

the

hearing

exam-

iner can be said

to wear

three hats rather

than two,

as he must

"scrupulously

and

conscientiously

probe

into,

inquire of, and

explore for all

the relevant

facts

surrounding the

alleged right

or

privi-

lege."

Gold

v.

Secretary of

HEW, 463

F.2d 38, 43 (2d

Cir. 1972)

(quoting

Hennig

v.

Gardner,

276

F.

Supp. 622,

624-25 (N.D.

Tex. 1967)).

56.

20

C.F.R. ??

404.967-70 (1988).

57. 20 C.F.R.

? 404.976

(1988).

58.

42

U.S.C.

? 405(g)

(1982).

59. Id.

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694

The

Yale Law Journal

[Vol. 98:

679

ness."60

The

vast

majority

of

district court appeals

are filed in the district

where

the

plaintiff

resides."

2.

The

Agency's

Nonacquiescence

Policy

From the 1960's

(and perhaps earlier)

until June 1985,

SSA's

policy

was not to acquiesce

in decisions of the

courts

of

appeals

that differed

from

the agency's

positions. The agency

described

its

intracircuit nonac-

quiescence policy

as follows:

While the

ALJs

are bound by decisions

of the United

States Su-

preme Court, they

should also make

every reasonable effort

to follow

the district or circuit court's views

regarding procedural

or eviden-

tiary matters

when handling similar

cases in that particular

district

or circuit.

However, where

a district or circuit

court's decision

contains

in-

terpretations

of the law, regulations,

or

rulings

which are

inconsis-

tent with

the

Secretary's interpretations,

the ALJs should not

con-

sider

such

decisions

binding on future

cases simply because

the case

is not

appealed.

In

certain cases

SSA will not appeal a

court

decision

it

disagrees

with,

in view of

special

circumstances

of the

particular

case (e.g., the

limited effect of the

decision).

When SSA

decides to acquiesce

in a district court

decision,

or a

circuit court decision,

which is

inconsistent with our previous

inter-

pretation of the

law, regulations, or

rulings, SSA will take

appropri-

ate action to

implement changes

by means

of

regulations,

rulings,

etc. ALJs will

be

promptly

advised

of such

action.62

Similarly,

a

statement

by

the

Associate

Commissioner for Hearings

and

Appeals,

issued to

Social Security

ALJs in January 1982,

advised

that

"[tihe

Federal courts

do not run SSA's

programs,

and

[SSA's

adjudicators]

are

responsible

for

applying

the

Secretary's policies

and

guidelines

regard-

less of court decisions below the level

of the Supreme Court.'

"

In

addition to this general policy, the

agency occasionally

issued formal

nonacquiescence

rulings which indicated

the agency's explicit

disagree-

ment with particular

circuit court decisions.

A total of ten

such rulings

were

adopted,

the

first

in 1966 and the last in 1982.64

The

purpose

of

60. Id. If a

plaintiff does not reside

or

have his

principal place

of business in

any district, the

action

can be

brought in the U.S. District

Court for the District of Columbia.

Id.

61.

Letter

from Donald A. Gonya, Chief

Counsel for Social Security, to

Professor Revesz at

2

(March 23,

1987) [hereinafter Gonya Letter]

(on file with authors). Similarly,

the majority

of

admin-

istrative

proceedings occur in the claimant's

state of residence. Id.

62.

Office

of Hearings and Appeals

Handbook ?

1-161

(quoted in J.

MASHAW,

supra

note

46,

at

186-87). It

follows, a fortiori, that the agency

also engaged in intercircuit

nonacquiescence.

63.

Quoted in H.R. REP. No. 618, 98th

Cong., 2d Sess.

at 24

(1984), reprinted

in 1984 U.S.

CODE CONG. & ADMIN. NEWS

3061 [hereinafter

HOUSE REPORT].

64.

The

following are the cases subject to

these rulings with the number of

the relevant ruling

indicated

parenthetically: Patti v. Schweiker, 669

F.2d 582 (9th Cir. 1982) (SSR

82-49c); Campbell v.

Secretary of

HHS, 665 F.2d 48 (2d Cir. 1981)

(SSR 82-33c); Finnegan v.

Matthews, 641 F.2d 1340

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1989]

Nonacquiescence

695

such

rulings

was

not

only to

ensure that

ALJs

disregarded the

circuit

law

that

was

inconsistent

with

the

agency's

policy, but

also to

indicate for-

mally

the

agency's

disagreement

with

particularly significant

adverse

decisions.6"

SSA

defended

its

pre-1985

nonacquiescence

policy

principally

on

the

grounds of

horizontal

equity.

For

example, in

1984, the

Acting

Commis-

sioner

of

Social

Security

testified

before

Congress

that the

agency's

policy of

nonacquiescence

is

essential

to

ensure

that

the

agency

fol-

low its

statutory

mandate to

administer

the

Social

Security

program

in

a

uniform and

consistent

manner.

In a

program

of

national

scope,

it

would

not

be

equitable

to

people to

subject

their

claims

to

differing

standards

depending

on

where

they

reside."

The

policy

seeks

to

further

horizontal

uniformity

(similar

treatment

at the

agency level of

all

claimants

similarly

situated), but it

does not

promote

vertical

uniformity

(similar

treatment in

the

same

geographic

area

of all

claimants

similarly

situated).

Because

one

set of

rules

obtains in

the

agency

and

another in

the court of

appeals

that will

review the

case,

non-

acquiescence

creates

distinctions between

claimants

who are

able

to

appeal

to

the

circuit courts

and

who will

ultimately

prevail

against the

agency,

and

those who

are

unable

to

appeal

and

will

therefore be

denied

benefits.7

Partly

in

response to

congressional

criticism

expressed

during the

con-

sideration

of the

1984

amendments

to

the

Social

Security

Act,"8

SSA

de-

parted

from

its

blanket

nonacquiescence

approach

in

1985

through the

adoption

of

Interim

Circular No. 185.69

Under

the

Circular, the

agency

(9th Cir.

1981)

(SSR

82-10c);

Hutcheson

v.

Califano,

638 F.2d 96

(9th Cir.

1981) (SSR

81-28c);

Boyland v.

Califano,

633

F.2d

430

(6th Cir.

1980) (SSR

81-1c);

Johnson v.

Califano,

607

F.2d

1178

(6th

Cir.

1979)

(SSR

80-10c);

Levings v.

Califano, 604

F.2d 591

(8th Cir.

1979) (SSR

80-11c);

Rasmussen

v.

Gardner,

374

F.2d 589

(10th Cir.

1967)

(SSR

68-48c);

Hodgson

v.

Celebrezze, 357

F.2d

750

(3d

Cir.

1966)

(SSR

67-14c);

Cyrus

v.

Celebrezze,

341

F.2d

192

(4th Cir.

1965) and

Massey v.

Celebrezze, 345

F.2d

146

(6th Cir.

1965)

(SSR

66-23c).

Eight of

these

ten

rulings

were in

effect in

1984,

at the

time

that

Congress

considered

barring

nonacquiescence

by

SSA. See S.

REP. No.

466,

98th

Cong., 2d Sess.

21

(1984)

[hereinafter

SENATE

REPORT].

65.

Social

Security

Disability

Insurance

Program:

Hearing

Before the

Senate Comm.

on

Finance,

98th

Cong., 2d

Sess.

115

(1984)

[hereinafter SSA

Senate

Hearing]

(statement of

Carolyn

B.

Kuhl,

Deputy

Assistant

Attorney

General,

Civil

Division).

66.

Id. at

105-06

(statement of

Commissioner

Martha

A.

McSteen). The

Commissioner

also

made

an

argument

of

administrative

convenience,

noting

that

thereee

would

be

enormous

problems

with

circuit-by-circuit

acquiescence

since

we

would

need to

keep

track of

applicants

as

they

move

through

the

decisionmaking

process,

determine

which

circuit law should

apply, and

separately handle

claims

by

jurisdiction." Id.

at

106.

67.

See

HOUSE

REPORT, supra

note 63, at

24, 1984

U.S.

CODE

CONG &

ADMIN. NEWS at

3061.

68.

See infra

text

accompanying

notes

126-37.

69.

Interim

Circular,

supra

note

42.

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696 The Yale

Law Journal

[Vol. 98:

679

would prepare Acquiescence

Rulings70

that

identified

circuit court

deci-

sions at variance with established

SSA

policy."

For cases covered by Acquiescence

Rulings,

the

ALJ

would analyze

the

facts both under the agency's

policy and under the adverse

circuit court

decision.

An

ALJ

prepared

to rule unfavorably

to the claimant

under

agency policy,

but

favorably

under

circuit

law,

would enter

a

recom-

mended decision, rather than

an initial decision,72 favorable

to the claim-

ant.73 If the

Appeals

Council agreed with

the

ALJ's

recommendation,

it

would ordinarily enter a favorable

decision.74

An unfavorable decision would

follow only if the agency decided,

after

several stages of further review,

that relitigation in the context of

that case

was appropriate. The Appeals

Council itself would make the initial

deci-

sion

whether to relitigate; this

decision would be reviewed by the

agency's

Special Policy Review Committee

and the Office of General

Counsel.

Before making a final decision,

the agency would seek the advice

of the

Justice Department.76

Interim

Circular No. 185

applied

only

to the

ALJ

and Appeals

Council

levels;

the

prior nonacquiescence

practice would continue

to be followed

by

state

agencies

both

at the

initial and reconsideration

levels.7'

Also,

it

applied only in the circuit that

issued the adverse ruling; the

agency

would continue to apply its policy

in other circuits, thereby

engaging in

intercircuit nonacquiescence.77

Moreover, a necessary condition

for acqui-

escence under Interim Circular

No. 185 was the publication of

an Acqui-

escence

Ruling.

The

agency contended

that such rulings would issue

in all

cases of

disagreement with adverse

circuit court precedent; to the

extent

70.

Initially, these rulings were referred

to as Social Security Rulings

(SSRs). Because the

agency

eventually

began to refer to SSRs dealing

with acquiescence issues as

Acquiescence Rulings, we refer

to them in

this manner from the outset.

71. To

draft these Rulings, the agency

established a 12-member Task

Force on

Acquiescence,

composed

of

staff from the regional and central offices.

See Judicial Review

of Agency Action-HHS

Policy

on

Nonacquiescence: Oversight

Hearing

Before

the Subcomm. on

Administrative Law and

Governmental Relations of the House

Comm. on the Judiciary, 99th

Cong., 1st Sess.

9

(1985) [here-

inafter SSA

House Hearing] (statement of

Martha McSteen, Acting

Commissioner of Social Security).

72. An

initial decision by an

ALJ

becomes binding if it is not

reviewed by the Appeals Council.

In

contrast,

a recommended decision by an

ALJ

must be reviewed by the

Appeals Council.

73. Interim

Circular, supra

note

42, at 3. There are

two

other

relevant

categories. First,

if

the

ALJ

is

prepared

to

rule

favorably

for the claimant under SSA

policy,

the decision need not

consider

the impact

of the circuit law. The

ALJ

would then issue an initial

decision in the usual manner.

Second,

if

the

ALJ

is prepared to rule

unfavorably to the claimant under

the agency's policy, he must

then

consider

the circuit law, and if he

would

rule

against the claimant

under circuit law as well,

he

must enter

an unfavorable initial decision.

Id. at

2.

74. Id.

at

4.

75.

Id.

If the

ALJ's

initial decision

is

unfavorable

to the claimant and

the

Appeals

Council

deter-

mines that a

favorable decision should have

been entered under circuit law, it will treat the

case

in

the

manner described above.

Ordinarily,

it will

enter a favorable

decision,

but it will enter an unfavorable

decision where

it believes

that relitigation

is

appropriate. Id.

76. The

agency considered extending

its acquiescence policy to the

state level, but rejected this

option as too

cumbersome. See SSA House

Hearing, supra note 71, at 9.

77. Interim

Circular, supra

note

42,

at 1.

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1989]

Nonacquiescence

697

that they did not,

however, the prior nonacquiescence

practice would

continue.

As a practical matter,

Interim Circular No.

185 was never implemented

since the agency changed

its policy, at least

in part as a result

of

the

litigation in

Stieberger v.

Heckler,7 before it

had issued any Acquiescence

Rulings.

A new

policy

provided that under certain

conditions

acquiescence

would be extended

to

all four administrative

levels.80 It

contemplated

two

different

types

of Acquiescence Rulings: one

that would apply only

at

the

ALJ

and

Appeals

Council levels, as had

been the case under

Interim Cir-

cular No. 185, and another

that would apply

at the state agency levels

as

well.81 The

procedures

with respect to the

first type

of

Ruling

were

the

same as those under

the Circular.82 As to

the second type,

the

agency

noted that

it

was unlikely

that cases would reach

the ALJs or the Appeals

Council

because the benefit would have

been

granted at

the state

agency

level.8s

Consistent with its new policy, the agency

published proposed

regula-

tions.84 They provided

that Acquiescence Rulings

would apply

within

the

appropriate circuit at

all administrative levels

if

(1)(a)

No

prompt

relitigation of the relevant

policy at issue

will

be

sought

in the

relevant circuit;

and

78. See

infra text accompanying

notes 93-94

(discussing

silent

nonacquiescence).

79.

615

F.

Supp. 1315 (S.D.N.Y. 1985), prelim. inj. vacated sub nom. Stieberger

v.

Bowen,

801

F.2d 29 (2d Cir. 1986). See infra text accompanying notes

114-26.

80. See Memorandum of

Acting

Commissioner of

Social Security

to

Principal

Deputy Undersec-

retary of HHS (Jan. 15, 1986). The recommendations contained in this memorandum

were approved

by HHS

on

January 16,

1986. On

that day, HHS also approved the issuance

of

three

Acquiescence

Rulings, applicable at all four administrative levels. Id. The Memorandum stated the

hope that adop-

tion of

the new policy would "assist

in

obtaining a favorable ruling in Stieberger." Id. at 3. It ended

with the comment: "SSA and the Office of General Counsel strongly urge that the

revised policy be

approved,

or

at least the concept

of

acquiescing

in

some

circuit

court decisions at all

adjudicative

levels.

Such a position would strengthen the hand of Justice

in

the crucial Stieberger case." Id. The

new policy was later embodied in OHA Staff Guides and Program Digest,

Transmittal No. X-7,

SGPD

Bulletin No.

III-2(86)

(Aug. 22, 1986)

[hereinafter

SGPD Bulletini which

formally replaced

Interim Circular No. 185.

81.

See SGPD Bulletin, supra note 80, at 2.

82. Id. at 3-5.

83. Id. The Bulletin provided that because the U.S. District Court for the

Southern District

of

New York in

Stieberger had enjoined the practice of limiting the agency's

acquiescence policy

to

the

ALJ

and Appeals Council levels, in the case of New York residents, all Acquiescence

Rulings

would

apply

to

the four

administrative levels, unless

the

injunction

in

Stieberger

were modified

or

vacated.

Id. at 2 n.2; see infra text accompanying notes 114-26.

84.

52 Fed. Reg. 2557 (1987). After this Article was in page proofs, SSA withdrew these

pro-

posed regulations and proposed a different set of regulations, under which Acquiescence

Rulings

would apply at all four administrative levels. See 53 Fed. Reg. 46,628 (1988). These

proposed regula-

tions

contemplate intracircuit relitigation following the publication of an

Acquiescence Ruling only

where (1) "occurrence of an activating event . . . raises the question of whether

the circuit court

would

reach the same decision if the issue(s) previously decided were presented to it

again," (2) the

General Counsel

of

the

Department

of

Health and Human Services, after consulting

with

the

Depart-

ment of

Justice,

concurs

that relitigation

is

appropriate, and (3) a notice that SSA

will

begin

to

apply

its own

interpretation of the issue that had been the subject of the Acquiescence Ruling

is published

in

the Federal

Register. See 53 Fed. Reg. 46,629-30 (1988).

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698 The

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679

(b)

Application

of the

Ruling

at all administrative

levels would be

workable

(i.e., would not result in

administrative

inefficiency) and

feasible

and would not

have an

unacceptably

adverse effect

on

Social

Security programs

or

disadvantage

individuals

already

on the

Social

Security

benefit

rolls;

or

(2)

A

regulatory change

to

conform

national policy

to

a

circuit

court

ruling

is being pursued and

there is little doubt of

its ultimate

publication.""

If

neither

condition was met, the

Acquiescence Ruling

would apply only

at

the

ALJ

and

Appeals Council levels.8"

On

June

4, 1986,

the

agency

published,

in the Federal

Register,87

a

notice

indicating that 14 such

Rulings had been issued

between January

23

and

April 30, 1986.88 The

agency also indicated that

future rulings

would be

published periodically

in the same manner,89 and

on August 7,

1987, it

published 12 such

rulings which had been

issued between May

20,

1986

and

March 31, 1987.90

By March 1988, the

agency had issued

an

additional seven rulings which

have not yet been

published in the Fed-

eral

Register.9"

85.

Id. at 2557.

86. Id.

87. When

Acquiescence

Rulings are first

issued,

they are

not

published

in

the Federal

Register.

88. 51

Fed. Reg.

20,354

(1986). The

agency

published

acquiescence

rulings

for

the

following

cases:

Sumrny

v.

Schweiker, 688

F.2d 1233

(9th Cir.

1982) (AR

86-1 (9));

Rosenberg

v.

Richardson,

538 F.2d 487

(2d

Cir. 1976)

and Capitano

v.

Secretary

of

HHS,

732 F.2d

1066 (2d

Cir. 1984)

(AR

86-2

(2)); Martinez v.

Heckler,

735 F.2d

795 (5th Cir.

1984)

(AR

86-3(5));

Paskel

v.

Heckler,

768

F.2d

540

(3d

Cir.

1985) (AR 86-4

(3));

Leschniok v.

Heckler,

713

F.2d 520

(9th Cir.

1983) (AR 86-

5(9));

Aubrey

v.

Richardson,

462 F.2d

782

(3d

Cir.

1972)

and

Shelnutt v.

Heckler,

723 F.2d

1131

(3d

Cir.

1983) (AR

86-6(3));

Autrey v.

Harris,

639 F.2d

1233 (5th

Cir.

1981)

and Wages

v.

Schweiker,

659 F.2d

59

(5th

Cir.

1981) (AR

86-7(5)); Johnson

v.

Califano,

607 F.2d

1178

(6th

Cir.

1979) (AR

86-8(6));

Secretary of

HEW

v.

Meza, 368 F.2d

389

(9th Cir.

1966) and

Gardner v.

Wilcox, 370

F.2d

492 (9th Cir.

1966)

(AR 86-9(9));

Edwards

v. Califano,

619 F.2d

865 (10th Cir.

1980) (AR

86-10(10)); Autrey

v. Harris,

639 F.2d

1233 (5th

Cir.

1981) (AR

86-11(11));

Hutcheson

v.

Califano,

638 F.2d 96

(9th Cir.

1981)

(AR

86-12(9)); McNeal

v.

Schweiker,

711

F.2d

18

(3d

Cir.

1983) (AR

86-13(3)); Jones v.

Secretary of

HEW, 629

F.2d 334

(4th Cir.

1980) (AR

86-14(4)). Note

that this list

includes

two cases

decided as

early as

in 1966 and

three

cases decided

in the

1970s.

The

number of

the

Acquiescence

Ruling is

indicated in

parenthesis.

For

example, AR

86-1(9)

refers to

the first (1)

acquiescence ruling

issued in

1986 (86),

which is

applicable

only in the Ninth

Circuit

(9).

89. 51 Fed.

Reg.

20,354

(1986).

90.

52 Fed.

Reg.

29,441

(1987). The

agency

published

acquiescence

rulings for

the

following

cases:

Boyland

v.

Califano,

633 F.2d 430

(6th

Cir.

1980), Parker

v.

Schweiker,

673 F.2d 160

(6th

Cir.

1982), and

Childress

v.

Secretary of

HHS,

679

F.2d 623

(6th Cir.

1982) (AR

86-15(6));

Damon

v.

Secretary

of

HEW,

557 F.2d

31 (2d Cir.

1977)

(AR

86-16(2)); Owens

v.

Schweiker,

692 F.2d 80

(9th Cir.

1982) (AR

86-17(9));

Woodson

v.

Schweiker, 656 F.2d

1169 (5th

Cir. 1981)

(AR

86-18(5)

and AR

86-19(11));

Grigg

v.

Finch, 418 F.2d 661

(6th Cir.

1969) (AR

86-20(6)); Adams v. Wein-

berger,

521 F.

2d 656

(2d

Cir.

1975) (AR

86-21(2));

Parsons v.

Secretary

of HHS, 762 F.2d 1188

(4th

Cir.

1985) (AR

86-22(4)); Doran v.

Schweiker, 681

F.2d

605 (9th Cir.

1982)

(AR

86-23(9));

Hansen v.

Heckler,

783

F.2d 170

(10th

Cir.

1986) and Elliott

v. Heckler, No. 84-2055

(10th

Cir.

1986) (AR

86-24(10)); Fagner

v.

Heckler,

779

F.2d

541 (9th Cir.

1985)

(AR

86-25(9));

Webb v.

Richardson,

472

F.2d 529

(6th

Cir. 1972)

(AR

87-1(6)). Note that

this list

includes a case

decided

as

early

as 1969 and

three

cases

decided in

the 1970s.

91.

Butterworth

v.

Bowen,

796

F.2d 1379

(11th

Cir. 1986)

(AR

87-2(11)); Hart v.

Bowen,

799

F.2d 567

(9th Cir.

1986) (AR

87-3(9));

Iamarino

v.

Heckler,

795

F.2d

59

(8th Cir.

1986) (AR

87-

4(8));

Velazquez

v.

Heckler,

802 F.2d 680

(3d

Cir.

1986) (AR

87-5(3));

Groseclose v.

Bowen,

809

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1989]

Nonacquiescence

699

These

rulings all

apply

at all

four

administrative

levels;92

thus,

the

agency

has

not

invoked

its

split

policy

under which

it would

acquiesce

only at

the

ALJ

and

Appeals

Council

levels.

Also, by

acquiescing at all

four

levels,

the

agency

has

essentially

foreclosed

relitigation

of

questions

covered

by

Acquiescence

Rulings

in the

circuits

that

rendered the

adverse

decisions.

It is

debatable

whether one

can

assume

that SSA is

now

engaged

in

a

policy of

blanket

intracircuit

acquiescence.

It may well

be,

for

example,

that SSA

is

not

issuing

Acquiescence

Rulings

for

cases

in

which

there

are,

in

fact,

irreconcilable

inconsistencies

between the

agency's

position

and

circuit

law,93

and

therefore,

decisionmakers

at all

levels

are

continuing to

apply

agency

policy

even

though this

policy has

been

rejected

by

the

court

of

appeals

which

will

review

the

agency's

action.94

3.

Judicial

Reaction

to

the

Agency's

Nonacquiescence

Policy

SSA's

pre-1985

policy

of

blanket

nonacquiescence

has

been

roundly

criticized

by

the

courts.

We

focus

primarily

on

two

such

cases-Lopez

v.

Heckler9"

and

Stieberger

v.

Heckler96-that

are

representative of

the

judi-

cial

rebuke

that

intracircuit

nonacquiescence

by

SSA

has

engendered.

a.

Lopez

v.

Heckler

This

class

action

was

filed in the

U.S.

District

Court for

the

Central

District of

California

to

challenge

the

procedures used

by SSA in termi-

nating

disability

benefits

pursuant

to

its

program of

Continuing

Disability

Investigations.97

In

two

earlier

cases, the

Ninth

Circuit

had

held

that

disa-

bility

benefits could

not

be

terminated

unless SSA

had come

forward

with

evidence

of

improvement in

the

recipient's

medical

condition.98

The

F.2d 502

(8th Cir.

1987)

(AR

88-2(8));

McDonald

v.

Bowen,

800

F.2d 153

(7th

Cir.

1986),

amended on

reh'g, 818

F.2d

559

(7th

Cir.

1987)

(AR

88-3(7)).

92.

See 52

Fed.

Reg.

29,441

(1987);

51

Fed.

Reg.

20,354

(1986). The

HHS General

Counsel

has

indicated

that

the

only

Acquiescence

Ruling

that

does

not

apply

at all

four

levels

concerns a

case,

Butterworth v.

Bowen,

796

F.2d 1379

(11th

Cir.

1986),

that

involved

only the

actions of

the

Appeals

Council;

by

definition,

then,

the

Ruling

could

not

have

applied at lower

levels.

