Physicians for Social Responsibility v. Andrew Wheeler ( 2020 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 19, 2020 Decided April 21, 2020
No. 19-5104
PHYSICIANS FOR SOCIAL RESPONSIBILITY , ET AL.,
APPELLANTS
v.
ANDREW WHEELER, ADMINISTRATOR, U.S. ENVIRONMENTAL
PROTECTION AGENCY, IN HIS O FFICIAL CAPACITY,
APPELLEE
Appeal from the United States District Court
for the District of Columbia
(No. 1:17-cv-02742)
Neil Gormley argued the cause for appellants. With him on
the briefs were Tosh Sagar, Michael Burger, and Patti
Goldman.
Robert W. Ferguson, Attorney General, Office of the
Attorney General for the State of Washington, Kelly T. Wood,
Assistant Attorney General, Xavier Becerra, Attorney General,
Office of the Attorney General for the State of California,
William Tong, Attorney General, Office of the Attorney
General for the State of Connecticut, Kwame Raoul, Attorney
General, Office of the Attorney General for the State of Illinois,
Daniel I. Rottenberg, Assistant Attorney General, Brian E.
Frosh, Attorney General, Office of the Attorney General for
2
the State of Maryland, Joshua M. Segal, Special Assistant
Attorney General, Gurbir S. Grewal, Attorney General, Office
of the Attorney General for the State of New Jersey, Lisa
Morelli, Deputy Attorney General, Letitia James, Attorney
General, Office of the Attorney General for the State of New
York, Barbara D. Underwood, Solicitor General, Steven C.
Wu, Deputy Solicitor General, Michael J. Myers, Senior
Counsel, Ellen F. Rosenblum, Attorney General, Office of the
Attorney General for the State of Oregon, Josh Shapiro,
Attorney General, Office of the Attorney General for the
Commonwealth of Pennsylvania, Maura Healey, Attorney
General, Office of the Attorney General for the
Commonwealth of Massachusetts, Christophe Courchesne,
Assistant Attorney General and Chief, Karl A. Racine,
Attorney General, Office of the Attorney General for the
District of Columbia, and Loren L. AliKhan, Solicitor General,
were on the brief for amici curiae the States of Washington, et
al. in support of plaintiff-appellants and reversal.
Shaun A. Goho was on the brief for amici curiae Lynn R.
Goldman, et al. in support of appellants and reversal.
Jeffrey E. Sandberg, Attorney, U.S. Department of Justice,
argued the cause for appellee. With him on the brief was Mark
B. Stern, Attorney.
Before: ROGERS and TATEL, Circuit Judges, and
GINSBURG, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge TATEL.
TATEL, Circuit Judge: The Environmental Protection
Agency (EPA) utilizes nearly two dozen scientific advisory
committees—multimember groups that “review scientific
research” relevant to the agency’s regulatory objectives and
generally “provide advice and expertise from outside the
3
agency.” National Research Council, Science for
Environmental Protection: The Road Ahead 180 (2012).
Historically, EPA advisory committees have included
academic scientists who, supported by EPA grants, conduct
cutting-edge scientific and technical research important to the
agency’s statutory mission. In 2017, the EPA Administrator
issued a directive that now prohibits all grant recipients from
serving on any agency advisory committee. Three scientists
who had previously received EPA grants and served on
advisory committees, along with several non-profit
organizations, filed suit, arguing that the directive was both
arbitrary and capricious and contrary to law in violation of the
Administrative Procedure Act (APA), 5 U.S.C. § 706(2)(A).
The district court granted EPA’s motion to dismiss, holding
that the directive was unreviewable and, in the alternative,
lawful. For the reasons explained below, we reverse.
I.
Several environmental statutes require EPA to ground its
decision-making in scientific evidence. The Clean Air Act, for
example, mandates that “[a]ir quality criteria . . . accurately
reflect the latest scientific knowledge useful in indicating the
kind and extent of all identifiable effects on public health or
welfare,” 42 U.S.C. § 7408(a)(2), and the Toxic Substances
Control Act requires the Administrator to “make decisions . . .
based on the weight of the scientific evidence,” 15 U.S.C.
§ 2625(i).