See Letter from Ron-

ald

Robertson

to

Mary

Candace

Fowler

at 2

(April

21,

1988)

[hereinafter

Robertson

Letter]

(public

comment on

draft

ACUS

policy).

93.

Where the

agency

studies a

potentially

adverse

decision

and

decides

that

there is

no

conflict,

it

prepares

a

document

entitled:

"Decision

That

Ruling of

Acquiescence Is

Not

Needed."

These

state-

ments are

not

widely

disseminated.

94.

Attorneys

representing

claimants

believe

that

such

silent

nonacquiescence is

widespread.

See

Brief for

the

City

of

New

York

and

the

Stieberger

Class as

Amici

Curiae,

No.

87-6244 (2d

Cir.

1987).

For a

discussion

of the

problem

of

silent

nonacquiescence,

see

infra

text

accompanying

notes

338-39.

95.

725

F.2d

1489

(9th

Cir.),

vacated on

other

grounds,

469

U.S.

1082

(1984).

96.

615 F.

Supp.

1315

(S.D.N.Y.

1985),

prelim.

inj.

vacated

sub

nom.,

Stieberger v.

Bowen, 801

F.2d

29

(2d

Cir.

1986).

97.

See 42

U.S.C.

?

421(h)

(1982).

98.

Patti v.

Schweiker, 669 F.2d

582

(9th

Cir.

1982);

Finnegan

v.

Matthews,

641 F.2d

1340

(9th

Cir.

1981).

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700

The Yale Law

Journal

[Vol. 98: 679

agency had published formal notices

of nonacquiescence in both of

these

cases." The Lopez plaintiffs attacked

the constitutionality of SSA's

nonac-

quiescence policy on separation of

powers and due process

grounds.100

The

district court certified a

class of Ninth Circuit claimants101 and

granted a preliminary injunction requiring

SSA to apply the rulings of the

two

Ninth

Circuit cases to all

claimants residing in the circuit.102

The

court

noted that "for the Secretary

to make the general assertion that

a

decision of

the

Court of

Appeals

is not to be followed because she

dis-

agrees

with it is

to operate

outside the law."'103 Its conclusion was

grounded on the principle "laid

down many years ago by Chief Justice

Marshall

in

the landmark case

of

Marbury

v. Madison" that "govern-

mental agencies, like all individuals

and other entities, are obliged to

fol-

low and apply the law as it is

interpreted by the courts."'O'

The

court also stressed the vertical disuniformity caused by a policy

of

nonacquiescence. It noted that if

a claimant

has the determination and the

financial and physical strength and

lives

long enough to make it through

the administrative process,

he

can turn to the courts and ultimately

expect

them to

apply

the

law

as

announced

[by

the Ninth

Circuit].

If

exhaustion

overtakes

him

and

he falls somewhere along the

road leading to such ultimate relief, the

nonacquiescence and

the

resulting termination stand. Particularly

with

respect

to

the types

of

individuals here concerned,

whose

re-

sources, health and prospective

longevity are, by definition, relatively

limited,

such

a

dual system

of

law is

prejudicial

and unfair.105

A

unanimous panel of the Ninth

Circuit denied the Secretary's request

for

a partial stay of the preliminary

injunction, finding "little chance

that

the

Secretary will succeed in her

argument that nonacquiescence is a legit-

imate

policy."'106

In

a

concurrence, Judge Pregerson compared nonacqui-

escence

to the

"repudiated pre-Civil

War doctrine of nullification"

and

found

that

the

Secretary's refusal

to follow Ninth Circuit law "flouts some

very important principles

basic

to our

American system

of

govern-

ment-the rule of

law,

the doctrine of separation of powers imbedded

in

the

constitution, and the tenet

of

judicial supremacy laid

down in Mar-

bury v.

Madison.

107

Justice

Rehnquist, sitting as

Circuit Justice, then granted a partial

stay

99.

See

supra

note

64.

100.

Lopez

v.

Heckler,

572 F.

Supp.

26,

28

(C.D.

Cal.

1983).

101. Id.

at 30-32.

102. Id.

at

32.

103. Id.

at 30.

104. Id.

at

29

(citations omitted). This

view

is

criticized infra

text

accompanying

notes

226-62.

105. Lopez

v.

Heckler, 572 F. Supp. at

30.

106.

Lopez v. Heckler, 713 F.2d 1432,

1438 (9th Cir. 1983).

107. Id.

at

1441

(Pregerson, J.,

concurring).

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1989]

Nonacquiescence

701

of the preliminary

injunction but did

not consider the merits

of the nonac-

quiescence question.108

Subsequently,

the

full

Court denied,

on a five-to-

four vote, an emergency

application to

vacate the stay entered

by

Justice

Rehnquist.109

The Ninth Circuit

affirmed

the

preliminary

injunction,

except as ap-

plied to benefits

denied before the

Ninth

Circuit

had

held that medical

improvement was

a necessary

condition for

the

termination

of

disability

benefits.110

On

the question of nonacquiescence,

the court

said:

"That

the

Secretary,

as a

member

of the executive,

is

required

to

apply

federal

law

as

interpreted by

the federal

courts

cannot seriously

be doubted.""'

The

Supreme

Court

ultimately vacated and

remanded

for reconsideration

in

light of the Social

Security Disability

Benefits Reform Act

of 1984, with-

out

reaching

the legality

of

nonacquiescence.1"2

Thus,

in the

Lopez

v.

Heckler litigation,

both the district

court and the Ninth

Circuit concluded

that intracircuit

nonacquiescence was

a per se violation

of separation of

powers doctrine.1"3

b.

Stieberger

v. Heckler

This case, brought

in the U.S. District

Court for the Southern

District

of

New York, involved

a frontal challenge

to SSA's nonacquiescence

pol-

icy.114

Plaintiffs

argued

that

SSA

had nonacquiesced

in

many

decisions

of

the Second Circuit.

In considering whether

to enter a preliminary

injunc-

tion, however, the

court focused only

on the Second Circuit's

treating phy-

sician rule, which

concerns the weight

to be given to the

opinion of the

claimant's

treating physician.1""

As

a

threshold matter, the court

rejected the agency's

claim that there

was

no

inconsistency

between its

policy

and

the

Second Circuit's

rule.1"

Finding

that

SSA in

fact had

not been

applying

the Second Circuit's

rule

to

claimants

residing within its territory,

the court turned

to the legality

of

108. Heckler v. Lopez, 463 U.S. 1328

(1983) (Rehnquist, J.,

in

chambers).

109.

Heckler

v.

Lopez,

464

U.S. 879 (1983).

Justices

Brennan and Marshall

dissented,

and

Jus-

tices Blackmun and Stevens dissented in

part. Justice Brennan noted that SSA "has

not

paid

due

respect to a coordinate branch of Government

by expressly refusing to implement the binding deci-

sions

of

the Ninth Circuit." Id. at 887

(Brennan, J., joined by Marshall, J., dissenting).

110.

Lopez v. Heckler, 725 F.2d 1489,

1510 (9th Cir.), vacated and remanded, 469 U.S. 1082

(1984).

111. Id.

at 1503. Here, too, the court

invoked Marbury v. Madison, 5 U.S. (1 Cranch) 137

(1803),

to

support its conclusion that

nonacquiescence is illegal.

112.

Heckler

v.

Lopez, 469 U.S. 1082

(1984).

On

remand,

the district court

in

turn remanded the

case to the Secretary, also for reconsideration

in light of the statutory amendments. Lopez

v.

Heckler,

106

F.R.D. 268 (C.D. Cal. 1984).

113. See infra text accompanying notes

226-62 (criticizing this view).

114.

Stieberger

v.

Heckler, 615

F.

Supp.

1315,

1321

(S.D.N.Y. 1985), prelim. inj.

vacated sub.

nom., Stieberger v. Bowen, 801 F.2d 29 (2d

Cir. 1986). The case also involved a challenge to the

agency's "Bellmon Review" policy, under

which the decisions of ALJs with a high percentage

of

pro-

claimant

determinations were subject to

agency-initiated

review

by the Appeals

Council.

Id.

115. Id. at 1343 &

n.23,

1344-49.

116. Id. at 1344-49.

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702 The Yale Law Journal

[Vol. 98:

679

the agency's nonacquiescence

policy. Dismissing the

contention that

non-

acquiescence was permissible

in light of the status

of SSA as part of a

coordinate branch of government,117

Judge Sand

concluded that plaintiffs

were likely to succeed in

showing that the agency's pre-1985

policy "was

inconsistent with the constitutionally

required separation

of powers.""'

The

court also stressed

the

problem

of vertical disuniformity:

The Secretary emphasizes

the disuniformity of a

rule which would

require the SSA to apply

one legal standard in Connecticut

but an-

other in

California.

We have just as much, if not

more, difficulty

with

a policy

whereby one claimant is governed

by

one

legal

stan-

dard

but his

neighbor,

lacking

in either financial

resources, litiga-

tional

persistence,

or

physical

or

mental stamina,

is

governed by

another.119

The court found

that

the

problems

caused

by

nonacquiescence persisted

even under the

split acquiescence

policy contemplated

by

Interim Circular

No. 185, which allowed

for nonacquiescence by the state

agencies, because

it

created distinctions "between those who

appeal

adverse state agency

de-

terminations and

those who do not."120 The court entered a preliminary

injunction, barring intracircuit

nonacquiescence.121

The Second Circuit

vacated

the

preliminary injunction122

in light

of the

injunction that had

issued in Schisler v. Heckler.I23

Under the

Schisler

injunction,

SSA

was required

to

"

'state

in

relevant

publications

.

that

adjudicators

at all

levels,

state and federal, are

to

apply

the treating physi-

cian rule

of

[the

Second]

[C]ircuit.'

"124

Even

though

the

Stieberger

in-

junction was

broader and "was not necessarily erroneous

when issued,"1

the

Second Circuit concluded that the Secretary should

be

given

the

op-

portunity "to demonstrate

his good-faith compliance

with the law of this

Circuit."12

117.

Id.

at 1357 ("The judiciary's duty and authority, as first established

in

Marbury,

'to

say

what the law is' would be rendered a virtual nullity if coordinate branches of government could

effectively and unilaterally strip its pronouncements of any precedential force.").

118. Id. at 1367.

119. Id. at 1363.

120. Id. at 1370.

121.

Id.

at 1375-76, 1400. Nonetheless, the court recognized that intracircuit nonacquiescence

might be less troublesome if, after the adverse decision, the agency's policy had been upheld

in

other

circuits.

Id.

at

1366.

122. Stieberger

v.

Bowen, 801 F.2d 29 (2d Cir. 1986).

123. Schisler v. Heckler, 787 F.2d 76 (2d Cir. 1986). The court in Schisler considered whether

the

entry

of

an injunction would be an "unnecessary intrusion

into

the administrative process."

Id. at

84. But the court concluded that it would not be an intrusion because the agency was asked only to do

what it said it was already doing when it represented to the court that it was following the

Second

Circuit's case law on the "treating physician" rule. Id. Hence,

Schisler

does

not

squarely address

the

legality

of

an openly articulated nonacquiescence determination by SSA.

124. Stieberger, 801 F.2d at 37 (quoting Schisler, 787 F.2d at 84).

125.

Id.

126. Id. at 38. Nonacquiescence by SSA was also enjoined by the district court in Hyatt v. Heck-

ler,

579

F.

Supp.

985

(D.N.C. 1984). The Fourth Circuit, however, vacated the injunction.

757 F.2d

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1989]

Nonacquiescence

703

4.

Congressional

Reaction

to the

Agency's

Nonacquiescence

Policy

SSA's

nonacquiescence policy

received

close scrutiny

from Congress

during

the

consideration

of the

Social Security

Disability

Benefits Reform

Act of

1984. The

House bill

would have

barred

intracircuit

nonacquies-

cence

outright. It

provided that

when a

court

of appeals

interprets

the

governing

statute or

regulations,

the

Secretary shall

acquiesce in

the decision and

apply

the

interpre-

tation

with respect

to all

individuals and

circumstances

covered by

the

provision in the

circuit,

until a different

result is

reached by the

Supreme Court

of

the United

States

on the

issue involved

or

by

a

subsequently

enacted provision of federal law.127

The

bill

authorized

the

Secretary to

nonacquiesce

in

decisions of the

courts of

appeals only

during the

time

allowed for

filing

a

jurisdictional

statement or

certiorari

petition before

the

Supreme Court.128

The

report

accompanying the

House bill

gave several

reasons

for the

bar

against

intracircuit

nonacquiescence.

Although

it noted

the

importance

of the

uniform

administration of

the

disability program,

it added

that

SSA's

nonacquiescence

policy

did

not

"substantially

achiev[e]

that

end,"

because

of

"distinctions which exist within circuits

between

policies

ap-

plied

to

those claimants who

pursue their claims to the

appeals court

level,

and

those who cannot.

1la

The

report

also

expressed

concern over the "in-

creasing number

and

intensity of

confrontations between

the agency

and

the courts

as

SSA

refuses

to

apply

circuit

court opinions."'130

It faulted

SSA

for

frequently

declining

to seek

Supreme

Court review of circuit

court

decisions

with

which it

did not

agree:

"This practice ensures that

1455 (4th

Cir. 1985).

It reasoned

that

Congress had

rejected a

blanket bar

against

nonacquiescence

during its

consideration of the

Social Security

Disability

Benefits

Reform Act of 1984.

See

infra

text

accompanying notes

127-37. The

court also

relied on

Heckler v.

Day, 467

U.S.

104

(1984), where

the

Supreme Court

vacated an

injunction

requiring the

Secretary to

adjudicate

claims and

pay benefits

within

specified times,

in part

because

Congress had

rejected

legislation

imposing

mandatory

deadlines

on

disability reviews.

Hyatt, 757

F.2d at

1459. The

Supreme

Court vacated

the court

of appeals'

ruling for

reconsideration in light

of Bowen

v. City of

New York,

476 U.S. 467

(1986). See

Hyatt

v.

Bowen,

476

U.S. 1167

(1986).

Upon

reconsideration,

the Fourth

Circuit noted

that

"[t]he

separation

of

powers doctrine

requires

administrative

agencies to follow

the law

of the circuit

whose

courts have

jurisdiction

over the

cause of

action." Hyatt

v.

Heckler, 807 F.2d

376, 379

(4th Cir.

1986),

cert.

denied, 108

S.

Ct.

79

(1987). It

did not

enjoin the

agency's

nonacquiescence, however,

because it

determined that

the

question of the

propriety

of an

injunction had

not been

embraced

within the scope

of

the

Supreme Court's

remand. See

id. at

381. For other

nonacquiescence cases in

which

injunctions

were

entered, see

Thomas v.

Heckler, 598 F.

Supp. 492

(M.D. Ala.

1984);

Holden v.

Heckler, 584 F.

Supp.

463

(N.D.

Ohio

1984).

127.

H.R.

3755,

98th Cong.,

2d Sess. ?

302(a)

(1984).

128. Id.

? 302(b).

If the

Supreme

Court dismissed

the appeal

or denied

certiorari,

the agency

would

then be

required to acquiesce

in the

adverse

decision of the

court of

appeals. Id.

129.

HOUSE

REPORT, supra

note 63, at

24, 1984

U.S. CODE

CONG. &

ADMIN.

NEWS at 3061.

130.

Id.

at 24,

1984 U.S.

CODE CONG.

&

ADMIN. NEWS at

3062.

According to

the report,

whileie

the issue of

the

constitutionality

of

the

non-acquiescence

policy may be in

doubt,

the

undesir-

able

consequences of

escalating

hostility

between the

Federal courts

and the

agency are

clear."

Id.

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704 The Yale Law

Journal [Vol.

98:

679

the

Supreme Court will not have

the opportunity

to review

the issue

and

render

a decision with

which the agency

would be compelled to

comply."13

The

Senate bill

took

a

different

approach.

Rather than bar intracircuit

nonacquiescence

outright,

it

mandated the use of

procedural safeguards

when

nonacquiescence

was

invoked. It

required

the

Secretary

to

publish,

in the

Federal

Register,

and

to send to the

Committees

on Finance and

on

Ways

and

Means a statement of

her

decision not to

acquiesce,

and

the

specific

facts and

reasons

in

support

of that decision.132

The

Secretary

had

to

comply with these

requirements within ninety

days of the issuance of

the

court

decision, or

the

last day for filing an

appeal,

whichever

was

later.133

Treating the

constitutionality of

nonacquiescence as an open

question,

the

bill stated that

"nothing

in

[the section

dealing

with nonac-

quiescence]

shall

be

interpreted as sanctioning

any decision of the

Secre-

tary not to

acquiesce

in

the

decision of a U.S.

Court of Appeals."'34

The

relevant provisions of

both bills were

deleted in conference.

The

Conference

Report

nonetheless noted that the

decision to

eliminate

statu-

tory

language should

not

"be

interpreted

as

approval

of

'non-acquiescence'

by

a

federal

agency

to an

interpretation

of

a U.S. Court

of

Appeals

as a

general

practice."1 Rather,

the conferees

urged that "a

policy of

non-

acquiescence be

followed

only

in

situations where the Administration has

initiated,

or

has the reasonable

expectation

and intention of

initiating, the

steps

necessary

to receive a

review of the issue

in

the

Supreme

Court."'13"

The

report

further

urged

the

Secretary

to

propose

remedial

legislation

to

deal with the

nonacquiescence

problem.137

131. Id.

at 23, 1984 U.S.

CODE CONG. &

ADMIN.

NEWS

at 3060.

132.

SENATE REPORT,

supra

note

64, at 21.

The reporting

requirement

would

apply

also to

decisions to

acquiesce in significant cases.

Id.

133.

Id.

134.

Id.

135.

H.R. CONF. REP. No.

1039,

98th

Cong.,

2d Sess.

37, reprinted

in 1984 U.S. CODE

CONG.

& ADMIN. NEWS

3095.

136.

Id.

137.

Id. at 38, 1984

U.S. CODE CONG. &

ADMIN.

NEWS

at 3096.

The

implications of the

Conference Report for

the legitimacy of

continued intracircuit

nonacquies-

cence

by SSA are difficult to

assess because the

legislators held a range of

views. According

to Senator

Long,

one

of the Senate

conferees, the Conference

Report recognized

that

"it

may

not

always

be

possible

to

immediately

initiate

an

appeal"

and that

a

total bar

against

nonacquiescence

would

there-

fore be too

harsh on the

agency.

130

CONG.

REC. S11,458 (Sept. 19,

1984). Nonetheless,

he

added,

the

report "urges that the practice of

nonacquiescence be used only in conjunction with a

continuing

good

faith

effort

of

the administration to

obtain

a

resolution of the

outstanding

issue."

Id. Several

Senators

complained about

the abandonment of the

per se bar of the House

bill.

Id. at

S11,460 (Sen.

Sasser), S11,469 (Sen.

Bingaman). Senator Sasser

noted

that if

SSA

continued

to follow a

nonacquies-

cence

policy despite the

statement of the

conferees, he would introduce

legislation

to

require

the

agency

to

appeal the

decision to the Supreme

Court.

Id. at

S11,460.

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1989] Nonacquiescence

705

B. National Labor Relations

Board

1.

General Description of

the

Agency

The NLRB's principal responsibilities are

to enforce

the unfair

labor

practice (ULP) provisions of section 8 of the National

Labor Relations

Act

and to hold elections under section

9

to

determine whether

the

em-

ployees of an appropriate unit wish to be represented by a collective bar-

gaining agent.""8 The five

members

of

the

Board, appointed

by

the

Presi-

dent

with the advice and consent of the Senate, sit for

five-year

terms

with

statutory protection from discharge without "cause."13 The General

Counsel, also a Presidential appointee, is an

independent officer with

fi-

nal, unreviewable authority over the investigation of

charges and issuance

of ULP

complaints.140

Representation proceedings are handled

administratively

at the

regional

level, with only discretionary review by the Board. A

party aggrieved by

the agency's determination in a representation case-say,

because

of

objec-

tions to

the election unit or to the conduct of the election-cannot

obtain

direct

judicial

review.141 Such review

may

be

obtained

only by converting

the case

into an ULP

proceeding-in

the

case

of

an

employer, by refusing

to

bargain

with the union which

has

been certified as the

bargaining

representative.

ULP

proceedings

are

triggered by

the

General Counsel's issuance

of a

complaint.

Absent

settlement, there

will

be a trial-type

adjudication before

an

ALJ

in

which the General Counsel acts

as prosecutor

with the assis-

tance

of the

charging party.

The

ALJ's

proposed report

and recommended

order,

if

not excepted to, become the order of the Board.

Typically, how-

ever, exceptions are filed, which the Board reviews on the basis

of

the

record compiled before the

ALJ

and the briefs filed by

the parties.142

138.

29

U.S.C.

?? 158-59

(1982).

139.

The Board

exercises

virtually exclusive

authority over

the

administration of the Act; there

is

no

private right of

action save for

secondary

boycott violations

under ? 8(b)(4),

29

U.S.C.

?

158(b)(4)

(1982).

categories

of

nonacquiescence

that we have

defined.

Indeed,

in

pursuing

a

policy

of intercircuit nonac-

quiescence, by definition the

agency

is

not

acting

inconsistently

with the

case

law of the

court of

appeals

that will

review its

action,

and that court

is

under no

obligation to

follow the

ruling of the

circuit

that

previously

rejected

the

agency's

position.211

The disregard

of judicial

authority,

which

undergirds

the

charge

of

unconstitutionality,

is therefore

less

direct,

and the

claim

of

obedience less

compelling.

For

the same

reason,

the claim

of

unconstitutionality

is also

stronger

in the

intracircuit context than

where,

because

of

venue

choice, the

agency

does

not know

with

absolute

certainty,

at the

time

of its

administrative

proceedings,

whether its action

conclusion

about

nonacquiescence

. .

. is

a long

one.").

209.

5

U.S.C. ?

706(2)(A)

(1982). For

our

view

of

the

requirements

of APA

rationality

review,

see

infra

text

accompanying

notes 335-62.

The

organic statute under which

the

agency

operates

may

give

rise to

similar

limitations. For ease

of

exposition,

we refer

explicitly

in

the text

only

to the

APA.

210.

Our

position is

consistent with the

general

policy in

favor

of

avoiding

unnecessary

constitu-

tionalization

of

administrative

law, as

embodied in

the "clear

statement" approach

to

statutory ques-

tions

trenching upon

constitutional values.

See, e.g., NLRB

v.

Catholic

Bishop

of

Chicago,

440

U.S.

490

(1979).

211. On

the absence

of

intercircuit

stare

decisis,

see

infra text

accompanying

notes 274-75.

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720

The Yale Law

Journal

[Vol. 98:

679

will

be reviewed in a

court of appeals

that rejected its

position rather than

in

a court

that either

has not

addressed the legality of the

agency's posi-

tion or

has

upheld

that position.

Second,

our

discussion addresses

only

cases in which the

organic

statute

under which the

agency operates does

not, of its own

force,

command the

agency to conform its

administrative

proceedings

to the

law of the

circuit

that

will review its

action.212

Where such a bar is

present,

an

agency

acts

ultra vires if

it refuses to adhere

to

circuit

law,

and the

legality

of the

agency's action can

be decisively resolved

as

a

matter of

statutory

con-

struction.

Therefore,

the

claim

of

unconstitutionality

has

independent

force and significance

only

in

cases in

which nonacquiescence

is

not

pro-

hibited

by

statute.

Third,

we

deal

only

with

situations where the

grounds

for the

agency-

court

disagreement

involve

interpretations of statutes.

As we show

be-

low,213 it is

partly

because

Congress

has

charged agencies

with

responsi-

bility

for

the uniform

administration of their

enabling

statutes that

they

have

institutional

competence, in the

absence of

a

contrary congressional

indication and

within

certain limits, to

persist

in

their

disagreement

with

the

reviewing circuit.214

Fourth,

we

confine

our

inquiry to

the analysis of the claim that

in-

tracircuit

nonacquiescence is per se

unconstitutional. If,

instead, the chal-

lenge contemplates a

case-by-case

inquiry, it must rest on

the premise that

an

agency acts

unconstitutionally only

when it

nonacquiesces without

suf-

ficient

justification and

must envision

a

balancing of the

agency's

interests

in

nonacquiescence

against

the

harms of such a

practice.