To effectuate these statutory commands and ensure that
“national efforts to reduce environmental risks are based on the
best available scientific information,” EPA, Our Mission and
What We Do (Feb. 7, 2018), https://www.epa.gov/aboutepa/
our-mission-and-what-we-do, EPA relies on twenty-two
advisory committees to provide scientific knowledge relevant
4
to the agency’s statutory objectives. These committees serve a
range of functions. Some provide general knowledge across
scientific domains, such as the Science Advisory Board (SAB)
which offers “scientific advice” to EPA and Congressional
committees. 42 U.S.C. § 4365(a). Others are tailored to specific
statutory mandates. For example, the Federal Insecticide,
Fungicide, and Rodenticide Act requires the Administrator to
convene and consult a panel of “7 members appointed by the
Administrator from a list of 12 nominees, 6 nominated by the
National Institutes of Health and 6 by the National Science
Foundation,” chosen “on the basis of their professional
qualifications to assess the effects of the impact of pesticides
on health and the environment.” 7 U.S.C. § 136w(d)(1).
Similarly, the Clean Air Act requires EPA to create the Clean
Air Scientific Advisory Committee (CASAC), directing the
Administrator to appoint “seven members including at least
one member of the National Academy of Sciences, one
physician, and one person representing State air pollution
control agencies.” 42 U.S.C. § 7409(d)(2)(A). And while
committees may be “advisory” in name, EPA engagement with
such committees is often mandatory. The statute creating the
SAB, for example, requires that the Administrator “shall make
available” to the Board “any proposed criteria document,
standard, limitation, or regulation” created under numerous
environmental statutes and shared with any other agency, id.
§ 4365(c)(1), and the Clean Air Act requires that when issuing
notice of certain proposed rules, EPA must “set forth or
summarize” the findings and recommendations of CASAC
and, “if the proposal differs in any important respect from any
of these recommendations,” EPA must provide “an explanation
of the reasons for such differences,” id. § 7607(d)(3).
 5
EPA advisory committees, like others throughout the
federal government, are authorized and regulated by the
Federal Advisory Committee Act (FACA), 5 U.S.C. app. II
§§ 1 et seq. FACA imposes government-wide procedural
requirements on advisory committees, directing them to give
advance notice of meetings; hold meetings “open to the
public”; allow “[i]nterested persons” to “attend, appear before,
or file statements”; keep minutes of each meeting and copies of
all reports received, issued, or approved by the committee; and
make committee records publicly available. Id. § 10(a)–(c).
The Act also imposes substantive requirements. Committee
“membership,” for example, must be “fairly balanced in terms
of the points of view represented and the functions to be
performed by the advisory committee,” id. § 5(b)(2), and
implementing regulations for such a committee “shall . . .
contain appropriate provisions to assure that the [committee’s]
advice and recommendations . . . will not be inappropriately
influenced by the appointing authority or by any special
interest, but will instead be the result of the advisory
committee’s independent judgment,” id. § 5(b)(3).
FACA charges the General Services Administration
(GSA) with developing government-wide standards for
convening advisory committees. In response, GSA has issued
regulations that largely leave appointments to individual
agency heads, explaining that “[u]nless otherwise provided by
statute, Presidential Directive, or other establishment authority
advisory committee members serve at the pleasure of the
appointing or inviting authority,” and that their “[m]embership
terms are at the sole discretion of the appointing or inviting
authority.” 41 C.F.R. § 102-3.130(a). But that discretion is not
boundless. Because advisory committee members are
government workers—technically “special Government
employee[s]” who perform temporary duties for the federal
government for a limited period each year, 18 U.S.C.
6
§ 202(a)—GSA regulations require that each agency head
“must . . . [a]ssure that the interests and affiliations of advisory
committee members are reviewed for conformance with
applicable conflict of interest statutes . . . and other Federal
ethics rules,” 41 C.F.R. § 102-3.105(h). GSA regulations, in
other words, dictate that advisory committee members, just like
all other government employees, are bound by federal ethics
rules.
The ethics rules at issue in this case have been
promulgated by the U.S. Office of Government Ethics (OGE),
which is responsible for implementing two major ethics
statutes. The Ethics in Government Act directs OGE to provide
“overall direction of executive branch policies related to
preventing conflicts of interest on the part of officers and
employees of any executive agency.” 5 U.S.C. app. § 402(a).