An

inquiry

of

this

sort, which we

perform

in

Section IV, fits

comfortably within the

requirement of

rationality that the

APA imposes on

all agency action;

nonacquiescence that is

not properly

justified can (and

should) be

struck

down as

"arbitrary

and

capricious."21'

Absent a

per

se rule, it is difficult

to

conceive

of

a

situation in which

the

application of

the agency's policy

would be

held to survive

rationality review

under the

APA and

yet violate

constitutional

norms,

since presumably

both inquiries

would focus on the

same

factors and

balance them in

similar ways.2" Here,

too, for the claim

212.

Cf supra

text

accompanying notes 126-37

(discussing

congressional

attempts to

limit

nonac-

quiescence by

SSA).

213.

See

infra

text

accompanying notes

233-35.

214.

The

status of

nonacquiescence in a

constitutional

interpretation

presents a much more

troub-

ling

question.

Similarly,

the

legitimacy of

nonacquiescence

in the

interpretation of a

statute other

than

the

agency's

organic

statute cannot

be

defended by

reference to

the

congressional

delegation of

poli-

cymaking

authority to that

agency.

See infra

text

accompanying

notes

233-35.

215. Of

course, if

Congress

were to

amend the

APA or an

agency's

organic statute to

endorse

intracircuit

nonacquiescence across

the board,

or courts

were to

decline to

use the

APA as a tool for

scrutinizing the

justifiability of

nonacquiescence in

particular

circumstances,

the

validity of the

prac-

tice

would

have to

be

analyzed under

the

Constitution,

and the

balancing of

competing

factors that we

present

in

Section IV

might become

the basis

for a

constitutional

standard.

216.

By

analogy

to the

Supreme

Court's

tiers of

review under

the equal

protection

clause,

it is

conceivable that courts

might

conclude that the

Constitution demands

a

more

thoroughgoing

review of

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1989] Nonacquiescence

721

of unconstitutionality to have any independent force and significance, it

must go to the validity

vel non of the

policy.

Fifth, we deal only with situations in which the circuit court ruling to

which the agency refuses to acquiesce is not accompanied by an injunction

ordering the agency to conform its administrative practices to circuit law,

or

was not itself the product of a class

action lawsuit in which all

residing

in that circuit who are, and who in the future may be, potentially affected

by

the

agency policy

were

formally

made

parties

to the

judicial proceed-

ing.

As

to

judgments emerging

from class actions that include

individu-

als

who

will come into contact with the agency only

in

the future,'18

non-

acquiescence would be inconsistent with the norm, which is a bedrock of

our

scheme of separation of powers, that

a

final decision

of an Article III

court is binding on all parties before that court, absent reversal on direct

appeal. Similarly,

it is

difficult to

take

seriously

the claim that

an

admin-

istrative

agency has the option, under

our constitutional

scheme,

to disre-

gard

an

injunction entered against

it.

That the

entry

either of

an injunction or

of certain

types

of

classwide

relief makes nonacquiescence unlawful does not mean that such

interven-

tion is

appropriate whenever

a

court

strikes down

agency

action. The

pro-

priety

of

such relief must therefore depend on a case-by-case evaluation of

agency nonacquiescence than the rationality review envisioned by the

APA.

But

we think that it is

highly unlikely that,

if

the per se

rule

is rejected, the levels

of

scrutiny would

in

fact

diverge. Because

review of agency action under the APA is far more substantively demanding than

the highly deferen-

tial "rationality review" accorded to legislative or administrative classifications in

equal protection

analysis,

there would be

no

need to create an intermediate level

of

review,

as there has been in

the

gender area, simply

to

ensure meaningful judicial oversight. Moreover, the "strict

scrutiny"-strict

in

theory,

fatal in

fact-prong

of

equal protection jurisprudence

is

merely

a mild variant

of a

rule

of

per

se

invalidity, with the courts simply leaving some room for the possibility

of an

extraordinary,

overrid-

ing justification in what would otherwise be plainly impermissible action. We believe that

a

rejection

of

"strict scrutiny" review of nonacquiescence is fairly subsumed in our rejection of the

per

se

argu-

ment

of

unconstitutionality.

217.

For example, in the Lopez

v. Heckler

litigation,

the district court certified a circuit-wide

class consisting

of

all persons in

the

circuit "whose rights and benefits are, have

been,

or

will be

denied by defendants' express refusal to follow [the Ninth

Circuit's]

precedent" and issued

an

injunc-

tion directing the Secretary of Health and Human Services and her agents

to

"apply

the standards set

forth"

in previous Ninth Circuit rulings. 572 F. Supp. 26, 30, 32 (C.D. Cal.

1983).

See

supra

text

accompanying notes 106-13 (discussing subsequent history).

218.

Although

we

recognize that in other contexts class actions including future members

have

been certified under

Federal Rule

of

Civil Procedure 23, see Note,

The

Inclusion of

Future Members

in

Rule 23(bX2) Class Actions, 85 COLUM.

L.

REV. 397 (1985), we believe that

since declarations of

invalidity in the context of such class action suits will be the functional equivalent of an

injunction

that effectively bars nonacquiescence, any final determination to include future

members within the

reach of the court's judgment should be subject to the same standards that govern the

issuance of such

injunctive

relief.

Procedural devices like class actions cannot be employed to

accomplish goals fore-

closed by the substantive law. See 28 U.S.C. ? 2072 (1982); Burbank, The Rules

Enabling

Act

of

1934, 130 U.

PA. L.

REV. 1015, 1027-35, 1106-31 (1982).

Admittedly,

future

litigants were included

in class action certifications sustained

in

Califano

v.

Yamasaki,

442 U.S.

682, 688-89 (1979).

But

the

Court in

that

case

limited

its focus to

the permissi-

bility

of a

nationwide class

action,

and did not consider

the validity

of

agency

nonacquiescence.

Yamasaki cannot

plausibly

be read

to

have resolved that

question

sub silentio

in the course of constru-

ing

Rule 23.

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722

The

Yale Law

Journal

[Vol. 98:

679

the costs

and

benefits

of nonacquiescence,

a matter

that we take

up

in

Section IV.

With

these

five

specifications

in

mind,

we

turn

to consider

whether the

Constitution

bars an administrative

agency

from ever pursuing

a

policy

of

intracircuit

nonacquiescence,

even

though

the

organic

statute

does not

it-

self erect such

a prohibition,

the

agency

can justify

the

particular

applica-

tion

of its

policy

sufficiently

to

withstand APA-style

rationality

review,

and no court

has explicitly

insisted

on generalized

compliance

either

by

issuing

an

injunction

directly

restraining

the agency

or entering

certain

forms of classwide relief.

Although

the judicial

pronouncements

and secondary

writings

on

the

subject

have not

always

carefully

defined which

constitutional provisions

are implicated

by

nonacquiescence,

we see

essentially

three lines of argu-

ment.

The first

claim,

which is

by far the

most

central,

is premised

on

principles

of separation

of powers.

By

analogy to

the Supreme

Court's

articulation of

its role in

Marbury

v. Madison2"

and

Cooper

v.

Aaron,220

courts and commentators

have

argued that

just

as

a

Supreme

Court ruling

has

coercive

force beyond

the parties

to the

immediate

dispute,

so

must

a

ruling

of a court

of appeals

command

obedience

by

all within

its jurisdic-

tion.221 A

second

position

flows

from due

process jurisprudence

and

holds

that

agency action

works

a deprivation

of

property

or liberty

without

due

process

when

it is inconsistent

with the

applicable

law announced

by the

court of

appeals

that will

review

that action.222

Another

due

process

objec-

tion is

constructed

from the test

in

Mathews v.

Eldridge223

and balances

the

agency's

interest in

nonacquiescence

against

the

interest

of participants

in

the administrative

process

in

having

the agency

follow

the ruling

of the

relevant court

of appeals.224

Finally,

a claim

based

on both

due process

and

equal protection

principles

maintains

that intracircuit

nonacquies-

cence produces

discrimination

based

on

wealth or

litigation

resources

by

limiting

the benefits of

favorable

circuit law to

those

litigants

who are

able

to seek

judicial

review of

the agency's

action.225

We examine

each of

these

arguments

in turn.

219. 5

U.S.

(1

Cranch) 137 (1803).

220. 358 U.S. 1 (1958).

221. See supra text accompanying notes 95-126 (discussing judicial treatment of

SSA); Note,

Social Security Administration in Crisis: Non-Acquiescence and Social Insecurity,

52 BROOKLYN L.

REV. 89, 103-10 (1986); Note, Executive Nonacquiescence:

Problems of Statutory Interpretation

and

Separation of Powers, 60 S. CAL.

L.

REV. 1143, 1158-71 (1987); Note, Denying

the Precedential

Effect of Federal Circuit Court Decisions: Nonacquiescence by Administrative

Agencies, 32

WAYNE

L. REV. 151, 186 (1985).

222. See Note, Social Security Administration in Crisis, supra note 221, at

122

("SSA instruc-

tions to its

adjudicators to ignore judicially mandated legal rules favorable to

claimants operates

to

effectively deny many claimants their right to a meaningful hearing.") (footnotes

omitted).

223. 424 U.S. 319 (1976).

224. See Note, Federal Agency

Nonacquiescence,

supra note 8, at 252-60.

225. See, e.g., supra text accompanying note 105 (discussing Lopez v. Heckler),

note

119

(discuss-

ing Stieberger v. Heckler); Note, Collateral Estoppel and Nonacquiescence, supra

note

14,

at

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1989]

Nonacquiescence

723

B.

The

Separation of

Powers

Objection

Attorney

General Meese's

October 1986 address at Tulane

Univer-

sity226 sparked

intense debate

over whether

the

Supreme

Court's rulings

are indeed

owed the generalized

acquiescence

envisioned

by the nine

Jus-

tices

who

each signed

the

Cooper

v.

Aaron

opinion,

in an effort

to

stem

the resistance of several southern

governors

to the

desegregation

mandate

of Brown v.

Board of Education.227

We do not intend

in this

study

to

question

the premises

of

Cooper

v. Aaron. Our

approach

assumes that the

Supreme

Court's

pronouncements

on

federal

law must be

obeyed

not

only

by the particular

parties to

the dispute,

but also by all within

the regula-

tory

reach

of

federal law. This

obligation

of obedience entails

the

internal-

ization

of the

Supreme

Court's

rules in the conduct

of

primary

behavior.

For

example,

the Court's

Miranda

v.

Arizona228

rule

applies

to all

police

departments

in

this

country

and

requires

that the internal

operations

of

those departments

be

conducted in compliance

with

that rule; hence,

the

Constitution is violated when

Miranda

warnings

are

not

given

in

the

course of

interrogating

suspects

held

in

custody

even if

indictments

or con-

victions flowing

from such

questioning are

later

overturned. The question

here is whether our constitutional system

requires

that federal

administra-

tive agencies

acting within

the jurisdictional

reach of a

court of appeals

must accord the

same measure

of obedience

to a ruling

of that court.

In

addressing

this

question,

we first

reject

two competing

views

of

the

relationship

between an administrative

agency

and its

reviewing

courts,

conceptions

that have figured

prominently

in the judicial

and secondary

writings

on the

subject: first,

that the status

of an agency,

particularly

that

of an

adjudicatory

agency,

is analogous

to that

of

a district

court

in the

circuit;229

and, second,

that

an

agency

is

part

of a

co-equal

branch

of

gov-

ernment with

independent

responsibility

for the interpretation

of

federal

law.

230

The first

characterization

argues strongly

against

intracircuit

nonacqui-

escence,

for a district court

is bound in all

instances to follow

the rulings

of

its

supervising

court of appeals.

This view,

however, fails

to account

for

the

congressional

delegation

of substantive

policymaking

authority to the

administrative

agencies

and the resulting

constraints on the

review role

of

857-59.

226. Meese, The Law of the Constitution,

61 TUL. L. REV.

979

(1987); Meese,

The Tulane

Speech: What I Meant, Wash. Post, Nov. 13, 1986, at A-21, col. 4.

227. 347 U.S. 483 (1954). For a collection of responses to the Meese speech, see Perspectives on

the Authoritativeness of Supreme Court Decisions, 61 TUL. L. REV. 977, 991-1095 (1987).

228. 384 U.S. 436 (1966).

229. See, e.g., Ithaca College v. NLRB, 623 F.2d 224, 228 (2d Cir.) ("as must a district court, an

agency is bound to follow the law of the Circuit"), cert. denied,

449

U.S. 975

(1980).

230.

See Meese, The Law of the Constitution, supra

note

226, at 985-86.

If this

latter analogy

is

at

all helpful, it is more applicable to agencies that are clearly within the Executive Branch, the top

officials of which serve at the pleasure of the President, than to independent agencies, whose heads

are

insulated from direct presidential control by "for cause" removal provisions.

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724

The Yale Law Journal

[Vol. 98: 679

the federal courts under basic administrative law principles

as articulated

in SEC

v.

Chenery Corp.231

Administrative

agencies,

unlike district

courts,

are

responsible

for

a nationally uniform administration

of the statutes en-

trusted to them,232 and are typically the principal

decisionmakers

under

these statutes. The court's role is the reactive one of

checking for abuse of

discretion or other

transgressions of statutory limitations.

Indeed, even

on

questions of statutory interpretation, a strong rule

of deference to

agency

views

operates

in

lieu of the

de

novo

review characteristic

of

appellate

consideration of trial court determinations of questions

of law.

The

differences between

an

agency's interpretation

of law and that

of

the reviewing court were recently reaffirmed by the

Supreme Court in

Chevron,

U.S.A.

v.

NRDC233

and

INS

v.

Cardoza-Fonseca,234

where the

Court

made clear that the federal courts must uphold

an agency's inter-

pretation of the statute it administers if that interpretation

is reasonable

and

is

not

inconsistent with the clear intent of Congress.235

That a federal

court, in the first instance, might have interpreted the

statute differently is

irrelevant, for Congress delegated the policymaking

role to the agency,

and not to the federal judiciary.23' The district court

analogy also fails to

take account of the tension between the national responsibilities

of admin-

231. 318 U.S.

80 (1943) (Chenery I);

332

U.S.

194

(1947) (Chenery II).

In

FCC v.

Pottsville

Broadcasting Co.,

309

U.S.

134 (1940), the Court

stated:

This was

not

a mandate from court to court but from

a

court to an

administrative

agency.

. .

. A review

by a federal court of

the

action of a lower court is

only

one

phase

of

a

single unified

process. But to the extent that a

federal court is authorized to review an admin-

istrative

act,

there is superimposed upon the enforcement of

legislative policy through

adminis-

trative control a

different process from that out of which the

administrative

action under re-

view

ensued.

The

technical rules derived from the

interrelationship of judicial tribunals

forming

a

hierarchical system are taken out of their environment

when mechanically

applied

to

determine the extent

to which Congressional

power, exercised through a delegated

agency,

can be

controlled within the limited

scope of "judicial

power" conferred by Congress

under

the

Constitution.

Id. at

141

(emphasis added).

232.

See United

States v. Estate of Donnelly, 397

U.S. 286,

294-95

(1970).

233.

467 U.S.

837 (1984).

234. 107

S.

Ct. 1207

(1987).

235.

To the

extent

the

disagreement does not

involve the agency's organic statute,

agency

nonac-

quiescence

in

a

circuit

ruling

must be

justified,

if

at

all,

on

other grounds.

This

question,

like the

question

of

nonacquiescence

in

constitutional rulings, see

supra

note

214,

is

beyond

the

scope

of this

Article.

236.

See

Chevron,

467

U.S.

at 843 &

n.11. We do

not believe that the constitutional

analysis

changes

when

Congress

separates enforcement and

policymaking from adjudications, as

it

has done

for

internal revenue

and occupational safety, by conferring

adjudicatory responsibility on bodies

indepen-

dent of the

enforcement/policymaking agency (the Tax

Court and OSHRC, respectively).

The en-

forcement/policymaking agency's duty to acquiesce in the

rulings of the adjudicatory

agency

is

solely

a

question

of

congressional

design.

As

to the latter

agency, unless its role is limited to

factfinding

without

any

substantive policymaking prerogative, and,

hence, it may properly be viewed

as an ad-

junct

to

the court

of

appeals,

its

obligations

to

adhere to the

rulings

of the

circuit that

will

review

its

orders is no

different from that of an agency that

combines enforcement/policymaking and

adjudica-

tory functions.

Presently, however, both the Tax Court

and OSHRC have opted for a

policy of

in-

tracircuit

acquiescence.

See Golsen

v. Commissioner, 54 T.C. 742

(1970),

affd,

445 F.2d

985

(10th

Cir.

1971); Davis

Metal Stamping, Inc., 12 O.S.H. Cas.

(BNA) 1259, 1261 (1985),

affd,

800 F.2d

1351

(5th

Cir.

1986).

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1989]

Nonacquiescence

725

istrative agencies

and the limited geographic

reach of

the regional circuits,

a matter we discuss

below.237

Unlike the district

court analogy,

the co-equal branch

analogy,

at

least

in

its strong form,

argues sweepingly

for the constitutionality

of

nonacqui-

escence because

it does not recognize

for any federal court

a superior

role

in

the

interpretation

of federal

statutory

law

to

that

exercised

by

adminis-

trative agencies,

except with respect

to the adjudication

of the rights

of

the

parties

before the court.

The

co-equal

branch

analogy

significantly

over-

states the autonomy

of administrative

agencies. Like

the district court

analogy,

the co-equal branch* analogy

is inconsistent

with our constitu-

tional

scheme.

It

cannot coexist with

the holding

of the Supreme

Court

in

Cooper

v. Aaron and would

justify

nonacquiescence

even in the face of

a

pronouncement

by the Supreme Court.238

A more

useful starting place

is to

ask whether the

Supreme Court

and

the courts of

appeals

occupy positions

in our legal system

sufficiently dif-

ferent to place

in question the applicability

of Cooper

v. Aaron to

in-

tracircuit nonacquiescence.

We

focus initially on the

regional courts

of

appeals and on

statutory schemes

that do not provide for

exclusive venue

to a

single court

of

appeals

with nationwide jurisdiction.

It is

here that

the

differences are most

salient.

In

thinking

about

whether the

courts of appeals

should be treated

like

the

Supreme

Court, it

is

important

to bear

in mind

that the Cooper

v.

Aaron

principle

assumes that the law

forming the basis

for the obligation

to

acquiesce

is no

longer

in

flux.

The southern

governors

were embarking

on

a fundamentally illegitimate

campaign

of resistance precisely

because

the

Supreme Court

in

Brown and

its progeny made clear

that all public

schools had to desegregate. The

desegregation principle

was established

and

reaffirmed by the Court at a

level of generality that

precluded any

effort at common law modification

or narrowing through

the drawing of

factual

or

legal

distinctions. The

duty of generalized

compliance in

the

Cooper

v.

Aaron

sense

emerges,

however, only

when the

process

of

fed-

eral law development has been completed

in this manner.239

Any contin-

ued

resistance to a

ruling

of

the Supreme

Court after

that point must

be

237.

See

infra text accompanying notes 241-46.

238. See

Meese,

The

Law of the Constitution, supra note 226, at

985

("[constitutional]

decisions

do

not

necessarily determine

future

public policy[;]

. . .

constitutional

interpretation

is not the

busi-

ness

of

the

Court only, but also properly the business of all branches

of government").

239. See Wechsler, The Courts and the Constitution, 65 COLUM.

L. REV. 1001, 1008 (1965)

(Supreme Court's decisions are not statutes "calling for obedience by

all within the purview of the

rule that is declared," but once rule is settled and reaffirmed, "its

acceptance is demanded"). There

will

be occasions, however, where previously well-established precedent

has either fallen into desue-

tude or been substantially eroded by changes in the legal landscape.

See, e.g., Brown v. Board of

Educ.,

347

U.S.

483 (1954) (overruling "separate but equal" doctrine);

Erie R.R.

Co. v.

Tompkins,

304 U.S.

64

(1938) (denying previously asserted existence of "general"

federal

common

law).

In

such

circumstances, nonacquiescence may be a legitimate strategy.

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726

The Yale Law Journal [Vol. 98: 679

confined

to

the arena of

public opinion

and, ultimately, to the Article

V

amendment

process.240

The

rulings

of

the courts of

appeals, by

contrast, are

in

a

sense

only

intermediate points of

decision

in

this process

of

federal

law development.

This

conclusion

follows most

directly

from

the

absence of intercircuit stare

decisis and

from other features of

the federal

system's

commitment to

the

process of

intercircuit

percolation. The

fact that the

circuits are free to

disagree

with

each

other,241

that the

government

is

insulated under

United

States v.

Mendoza242 from the

constraints

of

nonmutual collateral

estoppel

in

order to ensure

the

possibility of multiple

circuit

consideration of a rule

of

law, and

that the Supreme

Court itself

relies on

intercircuit conflicts

as

an

important

signaling device

for

case

selection and as a source of doctri-

nal

materials

for

decisionmaking,243 makes

clear that the

law remains

in

a

state of

flux

even well after

a particular

court of appeals has announced

its

rule on

a

subject.

It might be

argued, of

course, that even

if the law is in

flux

nationally,

the

process

of

legal development

has

ended in

the

particular circuit, hence

rendering

illegitimate an

agency's policy

of intracircuit

nonacquiescence.

A

court of

appeals, however, does not

enjoy sovereign

responsibility

over

its

territory

akin to that

enjoyed by a state

court on

questions of state

law;

it is still

engaged

in

the process of

interpreting a unitary national law244

and

remains a

part

of

that process

even after

it

has ruled on the

subject.245

240.

But

cf. Ackerman,

The Storrs

Lectures:

Discovering

the

Constitution,

93 YALE

L.J. 1013

(1984)

(constitutional change

may come

about

through

extraconstitutional

upheaval in

public

values).

241.

See infra

notes

274-75.

242. 464

U.S.

154 (1984).

243.

See S.

ESTREICHER

& J.

SEXTON,

REDEFINING THE

SUPREME

COURT'S

ROLE

48

(1986).

244.

Even

where the

federal court

acquires

authority over

the case by

interdistrict

transfer,

it "has

an

obligation to

engage

independently [of

the views

of the

transferor

court]

in reasoned

analysis."

Binding

precedent

for all is set

only by

the Supreme

Court, and

for the

district courts

within a

circuit,

only by

the court of

appeals

for that

circuit. In re

Korean Air

Lines

Disaster, 829

F.2d 1171, 1176

(D.C.

Cir. 1987)

(transfer

under 28

U.S.C. ?

1407). Hence

the rule of

Van Dusen

v.

Barrack, 376

U.S.

612

(1964),

which requires federal

courts

in

diversity

cases

to

apply

the

law

of the

transferor

court, does

not

apply to federal

question

cases. See

generally

Marcus,

Conflict

Among Circuits and

Transfers

Within

the

FederalJudicial

System, 93

YALE L.J.

677, 721

(1984);

Steinman, Law

of

the

Case:

A

Judicial Puzzle in

Consolidated and

Transferred

Cases

and in

Multidistrict

Litigation, 135

U. PA.

L. REV.

595, 662-706

(1987).

245.

We

recognize that for

purposes

of assessing

whether

state

officials have

acted in

violation of

"clearly

established"

constitutional rights,

and hence

are shorn

of official

immunity

from

liability

in

damages under 42

U.S.C. ?

1983, some

courts have

held that

rights can

be "clearly

established"

by

circuit law even in

the absence of a

Supreme Court

ruling on

the subject.

See, e.g.,

Weber

v.

Dell,

804

F.2d

796, 803-04 (2d

Cir.

1986), cert.

denied, 107

S. Ct.

3263 (1987);

McCann v.

Coughlin, 698

F.2d 112

(2d

Cir.

1983).

Two

distinctions

are

relevant. First,

nonacquiescence by

federal

administrative

agencies

normally

arises over

statutory

questions,

and as to

such

questions

administrative

agencies play the

special

role

that

was

underscored

by

the

Supreme

Court

in

Chevron.

Second, federal

administrative

agencies

have

statutory

responsibilities

outside of the jurisdiction of a

regional court

of

appeals and have a

responsi-

bility

for the

uniform

administration of their

governing statute. As a

result, the fact that

an

agency's

policy

is

inconsistent

with the

ruling

of a

court of

appeals

is

itself a relevant consideration

in

ascer-

taining

whether

the rule

articulated by the

court of

appeals is

"clearly

established," for the

contrary

agency

position

detracts from

the clarity of

the rule.