And the federal conflict-of-interest statute likewise tasks OGE
with identifying “the types of interests that are not so
substantial as to be deemed likely to affect the integrity of the
services the Government may expect from the employee,” 18
U.S.C. § 208(d)(2)(B), and with granting class-wide
exemptions from the ethics rules for certain conduct that is “too
remote or too inconsequential to affect the integrity of the
services of the Government officers or employees,” id.
§ 208(b)(2).
Pursuant to these authorities, OGE issued a regulation
known as the “Standards of Ethical Conduct for Employees of
the Executive Branch,” which interprets the conflict-of-interest
statute and “establishes uniform standards of ethical conduct”
for all executive-branch workers. 57 Fed. Reg. 35,006, 35,006
(Aug. 7, 1992). These detailed regulations tell government
employees precisely when they might or might not have an
ethics problem. And although recognizing that certain ethics
rules “tailored to the functions and activities of a given agency”
7
might be appropriate, id., OGE requires that agencies wishing
to supplement their rules “prepare and submit” any
supplemental regulations to OGE “for its concurrence and joint
issuance” in the Federal Register, 5 C.F.R. § 2635.105(a)–(b).
Central to this case, OGE has expressly addressed the
ethical responsibilities of “special government employees” like
EPA advisory committee members who receive agency
funding. Specifically, a “special Government employee
serving on an advisory committee within the meaning of
[FACA] may participate in any particular matter of general
applicability where the disqualifying financial interest arises
from his non-Federal employment or non-Federal prospective
employment, provided that the matter will not have a special or
distinct effect on the employee or employer other than as part
of a class.” Id. § 2640.203(g). The regulations spell out what
this rule means in practice. For example, “[a] chemist
employed by a major pharmaceutical company . . . developing
an experimental AIDS vaccine” can ethically serve “on an
advisory committee established to develop recommendations
for new standards for AIDS vaccine trials,” because the
chemist’s employer “will be affected by the new standards only
as part of the class of all pharmaceutical companies and other
research entities that are attempting to develop an AIDS
vaccine.” Id. By contrast, “[a]n employee of [a] university” that
receives grants from the agency “may not participate in” an
advisory committee that focuses on “the evaluation of th[at]
university’s performance,” because the evaluation of that
specific university’s performance “is not a matter of general
applicability.” Id. According to OGE, then, grantees may
ethically serve on advisory committees that affect an otherwise
disqualifying interest so long as they limit their participation to
topics of broad applicability.
8
Consistent with OGE’s uniform standards, EPA has long
allowed individual recipients of EPA grants to serve on its
scientific advisory committees, provided they do not address
matters related to their individual grants. As a 2013 report from
EPA’s Office of the Inspector General illustrates, the agency
generally “d[id] not consider a prospective or current member’s
receipt of an agency or other federal research grant to create the
basis for a financial conflict of interest.” Office of the Inspector
General, EPA, EPA Can Better Document Resolution of Ethics
and Partiality Concerns in Managing Clean Air Federal
Advisory Committees 9–10, https://www.epa.gov/sites/
production/files/2015-09/documents/20130911-13-p-0387.pdf
(2013).
That changed in October 2017, when then-EPA
Administrator Scott Pruitt issued a directive titled
“Strengthening and Improving Membership on EPA Federal
Advisory Committees.” Compl., Ex. A (“the Directive”). The
Directive provides that “[i]n order to strengthen and improve
the independence, diversity, and breadth of participation on
EPA federal advisory committees, the Agency shall, consistent
with applicable laws and regulations, apply the following
principles and procedures when establishing the membership
of such committees,” and then lists four principles, only one of
which is at issue here: “[s]trengthen [m]ember
[i]ndependence.” Id. According to that principle, “[m]embers
shall be independent from EPA, which shall include a
requirement that no member of an EPA federal advisory
committee be currently in receipt of EPA grants, either as
principal investigator or co-investigator[,] or in a position that
otherwise would reap substantial direct benefit from an EPA
grant.” Id. Simultaneously, the Administrator issued a
memorandum that “accompanie[d] and explain[ed]” the
principles. Compl., Ex. B (“the Memorandum”). We shall have
more to say about that memorandum later in this opinion.
9
Three organizations—Physicians for Social
Responsibility, the National Hispanic Medical Association,
and the International Society for Children’s Health and the
Environment—along with three individuals who have
previously received EPA funding and served on advisory
committees (“Scientists,” as they describe themselves) sued,
contending that the Directive violates the APA. In their
complaint and its accompanying declarations, the Scientists
allege that many advisory committee members received emails
asking them to “confirm” that they received EPA grant
funding, and, after doing so, were quickly notified that they
“had been removed” from their respective committees. Compl.
¶ 60.
The district court granted EPA’s motion to dismiss, ruling
that the Scientists failed to state a claim for relief because the
Directive was committed to agency discretion by law, or, even
if subject to APA review, was neither arbitrary and capricious
nor contrary to law. See Physicians for Social Responsibility v.
Wheeler, 359 F. Supp. 3d 27, 35–50 (D.D.C. 2019). This appeal
followed. “We review a district court’s dismissal of a
complaint for failure to state a claim de novo,” Harris v.
District of Columbia Water & Sewer Authority, 791 F.3d 65,
68 (D.C. Cir. 2015), and “‘accept as true all material allegations
of the complaint,’” Barker v. Conroy, 921 F.3d 1118, 1121
(D.C. Cir. 2019) (quoting LaRoque v. Holder, 650 F.3d 777,
785 (D.C. Cir. 2011)). In an appeal from a district court
decision reviewing an agency action—as here—“we review the
administrative action directly, according no particular
deference to the judgment of the District Court.” Holland v.
National Mining Association, 309 F.3d 808, 814 (D.C. Cir.
2002).
10
II.
At the outset, EPA argues that “the APA does not allow
review of” the Directive. Appellee’s Br. 16. As our court has
explained, while “[t]here is a strong presumption of
reviewability under the Administrative Procedure Act,”
Steenholdt v. FAA, 314 F.3d 633, 638 (D.C. Cir. 2003) (citing
Abbott Labs. v. Gardner, 387 U.S. 136, 140 (1967)), section
701(a) expressly precludes judicial review of “agency action
. . . committed to agency discretion by law,” 5 U.S.C.
§ 701(a)(2). Regardless of what ground a challenger invokes
under the APA, then, “before any review at all may be had, a
party must first clear the hurdle of § 701(a).” Heckler v.
Chaney, 470 U.S. 821, 828 (1985). That provision imposes two
related, but distinct, barriers to judicial review.
First, the Supreme Court has “read § 701(a)(2) to preclude
judicial review of certain categories of administrative decisions
that courts traditionally have regarded as ‘committed to agency
discretion.’” Lincoln v. Vigil, 508 U.S. 182, 191 (1993). As the
Court explained in Heckler v. Chaney, this means that
notwithstanding the APA’s background presumption of
reviewability, certain agency actions are “presumed immune
from judicial review.” 470 U.S. at 832. The paradigmatic
example of presumptively unreviewable agency action is “a
decision not to institute enforcement proceedings.”
Department of Commerce v. New York, 139 S. Ct. 2551, 2568
(2019) (citing Heckler, 470 U.S. at 831–32). Other “kinds of
administrative determinations [also] evade review” under
Heckler’s presumption of non-reviewability, including
“allocation of funds from a lump-sum appropriation,” “the
FAA’s decision not to renew an aircraft examiner’s authority,”
“an agency’s decision to reach a settlement,” and “a federal
prosecutor’s certification that there is a substantial federal
interest in a case, required to proceed against a juvenile in
11
federal court.” Secretary of Labor v. Twentymile Coal Co., 456
F.3d 151, 156 n.6 (D.C. Cir. 2006) (internal citations omitted).
Second, as the Court explained in Citizens to Preserve
Overton Park, Inc. v. Volpe, even if agency action is
presumptively reviewable, section 701(a)(2) also applies “in
those rare instances where statutes are drawn in such broad
terms that in a given case there is no law to apply.” 401 U.S.
402, 410 (1971) (internal quotation marks and citation
omitted). That is, “if the statute is drawn so that a court would
have no meaningful standard against which to judge the
agency’s exercise of discretion,” then there can be no judicial
review. Heckler, 470 U.S. at 830. As a result, “[b]oth the
Supreme Court and this court” have applied section 701(a)(2)’s
threshold bar where “‘the courts have no legal norms pursuant
to which to evaluate the challenged action, and thus no concrete
limitations to impose on the agency’s exercise of discretion.’”