At

some

point,

however, the

law will no

longer be in

flux,

even if the

Supreme

Court

has

not

ruled.

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1989]

Nonacquiescence

727

Thus,

a court of

appeals is

expected to

be open to

reconsidering prior

rulings

in the

light of

developments in

other circuits;

the role of

the cir-

cuits

in

harmonizing federal

law in this manner is an

important

adjunct to

the

Supreme

Court's role

as

conflict-resolver.2"

This is

not to

say

that

the

legal system

or the

courts of

appeals

them-

selves

should view

with

indifference

widespread, unjustified

disregard

of

circuit

law by

administrative

agencies (or other

actors).

For

example,

even

in

the

absence of

Supreme

Court review,

at some

point the law

in a

par-

ticular

circuit and

across circuits will no

longer

be in

flux.

As

developed

below,

the means are

available under

APA-style

rationality

review, possi-

bly

the

EAJA,247

and,

in

egregious cases,

the

courts' own

injunctive

pow-

ers to

prevent

nonacquiescence

that is not

adequately

justified.

The

modi-

fiable, intermediate

status of

a circuit

ruling does

suggest,

however,

substantial

differences from

the Cooper

v.

Aaron

paradigm.

These

arguments are less

persuasive

for

courts of

appeals

of national

jurisdiction,

such as the

Federal

Circuit

in

patent

cases,

and for the re-

gional

circuits

themselves where

they have been

given

nationally

exclusive

responsibility over

particular

subject

matter, such as

the D.C. Circuit has

over

various

types

of

administrative appeals.248 In those

cases,

of

course,

the law is

much more

resistant to change

because, at

least for

certain

is-

sues,

there will be

no

intercircuit

dialogue and

percolation.249

But

it

would

nonetheless be a

mistake,

in

considering the per se

constitutionality

of

nonacquiescence,

mechanically to equate

these

courts with the

Supreme

Court.

The

fact

that

circuit law

is

typically

made

by panels

of three

judges

(some

of

whom

may not be active

members of the

court

of

appeals) ren-

ders

a

single

decision on

a

particular issue

more open to

reexamination

by

a

subsequent panel

than is true of the

Supreme Court's

pronouncements.

This

result

is

reinforced by the

fact that

a court of

appeals

generally acts

on

the basis of

mandatory

jurisdiction,

and therefore

almost

certainly con-

siders

a

particular

issue more

frequently

and in more

diverse

factual con-

texts than

does the

Supreme

Court, with

its largely

discretionary docket.

We

do

not mean

to

place

too much

emphasis,

however, on the

panel/en

Then,

a

court

might be

able to

enjoin

nonacquiescence or

sanction

the agency,

for

example, by

making

it

pay

attorney's

fees

under the

EAJA. See

infra

text

accompanying notes

347-48.

246.

See S.

ESTREICHER

& J.

SEXTON,

supra

note

243, at

48-52,

53-59.

247.

28 U.S.C.

? 2412

(1982);

see infra

text

accompanying notes

347-48;

categories

of

nonacquiescence.

We

conclude that intracir-

cuit

nonacquiescence can be

justified

only

as an interim

measure

that

al-

lows the

agency to

maintain a

uniform

administration

of its

governing

statute

following an

adverse decision

by

a

court of

appeals while the

agency

reasonably

seeks

in

the

courts a national

validation of

its position.

For the

other

two

categories,

we

do not believe

that

limitations

would

advance

the

proper

functioning of the

administrative

lawmaking

system.

A.

Intercircuit

Nonacquiescence

Given

the

lack

of

intercircuit

stare

decisis, and the

reasons

underlying

our

system

of

intercircuit

dialogue,

an

agency's

ability

to

engage

in in-

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736 The Yale Law Journal [Vol. 98: 679

tercircuit nonacquiescence

should not

be constrained.274 The costs

and

benefits

of

intercircuit nonacquiescence must be evaluated in light of our

legal system's rejection of intercircuit stare decisis,275 which, in turn, can

be

justified only by reference to the benefits of intercircuit dialogue.27

Indeed,

if

such dialogue were not desirable, the uncertainty that results

when different circuits independently examine a legal issue would clearly

suggest making binding on all courts of appeals the ruling of the

first

court of

appeals to consider a particular issue.277

The benefits

of

dialogue can be grouped into four categories.278 First,

doctrinal

dialogue

takes

place

when

one

court

of

appeals

addresses

the

legal reasoning of another and reaches a different conclusion. Such dia-

logue is likely to result

in

better decisions, as it will produce a more care-

ful and

focused consideration of the issues.279

Second, experiential dialogue

occurs when

courts

of

appeals

are able to

observe

and compare the consequences of different legal rules.

This em-

pirical evidence is relevant both to circuits that have not yet considered an

issue as

well as to ones that may wish to reconsider

their

position.280

Third, the conflicts produced by intercircuit dialogue play

a

useful

role

274. Although the Supreme Court has

declined to hold that a nationwide class action may never

be

certified, it has urged that care be taken

to ensure "that certification of such a class would not

improperly interfere with the litigation of

similar issues in other judicial districts." Califano v.

Yamasaki, 442 U.S. 682, 702 (1979). Such

class certification, in our view, should be avoided

where

it

would have the effect of precluding intercircuit

nonacquiescence, or restricting intracircuit nonacquies-

cence

that satisfies rationality review as set

forth in Section

V

below.

275. The absence of intercircuit stare

decisis, and the concomitant "law of the circuit" rule, may

be

largely an accident of history. See

Friendly,

The

"Law of the Circuit" and

All

That,

46

ST.

JOHN'S

L. REV. 406

(1972); Vestal, supra

note 29, at 136-66. The point of departure

is the

Act of

Mar.

3, 1891, ch. 517, 26 Stat. 826, the

so-called Evarts Act, which created the circuit

courts of

appeals. Although ? 6 of the Evarts Act provided that "the

judgments

or decrees of the circuit courts

of

appeals shall be final in all cases," 26 Stat.

828, and Congressman Breckenridge

of

Kentucky

feared for "the preservation of homogeneous

jurisprudence,"

21

CONG.

REC.

3407 (1890),

this re-

quirement of finality could have readily

co-existed with a rule of intercircuit stare decisis. Indeed,

some early decisions deferred to rulings of

other circuits unless they were clearly wrong, see, e.g.,

Beach v. Hobbs, 92 F. 146 (1st Cir. 1899),

affd, 180 U.S. 383 (1901); United States v. Flannery, 106

F.2d

315 (4th Cir. 1939). Other courts,

however, began to assert a duty

of

"independent judgment

in

cases of

first impression in our own court,"

Haberle Crystal Springs Brewing Co.

v.

Clarke, 30

F.2d

219, 222 (2d Cir. 1929), rev'd on other

grounds, 280 U.S. 384 (1930); see Heckendorn

v.

United

States,

162 F.

141,

143

(7th Cir. 1908), cert.

denied,

214

U.S. 514

(1909).

For the

arguments

in

favor of

intercircuit stare decisis, see Note,

Securing Uniformity

in National Law:

A

Proposal for

National Stare Decisis in the Courts of

Appeals,

87 YALE

L.J. 1219, 1240-46 (1978). Despite

its

adventitious

beginnings, however, the absence

of

intercircuit stare decisis is now

firmly

embedded in

the

legal landscape. See S. ESTREICHER & J.

SEXTON, supra

note

243, at

48.

276.

See, e.g., S. ESTREICHER & J.

SEXTON, supra note 243, at 48, 50-52, 73-74; R. POSNER,

THE FEDERAL

COURTS:

CRISIS AND

REFORM 163

(1985).

277.

In

fact,

under

some statutory

schemes, Congress has made a judgment that a quick and

authoritative resolution is more

important

than the

benefits

that

might

result from intercircuit dia-

logue. Thus, for example, challenges to many

environmental regulations can be brought only

in the

D.C.

Circuit.

See infra

text

accompanying

notes 394-95

(discussing

exclusive venue

provisions).

278.

The

discussion of these four

categories is a summary of a more comprehensive inquiry in

R.

Revesz, Specialized Article

III

Courts and the

Administrative Lawmaking System 30-40 (1987) (un-

published manuscript on file with authors).

279.

Id. at 7; see Wallace, The Nature

and Extent of Intercircuit Conflicts: A Solution Needed

for

a Mountain or a

Molehill?,

71 CALIF. L. REV.

913,

929

(1983).

280. See R.

Revesz, supra note 278, at

33.

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1989]

Nonacquiescence

737

in

signalling to the

Supreme Court the

difficulty

of

particular

legal

issues,

and

thereby

help

the

Court

make better case

selection

decisions.

Difficult

issues are

likely to

have

been

decided

incorrectly

in

the first

instance

and

are

also

likely to

result in

intercircuit

conflicts.281

Under a

regime

of

in-

tercircuit

stare

decisis, the

Supreme

Court is

hampered

in two

ways:

(1)

without

the

signalling

role of intercircuit

conflicts,

the Court

has

to

ex-

pend

more

of its

resources to

identify

difficult

issues that

may

have been

resolved

incorrectly

by the

first

court of

appeals to

address

them,

and

(2)

to

the extent

that the

Court fails to

identify such

cases,

it

may

let stand

erroneous

decisions

below.282

Fourth,

doctrinal and

experiential

dialogue

on the

part of the circuits

aids the

Supreme

Court in

deciding

cases

on

the merits. Doctrinal dia-

logue

isolates the

issues

on

which the

courts

of

appeals are

divided and

presents the

competing

positions

on

those

issues,

probably

stated in

their

most

compelling

terms.

As to

experiential

dialogue, the

Supreme

Court,

like the

circuits,

benefits

from the

existence of

a

store of

accumulated

283

experience.

If

an

agency

must

conform its

policy

nationwide to an

adverse

ruling by

a court

of

appeals, it

becomes

exceedingly

difficult,

if

not

impossible,

for

either

the

agency or

a

private

litigant

to

bring before

another court

of

appeals

the

question whether

the

agency's

original

policy

was

permissible

under

the

statute.284

Consider,

for

example,

the

question whether EPA

can use

independent

contractors

in

enforcement

proceedings

under the

Clean

Air

Act-the

question

at

stake

in

United

States

v.

Stauffer Chemi-

cal Co.285

If

the

first court of

appeals

to face

this

question

determined that

EPA could

not use

independent

contractors, a

bar

against

intercircuit non-

acquiescence

would

prevent

the

agency

from

using

such

contractors

any-

where in

the

country.

In

addition, it is

unlikely that

any

private

party

would have

standing to

argue that

the

agency

should

be given the

option

of

using such

contractors.

Thus,

no

subsequent

court would

have the

op-

281. As

Judge

Posner

noted:

An issue

that

provokes a

conflict

among

the circuits

that is not

immediately

eliminated

by

one

circuit

receding

from its

is

likely to

involve

a

difficult

legal

question;

and a

difficult

legal

question is more

likely to be

answered

correctly

if it is

allowed to

engage

the

attention

of

different sets

of

judges

deciding

factually

different

cases

than if it is

answered

finally

by the

first

panel

to

consider

it.

R.

POSNER,

supra note

276,

at

163.

282. See

R.

Revesz,

supra note

278,

at

33-35.

283. See

id.

at

34-35.

Percolation is

not

without

costs,

however. If

what

matters

is

not a correct

answer, but

instead a

uniform

rule,

intercircuit

stare

decisis is

preferable

because it

yields

a

uniform

rule

without the

need

for

Supreme

Court

intervention. As

one

of us

has

argued

elsewhere, it is

un-

likely

that

this

consideration

should or

will be

decisive in

those cases

where

outcome

really

does

matter.

See

id. at

39.

284.

There

will be

some

cases

in

which

the

agency's

administrative

proceedings

will have

been

completed

before the

first

adverse

ruling. Those

cases

might

give

another

court

of

appeals the

oppor-

tunity to

uphold

the

agency's initial

policy. But there

would be no

such

opportunity

for

cases in which

the

administrative

proceedings

take

place after the first

adverse

ruling.

285. 464

U.S.

165

(1984).

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738 The Yale

Law

Journal

[Vol.

98:

679

portunity to decide whether independent

contractors are

part

of the

per-

missible arsenal of enforcement options.286

As a

practical matter,

and

con-

trary to

the

systemic judgment underlying

the

Supreme

Court's

ruling

in

Mendoza, the adverse ruling of the court of appeals would therefore

be-

come binding and no further dialogue among the circuits would be

possible.

It

is

true that even in this

scenario,

the

Supreme

Court could

grant

certiorari, or Congress could amend the governing statute

to

explicitly

au-

thorize the use

of

independent contractors.

But both the

Supreme

Court

and

Congress

would be

deprived

of the benefits

of

intercircuit

dialogue.287

Moreover, from a managerial perspective, there are important costs

at-

tached to involving either of these institutions, which have limited deci-

sional

resources,

in

problems

that could

be resolved by

the

circuits them-

selves.288

More fundamentally, although

our

legal system generally

assumes that Congress will be able to correct judicial errors,

the combined

influence of inertial forces and unwillingness to open up what may have

been

a

controversial

legislative compromise

to reexamination

may severely

limit the occasions for congressional intervention of this type. Such an un-

derstanding

of the

legislative process

not

only explains why

the Court oc-

casionally is willing to overrule prior erroneous statutory construction,

but

also

undergirds

the

decision

to

assign policymaking

under federal statutes

to

the

reversible discretion

of

administrative agencies.289

Allowance of

agency intercircuit nonacquiescence is, therefore, implicit in the system's

commitment to

avoiding premature finalization

of federal law.290

A bar

against

intercircuit

nonacquiescence,

in

its strongest form,

would

force

an

agency

to conform nationwide

to an adverse ruling by

a court of

appeals

even

if, prior

to

that

adverse

ruling,

the

agency's position

had

been

upheld

in other courts of

appeals.

For

example,

if

the first two cir-

cuits to

consider the

question

had found

it

permissible

for

EPA

to

use

independent contractors, but the next circuit had disagreed, the agency

would have to abandon the use of

independent

contractors

everywhere

in

the

country,

even

in

the two

circuits

that

upheld their use.

There would

be no

mechanism,

absent intervention

by Congress

or the

Supreme Court,

that

would

permit

the

agency

to use

independent

contractors ever

again.

Thus,

not

only

would adverse decisions truncate

further

dialogue,

but

they

would

also

dominate

decisions

that are favorable to the

agency.

The

286.

As we

explain below, a

declaratory judgment mechanism does not provide an

adequate

alter-

native. See infra text accompanying

notes 311-13.

287.

Of

course, intercircuit

disagreement helps signal difficult legal issues not

only

for

the

Su-

preme Court, but for Congress as

well.

288. See S. ESTREICHER & J.

SEXTON, supra note 243, at 51-52, 118-19, 132-35.

289.

See, e.g., Estreicher,

Policy Oscillation at the Labor Board:

A

Plea for

Rulemaking, 37

ADMIN. L. REV. 163, 166-68

(1985); Winter,Judicial Review of Agency Decisions:

The Labor Board

and

the

Court, 1968 Sup. CT. REV.

53, 64-67, 71.

290.

See

S.

ESTREICHER

&

J.

SEXTON, supra

note

243, at

48.

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1989]

Nonacquiescence

739

result would be a one-way ratchet

in

which the authoritative

voice would

be that of

the first court

of

appeals

to rule

against

the

agency.

We have

already discussed how one central premise

of our

post-New Deal

adminis-

trative law

system, recognized by the Supreme

Court as

early as

SEC v.

Chenery

Corp.

,291

and more

recently

in

Chevron,

USA

v.

NRDC,292

is

that the

administrative agency as

the

delegates

of

congressional

authority,

rather than the Article III courts, is the primary policymaker

under the

statute. A

system

in

which the decision

of the first

court

of

appeals

to

rule

against

the

agency-even

in the

presence

of several decisions favorable to

the agency-becomes binding law nationwide is inconsistent with this

gov-

298

erning

premise.

Even

if

administrative law had developed differently,

and

courts

rather

than agencies had been designated as

the

primary policymakers,2"

it

would nonetheless be

perverse

to accord

greater

stature to the decision of

the first court to

rule against the agency

than to

favorable decisions ren-

dered

by

other courts at the same level. It is difficult to

imagine

a

justifi-

cation for such a

system, other than perhaps hostility to the

decisions of

administrative

agencies-regardless

of the substance of those

decisions.295

The results

generated by

our

independent

contractor

example, which

involves

an issue

of

internal

agency procedure,

can be

generalized over a

fairly

broad

spectrum

of

administrative action. Consider, instead,

a regu-

latory agency's interpretation

of a substantive

statutory question,

say,

an

NLRB

policy

determination that

particular

conduct

in

a union

represen-

tation election

constitutes an

unfair labor

practice.

Assume

that the

agency's

General Counsel issues

a

complaint applying

the

Board's

policy,

and

the Board

finds

a

violation, but enforcement is denied by a

court

of

appeals

on

the

ground that the Board's definition

of an

unfair labor

prac-

291.

318

U.S. 80, 88 (1943)

(Chenery

I);

332

U.S.

194,

202,

209

(1947)

(Chenery

II).

292. 467

U.S.

837, 842-44 (1984).

293. In

a system

that eschews intercircuit stare

decisis,

there is no reason to assume

that

the

adverse circuit rule

correctly identifies a

statutory limitation

on

agency discretion, and indeed there is

every reason to

believe that such a

determination cannot be

conclusively made in

advance

of

an

in-

tercircuit

dialogue

on

the point.

294. Such a

designation may have

occurred under Title

VII of the Civil Rights

Act of 1964,

42

U.S.C. ? 2000e

(1982). See, e.g.,

General Elec. Co.

v.

Gilbert,

429 U.S.

125,

141-42 (1976).

295.

These

problems would not be

cured even if the bar

against intercircuit

nonacquiescence were

stated in a weaker

form, so that an

agency would have to

comply with

an

adverse court

of

appeals

ruling in all circuits

except those that

had upheld the agency's

position. Here,

too, an adverse circuit

court

decision would be

given

an

unwarranted one-way ratchet

effect-binding

force in

those circuits

which have not yet

ruled-whereas a

favorable decision in

one circuit would not

have binding force in

other

circuits.

Moreover, such a

rule would create

a conflict in the

circuits which, without

intervention by the

Supreme

Court or

Congress, could

be

harmonized only by

rejecting

the

agency's position.

Because the

issue could not be

relitigated in circuits

in which the agency's

position had been

rejected, or where the

agency

was

prevented from

asserting

its

position as

a

result

of

the

bar

against

intercircuit

nonacquies-

cence, harmony

would result only if the

circuits that

originally had upheld the

agency's position ruled

against

the

agency

upon reconsideration.

Thus, even under the

weaker formulation of the bar

against

intercircuit

nonacquiescence, there

remains an asymmetry

that is inconsistent

with the position of

administrative agencies in

our legal

system.

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740

The

Yale

Law

Journal

[Vol. 98:

679

tice

in

this

context exceeds its

statutory

authority.

If

the General

Counsel

acquiesces

in

cases

arising in

other

circuits,

and

consequently

issues com-

plaints

only

in

cases that

meet

the

more

stringent

standard

of

the

adverse

circuit

rule,

no

other

circuit

will

have

the

opportunity

to consider the

Board's

original

policy,

since

the

General Counsel's decision not to issue

a

complaint

is

unreviewable." This result

obtains for

almost all

statutory

schemes

because, as the

Supreme Court

made clear in Heckler v.

Cha-

ney,297

a

regulatory

agency's

decision

not to

bring

enforcement

proceedings

is

almost

always

unreviewable.

Admittedly,

there are

other

forms of

administrative action

in which a

bar against

intercircuit

nonacquiescence does

not

completely

foreclose re-

litigation in

other

circuits.

For

example,

under the

statutory scheme

at

issue

in

Dunlop

v.

Bachowski,298 where

the

Supreme

Court

held

that the

Secretary

of

Labor's decision

not to

bring an

enforcement

action was re-

viewable,299

relitigation

in

another

circuit could

result from a

challenge by

a

party

aggrieved by

such

a decision.300

But even in such

cases there

are

asymmetries.

In

order to have

its

origi-

nal

position

vindicated

in

circuits

that

had not

yet

rejected

it, the

agency

would

have to

depend

entirely on

the

actions of

private

parties. In

some

statutory

schemes,

there may

be no

private

parties

with

standing

to

seek

review

of

agency

inaction;

even

where

present,

such

parties

might not

have the

resources

or

a

sufficient stake in

the

controversy

to

litigate.

Moreover,

in

defending

its

decision

not to

bring an

enforcement

action,

the

agency

would find

itself

in the

uncomfortable

position

of

arguing

against

a position

that

it

actually

favors.

Judicial

deference might

thus

attach to

the

position that the

agency

actually opposes. Such

situations

would,

in

any

event,

breed

confusion

and

undermine

conventional

under-

standings

of

the

respective

roles of

agency

and

reviewing

court.

In

summary, the

acceptance of

intercircuit

nonacquiescence

should

properly be

seen as a

corollary to

the

rejection of

intercircuit stare

deci-

SiS.301

To

make the

ruling

of

the

first court of

appeals that

considers an

296.

See

NLRB v. United

Food

&

Commercial

Workers

Union, 108

S.

Ct.

413,

420

(1987);

NLRB

v.

Sears,

Roebuck

&

Co., 421 U.S.

132,

148

(1975);

Vaca

v.

Sipes, 386

U.S.

171,

182

(1967).

297.

470 U.S.

821,

837-38

(1985).

298.

421

U.S.

560,

566

(1975).

299.

Dunlop

v.

Bachowski

involved

alleged

violations of

? 401

of the

Labor-Management

Report-

ing

and

Disclosure Act

of 1959

(LMRDA).

Distinguishing

this

case in

Heckler v.

Chaney, the

Court

stated

that the

LMRDA

"presents

an

example

of

statutory

language

which

supplied

sufficient

stan-

dards

to

rebut the

presumption of

unreviewability,"

470

U.S. at

833,

which

normally

would attach

to

an

agency's

decision

not

to

commence

enforcement

proceedings.

300.

Similarly, it is

possible

that in

cases

in

which an

agency

distributes

benefits, a

procedure

could

be

established

that

permitted

such

relitigation

without

intercircuit

nonacquiescence. For

exam-

ple,

if

there

were

statutory

authorization,

which

may not

be

present in the

statute as

currently

writ-

ten,

the

Social

Security

Administration

could

pay

disability

benefits

under

protest

rather

than

engage

in

intercircuit

nonacquiescence, and

then

bring

an

action

to

recover

the

benefits.

But

see

infra text

accompanying notes

311-13

(discussing

problems with

such

a

procedure).

301.

As

we

noted at

the

outset,

see

supra

text

accompanying

notes

24-29,

the

Court's

rejection in

Mendoza of

nonmutual

collateral

estoppel

against the

government does

not

logically

require

any par-

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1989]

Nonacquiescence

741

issue directly

binding

on all other

courts of

appeals through

the operation

of stare

decisis is undesirable

because

it eliminates

the

possibility

of in-

tercircuit

dialogue.

For the same

reason, it

is undesirable

to make

the

ruling of

the first court

of appeals

rejecting

an agency's

policy indirectly

binding

on other courts

by insisting

on compliance

with

that ruling

in the

agency's

internal proceedings,

a

requirement

which

would have the

prac-

tical effect

of precluding

the agency

from litigating

the issue

again in

other

courts of

appeals.

A

bar

against intercircuit

nonacquiescence

would be

worse than

the

adoption

of intercircuit

stare decisis.

If the

ruling

of one court of appeals

effectively

binds others,

it makes

little sense

to create

a system in

which

the binding

rule is

always the

one adverse

to the agency.

Such an

asym-

metry

would bespeak

a

hostility

to

the administrative

state

fundamentally

at odds

with

the doctrine

of deference

to agency

action

that

is a

corner-

stone

of modern administrative

law.302

B.

Nonacquiescence

in the Face

of

Venue Choice

As we have indicated,

nonacquiescence

in

the presence

of venue

choice

arises where an

agency

refuses,

in its

administrative

proceedings,

to

follow

a

ruling

of a

court of

appeals,

where

the

other

courts to

which

an

appeal

may

lie either have upheld

the

agency's position

or

have not

yet

addressed

the legality

of that

position. For

the most

part, this category

raises

the

same issues as intercircuit

nonacquiescence.

Consider

an

example

in

which,

because

of the breadth

of the venue

provisions,

the agency's

proceedings

could

be reviewed

in any of

the re-

gional

circuits.303

If

the agency

is to

avoid

nonacquiescence,

it

will have

to

conform

its administrative

proceeding

to the

ruling of the

circuit

that had

previously

rejected

its position.

Such a practice

has

the same

negative

asymmetries

as a

bar against

intercircuit nonacquiescence.

Moreover,

these problems

do not

disappear

in

cases

in

which

venue,

while

broad, does not

include all

of the regional

courts of appeals.

Assume

that review

of a

particular

administrative

proceeding

is available

in the

First,

Second,

and

Third

Circuits,

and that

of these

courts, only

the Sec-

ond

Circuit

has

rejected

the

agency's

position.

If

the

agency

does

not con-

ticular conclusion

on the

legitimacy

of nonacquiescence.

It would

be theoretically

possible

to

permit

relitigation,

but

only in those

circumstances

where the

agency can

do so

while adhering

to adverse

circuit

law in its

internal

proceedings.

However,

given

the problems

with

a declaratory

judgment

approach,

see infra

text

accompanying

notes

311-13,

relitigation

would, as a practical matter,

be

precluded

in circumstances

in which

the agency

acted

as anything

other than a prosecutor

bringing

actions in federal

court.

302. Intercircuit

nonacquiescence

is not

entirely

without costs,

as it

produces short-term

dis-

uniformity.

But

these costs

are no different

than

those that

inhere

in the rejection of intercircuit

stare

decisis.

303. The NLRB faces

this situation

when

it adjudicates

cases

involving

employers

with

nation-

wide operations.

Its actions can then

be

challenged in

any circuit

in which

such an employer

"trans-

acts business,"

in

addition

to the

D.C. Circuit.

See 29

U.S.C. ?

160(f) (1982).

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742 The

Yale

Law Journal

[Vol. 98:

679

form its

proceedings

to the

ruling

of

the

Second

Circuit,

it

will be

engag-

ing

in

nonacquiescence, as we have

defined

it,

regardless of whether

its

administrative

proceedings

are

ultimately

reviewed in one of the

other

two

circuits.3?

Nonacquiescence

in the

presence

of

venue

uncertainty,

however,

is

dif-

ferent

from

intercircuit

nonacquiescence in

some

important

respects. Re-

turning

to our last

hypothetical,

assume

that

the

agency

refuses to

follow

the

ruling

of

the

Second Circuit

and that its

proceedings

are

ultimately

reviewed in

that

circuit.

From our

perspective,

what is

relevant is the

con-

duct of the

agency

at

the time

of the

administrative

proceedings,

not

the

posture in which

the

agency finds

itself

when

it

gets to

court.

In the

hypo-

thetical,

the

agency's order is

reviewable in

three different

circuits,

and

it

cannot determine

with

complete

certainty whether its

action

will

be re-

viewed

in

the

Second

Circuit, rather than in

the First or

Third Circuit.306

But

when the

agency

finds itself

litigating in the

Second

Circuit,

from

the

perspective of

that

court, the

agency's

behavior

looks

like

intracircuit

nonacquiescence. In

fact,

courts

have

severely

criticized

administrative

agencies

in

precisely

these

circumstances,

apparently

without

considering

the

differences

between

pure

intracircuit

nonacquiescence and

nonacquies-

cence in

the face of

venue

choice.306 The

resulting

friction

between

agency

and

reviewing

court

is

a

cost not

encountered

with

intercircuit

nonacquiescence.307

In

summary, a

bar

against

nonacquiescence

under

conditions of

venue

choice is

undesirable

for the

same

reasons as

is a bar

against

intercircuit

nonacquiescence.

Moreover,

venue choice

makes it

exceedingly

difficult, in

some

situations

practically

impossible,

for an

agency

to

continue to

press

its

preferred

policy

in

circuits that

have not

rejected

it,

without

thereby

304.

Assume,

moreover,

that

the

Ninth

Circuit,

in

which

review of

this

hypothetical

administra-

tive

proceeding is

not

available,

had

also

rejected

the

agency's

policy.

Whether

the

agency

must

follow

the

ruling of

the

Ninth

Circuit

implicates

solely the

question of

intercircuit

nonacquiescence.

305. In

our

hypothetical, it

is

true

that the

agency will

have a

basis

for

predicting that a

losing

party

will

seek

review

in the

Second

Circuit.

However,

there

might

be

other

parties

to

the

administra-

tive

proceeding who will

be

aggrieved

by an

agency

order

issued

in

conformity with the

Second

Cir-

cuit's

position. The

agency

itself

may

seek

enforcement

of

its order in

a circuit of

proper

venue

that

has not

yet

ruled

against

the

agency,

even

if

the

agency

would

normally

go to

the

circuit

where the

alleged

violations

occurred.

Depending

on

the luck

of

the

draw,

if

petitions

are

filed

within the first 10

days after an

agency

order

under

Pub. L.

No.

100-236,

101

Stat. 1731

(1988) (to

be codified at 28

U.S.C.

?

2112(a)),

or

are

filed

after

that

period

under

the

rule

of

first-filing,

the case

might end

up in

the

Second

Circuit.

But such

a

fortuity

does

not transform

a

situation of

venue

uncertainty into one of

intracircuit

nonacquiescence.

306.

Where

venue

is

certain,

an

agency

can

engage in

intercircuit

nonaquiescence

without

thereby

having

also

to

engage

in

intracircuit

nonacquiescence.

That

is, if

the

Second

Circuit

is the

only

circuit

to

have

rejected an

agency's

policy, the

agency

can

acquiesce

in

that

circuit but

continue to

press

its

preferred

policy

elsewhere.

But

where

venue is

uncertain,

the

agency

may

find

itself

litigating before a

court

that

has

previously

rejected

its

position,

unless the

agency

complies

with

the unfavorable

ruling

nationwide.

Even

though

the

agency

might

concede

error,

as

the

NLRB

often

does

in

this

posture,

there are

costs

attached to

administrative

behavior

that, at

first

glance,

looks to

the

reviewing

court a

great

deal

like

intracircuit

nonacquiescence.

307. A

more

complete

understanding

of the

respective

roles of

agency

and

court

may

alleviate

some of

this tension.

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1989]

Nonacquiescence

743

having

that policy

repeatedly

challenged

in circuits that have

previously

rejected

it. To

remove the

friction between

agency and court that is

thereby

caused, we

recommend the

elimination,

or at least the substantial

reduction,

of venue

choice. Under

our proposal, an

agency

would

know,

at

the

time

of

its

administrative

proceedings,

where its action

will be

re-

viewed. We

consider this issue further in

Section

VI.

C. Intracircuit

Nonacquiescence

Given

our conclusion

that, even

though a court

of

appeals

has

rejected

an

agency's

policy, the

agency should

be allowed

to continue

to

press

that

policy

in

other

circuits,

what rules should

apply

to cases that are

review-

able

only in the

circuit that has

rejected the

agency's policy? Consistent

with the

proper role

of

agencies and

courts in our

legal

system,

we believe

that there

should

not

be

an

absolute

bar

against

intracircuit

nonacquies-

cence.

However,

such

nonacquiescence

can

be

justified

only

as an

interim

measure that allows the

agency to maintain a uniform

administration of

its

governing statute

while it

makes reasonable

attempts to

persuade the

courts

to validate its

position.308

1. Intercircuit

Dialogue

It is

true that even

if

an agency must conform

its administrative

pro-

ceedings

to

the

case law of

the court of

appeals

to which

review

would

lie,

where

this case

law

is

inconsistent

with

the

agency's

policy,

the

agency

can

continue

to

press that

policy

in other circuits if

it

chooses

to do

so.

Thus,

a bar

against

intracircuit

nonacquiescence

would not

truncate the

development

of

the law.

Other circuits

would

have

the

opportunity

to

up-

hold

the

agency's position.

If

the

Supreme Court

eventually

grants

certio-

rari to

resolve the

conflict among

the circuits,

it

will benefit from

being

able to

observe

the effects of the

different

legal

regimes.

Nonetheless, an

inflexible bar

against

intracircuit

nonacquiescence con-

strains

the

dialogue

among

the

circuits.

Returning

to the

example

of

EPA's

use

of

independent

contractors, consider

a

scenario in

which that

question

comes first

before the

Second Circuit, which strikes

down

the use

of

such

contractors, and

then

before the Seventh

and

Ninth

Circuits,

which

uphold

it. It

would

be desirable

for

the

agency

to

be

able

to

go back

before

the Second

Circuit and

reargue

its

position

in

light

of its

subse-

quent

victories.

The Second

Circuit

might be

persuaded by

the arguments

of

the two

other

circuits, and

the

conflicting

positions might

be harmo-

nized

without

the need for review

by

the

Supreme Court.

308.

At

present,

because of

broad venue

choice

under most

statutes

providing for

judicial

review of

agency

action,

intracircuit

nonacquiescence

arises in

only

a

few

statutory

schemes,

notably

the

Social

Security Act.

See infra

text

accompanying

notes 378-81.

It is

likely to

become much

more

significant,

however, if our

proposal

for

eliminating

venue choice,

advanced

in Section

VI, is

adopted.

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744

The Yale

Law

Journal

[Vol.

98:

679

But the Second

Circuit

will

be unable

to

reconsider

this

issue

unless

EPA

can use

independent

contractors

in

cases

subject

to

review

in

that

circuit.30? To

do

so,

however,

entails

acting

contrary

to the

case law

of

the

court

of

appeals

to which review

lies-that

is,

engaging

in

intracircuit

nonacquiescence.

Similarly,

intracircuit

nonacquiescence

is

a

prerequisite

to

judicial reconsideration

of

a

regulatory

agency's

substantive

policy

under schemes in which

the

agency's

failure

to

bring

enforcement actions

is

unreviewable.310

Thus,

a total bar

against

intracircuit

nonacquiescence

would make

it

impossible

for

a

circuit that at

one

time

ruled

against the

agency

to

continue a

dialogue

with

circuits

that

subsequently

ruled

for

the

agency.

Resolution of

the conflict

among

the

circuits

would

require

Su-

preme

Court

intervention,

thereby

adding

unnecessarily

to

the Court's

workload.

Moreover,

the

resulting

asymmetry

again

fits

uncomfortably

with

the

concept

of

administrative

deference.

If

intracircuit

nonacquies-

cence is

barred,

only the circuit

that

ruled

for

the

agency

would

be

open to

possible

reconsideration of

its

position;

rulings

against

the

agency would

be

immune to

such

reconsideration.

Here,

too, the

one-way

ratchet

moves

exclusively

in

the

direction

of

disapproval

of

the

agency's

action.

A bar

against

intracircuit

nonacquiescence

also

delays

the

harmoniza-

tion of

federal

law.

Were such

a bar in

place,

conflicts

could be

harmo-

nized

without

intervention

by

the

Supreme Court

only

if

the courts of

appeals

that

ruled

for

the

agency

reconsidered

their

position.

The

courts

that

ruled

against

it

would

ordinarily

not

have

an occasion to

reexamine

their

prior

rulings,

even

where

they

might

have

found

persuasive

the

views

of

the other

circuits.

It is

true,

of

course, that

the

Supreme

Court

and

Congress can

always

intervene.

But, as we

have

explained, both

of

these

institutions

have

lim-

ited

decisional

capacity,

and

Congress

may be

unwilling for

other

reasons

to

reopen

consideration

of

the

statute

in

question.

Moreover, the

Supreme

Court

may

be

reluctant to

intervene

every

time a

conflict arises.

Either

because of

perceived

benefits of

further

intercircuit

dialogue,

or

in

order to

avoid

committing its

docket

excessively to

the

administrative

law

area, the

Court

may

wish

to

defer

its

intervention

until

it is

clear

that

the

circuits

that

ruled

against

the

agency

will

not

depart

from

that

position,

particu-

larly

where

the

adverse

rulings

preceded those

supporting the

agency's

views.

It is

quite

likely,

therefore, that

the

conflict

may

persist for

a

longer

period

of

time

than if

the

circuits that

ruled

against the

agency

had

been

able

to

take a

new

look

at

the

agency's

policy

following its

acceptance in

other

circuits.

Critics of

nonacquiescence

urge

that

agencies

have

the

means to

prod

intercircuit

dialogue

without

disregarding

the

law

of

the

reviewing

court

309.

See

infra

text

accompanying

notes

311-13

(discussing

problems

with

declaratory

judgments).

310.

See

supra

text

accompanying notes

296-99.

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1989]

Nonacquiescence

745

of appeals.

For example,

our colleague,

Burt Neuborne,

has

suggested

that, while

agencies would

have to conform

their

internal administrative

proceedings

to circuit law,

they might

seek a declaratory

judgment

when

they were

ready to seek

reconsideration

of the

adverse circuit

rule.311

There are

at least four

serious problems

with this suggestion.

The first,

fatal from

a practical standpoint,

is the

likely unavailability

of

such

a pro-

cedure under

current law

for many agencies.

The

typical statute

requires

the

agency

to have made

some concrete

decision,

whether

the

promulga-

tion of a rule or regulation,

or the issuance

of an

order affecting

particular

parties, before

judicial review

may be

had.312 Second,

if

current

law were

revised to

authorize such

a procedure,

there are serious

questions

whether

Article

III

courts could

be employed

to

rule

on

abstract

questions

of statu-

tory

interpretation

in

the

absence of

concrete controversies.

Third, even

311. See Neuborne,

supra note 8, at 1002 n.32;

supra text accompanying

note

26.

312. For the two agencies

most often involved in

nonacquiescence disputes, the

NLRB and SSA, a

declaratory judgment procedure

is plainly not available.

Under ? 10(e)-(f) of the

NLRA, review in

the courts of appeals may

be had only of an "order,

an adjudicatory decision after

hearing,

as set forth

in section 10(c)." 29 U.S.C.

? 160(c), (e)-(f) (1982).

The case law is clear that

other determinations

of the

Board,

such as decisions in representation cases,

see AFL v.

NLRB,

308 U.S.

401

(1940),

or the

General Counsel's exercise

of her prosecutorial discretion,

see NLRB v. United

Food &

Commercial

Workers Union, 108 S.

Ct. 413 (1987),

are

not

such orders. See supra text accompanying

note 296.

While SSA does not have

the authority to bring

a

declaratory proceeding

under the judicial review

provisions of its statute,

see 42 U.S.C. ? 405(g) (1982)

("Any individual,

after any final decision

of

the Secretary made after

a

hearing to

which he

was a

party

. . .

may

obtain a review

of

such decision

by a civil action."), the

agency may seek recoupment

of overpayments except

from a

"person

who

is

without fault if such adjustment

or recovery would

defeat the purpose of [the Act]

or would

be

against

equity and good

conscience."

42

U.S.C. ? 404(b) (1982).

categories

of

polluters (for

example, coal-fired electric plants).316

If one

circuit

were

to strike down

regulations limiting the permissible emissions

of

a

particular pollutant, the effects would be

felt

not

only

in that

circuit,

but in

downwind

circuits as well.317 For the

ambient standards

to

be

met

in

those circuits, the agency

would have

to

define more stringent circuit-

specific emission standards

for

those downwind

states.318 Thus,

the

actions

of

the

court of appeals that

struck

down the

administrative policy will

have

important effects even

outside the geographic jurisdiction

of

that cir-

cuit, forcing the agency

to

take

suboptimal

measures

in

the downwind

circuits to

counteract the

impact

of the court's

action.31O

316.

42

U.S.C.

?

7411 (1982).

317.

Since this

Article is concerned

primarily with

adjudicatory

decisions,

see

supra

note 35, this

regulatory

example

should be viewed as

an illustration

of the benefits of

uniformity rather

than as a

conclusion

that the

nonacquiescence

standards that apply in

adjudication

would

necessarily apply in

rulemaking as well.

318.

There will, in

turn, be an

effect on regional

competition for

industry.

319.

If the agency

had thought that

this mix of

pollution control

measures was

optimal, it would

probably

have adopted

them in the first

place. Partly to

avoid these

problems of regional

competition,

Congress

provided that

ambient standards

and emissions

standards for

new

sources would be review-

able

in

a

single court of

appeals-the

D.C. Circuit. 42

U.S.C. ?

7607(b)(1) (1982).

Thus,

the situa-

tion

described in the

hypothetical

example in the text

would not arise.

For examples of

interstate

externalities

under the Clean Air

Act,

see, e.g., Air Pollution

Central

District

v.

EPA,

739

F.2d 1071

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748 The Yale Law

Journal

[Vol. 98:

679

Another

central

goal of federal

regulation is

to

prevent

regions

from

competing

for

industry by

offering

a

more

favorable

economic climate

at

the

expense

of

other societal

goals.

For

example, federal

regulation

in the

labor

field can

be

justified,

in

part,

as an

attempt

to

prevent

interstate

competition

for

industry

at

the

expense

of

worker

protection.320

If

one

circuit

takes a

more restrictive view than

does the NLRB of what

consti-

tutes

a

mandatory

subject

for

collective

bargaining,

employers

in

that

cir-

cuit have

more

enterpreneurial

flexibility, and

perhaps

lower

labor

costs,

than their

counterparts

in

other

circuits,

creating incentives

for

new indus-

try

to

establish itself

in

that

circuit and for

existing

industry

to move

there

from

other

circuits.

As long

as the

conflict

among

the

circuits

persists,

there will

be

undesirable

regional

competition.

Finally,

uniformity

promotes

some

fairness values.

Whether the

agency

acts as

regulator

of

private

sector

activity

or

administers

a

benefit

pro-

gram,

Congress

intended, by

enacting

federal law

to

promote

horizontal

uniformity-equal treatment of

regulatees

or

claimants

regardless

of

where in

this

country

the

dispute

or

claim arose. To

the

extent

the

agency

is

required to

alter its

policy

to conform

to

adverse

circuit

rulings,

the

federal

interest in

horizontal

uniformity is

undermined.

3.

Differential

Administration

If an

agency

cannot

engage

in

intracircuit

nonacquiescence,

it

will

have

to

administer

its

statute

differently in

various

parts

of

the

country,

if, after

its

policy

is

rejected

in

one

circuit,

it

wants

to

continue

pressing

that

pol-

icy

in

other

circuits.

Differential

administration can

impose

significant

costs

on

an

agency.

To

evaluate

these

costs

properly, it is

helpful

to ana-

lyze

the

separate

components

of an

agency's

nonacquiescence

policy. The

example

we

use is a

multi-member

agency

that

develops

policy

primarily

through

adjudication.

For

the

commissioners

themselves,

it

might not

be

particularly

burden-

some to

apply different

rules in

different

cases.

Presumably,

whatever

their

acquiescence

policy, the

commissioners

will be

made

aware

of

deci-

sions

by

the

courts of

appeals

that

affect

their

agency and

will

understand

the

extent to which

the

agency's

policy is

inconsistent with

these

decisions.

But

fashioning

an

acquiescence

policy

that

applies at all

levels

within

an

agency

is far

more

cumbersome

than

applying such

a

policy only

at the

level

of the

commissioners.

For

example,

enforcement

staff,

often non-

lawyers

who

are

normally

responsible for

large

caseloads,

may find

it dif-

ficult to

become

familiar

not

only with

the

agency's own

policy

but also

(6th

Cir.

1984);

Connecticut

v.

EPA,

696

F.2d 147

(2d

Cir.

1982).

320.

See,

e.g., Cox,

Federalism

in the

Law

of Labor

Relations,

67

HARV. L. REV.

1297, 1317

(1954);

Meltzer,

The

Supreme

Court,

Congress,

and

State

Jurisdiction

Over

Labor

Relations:

I, 59

COLUM.

L. REV.

6,

21

(1959).

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1989]

Nonacquiescence

749

with adverse court of appeals

decisions. Such

personnel

are

typically

in-

formed

of

their agency's

policies by means of instructions

manuals pre-

pared by the agency's

General

Counsel. If such officials are to follow a

policy of acquiescence, they

will have to be separately

instructed on the

case law of the relevant circuits. And whenever the

agency

loses a case

in

a court of

appeals,

these documents will have to

be

updated.'21

More

im-

portantly,

if

officials

in

different parts

of

the country

must operate

under

different

legal regimes,

it will be difficult

for

the

agency

to use

a

single

training system

for all

such officials

or to

evaluate

them

pursuant

to uni-

form standards.322

A

portion

of the economies of scale

that attach to cen-

tralized administration

will

thereby be

lost.323

The costs

of

differential administration

are a

cognizable

cost

of

requir-

ing intracircuit acquiescence.324

Just as it is not desirable

directly to force

the

agency

to conform nationwide to the first adverse

decision by

a court

of

appeals,

it is

similarly

not

desirable

to do so indirectly by imposing

overly

burdensome costs upon it. Ultimately, the agency

should

fashion a

uniform

policy,

but

it

should be permitted

to

litigate

its

position

in

several

circuits

before making

a final

decision as to what that

policy

should be.

Perhaps

after

losing

in one circuit and then

winning

in

two,

the

agency

will

convince the first circuit to

reconsider

its

holding,

the

Supreme

Court

to

grant certiorari,

or

Congress

to amend

the

statute.

It would

be

undesir-

able

if

the high costs

of

differential administration

prematurely foreclosed

this

outcome.

4. Distributional Effects

As we have

suggested

in

Section

III,

intracircuit

nonacquiescence pro-

duces undesirable distributional

consequences.

A

litigant's ability

to obtain

the benefit of the case law of the

reviewing

court

of

appeals

will

depend

on

whether

he has sufficient resources to

pursue

an

appeal

to the federal

courts.325

The result is

analogous

to one

in

which a

litigant

before

a court

321. See

supra notes

40-41 and

accompanying

text.

322. Id.

323. These

problems are magnified for agencies which are responsible for administering high-

volume programs. As Ronald E. Robertson, General Counsel of HHS, observed:

Each year some 15,000 State agency adjudicators make some two million disability decisions.

Following these decisions, for claimants who appeal, Social Security Administration adjudica-

tors at the Office of

Hearings

and

Appeals (over

650

Administrative Law Judges) customarily

enter over

200,000 decisions

a

year.

In

addition to the disability programs, Social Security

Administration employees must adjudicate over three million retirement and survivors claims

annually,

as well as over

150,000 Supplemental Security Income non-disability claims.

Robertson Letter, supra note 92, at 3-4. For a similar view of the IRS, see supra note 40.

324.

An

additional cost of differential administration involves the less tangible impact on esprit

de

corps

and

ideological commitment

in

compelling agency personnel-trained to believe they are respon-

sible for

a

unitary, internally coherent set of policies-to administer the statute differently in different

parts

of the

country.

325. See supra text accompanying notes 269-73 (discussing distributional concerns). Other liti-

gants

who will not

pursue their remedies into the courts

are those who are too

unsophisticated

to

know that this

course

of

action is available and those whose stake in the controversy is insufficient

to

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750

The Yale

Law Journal

[Vol.

98: 679

is told

that

he can

purchase

the rule

of law which

will

govern

the

disposi-

tion of his

case

and

that

more

favorable

rules of

law

are

progressively

more

expensive. This

distributional

unfairness is the central cost of in-

tracircuit

nonacquiescence.

A

by-product

of

these

distributional

effects

is the

lack

of

uniformity

in

the

output

of

the

administrative

lawmaking

system.

When lack of

re-

sources

prevents

a

litigant's

challenge

to the

agency's

nonacquiescence

in

court, the result

will be

vertical

disuniformity-disuniformity

in

outcome

between those who

pursue

their

case into

the courts

and those who do

not.

Like

horizontal

disuniformity,

which

is

present when

different circuits ad-

judicate

under

different

legal

standards,

vertical

disuniformity

also

under-

mines the

goals of

uniform

administration of

federal law.326

Vertical

dis-

uniformity is

especially

troublesome

because

the

negative

impact of

the

differential

policy

will

probably fall

disproportionately on those

parties

least

able to

bear it.

5. Workload

of

the Federal

Courts

Nonacquiescence

is

likely

to

increase the

volume of

cases

reaching

the

federal

courts.

Indeed, it is

logical to

expect

that,

when

the relevant court

of

appeals

has

rejected the

policy

underlying

agency

action,

a

relatively

large

number of

litigants

would

seek

review.

In

the

case of

intracircuit

nonacquiescence,

the link

is

quite

direct.