Twentymile Coal Co., 456 F.3d at 156 (quoting Drake v. FAA,
291 F.3d 59, 70 (D.C. Cir. 2002)).
EPA believes that the Directive is unreviewable under
both theories. First, the Directive represents a presumptively
unreviewable decision traditionally committed to EPA’s
discretion because “[a]n agency’s elaboration of the principles
it intends to follow, for the purpose of identifying preferred
candidates for advising the agency on matters within the
agency’s purview, directly implicates the agency’s ‘ordering of
its [own] priorities’ and its expert policy judgment.” Appellee’s
Br. 21 (quoting Lincoln, 508 U.S. at 193) (alteration in
original). And second, even under a traditional presumption of
reviewability, there is no “law to apply” because “none of the
statutes governing [EPA’s] committees provides any basis for
reviewing the merits of the [Directive].” Id. at 22, 38. Whatever
EPA’s starting point under section 701(a)(2), however, the
Directive is reviewable.
12
As our court has explained, regardless of “whether [a] case
is governed by Overton Park (‘no law to apply’ so the
presumption of reviewability is lost) or Chaney (agency action
[where a] presumption of non-reviewability has not been
overcome),” judicial review is available where there are
“meaningful standards to cabin the agency’s otherwise plenary
discretion.” Drake, 291 F.3d at 71. And significantly for this
case, “judicially manageable standards ‘may be found in
formal and informal policy statements and regulations as well
as in statutes.’” Steenholdt, 314 F.3d at 638 (quoting Padula v.
Webster, 822 F.2d 97, 100 (D.C. Cir. 1987)); see also Center
for Auto Safety v. Dole, 846 F.2d 1532, 1534 (D.C. Cir. 1988)
(“[R]egulations promulgated by an administrative agency in
carrying out its statutory mandate can provide standards for
judicial review of agency action.”).
GSA’s regulations implementing FACA provide just such
standards. Although, as EPA emphasizes, those regulations
provide that “advisory committee members serve at the
pleasure of the appointing or inviting authority” and their
“terms are at the [authority’s] sole discretion,” 41 C.F.R. § 102-
3.130(a), they also require that when appointing such members,
“[t]he head of each agency . . . must . . . [a]ssure that the
interests and affiliations of advisory committee members are
reviewed for conformance with applicable conflict of interest
statutes, regulations issued by the U.S. Office of Government
Ethics (OGE) including any supplemental agency
requirements, and other Federal ethics rules,” id. § 102-
3.105(h) (emphasis added). Indeed, our court has found
meaningful standards to apply “under far more permissive and
indeterminate language.” Cody v. Cox, 509 F.3d 606, 610 (D.C.
Cir. 2007). In one case, for example, we found that a statute
requiring nothing more than “high quality and cost-effective”
care provided a reviewable standard. Id. at 611. In another, we
found “law to apply” in a statute providing that the Army Board
13
for Correction of Military Records “‘may excuse a failure to
file . . . if it finds it to be in the interest of justice.’” Dickson v.
Secretary of Defense, 68 F.3d 1396, 1398 (D.C. Cir. 1995)
(emphasis added) (quoting 10 U.S.C. § 1552(b)). Set against
this precedent, the mandatory language of GSA’s regulations—
agency heads “must . . . assure” compliance with federal ethics
rules—provides “meaningful standards for defining the limits
of [the agency’s] discretion,” giving us “‘law to apply’ under
§ 701(a)(2).” Heckler, 470 U.S. at 834. We therefore turn to the
merits of the Scientists’ APA claims.
III.
The Scientists allege that the Directive runs afoul of the
APA in three ways: one, it is contrary to law because EPA has
no authority to deviate from OGE’s ethics regime; two, it is
arbitrary and capricious because it lacks a reasoned
explanation; and three, it is procedurally flawed because EPA
failed to submit it to OGE for approval. We address each in
turn.
A.