Be-

cause a

litigant

will

probably

prevail

simply

through

the

application of

stare

decisis, there will

be a

strong

incentive

to seek

review,

since,

in bal-

ancing

the

costs

and benefits of

challenging the

agency

action,

the

discount

for

the

risk of

not

prevailing

before

the

court will

be

very

small. In con-

trast,

if the

agency had

acquiesced,

the

litigant would

have been satisfied

with the

agency's decision

and the

case

would

never

have

entered the fed-

eral

courts.327

The

explosion

in

the

workload

of

the

federal

courts has been well

docu-

mented.328

Strong

arguments

have also

been made

about how the

problem

cannot be

addressed

simply by

appointing

more

judges

because,

at some

point,

an

increase in

the

number of

judges

would

lead

to

a deterioration in

the

quality

of

the

courts.329

The

contribution

that

nonacquiescence

makes

to

burgeoning

federal

caseloads is a

cost that

must

be

considered.330

justify the

expense of

resorting to

the

courts. See

supra

note

36.

326.

See

supra

text

accompanying

notes 105, 119.

327.

Even if

the

court of

appeals

to

which

review

lies has

not

previously

addressed

the

issue,

a

decision

adverse to the

agency in

another

circuit

will

signal to the

litigant the

existence of a

reasonably

persuasive

position

in

his favor.

Thus,

even

intercircuit

nonacquiescence is

likely

to generate

addi-

tional

challenges

to

agency

action.

328. See R.

POSNER, supra

note

276,

at

59-93;

Estreicher,

Conserving the Federal

Judiiaryfor

a

Conservative

Agenda?

(Book

Review),

84

MICH.

L.

REV.

569,

570-77

(1986).

329.

See R.

POSNER, supra

note

276, at

96-102.

330.

The

ensuing

friction

between

agency

and

reviewing

court is

a

conceivable

additional cost.

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1989]

Nonacquiescence

751

6.

Assessing

the Competing Factors

The presence

of

weighty

factors

on

both sides

of the scale

suggests

that

either a per

se prohibition

or an unqualified

endorsement

of

intracircuit

nonacquiescence

would be

undesirable, and

that

striking a proper

balance

between the

competing

values

will

be

exceedingly

difficult.

It is

a useful

starting point

to consider

situations at the extreme where continued

in-

tracircuit nonacquiescence

should not be

tolerated.

One such

situation is

where all of the

circuits have

ruled

against

the

agency

and the Supreme

Court has repeatedly

declined to

grant

certiorari.

Continued nonacquiescence

under

such a scenario would

raise

the

specter

of

unconstitutionality.

In

this setting,

our reasons for

concluding that

the

Cooper

v. Aaron

principle

does not

carry

over to the circuit courts

would

lose much

of

their force: Federal

law

would

not be in

flux,

and the

judi-

cial

rejection

of

the agency's

position

could not be attributed

to the

isolated

decision of

a

single circuit

panel.

Neither

could

nonacquiescence

under these

circumstances be

defended

by

a

cost-benefit calculus.

The relevant

comparison

is

between

the

effects

of

two uniform

policies: the

agency's

original policy

as against a

new

pol-

icy that would

be consistent

with the

rulings

of the courts

of

appeals.

From

the

perspective of

the goal of

uniformity, the

latter outcome

is

clearly preferable

since

the

former produces

vertical disuniformity.

Simi-

larly,

from the

perspective

of distributional effects,

the latter

outcome

is

also

clearly preferable, as

the governing

rule of law

will

not

depend

on

access to

litigation resources.

Moreover,

neither outcome

introduces

costs

of

differential

administration, as they

both contemplate

that

the

agency

would

be implementing

a

uniform policy.

The only argument that

the agency could

muster

in

favor

of maintain-

ing

its

original

policy would

be based

on

the

cost

of

the

change

to

a

new

policy.

But that argument

would simply

be a restatement

of the

co-equal

branch

analogy:

that the

agency's responsibility

for

the

interpretation

of

federal law

is of

equal stature

in

the

legal hierarchy as

that of the

courts.

We thus reject intracircuit

nonacquiescence

under these

circumstances.

A

second scenario would have

the

agency

continuing

to

engage

in in-

tracircuit nonacquiescence

after all of the courts

of

appeals

have

addressed

the validity

of

the agency's

policy and

have split on

that question,

the

circuits have

had

an

opportunity,

which

they

have declined,

to

reconsider

their

original

rulings,

and neither

the

Supreme

Court

nor

Congress

has

been

willing

to resolve the conflict. We

think it

highly

unlikely

that both

the

Supreme

Court and Congress

would

let stand persisting

conflict

Much of this friction

is due, however, to the uncertain

legal status of agency

nonacquiescence, and

might recede, at least

in part, with clarification

of the proper scope of such

practices. See supra

text

accompanying notes 306-07

(discussing friction

under venue choice).

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752

The Yale

Law

Journal

[Vol.

98:

679

among

the circuits

on issues

of

any

real

importance."'

The Court's

re-

peated refusal to

intervene in

the face of

an

intercircuit conflict

therefore

might

be

read as a

signal

to the

agency

to

fashion

a

policy

that is

consis-

tent

with

the

rulings

of

the

circuits.3"2

The

critical

factor

here,

too,

is

that

the

law

is no

longer

in

flux:

The

circuits

have

proven

unwilling

to reconcile

their

views,

and

Congress

and

the

Court,

by

their

inaction,

have

chosen to

tolerate

horizontal

dis-

uniformity

in

the

administration

of the

particular statute. In

such

circum-

stances, intracircuit

nonacquiescence is

undesirable on

policy grounds be-

cause it

produces

distributional

unfairness without

the

compensating

benefits of

prodding

intercircuit

harmonization or

Supreme

Court

intervention.333

We turn next

to a

situation

in

which

the

law at the

circuit court

level

is

in

flux-it

is

still

conceivable

that

some

courts will

reconsider their

origi-

nal

decisions

adverse

to the

agency

and

that

the

agency's

policy will

ulti-

mately

be

uniformly

validated.

Assume,

for

example,

that the

agency

loses

before

one circuit

and

then

wins before

the

next two

considering

its

policy.

Certainly,

at

that

point

one

would

not

say

that a uniform

outcome in

the

agency's

favor

is

foreclosed,

or

even

improbable.

In

such

circumstances,

nonacquiescence

may

lead

to

a

quicker

resolution of

intercircuit

conflicts,

with

consequent

benefits in

terms of

the

goals of

uniform

administration.

Moreover, there

are

cost

savings

from

obviating

the

need

for

differential

administration

during

the

period

in

which

the

agency

has

a

reasonable

basis to

believe

that

its

policy

might

yet

prevail.

On

the

other

side of the

equation are the

distributional

concerns.

While

sympathetic

to

such

con-

cerns, we

believe

that

they

should

not

be

an

automatic

trump,

except

where

Congress has

spoken

on

the

question

in

the

governing

statute.

In

light

of the

preceding

discussion,

we

conclude

that

intracircuit

non-

acquiescence

is

justified

only

where

it is

an

adjunct

to

litigation

designed

to

yield

a

uniform

rule in

favor of

the

agency's

preferred

policy.

It

follows,

as a

corollary,

that once

it

becomes

unlikely

that

relitigation

will

lead to

judicial

acceptance

of

the

agency's

policy,

intracircuit

nonacquiescence

loses its

justification;

the

agency

must

then

fashion

an

approach

consistent

with

the

law of

the

circuit,

even

though it

remains

free

to

continue

to

331.

Recent

studies

suggest

that

the

Court

has

sufficient

decisional

capacity

to

address such

con-

flicts

and

has

rarely

failed to

intervene

in

such

circumstances.

See

S.

ESTREICHER

&

J.

SEXTON,

supra

note

243, at

6;

Note,

The

Intercircuit

Tribunal

and

Perceived

Conflicts:

An

Analysis

of

Jus-

tice

White's

Dissents

from

Denial

of

Certiorari

During

the

1985

Term,

62

N.Y.U. L.

REV.

610,

615

(1987).

332.

See

Linzer,

The

Meaning

of

Certiorari

Denials,

79

COLUM.

L.

REV.

1227,

1278-91

(1979);

Revesz

&

Karlan,

Nonmajority

Rules

and

the

Supreme

Court,

136 U.

PA. L.

REV.

1067,

1100-04

(1988).

The

agency

might

either

attempt

to

fashion

a

uniform

policy,

or

it

might

apply

different

policies

in

different

circuits.

333.

Similarly,

in

statutory

schemes

providing

for

nationally

exclusive

review in a

particular

court

of

appeals,

agency

nonacquiescence

would

ordinarily

be

unjustified.

See

supra

text

accompanying

notes

248-49.

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1989]

Nonacquiescence

753

press

its

preferred

policy

in circuits that

have not

yet rejected

it.

In

Section

V,

we

translate this

general

principle into

judicially

manageable

standards.

We

recognize

the tension between

the values of

percolation,

on

the one

hand, and

uniformity

of federal

law,

on the other.

Similarly,

there

is

a

tension

between the

view

of

administrative

agencies

as the

primary

policy-

makers and the role

of

the courts as the final arbiters of the

legality

of

agency policy.

In

our

view,

a qualified

acceptance

of

intracircuit nonac-

quiescence better

accounts

for the

competing goals of

the administrative

lawmaking system

than

would a blanket rule either

accepting or proscrib-

ing such

nonacquiescence.

V.

CONSTRAINING

INTRACIRCUIT

NONACQUIESCENCE

We

have

shown that

intracircuit

nonacquiescence

is

justifiable

only

when it

is

employed as an interim

measure that allows

the

agency

to

maintain a

uniform

administration of its

governing statute while it makes

reasonable

attempts to

persuade the

courts to validate its

preferred

policy.

The

question,

then, is how

to constrain

unjustifiable

nonacquiescence.

We

believe

that

existing

administrative law doctrines

provide

appropriate

tools

for

constraining intracircuit

nonacquiescence within its

proper

limits.

A. The

Substantive Standard

Consistent

with our

discussion

in

Section

IV(C),

we believe

that

the

following substantive

standard

best

accounts

for

the role

of

the administra-

tive

agency

in

the

national

lawmaking

process,

the

checking

function

of

reviewing courts of

appeals, and other

structural

features of the

system,

such as the

absence of

intercircuit stare

decisis,

the

rejection

of

nonmutual

collateral

estoppel against

the

government,

and the

Supreme

Court's com-

mitment to

multicircuit

percolation of issues of

federal

law.

Under this

standard, agencies should not

engage

in

intracircuit

nonacquiescence

un-

less (1) the

agency has

responsibility

for securing a

nationally uniform

policy

with

respect

to

the

question that

was the subject of

the

adverse

judicial

decision; (2)

there is a

justifiable

basis for belief that the

agency's

position

falls within

the

scope

of its

delegated

discretion;

and

(3)

the

agency

is

reasonably

seeking

the

vindication

of

its

position

both

in

the

courts of

appeals

and before the

Supreme

Court.

While a court that had

previously

ruled

against the

agency

could continue to set

aside

agency

ac-

tion

inconsistent with

the

previous rule,

it

could

not

enjoin

the

agency

from

engaging

in

intracircuit

nonacquiescence

in

accordance with this

standard

(or

accomplish

the

same end

by certifying a

circuit-wide class

action

including

future

litigants).

Of

course,

this

standard is

a

prescription

for

dealing

with

congressional

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754 The Yale Law Journal

[Vol. 98:

679

silence

about

nonacquiescence.334 Where Congress has provided in an

agency's governing statute that nonacquiescence

should be treated in

a

particular manner, that determination

must control.335

The

first

prong

of

the

standard

requires

that the

agency

have national

policymaking authority

over the

point

in

dispute.

We

recognize

that

agency-court disagreements

sometimes

involve

questions

over the extent

to

which other laws

(such

as the

Freedom

of Information

Act or

Privacy

Act)

or

constitutional

principles

limit

agency authority

under

its

enabling

statute.

In

these latter

instances,

the

agency

stands

in a

position

not

too

different

from

that

of

any

other

litigant complaining

of a

misapplication

of

legal principles that

interferes

with

its freedom to

maneuver;

the

agency

enjoys

no

special

claim to conduct

its

proceedings independent

of

circuit

precedent."36 The conflict that lies at the heart of this Article,

and informs

the

legitimacy

of

intracircuit nonacquiescence, occurs only

where

the dis-

pute

is between an

agency's view

that it

enjoys

discretion over the

ques-

tion under its organic statute and a judicial ruling that the agency's posi-

tion

is

barred by the statute. Only

in

such circumstances can Congress

be

said

to

have

endowed the

agency

with

authority

to

pursue national

uni-

formity, for a time, even in the face of adverse circuit precedent.

In

a sense, Congress has created a situation of shared responsibility.

It

has

conferred on

the

agency a mandate

to secure

a nationally

uniform

administration

of

its

organic statute,

and

an

authority,

reflected in the

Supreme

Court's doctrine of

Chevron

deference,

to

elaborate

upon

the

bare commands of the

statutory

text.

Yet,

at the same

time, Congress

has

provided

that

agency decisions will be reviewed for conformity with law

by appellate

courts which are free to

disagree

with each other until the

Supreme

Court or

Congress forecloses further dialogue.

It

is only

in

this

setting

that the

agency has institutional competence to press its policies

while the law

remains

in

flux.

The second

prong requires a "justifiable basis" for belief that

the

agency's position falls within its policymaking discretion. Only where such

grounds for agency-court disagreement are present can the agency be said

to

be

legitimately advancing its responsibility under its enabling statute.

The

court must

assess the

validity

of

agency action on two levels: review

of the

agency's

decision on

the merits and review of the rationality of the

nonacquiescence policy. An agency does not lack a justifiable basis simply

because

its

position

was

previously rejected by

the court of

appeals;

a

pre-

vious

rejection can be a sufficient condition for setting aside the agency's

action,

but it

is not a

sufficient condition for enjoining nonacquiescence.

A

justifiable

basis is

lacking only where the court concludes that the agency's

334.

See

supra text

accompanying

notes 254-56.

335. For

example,

Congress

considered taking

such action

in

1984 with

respect

to

nonacquies-

cence

by

the

Social Security

Administration. See

supra Section

II(A)(4).

336.

See

supra notes

214, 235.

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1989]

Nonacquiescence

755

position is so bereft

of support

in

available

legal materials

that

it

is

un-

likely to

be

accepted by any

other

court of

appeals.

Although the

task of

considering

the

rationality of the

agency's position

on

these

two

different levels will be

difficult, there is

no

reason to believe

that a

court would

equate

a losing

argument,

sufficient to

set aside the

agency's

action,

with an argument devoid of a

justifiable

basis,

which

is

the

proper

predicate for an

injunction

against

nonacquiescence.

In

the

context of

passing

on

sanctions for

legally insubstantial

positions under

Rule 11 of

the

Federal

Rules

of

Civil

Procedure

and

the

EAJA,

the

courts

have shown that

they

are

capable of

distinguishing

claims that are

merely

unsuccessful

from

those that

are

actually

unsupportable.337

The need for

these two levels of

review is not

obviated by

heightening

the

deference

that is

accorded to the

administrative

decision. Even

with

the

substantial dose of

deference to

agency

views required

by the

Supreme

Court's

Chevron

doctrine

(or

any

other level of

deference),

there will

be

an

area of

bona fide

dispute

over

whether

statutory limits on

agency dis-

cretion in

fact

apply. Where this

is

the case, the

agency, as the

delegates

of

congressional

authority,

may

continue,

for

a

time,

to

advance

its

view

despite

some

setbacks in

the intermediate

appellate

courts.

The

final

prong

of

our standard

requires

that

the

agency

be

reasonably

seeking

to

vindicate its

position

in

the courts

of

appeals

and before the

Supreme

Court."8'

Even

though

we do not

propose

to

describe the

opera-

tion

of

this

requirement-which

provides the

key

brake on

nonacquies-

cence

practices-with

mathematical

precision,

it is

possible

to

provide

some

structure

for

the

judicial

inquiry.

First,

there is a

requirement

of

candor. The

agency must

openly

state

the

grounds

of

its

disagreement

with

circuit

precedent

because

only

by

doing

so does it

make

possible

intercircuit

dialogue,

which

is a

principal

justification for

nonacquiescence.

Where the

agency

disguises its

disagree-

ment

by

means of

a

disingenuous distinction

of

adverse

circuit

prece-

dent,33

it

effectively precludes

that

court from

reexamining

its

ruling,

and,

therefore,

from

participating

in the

intercircuit

dialogue.

It also sends

misleading

signals to other

courts

of

appeals,

which

may pay

closer scru-

tiny

to

the adverse

ruling

if

the

agency

openly

acknowledges

its

disagreement.

Second,

a

reviewing

court should look at how the

agency's position

has

337. See

infra

notes

347-48 and

accompanying text

(discussing EAJA).

338.

Another

commentator

has

suggested several

reasons why

an

agency should sometimes

refuse

to

acquiesce in a

single

adverse court of

appeals

ruling. See Note,

Administrative

Nonacquiescence

in

Judicial

Decisions, 53 GEO.

WASH. L.

REV. 147,

163 (1984-85).

339. It is not

clear how the

courts

should treat such

an

agency.

The

conventional response

to

an

erroneous

agency ruling

which might be

sustainable

on grounds not

articulated by the

agency

is

a

Chenery

remand.

See

Friendly, Chenery

Revisited:

Reflections

on Reversal and

Remand

of

Adminis-

trative Orders, 1969 DUKE

L.J. 199. The

Chenery

doctrine,

however, depends

on

a

presumption

of

regularity that

may be

critically undermined

where

nonacquiescence is

surreptitious.

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756 The Yale

Law

Journal

[Vol.

98:

679

fared

in

the various courts

of

appeals.

Other

things-principally,

the

per-

suasiveness of the agency's legal position-being equal,

the

likelihood that

an agency will obtain a nationwide validation

of its

policy

decreases

with

increasing ratios of losses to wins. We are aware

that

there

are

cases in

which an agency had lost in almost all of the circuits,

then won

in

one

circuit, thereby creating a conflict,

and

finally prevailed

in the

Supreme

Court.340

While

an

agency's ability

to

press

its views

in circuits that

have

not yet ruled on that policy should not be constrained-we reject any

limi-

tations

on

intercircuit nonacquiescence-we

do not think that

the

agency

can necessarily continue to engage

in

intracircuit nonacquiescence merely

because one or

two

circuits

have

yet

to

rule. What

we are

considering

is

a

balancing

of

competing factors,

and after

unsuccessful

litigation

in a cer-

tain

number of circuits, that balance will start pointing against

continued

intracircuit nonacquiescence.

Third,

an

agency genuinely interested

in

securing

intercircuit

accept-

ance of its

position should actively press its views in the courts

of

appeals.

For

example,

in the

context of agency action

reviewable

initially

in the

district

courts,

an

agency

that

persistently

declines

to

seek

appellate

review

in

circuits that have not yet ruled on the legality of its position is not

reasonably seeking to vindicate that position in the courts of appeals.341

Fourth,

a

reviewing court should ascertain whether

the

agency

is mak-

ing sufficient efforts to obtain Supreme Court review of its policy. An

agency should, as a general matter, be petitioning for certiorari from ad-

verse decisions of the courts of appeals. Certainly, some flexibility is re-

quired;

it

might

be reasonable

for

the

agency not to seek review

in ad-

vance of

an intercircuit

conflict. But a general failure to seek certiorari

should

weigh heavily against the validity of the agency's intracircuit

non-

acquiescence. Similarly, the reviewing court should ask whether the

agency

is

opposing certiorari petitions

from

circuits

in which

its policy has

been

upheld.

If the

agency

is

genuinely

interested

in

the validation of

a

uniform

policy-rather than in the protection of a favorable judgment-it

should not

oppose,

and

indeed should support, its opponents' certiorari

petitions.

Of

course, agencies generally cannot directly petition the Supreme

Court but

must

obtain

the

clearance of the Solicitor General,342 who, in

order to

preserve his capital with the Court, may often resist agency de-

340.

See supra

note 154.

341. We

define

intracircuit

nonacquiescence

as disregard

of a decision

of a

court of appeals. That

does not

mean,

however,

that an

agency can

avoid the

nonacquiescence label

merely by

failing to

appeal adverse

district

court

decisions.

342.

See

28

U.S.C. ? 518

(1982);

28 C.F.R.

? 0.20(a)

(1988).

But see 28 U.S.C.

??

2341,

2348

(1982)

(granting

certain

agencies

more

independence from

control

by Justice

Department).

For

a

general

discussion

of the

relationship

between the

Solicitor

General

and

administrative

agencies, see

Note, Government

Litigation

in

the

Supreme Court:

The

Roles of the Solicitor

General,

78

YALE

L.J. 1442

(1969).

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1989]

Nonacquiescence

757

mands for

review.

We

do not

mean

to authorize

judicial review

of the

delicate

negotiations

and

deliberative

processes

that

inform

the

Solicitor

General's

decision

whether or

not to

petition

for

certiorari.

Nevertheless,

the

government

cannot defend

continued

nonacquiescence

without

seeking

Supreme Court

intervention

merely

because

it

has chosen to

divide

peti-

tioning

authority in

this way.

We have considered the

question

whether the active

pursuit

of a

legisla-

tive

solution should

suffice

even if

Supreme

Court review is

not

sought."4'

There

is

something

to this

view, as there is no

reason

to

prefer

judicial

to

legislative

intervention.

Nevertheless,

because of

the

practical

difficulties

that

plague

the

evaluation

of

what constitutes an active

pursuit

of

legisla-

tion-flowing from the

relative ease with which a bill

may

be

introduced

into

the

legislative

hopper-we

do not believe that

an

agency

can

justify

prolonged

nonacquiescence in

this manner.

Fifth, it is

relevant whether the

statutory scheme

or

the

Supreme

Court's due

process

and

equal

protection

jurisprudence

evinces a

particu-

larly

strong

concern

over distributional effects.

Of

course,

if

the

agency's

governing

statute bars

nonacquiescence

altogether,

there is no

room for

further

discussion.

But

Congress may

have

intended that the

agency pay

particular

attention

to

distributional effects without

stipulating

a

per

se

rule

against intracircuit

nonacquiescence. If a

heightened concern

about

such

effects is

statutorily

authorized or

constitutionally

prescribed,

in-

tracircuit

nonacquiescence could be

truncated more

quickly than

it

would

otherwise be.344

Without

specific

congressional

direction,

however, such

distributional

concerns

should not

be elevated to

the

point

of

creating

a rule of

presump-

tive

invalidity.345

It is

the central thesis of this Article that

nonacquies-

cence, even intracircuit

nonacquiescence,

is

a

legitimate

feature

of the

ad-

ministrative

landscape;

agencies

must

be

permitted

the

option of

pursuing

uniform

policies at the

administrative level as an

adjunct

to a

reasonable

litigation

policy

designed

to

secure nationwide

judicial validation

of

the

point

in

dispute.346

343. The

draft

recommendations of

the

Administrative

Conference of the United

States take the

position that

"the active

pursuit of

legislative change"

could substitute

for

a

litigation

campaign. See

53 Fed.

Reg. 12,445

(1988).

344. See

Lopez

v.

Heckler, 572 F.

Supp. 26, 30

(C.D. Cal.

1983),

affd

in

pertinent part, 725

F.2d

1489, 1497-98 (9th

Cir.), vacated

on other

grounds, 469 U.S.

1082 (1984);

Letter from Nancy

Morawetz, Matthew

Diller, Burt

Neuborne, and David

Udell to

Mary Candace

Fowler,

at

3-4

(May 6,

1988) (public

comment to

ACUS policy)

[hereinafter

Letter

from

Stieberger Plaintiffs].

345.

Similarly, without a

congressional mandate, such

concerns do

not require interim

compliance

with

adverse circuit

precedent until

the agency can

demonstrate

some overriding

justification. See

supra

text

accompanying

note

314-15.

346.

We do not

believe that for

purposes of

assessing the

legitimacy of

nonacquiescence practices,

a

distinction should be

drawn between

agencies that

dispense benefits,

such as SSA or the

Veterans'

Administration (VA) and

agencies that

exercise

regulatory authority, such

as the

NLRB

or EPA. The

argument for such a

distinction holds that

agencies

in the

former

category,

because

they.are

in a sense

dispensing

"their"

money, have a

tendency

to

"cheat"-to

favor legal

rules

and

factfinding processes

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758

The Yale

Law

Journal

[Vol.