In support of their first claim, the Scientists argue that the
Directive adopts appointment conditions “inconsistent with the
uniform and binding ethics standards established by the Ethics
Office.” Appellants’ Br. 26. As they see it, because OGE is
tasked with promulgating uniform standards of conduct for the
executive branch, EPA has no discretion to deviate from
OGE’s ethics standards; any EPA appointment policy “must
prohibit what [OGE] ethics rules prohibit, and allow what the
rules allow.” Id. at 31.
The plain text of OGE’s uniform standards dooms the
Scientists’ claim. Those standards expressly acknowledge that
if an agency “wishes,” it may promulgate supplemental rules
14
that operate “[i]n addition to the substantive provisions” of
OGE’s regime. 5 C.F.R. § 2635.105(a)(2). And in the Federal
Register notice announcing the uniform standards, OGE
explained that because agencies may need to “tailor[]” their
ethics rules “to the functions and activities of a given agency,”
the uniform standards provide “authority for individual
agencies to issue” additional agency-specific rules. Standards
of Ethical Conduct for Employees of the Executive Branch, 57
Fed. Reg. at 35,006. To be sure, as we shall later explain in our
discussion of the Scientists’ procedural challenge, infra at Part
III.C, an agency seeking to depart from OGE’s uniform rules
may have to comply with OGE’s supplemental-regulation
process. But to the extent the Scientists view the Directive as
an impermissible deviation from OGE rules, that grievance is
procedural, not substantive. The district court therefore
correctly dismissed the Scientists’ claim that the Directive is
contrary to law merely because it differs from OGE’s uniform
standards.
B.
In support of their claim that EPA’s new policy is arbitrary
and capricious because it lacks the indicia of a reasoned
decision, the Scientists argue that “the Directive and
Memorandum evidence no awareness that EPA’s new position
contradicts the executive-branch ethics standards” and the
agency “failed to rationally address its previous conclusion . . .
that EPA grantees can provide objective and unbiased advice
on matters unrelated to their grants.” Appellants’ Br. 47, 52.
We agree with the latter point.
It is axiomatic that the APA requires an agency to explain
its basis for a decision. We are hardly the first panel to quote
State Farm’s maxim that “the agency must examine the
relevant data and articulate a satisfactory explanation for its
15
action.” Motor Vehicle Manufacturers Association of U.S. v.
State Farm Mutual Automotive Insurance Co., 463 U.S. 29, 43
(1983). This foundational precept of administrative law is
especially important where, as here, an agency changes course.
Reasoned decision-making requires that when departing from
precedents or practices, an agency must “offer a reason to
distinguish them or explain its apparent rejection of their
approach.” Southwest Airlines Co. v. FERC, 926 F.3d 851, 856
(D.C. Cir. 2019) (internal quotation marks and citation
omitted). To be sure, in FCC v. Fox Television Stations, Inc,
the Supreme Court made clear that “State Farm neither held
nor implied that every agency action representing a policy
change must be justified by reasons more substantial than those
required to adopt a policy in the first instance.” 556 U.S. 502,
514 (2009). But “however the agency justifies its new position,
what it may not do is ‘gloss[] over or swerve[] from prior
precedents without discussion.’” Southwest Airlines, 926 F.3d
at 856 (quoting Greater Boston Television Corp. v. FCC, 444
F.2d 841, 852 (D.C. Cir. 1970)).
Recall that EPA announced its new policy in a single-page
Directive, along with a memorandum explaining its rationale.
The challenged “principle” states:
Strengthen Member Independence: Members shall
be independent from EPA, which shall include a
requirement that no member of an EPA federal
advisory committee be currently in receipt of EPA
grants, either as principal investigator or co-
investigator[,] or in a position that otherwise would
reap substantial direct benefit from an EPA grant.
This principle shall not apply to state, tribal or local
government agency recipients of EPA grants.
Directive at 1.