98: 679

By

applying

our

proposed

standard,

a court

should

be

able to

determine

when

intracircuit

nonacquiescence is

unjustifiable. This

determination is

central to

the

remedial

inquiry. It is

only in

the

cases of

unjustifiable

nonacquiescence

that a court

should

enter

injunctions

mandating

that the

agency

internalize

the case law

of the

circuit in

its

administrative

proceed-

ings (or

should

certify class actions

that include

future

members).

In the

administrative

context, as in

other

areas of the

law, it

is

simply

improper

to

turn

each

case into

an

injunctive

proceeding;

an injunction is warranted

only when

an

agency has

exceeded

the bounds

of a

rational

nonacquies-

cence

policy.

This

same

standard need

not

necessarily

apply to the

award

of attor-

ney's

fees

against

the

government. For

example,

distributional

concerns

posed

by

nonacquiescence could

be

mitigated by

requiring the government

to

pay the

attorney's

fees of

prevailing

parties

against

whom it

had nonac-

quiesced.

We doubt,

however,

that the

EAJA,347

as

presently

drafted, can

be construed

in

this manner.348

that

limit the

number of

claimants

and the

size of

their

claims,

regardless of

contrary

signals

in

their

enabling

statutes. If

so,

such

agencies

should

not

be entitled

to

a

presumption

of

regularity,

a

pre-

sumption that

supports

the

allowance

of

intracircuit

nonacquiescence.

There are

a

number

of

difficulties with

this

argument.

First,

it

depends on

an

empirical pre-

mise-that such

agencies

administer

programs

in

which

the claims of

qualified beneficiaries

exceed

the

resources that

Congress

has

budgeted

and

that

these

resources

are

unlikely

to be

supplemented

upon a

showing of

need.

Second, the

argument

relies on

a

psychological

judgment

that officials of such

agencies view the

public

funds

entrusted to

their

care as

personal resources to be

expended

in

accor-

dance

with

personal

predilection,

rather than

statutory

directives.

Finally,

the

argument

requires

stripping

these

agencies

not

only of

the

presumption of

regularity

but also

of Chevron

deference

to

their

interpretation

of

the

statute,

and of

"substantial

evidence"

deference to

their

factfinding.

In

short,

such

an

argument

casts

agencies in

a

radically

different

role at

variance

with

congressional

design.

347.

28

U.S.C.

?

2412(d)

(1982).

348.

The

EAJA

authorizes

attorney's

fees against

the government

whenever its

position

on the

merits either

at the

agency level

or

in

the courts

is not

"substantially justified." 28 U.S.C.

?

2412(d)(1)(A),

(d)(2)(D)

(1982); see

Herron

v.

Bowen,

788

F.2d

1127,

1128-30

(5th Cir.

1986).

The

statute

clearly

contemplates

that the

standard for

awarding

fees is

not

the same

as

the

standard

for

determining

whether

the

agency's

position

should be

sustained on

the

merits. The

Supreme Court

held

in

Pierce v.

Underwood,

108

S. Ct.

2541

(1988),

that

"substantially

justified"

means

"justified

to

a

degree

that could

satisfy

a

reasonable

person," id. at

2550,

and added that "a

position

can be

justified even

though it is

not

correct,

and

we

believe it

can

be

substantially

(i.e., for

the

most

part)

justified if a

reasonable

person

could

think

it

correct,

that is,

if it

has a

reasonable

basis in

law

and

fact."

Id.

at 2550

n.2.

The

EAJA

decisions

to

date

do not

provide a

clear

answer

to the

question of

whether fee

awards

may be

assessed

even in

circumstances

where an

agency's

nonacquiescence

policy

should not

be

en-

joined.

Underwood

itself

involved a

situation

where the

agency

settled the

litigation

after

having

suc-

cessfully obtained

a writ of

certiorari

from

the

Supreme

Court. Id.

at

2545. In

sustaining

the

trial

court's fee

award,

the

Court

engaged in

deferential,

"clearly

erroneous"

review

of

the

district court's

determination,

noting that the

grant

of

certiorari was

counterbalanced

by

the fact

that

every

court

to

hear

the merits

(nine

district

courts

and two

courts of

appeals)

rejected the

government's

position. Id.

at 2552.

Because

the

Supreme Court

did

not

look

at the

issue de

novo,

it

provided little

guidance on

the

proper

interpretation of

the

EAJA.

For

pre-Underwood

case

law,

compare

Enerhaul,

Inc. v.

NLRB, 710

F.2d

748,

751

(11th

Cir.

1983)

(Congress

did not

intend

to

approve

agency's

"reliance

on a

legal

theory

that

has

been

clearly

and

repeatedly rejected

by this

Court")

with

Wyandotte

Savings

Bank v.

NLRB, 682

F.2d

119,

120

(6th

Cir.

1982)

(although

agency's

position

had

been

rejected

by

circuit, it

enjoyed

support in

dissent-

ing opinions and

rulings

of

other

circuits).

Fees

also

have

been

awarded

for

intercircuit

nonacquies-

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1989] Nonacquiescence 759

B.

The Role

of

the

APA

We believe that the APA349 provides

courts with the

legal authority

to

enjoin nonacquiescence that does not comport with the standard described

in the

previous section. Under the

APA's

"arbitrary

and

capricious"

stan-

dard,350

a court

must set aside administrative action

if

the

agency has relied on factors which Congress has

not

intended

it

to

consider, entirely

failed

to

consider an

important aspect

of the

problem, offered an explanation for its decision that runs counter to

the

evidence before the agency, or is so implausible

that it could not

be

ascribed

to

a difference

in

view

or the

product

of

agency

expertise.351

As

Judge Breyer and Professor Stewart have noted, the "arbitrary

and

capricious" standard has both a "hard look"

or

"adequate

consideration"

component,

which focuses on the

process of

the

agency's decision,

and

a

"substantive" component, which assesses the rationality of

the

agency's

action.352

We

have identified four principal factors relevant to the analysis

of in-

tracircuit

nonacquiescence: intercircuit dialogue, uniform outcomes, differ-

ential

administration, and distributional effects. We believe that an

in-

quiry

based on

these factors is encompassed within the

APA's

"arbitrary

and

capricious"

standard.353

Thus,

intracircuit

nonacquiescence

in con-

formity

with

our

proposed

standard

can be viewed as satisfying

the APA's

requirement of "reasoned decisionmaking."354 Intracircuit nonacquies-

cence

inconsistent with this standard cannot survive

APA

scrutiny.

The

typical

framework for APA

rationality

review

is

provided by

the

agency's organic statute; the rationality of an agency's policy

is

evaluated

in

terms of the

specific goals and constraints of

its

implementing stat-

ute.355

The factors that

govern the validity

of

intracircuit nonacquiescence,

cence

that

could not

be

justified in terms

of

a

plan

to

create

a

meaningful conflict

among

the

circuits.

See Keasler

v.

United

States,

766 F.2d

1227, 1234-38

(8th

Cir.

1985).

349. 5

U.S.C.

?? 551-59,

701-06

(1982).

350.

See 5 U.S.C. ?

706(2)(A) (1982) ("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

....").

351.

Motor Vehicle Mfrs.

Ass'n

v.

State Farm

Mut. Auto. Ins. Co., 463

U.S. 29,

43

(1983).

352.

See S.

BREYER

& R.

STEWART, ADMINISTRATIVE

LAW

AND REGULATORY POLICY 341-42

(1985).

353.

We maintain that

such an inquiry is presently

authorized by the APA

and is consistent with

the

strictures against

extrastatutory judicial innovation

set forth in Vermont

Yankee Nuclear Power

Corp.

v.

NRDC, 435 U.S. 519

(1978). We recognize,

however, that there may be

reasonable dispute

on this

point, and that

legislation may

be

required to

assuage concerns over the

legitimacy of

intracir-

cuit

nonacquiescence or over a

court's authority under

the APA to scrutinize the

reasonableness

of a

nonacquiescence

policy.

354.

See Baltimore

Gas

&

Elec. Co.

v.

NRDC,

462

U.S.

87,

104

(1983).

355.

See, e.g.,

id.

at

97

administrativetie

decisions should be

set

aside in this

context,

as

in

every

other,

only

for

substantial

procedural

or

substantive

reasons as mandated by

statute") (quoting

Ver-

mont

Yankee,

435

U.S. at

558).

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760

The Yale Law Journal [Vol. 98:

679

by contrast,

derive

from

the

structural

underpinning

of the

administrative

lawmaking

system,

principally

from the

position

of the administrative

agencies as the

primary

policymakers under

their organic

statutes,

the

value

of

uniformity in the

administration

of

federal law,

and the lack

of

intercircuit stare

decisis.

There is no reason to

believe,

however,

that the

APA's

"arbitrary

and

capricious"

standard

is confined to

statute-specific

norms, and

cannot give effect

to general

principles

of

administrative

law

and to the

background

norms against which the

relationship

between

agency

and

reviewing court is formed. "Hard look"

judicial

review,3"

for

example, is not so

much an

elaboration of specific

statutory

commands

as

it is

an

implementation of

a

broader conception of the court's

checking

function in the

administrative

process.

We also

rely on the

well-established

canon that,

wherever possible,

courts

should

construe

statutes to avoid

constitutional problems.

37

The

factors

that make

Cooper

v.

Aaron

not

wholly apposite

to

routine in-

stances of

intracircuit

nonacquiescence lose

most

of

their

force when such

nonacquiescence

is

carried too

far and

becomes a tool for

defiance of judi-

cial

review

instead of

a

reasonable quest for

the uniform

validation

of the

agency's preferred

policy.

Thus, a rule

against unjustifiable

nonacquies-

cence

may

be

necessary to

avoid collision with

constitutional

principles."8'

In

commenting

on our

proposed

substantive standard and an earlier

draft of this

Article,

representatives of the

Office of the

Solicitor General

and the

Civil

Division of

the

Justice

Department have

argued that any

judicial review

of

an

agency's

nonacquiescence

practice is

inappropriate

and

invites the

courts

to

embark on "a new

category of

litigation about the

very

conduct of

litigation

itself." 59The Justice

Department's

position is,

at

the

core, based on a

view of

the

relationship between

agency and court

inconsistent with

Cooper

v.

Aaron-that judicial decisions bind

only

the

parties

to

the case.360 There are

sound reasons for

qualifying

the

Cooper

v.

Aaron

principle

in

the

context of

intermediate,

regional appellate

courts.361

But it is

nevertheless

not true that

under current

legal princi-

356.

The

term

was

apparently

coined by the

late

Harold

Leventhal of

the D.C.

Circuit.

See, e.g.,

Greater

Boston

Television

Corp. v.

FCC,

444

F.2d

841,

850-52

(D.C. Cir.

1970),

cert.

denied, 403

U.S. 923

(1971); see

generally

Estreicher,

Pragmatic

justice:

The

Contributions

of Judge

Harold

Leventhal to

Administrative

Law, 80

COLUM. L.

REV.

894, 903-07

(1980)

(discussing "hard

look"

doctrine of

judicial

review).

357.

See,

e.g.,

NLRB

v.

Catholic

Bishop

of

Chicago,

440

U.S.

490,

500

(1979) (citing

Chief

Justice

Marshall's

opinion in

Murray v.

The

Schooner

Charming

Betsy, 6

U.S. (2

Cranch)

64, 118

(1804)).

358. The Court in

Vermont

Yankee,

while

eschewing

judicial

imposition of

procedures

not

re-

quired by the

organic

statute

or the

APA, took

care to

note the

absence of

constitutional

constraints.

435

U.S. at 542 & n.16.

359.

Merrill

Letter, supra

note 21,

at 14;

Letter from

John

R.

Bolton to

Marshall J.

Breger

(May 6,

1988)

[hereinafter

Bolton

Letter]

(commenting

on earlier

draft of

this

Article and

on draft

ACUS

policy).

360.

See

Bolton

Letter,

supra note

359, at

11-14.

361.

See

supra

text

accompanying

notes

239-47.

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1989]

Nonacquiescence 761

ples-notably

the

pervasive requirement

of

rational agency

action under

the APA-that agencies have a

completely free hand to disregard the pre-

cedent

of courts of appeals that

will review their action.

It is

also not the case that our

proposal

will

generate

a

new

form

of

litigation.

That

litigation

is there-witness the

Ninth Circuit's

circuit-

wide

injunction

in

the Lopez

v.

Heckler

litigation

and

the

Second

Circuit's

comparable Stieberger

litigation" -but

it is

presently conducted on a

plane

of

warring absolutism, which deflects careful consideration

of the

respective roles of agency and

reviewing court. Our proposal seeks

to

make nonacquiescence regular and

legitimate-to encourage agencies

to

be more

self-conscious about these

practices

and courts to understand

that

their role is not simply one of

policing wayward

subordinate actors.

C.

Procedural

Safeguards

In addition to

the substantive

standard

that we have

discussed,

we be-

lieve that

particular procedural

safeguards

should

accompany

an intracir-

cuit

nonacquiescence policy. Some

of these procedures may

be

judicially

imposed,

in our

view, pursuant

to

APA rationality review. Even if the

APA is

held

not

to

provide

authorization

for

requiring such procedures,

however, agencies intending

to

pursue

a

nonacquiescence policy

should

be

encouraged

to

adopt

them.

First,

a

decision to nonacquiesce should

be

ap-

proved by

the

agency head or

some specially designated delegates such as

an

acquiescence

review board.

Second, the agency should publish

in the

Federal

Register,

or

otherwise

widely disseminate,

a

notice

of its

decision

to

nonacquiesce including a brief

statement of reasons for that decision.

Third,

in

the case of

agencies

that cannot file a

petition for certiorari

in

the

Supreme Court absent

approval by the Solicitor General, efforts

should be

made to consult with the

Solicitor General prior to embarking

on

a

nonacquiescence policy.

Under

our

analysis,

intracircuit

nonacquiescence

is

justifiable only

where it is

an adjunct to

nationwide litigation reasonably seeking valida-

tion of

the

agency's preferred

policy. If the agency

is

not prepared

to de-

fend that

policy

in other

circuits,

nonacquiescence should simply be

im-

permissible. Decisions about intracircuit

nonacquiescence, therefore,

should

not be made in a

decentralized fashion in the agency's regional

offices; they

should

rest with the

agency head or commissioners."' Given

the

potential

for

friction

between

the agency and the federal courts, we

believe

that

approval by

the

agency

head

or

specially designated delegates

362. See

supra

text

accompanying notes 97-126.

363. For

those agencies which

use adjudication

as the exclusive

vehicle for

policymaking, the

agency's

declaration of

nonacquiescence or

acquiescence may be deferred

until an

appropriate case

is

presented to the

agency head or

commissioners. We

are not requiring

interim compliance

with the

circuit

ruling at

these levels for

reasons articulated

in

Section III(C) above.

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762

The Yale

Law Journal

[Vol.

98:

679

will enhance

the likelihood

that a decision

to

nonacquiesce

reflects a

con-

sidered determination

by the

agency.

The legal

basis for the requirement

of approval

of

intracircuit

nonac-

quiescence

by the agency head

rests in the

same structural

concerns that

underlie the

Supreme Court's

decision

in Hampton

v. Mow

Sun Wong.364

That case involved a challenge

to

a

regulation

imposed by

the

Civil

Ser-

vice

Commission

that barred

the employment

of aliens

in the

federal

gov-

ernment. The

regulation was

defended, inter

alia, on the grounds

that

it

gave

the

President

an expendable

bargaining

chip in negotiating

treaties

with foreign

countries and

that it provided

aliens with an

incentive to

become naturalized.365

The Court assumed

that the bar could

be

justified

on

the basis

of such goals.366

It found, however,

that these

were

not

goals

of

direct concern

to the Commission.367

Therefore, the

Court was

"not

willing to presume"

that the

Commission

"was deliberately

fostering an

interest so far

removed from

[its] normal responsibilities."36

As a conse-

quence, the

Court struck down

the regulations.

On remand,

an official

with

direct

responsibility

over the goals in

question-the

President

him-

self-issued

an order disqualifying

aliens

from the Civil

Service,369

and

that order was

sustained by

the courts.370

In

the case

of intracircuit

nonacquiescence,

as in Hampton

v. Mow Sun

Wong,

the

agency

decision

is justifiable

if

undertaken

as a

means of pro-

moting certain

goals-the agency's

interest

in maintaining

a uniform in-

terpretation

of its

statute

while it makes reasonable

efforts to obtain

a

nationwide

validation of this

position-but

not otherwise.371

Therefore,

intracircuit

nonacquiescence

should be upheld

only

if

it is approved

by the

officials

who have

a direct

interest and

control over those

goals-in

this

case,

the

agency

head or commissioners

or

their delegatees.

A

second procedural safeguard

we proffer

is that the decision

to nonac-

quiesce

be

published

and explained.

Intracircuit

nonacquiescence

is never

justifiable

when it happens

by default; it is

only permissible

as an adjunct

to

a

considered

policy

of

nationwide

litigation.

Thus, it is important

that

the

agency

evaluate the

impact

of

the adverse

court

of

appeals

ruling,

and

364. 426

U.S.

88 (1976).

365. Id.

at 104-05.

366. Id. at

105.

367. Id. at 114.

368. Id. at

105.

369. Exec.

Order No.

11,935, 41 Fed. Reg.

37,301 (1976).

370.

Vergara

v.

Hampton, 581 F.2d 1281

(7th

Cir.

1978).

371.

Although Hampton v.

Mow Sun Wong

involved a

constitutional challenge,

nothing

in the

Court's opinion

suggests that

the structural result

would have been

different if the

applicable

limita-

tions on

agency

action had

derived from a

statutory source. Thus,

if an

administrative

practice

is valid

only

if

undertaken

pursuant

to

particular

statutory goals,

the

practice cannot

stand

if

approved by

an

official for whom

fostering those

goals is "far

removed from his

normal responsibilities."

Hampton

v.

Mow

Sun

Wong, 426 U.S. at

105. Moreover,

intracircuit

nonacquiescence may

well raise constitu-

tional

concerns,

if

pursued

without adequate

justification. See

supra text

accompanying

notes

210,

246-47.

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1989]

Nonacquiescence

763

that it

explain,

albeit

briefly,

its reasons

for

pressing

its

position

in

the

face of

this

ruling.

The

issues

raised

in

this

connection

are

analogous to

those

that arise

when

an

agency

chooses

to

abandon

an

established

policy. The

Supreme

Court

has

made

clear

that

"an

agency

changing

its

course

. . .

is obli-

gated

to

supply a

reasoned

analysis for the

change."372

As the

D.C.

Cir-

cuit

stated

in

CBS v.

FCC:373

[A]n

administrative

agency

. .

.

is

not

bound to

rigid adherence

to

its

prior

rulings.

Lodged

deep

within

the

bureaucratic

heart of

adminis-

trative

procedure,

however,

is

the

equally essential

proposition

that,

when

an

agency

decides

to

reverse

its

course, it

must

provide

an

opinion

or

analysis

indicating that the

standard

is

being

changed

and

not

ignored.374

So,

too,

for the

reasons

that we

have

discussed,

an

agency

is not

always

required to

acquiesce

in

the

rulings

of

the

court

of

appeals

that

will re-

view

its

actions.

But

it

cannot

simply

ignore

such

rulings.

Just

as an

agency

cannot

"silently

depart from

it

cannot

silently

act

contrary

to

a

prior

ruling of

its

reviewing

court.376

A

third

procedural

safeguard is

consultation with

the

Solicitor

General.

One of

the

relevant

considerations in

assessing

the

rationality

of intracir-

cuit

nonacquiescence will

be

whether

the

agency

is

actively

seeking Su-

preme

Court

review on

the

disputed

legal

question.

With

limited

excep-

tions,

agencies

cannot

petition

for

certiorari

without

the

approval

of

the

Solicitor

General.

Therefore,

we

would

urge

agencies,

before

engaging

in

nonacquiescence,

to

consult with

the

Solicitor

General

and

seek

some

pre-

liminary

indications

as to

whether

the

agency's

position

will be

supported

by

the

Solicitor

General.377

We

do

not

believe,

however,

that

it is

appro-

372.

Motor

Vehicle

Mfrs.

Ass'n

v.

State

Farm

Mut.

Auto. Ins.

Co., 463 U.S.

29,

42

(1983).

373.

454

F.2d

1018

(D.C.

Cir.

1971).

374.

Id. at

1026

(emphasis

added)

(footnotes

omitted).

Or,

as

Judge

Leventhal

stressed,

the

agency

must

indicate

"that

prior

policies

and

standards

are

being

deliberately

changed,

not

casually

ignored."

Greater

Boston

Television

Corp. v.

FCC,

444

F.2d

841,

852

(D.C.

Cir.

1970),

cert.

denied,

403

U.S.

923

(1971).

In

recent

years,

the

D.C.

Circuit

has

set

aside

administrative

actions

in

many

cases

in

which

the

agency

had

not

properly

acknowledged or

explained

its

change

in

policy.

See,

e.g.,

Robbins v.

Reagan,

780 F.2d

37, 48-49

(D.C. Cir.

1985)

(per

curiam);

National Black

Media

Coalition

v.

FCC,

775

F.2d

342,

355-56

(D.C.

Cir.

1985).

375.

Committee for

Community

Access v.

FCC,

737

F.2d

74,

77

(D.C. Cir.

1984).

376.

The

requirements

of

notice

and

explanation

also

mitigate

somewhat

the

distributional

effects

by

alerting

at

least

some

potential

litigants

that

recourse to the

courts

may

well be

successful,

thereby

increasing

the

probability

that the

agency's

action

will in

fact

be

challenged.

377.

Advance

consultation

would

not

impose

an

unreasonable

burden

on

the

Solicitor

General.

Pursuant

to

regulation,

the

Solicitor

General

already

must

approve

appeals

from the

district courts

to

the courts

of

appeals. See 28

C.F.R.

?

0.20(b)

(1988). Because

it

is

unlikely

that

intracircuit

nonac-

quiescence

would be a

routine

practice,

this

responsibility

should not

overwhelm the

Solicitor

Gen-

eral's other

duties. In

any

event,

the

Justice

Department

will,

in

general, be involved

in the

litigation

when the

agency's

underlying

policy

and

nonacquiescence

practice are

challenged

in

the

courts.

See

28

U.S.C.

?

516

(1982).

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764

The Yale

Law Journal

[Vol. 98:

679

priate for courts

to

police

the

relationship

between an

agency

and its

law-

yer-the Justice Department

in general and

the Solicitor General

in

par-

ticular. Thus, while

it is desirable that

agencies voluntarily adopt

a

consultation requirement,

judicial enforcement

of this requirement

is

inappropriate.

VI. ELIMINATING VENUE

CHOICE

At

present,

intracircuit nonacquiescence

is

relatively

rare

because

most

statutes provide for

review of agency decisions

in a number

of

courts

of

appeals; the agency,

therefore, cannot predict

with certainty

the identity

of

the

reviewing circuit.378

The

NLRB,

as we have

discussed,

is often in

this

position

because

the

broad venue

provisions

of its enabling

statute lodge

review in the court

of appeals where the

petitioner resides or "transacts

business,"

where the

unfair

labor

practice

occurred,

or in the D.C.

Cir-

cuit.879 Provisions

of this type-a common

feature of enactments

of the

New

Deal era-were

patterned in part after

the Clayton and

Federal

Trade Commission

Acts,380 but differed from

these antecedents

in ena-

bling private petitioners

to

seek

alternative venue

in the D.C. Circuit.381

As

we

concluded

in Section

IV(C),

when an agency decision

is

subject

to review

in a

number

of different

courts

of appeals, limits on nonacquies-

cence are undesirable

for

the same reasons

as are limits on intercircuit

nonacquiescence. To

compel an agency to

follow the adverse ruling

of a

particular

court of appeals would be to give

that

court undue

influence

in

the intercircuit

dialogue by diminishing

the

opportunity

for other courts of

proper venue to consider,

and possibly sustain,

the agency's position.

Even

though

we would not restrict nonacquiescence

in the face

of

venue

choice,

we favor

predictable

venue rules.

While our conclusion

is moti-

vated

primarily by

our

analysis

of

the nonacquiescence

question,

we

also

identify independent

reasons

why venue choice

is undesirable.382

We realize that to the extent that an

agency sets its nonacquiescence policy in the context of

a

formal adjudication (or of a formal

rulemaking), advance consultation with the Solicitor General

may

be an inappropriate ex parte

communication (a subject on which we do not take a position).