16
That “principle” represents a major break from the
agency’s prior policy, under which grantees regularly served
on advisory committees. As EPA’s Office of the Inspector
General explained in its 2013 report, while “[a] prospective or
active member’s research or grant is a potential area of concern
if the [Federal Advisory Committee], panel, or subcommittee
plans to address work performed under the research grant,” the
agency generally “d[id] not consider a prospective or current
member’s receipt of an agency or other federal research grant
to create the basis for a financial conflict of interest.” Office of
the Inspector General, supra, at 9–10. Making the same point,
EPA’s Peer Review Handbook states that “when a scientist is
awarded an EPA research grant through an investigator-
initiated, peer-reviewed competition, there generally should be
no question as to that scientist’s ability to offer independent
scientific advice to the Agency on other projects.” Science and
Technology Policy Council, EPA, Peer Review Handbook 77
(4th ed. 2015), https://www.epa.gov/sites/production/file/
2016-03/documents/epa_peer_review_handbook_4th_edition.
pdf. That policy comported with the view of OGE, which
explained that “[a] special Government employee serving on
an advisory committee” who would otherwise be disqualified
“may participate in any particular matter of general
applicability” so long as that “matter will not have a special or
distinct effect on the employee or employer other than as part
of a class.” 5 C.F.R. § 2640.203(g).
Reading the Directive, however, one would have no idea
about the existence of these prior policies. The Directive
simply declares “that no member of an EPA federal advisory
committee be currently in receipt of EPA grants.” Directive at
1. The accompanying Memorandum is equally silent with
respect to EPA’s prior policy. Here is its entire text, and not a
peep:
17
A vital part of ensuring integrity and confidence in
EPA’s [Federal Advisory Committees] comes from
guaranteeing that [Committee] members remain
independent of the Agency during their service.
EPA [Committee] members should avoid financial
entanglements with EPA to the greatest extent
possible.
Non-governmental and non-tribal members in direct
receipt of EPA grants while serving on an EPA
[Committee] can create the appearance or reality of
potential interference with their ability to
independently and objectively serve as a
[Committee] member. [Committee] members
should be motivated by service and committed to
providing informed and independent expertise and
judgment.
Ensuring [Committee] member independence
strengthens the integrity, objectivity and reliability
of EPA [Committees]. Accordingly, in addition to
EPA’s existing policies and legal requirements
preventing conflicts of interest among the
membership of the Agency’s [Committees], it shall
be the policy of the Agency that no member of an
EPA federal advisory committee currently receive
EPA grants, either as principal investigator or co-
investigator, or in a position that otherwise would
reap substantial direct benefit from an EPA grant.
This principle should not apply to state, tribal or
local government agency recipients of EPA grants.
Memorandum at 3.
EPA nonetheless argues that the Directive and
Memorandum “clearly satisf[y]” APA standards because “[t]he
EPA Administrator issued the Directive precisely in order to
publicize the agency’s new priorities.” Appellee’s Br. 42.
18
“Anyone reading the Directive and accompanying
memorandum,” EPA insists, “would understand that it was
being issued precisely because EPA was marking a policy
change.” Id. at 43. In its view, nothing more is required. In
support, and quoting FCC v. Fox Television, EPA argues that
having acknowledged its change in course by issuing the
Directive, “to withstand APA review, ‘it suffices that the new
policy is permissible under the statute, that there are good
reasons for it, and that the agency believes it to be better.’” Id.
at 43 (quoting 556 U.S. at 515).
EPA misunderstands the lesson of Fox Television. True,
that decision makes clear that when changing position “[an]
agency need not always provide a more detailed justification
than what would suffice for a new policy created on a blank
slate,” nor “demonstrate to a court’s satisfaction that the
reasons for the new policy are better than the reasons for the
old one.” 556 U.S. at 515. Nothing in Fox Television, however,
absolves an agency of its obligation “to enable” a reviewing
court to conclude that the agency’s action “was the product of
reasoned decisionmaking.” State Farm, 463 U.S. at 52. In Fox
Television itself, the Court explained that the rule that an
agency must “display awareness that it is changing position” is
simply a species of the more general “requirement”—present
in all APA cases—“that an agency provide [a] reasoned
explanation for its action.” 556 U.S. at 515. As the Supreme
Court subsequently explained in Encino Motorcars, LLC v.
Navarro, although agencies remain “free to change their
existing policies,” they still must “provide a reasoned
explanation for the change.” 136 S. Ct. 2117, 2125 (2016).