378. See, e.g., supra text

accompanying notes 143-46 (discussing NLRB); supra note 186

(dis-

cussing OSHRC); 15 U.S.C. ? 45(c)

(1982) (Federal Trade Commission); 7 U.S.C. ? 13a-1

(1982)

(Consumer Futures Trading

Commission); 5 U.S.C. ? 7123 (1982) (Federal Labor Relations

Authority).

379. See

supra text accompanying

notes 143-46.

380. See Clayton Act, 15 U.S.C. ?

21(a) (1982); Federal Trade Commission Act, 15

U.S.C. ?

45(b) (1982). The legislative history

of

the National Labor Relations Act of 1935, 49 Stat. 449, now

codified as amended, 29 U.S.C. ??

141-87 (1982), where ? 10(e)-(f) originated, 29

U.S.C.

?

160(e)-(f) (1982), states that

provisionss

for similar enforcement

of

orders

of

administrative bodies

made upon like procedures may be found in

the Federal Trade Commission Act

...

[and]

the

Clayton

Act."

1

NLRB, LEGISLATIVE HISTORY

OF

THE

NATIONAL LABOR RELATIONS AcT, 1935, at

1361

(1985).

381. See

29

U.S.C.

?

160(f)

(1982).

382. Of

course, if venue choice is

eliminated, more cases will

come

under the constraints

that

apply to intracircuit nonacquiescence, and

agencies will be limited in their ability to maintain

a

uni-

form

policy at the administrative level in

the face of conflicting circuit court decisions. See supra

text

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Nonacquiescence

765

First,

venue choice has negative

effects from the

perspective

of

an

agency's

relitigation policy. Such

choice makes it difficult

for an agency to

continue

advocating its preferred

policy in circuits which

have not rejected

it,

without having to face

challenges to that policy, again

and

again,

in

circuits

which have already

rejected it. Where venue is

fixed, however,

an

agency can

largely confine the

impact

of an adverse

circuit

decision

to

the

geographic reach of that court. It

can

choose

to engage in

intercircuit

non-

acquiescence without concern that its

opponents

will

race

to a circuit

that

previously

ruled against it. But

where venue

is

uncertain,

petitioners ag-

grieved

by the agency action will

typically repair

to

the

circuit which pre-

viously

ruled against

the

agency,

and

that court will

view

the

agency's

behavior

to

be

quite

akin

to intracircuit

nonacquiescence.

Except

when

all

circuits with

venue

over the

agency

action have

taken

congruent

positions opposed to

the agency, venue choice

will exacerbate

the

agency-court tensions caused

by the pursuit of national

uniformity by

channeling

a

disproportionate

number of cases to circuits

that

have ruled

against the

agency. The corollary,

of course, is that such

circuits will

have

a

disproportionate role

in

determining

the

agency's decisions.

As we

have

already

explained, this bias

is

undesirable.-8-

Second,

venue choice

allows

an

agency

to continue to

advocate its

pre-

ferred

policy nationwide even after

such

a

strategy has ceased

to be

desira-

ble from

the

perspective of the

administrative

lawmaking system.

In

a

venue-certain

regime, an agency

could apply

its

preferred

policy

at the

administrative

level, without

restrictions,

in circuits that had

not

yet

ruled

on the

legality

of that

policy and in

circuits

that had

sided

with the

agency.

But in

circuits that had

rejected that policy,

the

agency could con-

tinue to

apply

it

only

if

it met the

rationality

standard

set forth

in

Section

V(A).

Venue

choice eliminates

the

restraining

force of

rationality

review.

It is

thus not

surprising that some

agencies perceive that

broad venue pro-

visions

increase

their power at the

expense

of the

courts

of

appeals.384

Venue choice

also has

undesirable effects in areas

unrelated to

the

focus

of

this

study.385 First,

and

perhaps most importantly, broad

venue provi-

sions lead to

forum shopping. To

the extent that review of

administrative

action is

available

in

several courts

of appeals, litigants will

seek to obtain

review in

the

court with the case

law most favorable to

their position. For

accompanying

notes 334-48.

383. See

supra text

accompanying

notes 291-95.

384. Collyer

Letter,

supra note 41, at

13-14. One

could argue,

of course,

that the proper

way

to

address this

problem is by

requiring

agencies to

acquiesce in the

adverse

ruling of any

circuit with

venue

over the

agency's

decision, even if

the other

available fora had

ruled for

the agency

or

were

uncommitted.

But,

as

we

have explained, costs

of

imposing such

limits

are

simply

too

high because

of

the

extent to

which they

would impair an

agency's

relitigation

efforts

in

circuits

that had not

rejected

its

policy and

because of the

undue weight

accorded to

the positions of

circuits which

ruled against the

agency. Thus, the

better

course

is

to remove

the

venue uncertainty.

385. See

Note, Venue for

Judicial

Review of

Administrative

Action: A New

Approach, 93

HARV.

L.

REV. 1735,

1736-44

(1980).

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766

The Yale Law

Journal

[Vol. 98:

679

example,

until the

advent of recent

legislation,386 there had been

intense

competition among

interested parties

to be the first

to file a petition

for

review. Under

then-prevailing law,

the

court

in

which the first

challenge

was

filed became the

forum

for

review

of the

administrative action;

chal-

lenges

filed

elsewhere were transferred

to that court.387

The result

was

that the applicable circuit

court

law was

determined by

who

won

the

"race to the

courthouse."

The

unseemliness of

this race

led Congress to

provide,

in the

recent

amendments,

that the

reviewing

circuit be determined

by lottery

from

among

all of the

circuits

in

which

petitions for

review

are

filed within

ten

days

of the

agency's

order;

the rule of first

filing

would

continue

where

petitions

are filed

after the ten-day

period.388 It

is not

clear, however,

why

it is

preferable to determine

venue

by lottery, after actions have been filed

in

several

circuits,

rather

than to

make it clear

ex ante.

For review

of

NLRB decisions, for

example, a

predictable venue

could

be

the

circuit in which

the unfair labor

practice

occurred.

Admittedly,

in

some cases

it will

be difficult to

determine the

site of the

underlying

events,

or

those

events may have

occurred

in

several

circuits. We

believe,

however,

that

such cases will

be

rare and that

predictable rules

could be

fashioned.

Marginal

applications

of

any venue rule will

produce

some col-

lateral

litigation.

But such

litigation

is

present

even

under

the current

venue

provisions,389

and

there

is

little

reason to believe that a

predictable

venue

regime will

exacerbate this

difficulty. In any

event, the few

cases

in

which

this rule will

not be wholly

predictable should

not drive venue

pol-

icy

for the

vast

majority

of cases.890

Second,

venue

choice,

as

it

operates

in

practice, places

some administra-

tive

agencies

at a

strategic

disadvantage. For

example, the NLRB gener-

ally seeks

enforcement of its orders

in the court of

appeals with

jurisdic-

tion

over the

geographic area

where

the unfair labor

practice

occurred.391

Thus,

it

does not

take full

advantage of the

strategic benefits of

venue

choice,

which

would

allow it,

if

it were so

inclined, instead to seek en-

forcement in the

circuit with the

most favorable

case law from

among

those

in

which

respondents reside or

"transact

business." In contrast,

par-

ties

aggrieved by the

NLRB's order

use venue

uncertainty more

strategi-

386. See

Pub. L.

No.

100-236, 101

Stat. 1731

(1988)

(amending 28 U.S.C.

?

2112(a)

(1982));

H.R. REP.

No. 72,

100th

Cong., 1st Sess.

(1987).

387. In

general, courts

apply the law of

the

transferee circuit.

See

supra note 242.

388.

See

supra

note 386.

389. See,

e.g.,

supra text

accompanying notes

158-60.

390.

The

fact that

the

NLRB, by

internal

policy,

already seeks

enforcement

of its

orders

in

the

circuit in which

the

unfair labor

practice

occurred,

see supra

text

accompanying note

142,

makes clear

that

such a

venue rule

can be

practicably

administered.

Indeed, the

Board,

in

its comments on an

earlier draft

of this

Article, did

not raise

practicability as

an

argument in

support of

status quo

ar-

rangements.

See

Collyer Letter,

supra

note 41.

391.

See

supra text

accompanying

note

144.

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1989] Nonacquiescence

767

cally.39"

We can think of

no

desirable

reason for

handicapping agencies in

this way. Neither can we think of a legitimate justification for equalizing

the scales by encouraging agencies

to

engage

in

forum shopping, rather

than by simply eliminating venue choice.898

Third, venue choice

is

undesirable

from a

distributional standpoint.

It

gives

multistate

actors

and

wealthy, well-organized parties (or

those other-

wise having access to litigation resources)

an

advantage over

less well-

situated parties, who are more likely to seek review in the court of appeals

that

is

geographically closest, rather than

in the

one that offers them the

best

case law.

It is important to stress that in criticizing the effects of venue uncer-

tainty, we are not advocating the use of exclusive venue provisions.

Under

an

exclusive venue provision, challenges to particular types

of

administra-

tive

action can be brought only in one circuit. For example,

the D.C.

Circuit

is

the

only proper venue

in

which

to

challenge regulations

promulgated by EPA establishing emission standards for new sources

under

section

111 of the

Clean

Air

Act.394 In contrast, under

a scheme

in

which

venue

is

predictable but

not

exclusive, ultimately all

of the circuits

may entertain challenges

to

agency action, even though for each particular

decision

only

one circuit will be the

proper

venue.

Thus,

whereas exclu-

sive

venue provisions hamper intercircuit dialogue,395 predictable venue

provisions

do not.3"9

The

benefits attributed to broad venue provisions do not outweigh the

problems

that we

have identified.

It is

true

that

venue choice may promote

the

convenience of certain

parties. Emphasizing

this

consideration,

NLRB

General

Counsel Collyer states:

The

convenience of citizens

aggrieved by government

action

is also a

factor that is still

entitled

to

respectful

consideration.

That conve-

nience

may involve

no

more

than that a

party's

Manhattan

attorney

may

seek

review

in

a

New

Jersey dispute

without

going

to Philadel-

392.

See

supra

text

accompanying

notes 155-60.

393. Before 1958, the court in which the

NLRB filed the transcript of its proceeding obtained

exclusive

jurisdiction over the entire case even

where

an

aggrieved party may have previously

peti-

tioned in another circuit. Congress removed the

Board's power to choose the forum by adding 28

U.S.C.

? 2112. See H.R.

REP.

No. 842, 85th

Cong.,

1st

Sess. 4-5 (1957).

It has

been suggested

that

the purpose

of

the 1958 amendment was to

"punish" the NLRB for its forum-shopping practice, see

McGarity, supra note 160, at 347, but it appears

that Congress's purpose was to limit forum-shop-

ping by agencies generally, see Comment, A

Proposal to End the Race to the Court House in Appeals

from Federal Administrative Orders, 68 COLUM.

L. REV. 166, 168-69 (1968). In light of the Board's

policy

to

seek enforcement only in the circuit

where the ULPs occurred, see supra note 144, a return

to

pre-1958 arrangements would have the same

effect as creating predictable venue

in

that circuit.

394. 42 U.S.C.

? 7607(b)(1) (1982).

395.

Exclusive venue provisions, however,

may have other benefits,

which

may outweigh

the loss

of

intercircuit dialogue. Perhaps most

importantly, they provide

a

quick,

authoritative resolution of

legal controversies. They also promote expertise on

the part of the reviewing court. The wholesale use

of exclusive

venue provisions, however, is inconsistent with the

rejection

of intercircuit stare decisis

and

the preeminence of generalist courts. See R.

Revesz, supra

note

278,

at 70-71.

396. See R. Revesz, supra note 278, at 70.

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768

The

Yale

Law

Journal

[Vol. 98:

679

phia. However,

it

may

also involve the more substantial claim

of

an

employee who was discharged

in

Wisconsin

but

who

lives

in

Nevada

at

the

time he

petitions

for review.

Or

the

convenience

may

be

that

of

employees

whose case

technically

arose

in an Indiana

border

town

but who live much

closer

to Cincinnati than

Chicago.397

There is reason to be skeptical about the

claim

that broad

venue choice

of

the

type present

in

the

NLRA

is

necessary

to

ensure that

litigants

are

not relegated to an inconvenient

forum.

Most importantly,

individuals and

small

corporations opposed

to

agency

action are

likely

to be

residents of

the circuit in which the

allegedly

unlawful conduct

occurred.

In

general,

the

forum choice

afforded

by

broad

venue

rules is

significant

only

for

a

particular

class

of

litigants-large organizations

that would

like to

peti-

tion for review in circuits where

they

have their

headquarters

or "transact

business." But even in such

cases,

the

convenience rationale

is

not

persua-

sive.

Appellate

review of

agency action,

such as

actions under

the

NLRA,

involve

only briefing

and

oral

argument

and review

on the basis of the

administrative

record;

there are no witnesses to be

called,

and other

fact-

gathering activity

does

not

take

place. Moreover,

in

the case

of

multiple

challenges

to the same administrative

decision,

if different

parties

prefer

to

litigate

in

different

circuits,

it

is

far

from clear that venue determined

by

the time of

filing

or

by lottery would be more convenient, for

most liti-

gants,

than a

rule fixing venue

in

the circuit where the

underlying events

occurred.

A

separate

issue is whether the

benefits of maintaining an alternative

venue

in the D.C.

Circuit

outweigh

the

costs engendered by the

resulting

unpredictability of venue. The NLRA's provision for alternate

venue in

the D.C. Circuit

(a common characteristic of New Deal

legislation) was

not

present

in

the earlier Clayton and Federal Trade

Commission Acts.398

We

suspect

that the initial

impetus was

to

permit opponents of

agency

action the

option of suit in the seat of national government,

rather than a

deliberate

judgment

to

allocate reviewing authority to a

court which

would,

over

time, acquire expertise in administrative law. Such

an inter-

pretation explains why

the

statute affords this option to parties

aggrieved

by

NLRB

orders while Senator

Wagner eliminated

the

provision which

would

have

given the agency the same choice.399

Whatever the

original design may have been, the D.C.

Circuit has de-

veloped

a

special competence in the administrative area, which

undoubt-

397.

Collyer Letter,

supra note 41, at 12

(footnote

omitted).

398.

See

J. CHAMBERLAIN,

N.

DOWLING

& P. HAYS, THE JUDICIAL

FUNCTION

IN FEDERAL

ADMINISTRATIVE

AGENCIES 170-72 (1942).

399.

Compare S. 1958,

Original Senate Print,

74th Cong., 1st Sess.

13-14 (Feb. 21, 1935)

with

S.

1958, as reported, 2d

Senate Print, 74th

Cong., 1st Sess. 15-16

(May 2, 1935),

reprinted in

1

NLRB, LEGISLATIVE

HISTORY OF THE

NATIONAL LABOR RELATIONS

ACT, 1935, at

1302-03, 2293

(1985).

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1989]

Nonacquiescence

769

edly

has

enriched

the

intercircuit

dialogue.4"'

It

is

unclear,

however,

to

what

extent

alternative

venue

provisions rather

than

exclusive

jurisdic-

tional

grants have

contributed to

this

phenomenon.

We

are

willing

to

con-

cede, for

purposes of

discussion,

that

because

of

its

limited

geographic

reach,

the

D.C.

Circuit's

role in

the

administrative

state

would be

reduced

under

predictable

venue rules.

The

question

is

whether the

incremental

contribution to

the

D.C.

Cir-

cuit's

expertise

stemming

from

its

role as

the

alternative

venue in

adminis-

trative

cases

outweighs the

costs of

the

attendant

venue

uncertainty.

In

considering

this

point,

one

should

bear

in

mind

that if

the

D.C.

Circuit

were to

become

the

sole

alternative

venue in

an

otherwise

venue-certain

regime,

its

decisions

would

acquire

a

national

prominence

even

greater

than

it now

enjoys,

overshadowing

the

regional

courts,

skewing the

in-

tercircuit

dialogue, and

creating

pressure on

the

Supreme

Court to

police

its

determinations

aggressively.

Such

an

arrangement is

problematic for

many

of the

same

reasons

that counsel

against

creation

of a

national

court

of

appeals

situated between

the

existing circuit

courts

and the

Supreme

Court.401

On

balance,

we

think that

the

better

approach

is pervasive

pre-

dictable

venue.

Yet

another

justification for

venue

choice,

extending

well

beyond con-

siderations of

party

convenience and

of the D.C.

Circuit's

special

role,

was

offered

by

NLRB

General

Counsel

Collyer,

commenting for

the

Board

on

an

earlier

draft

of

this

Article.

In

the

Board's

view,

existing

venue

provi-

sions

reflect

congressional

rejection of a

district

court model of

agency

review:

Rather

than

giving

the

circuit

courts

exclusive

authority

over

all

agency

activities

within

their

geographic

jurisdiction,

Congress

in-

stead

established a

system

whereby two or more

circuits

may

review

virtually

any

case-and

the

jurisdiction to

review

may

turn on

no

more

substantial

ground

than

the

results of a

lottery.

Such a

system

is a

deterrent

to those

courts

that

would command an

agency's

re-

sources on

a

territorial

basis.402

Moreover,

Ms.

Collyer

noted:

Venue

uncertainty removes

any

incentive for

the Board to

behave

like a

district court ....

The

knowledge

that

acquiescence is no safe

harbor

but a Board

decision that

the Board

must be

prepared

to

defend

nationwide

serves to

underscore

the

responsibility

that

Con-

400.

See

Sunstein,

Participation,

Public

Law,

and

Venue

Reform, 49

U. CHI. L. REV.

976

(1982);

Wald,

Making

"Informed"

Decisions on

the

District of

Columbia

Circuit,

50

GEO.

WASH. L.

REV.

135,

137

(1982).

401.

See S.

ESTREICHER

&

J.

SEXTON,

supra

note

243,

at 111-15.

402.

Collyer

Letter,

supra

note

41, at

13

(footnote

omitted).

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770

The

Yale

Law

Journal

[Vol.

98:

679

gress

has placed upon

the Board to fill in the

broad outlines of

na-

tional

labor

policy.403

This

articulate

statement betrays

a

misconception

that

pervades

judicial

and academic

commentary

on

the

subject

of

agency nonacquiescence-the

tendency to endow venue

provisions with structural

significance

for allo-

cating

the

roles of

administrative

agency

and

reviewing

court.

Critics of

SSA make the

argument

that

predictable

venue

invites the district court

analogy: that

Congress's

choice

of

predictable

venue demonstrates

a

legis-

lative intent to

bar

outright

intracircuit

nonacquiescence.4?

For the

NLRB,

venue

uncertainty conjures

up

the

co-equal branch

metaphor:

that,

in

fashioning

a broad

venue

provision, Congress chose to endow the

agency

with

power

to

disregard circuit

precedent

until the

Supreme

Court

has

spoken.

Both

projections miss the mark.

In our

view,

in

a multi-cir-

cuit

system

of

review, the

agency's

responsibility

for a

nationally

uniform

administration

of its

organic

statute

is simply not a function of the venue

provision.

The agency's

responsibility, and the

attendant

checking func-

tion of

the courts of

appeals,

remains the

same

regardless

of the

venue

provision.

In

summary,

it

is

only

the

accident of broad venue

provisions

that

en-

ables

many agencies to

pursue goals

of

national

uniformity

without incur-

ring

the

rebuke that has

bedeviled

intracircuit

nonacquiescence.

This state

of

affairs has

two

undesirable effects.

First, as a

result of the

relatively

small

number

of

agencies

that

operate under venue-certain

schemes,

courts have

viewed

intracircuit

nonacquiescence

as

an

aberrational case

meriting

sanctions,

rather than

as a

more

general

by-product

of an

agency's

legitimate

quest for national

uniformity.

Second, the

costs of non-

acquiescence under

venue

uncertainty have

escaped judicial

scrutiny. Pre-

dictable venue

rules

are

desirable

because they

facilitate

this checking

function

without

precluding

responsible agency

nonacquiescence.406

403.

Id. at 14

(footnote

omitted).

404.

As

attorneys

for the

plaintiffs

in the

Stieberger

litigation

contend:

"[Wihere

Congress has

distributed

venue

throughout

the

country to

protect

the

interests of

parties

appearing

before an

agency,

Congress had

accepted

that

nonuniform

rules

may

govern the

agency and

determined

that

other interests

outweigh

the value

of

uniformity."

Letter

from

Stieberger

Plaintiffs, supra

note

344, at

11. It is

therefore

important

that, in

limiting

venue

choice,

Congress

should

make clear

that it is

not

thereby

prohibiting

agencies

from

engaging in

intracircuit

nonacquiescence that

satisfies

rationality

review.

405.

An

alternative

would

be to

fashion

choice of

law

rules, which

would

make

it

possible to

predict,

at the

time of

the

administrative

proceedings,

which

circuit's law

would

govern the

review

of

that

decision. See

Note,

Using

Choice

of Law

Rules to

Make

Intercircuit

Conflicts

Tolerable, 59

N.Y.U.

L. REV.

1078

(1984).

But we

believe

that the

prospect

of

having one

circuit

apply

another

circuit's

law fits

uncomfortably

with the

idea of

federal

law as

a

unitary law.

See

supra note 244.

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1989]

Nonacquiescence

771

CONCLUSION

Responding

to an earlier

draft

of this

Article,

Assistant Attorney

Gen-

eral John

R.

Bolton, head of

the Justice

Department's

Civil Division,

stated

that

whileie

agency decisions

regarding

nonacquiescence

should

be

rational, subjecting

such decisions

to judicial

review offers

few, if any,

advantages over

straightforward

litigation on the

merits

of the underlying

issue

itself."4?O

Thus,

a court of

appeals

would

be

free to set aside

agency

action that

was

inconsistent

with a prior

ruling of that court,

but

would

not

be empowered

to enjoin nonacquiescence.

Each litigant would

have

to

seek

judicial

relief in order to

benefit from

the favorable

circuit

court

rul-

ing.407 Similarly,

Deputy Solicitor

General

Thomas W. Merrill

concluded

that

"nonacquiescence

decisions,

as such, should

not be separately

made

subject

to

judicial

review."408

Attorneys

representing Social

Security claimants

occupy the

polar ex-

treme. One

lawyer wrote that

anything short

of a blanket bar

of intracir-

cuit

nonacquiescence

"would destroy

the

very

basis of

the notion of

sepa-

ration of

powers

by allowing

an agency of

the

Executive

Branch

to ignore

the

judiciary."409

Another

stated

that

whenhn

an

agency

refuses

to follow

the case

law

of the Circuit,

knowing that

venue

to review

will be to

the

Court

of

Appeals

of that Circuit, it is engaging

in

anarchy, pure

and

sim-

ple."'410 Attorneys

for the Stieberger

class argued

that "in the

public

bene-

fits context intracircuit

nonacquiescence

is illegal."411

Along

similar lines,

the State

of New York urged

that "there

should be no instances

in which

agencies are

permitted to disregard

rulings of

a federal court

of appeals in

that circuit."412

Our Article takes

a

middle course

between the

co-equal

branch and

district court

metaphors

that underlie the

rhetorical

positions

assumed

by

these

litigants.

Our approach

recognizes

a

role for

the courts

in

policing

agency practices

in this

area,

but

also acknowledges

the

legitimacy

of an

agency's

desire to maintain

a

uniform

administration of

its

governing

stat-

ute

while

it

reasonably

seeks

the national validation of its

preferred

posi-

tion. The

virtue of this approach

is

not that it travels an

intermediate

course.

Rather, it flows from

a theory

of the proper

functions of courts

and

agencies

in the administrative

state.

It attempts to do justice

to the

406.

Bolton Letter, supra

note

359, at

6.

407.

The Justice Department does concede that, at least

in

some of

these cases, EAJA sanctions

would

be

appropriate.

408.

Merrill Letter, supra note 21, at 2.

409. Letter from Brian I. Clymer to Mary Candace Fowler

3 (April 28, 1988) (public comment

on draft

ACUS policy).

410.

Letter from Gary Palmer to Mary Candace Fowler 1 (May 3,

1988) (public comment

on

draft ACUS

policy).

411. Letter from Stieberger Plaintiffs, supra note 344, at 17.

412. Letter from Howard L. Zwickel, New York State Department of

Law,

to

Mary

Candace

Fowler

1

(May 6, 1988) (public comment on draft ACUS policy).

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772

The Yale Law

Journal

[Vol. 98: 679

respective responsibilities of,

and the delicate interaction between,

these

key institutions in our administrative

lawmaking system.

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Nonacquiescence by Federal Administrative Agencies

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