This EPA did not do. Regardless of whether the
Directive’s references to “improving” and “strengthening”
Committee independence might have been sufficient to
acknowledge EPA’s change in policy, the Directive and its
19
accompanying Memorandum failed to “provide a reasoned
explanation for the change.” Id; see also State Farm, 463 U.S.
at 43 (requiring agencies to “articulate a satisfactory
explanation for its action”). The Memorandum announces that
individuals “in direct receipt of EPA grants while serving on
an EPA [Federal Advisory Committee] can create the
appearance or reality of potential interference with their ability
to independently and objectively serve as a FAC member,”
Memorandum at 3 (emphasis added), yet nowhere even hints
that EPA and OGE—the agency tasked with defining conflicts
of interest—had previously reached exactly the opposite
conclusion: that grantees could, in fact, ethically serve. To be
sure, “no statute required specific discussion of th[ese ethics
rules] or any other topic,” Appellee’s Br. 44, but core principles
of administrative law dictate that “an agency changing its
course must supply a reasoned analysis indicating that prior
policies and standards are being deliberately changed, not
casually ignored,” Lone Mountain Processing, Inc. v. Secretary
of Labor, 709 F.3d 1161, 1164 (D.C. Cir. 2013) (emphasis
added) (internal quotation marks omitted). That “analysis” is
entirely missing from the Directive and its accompanying
Memorandum. An agency’s wholesale failure to address “past
practice and formal policies regarding [an issue], let alone to
explain its reversal of course . . . [is] arbitrary and capricious.”
American Wild Horse Preservation Campaign v. Perdue, 873
F.3d 914, 927 (D.C. Cir. 2017).
The Administrator’s failure to address OGE and EPA’s
contrary conclusions is especially glaring given that the prior
regime existed, in part, for the very purpose of facilitating the
critical role played by EPA’s scientific advisory committees.
As noted above, EPA operates pursuant to multiple statutory
mandates requiring that its decisions rest on various
formulations of “the best available science.” 15 U.S.C.
§ 2625(h). And as EPA’s Peer Review Handbook explains, the
20
agency’s prior policy—allowing EPA grantees to serve on
advisory committees—existed, in part, to “ensure that the
scientific and technical bases of its decisions . . . are based upon
the best current knowledge from science, engineering, and
other domains of technical expertise; and . . . are credible.”
Science and Technology Policy Council, EPA, Peer Review
Handbook, supra, at A-4. Even the Directive itself agrees that
“it is in the public interest to select the most qualified,
knowledgeable, and experienced candidates.” Directive at 1.
Yet the Directive nowhere confronts the possibility that
excluding grant recipients—that is, individuals who EPA has
independently deemed qualified enough to receive competitive
funding—from advisory committees might exclude those very
candidates. The question, of course, is not whether the
Directive, in fact, shrinks EPA’s pool of experts but rather
whether EPA has given an adequate explanation for its new
policy. And in failing to grapple with how EPA’s policy
affected its statutory scientific mandates, the Directive “failed
to consider an important aspect of the problem.” State Farm,
463 U.S. at 43.
At oral argument, agency counsel contended that the
Directive need not have addressed any prior ethics policy
because it focused on “guaranteeing that [advisory committee]
members remain independent of the agency,” and therefore
does not implicate ethics or “conflicts of interest at all.” Oral
Arg. Tr. 40. But that sharp distinction between “conflicts of
interest” or ethics, on the one hand, and “independence,” on the
other, appears nowhere in EPA’s briefs, and “[g]enerally,
arguments raised for the first time at oral argument are
forfeited,” United States ex rel. Davis v. District of Columbia,
793 F.3d 120, 127 (D.C. Cir. 2015). In any event, EPA itself
refers to the Directive as “ethics-related” throughout its brief,
see, e.g., Appellee’s Br. 17 (contending that “nothing in federal
ethics law purports to limit the factors—including ethics-
21
related factors—that an agency may, in its discretion, consider
in prioritizing its committee appointments”). Moreover, in
terms of EPA’s obligation to explain its reasoning, any
discrepancy between “independence” and “ethics” is a
distinction without a difference. EPA previously concluded
that grantees were capable of offering it independent advice; it
now concludes they are not. However EPA chooses to
characterize the Directive’s focus, its earlier determination,
consistent with OGE’s conclusion, was clearly a “relevant
factor[]” the agency had to consider. State Farm, 463 U.S. at
42.
Finally, EPA argues that “the Directive was issued against
a backdrop of well-known public disagreement regarding
whether the existing [OGE] regime was adequate.” Appellee’s
Br. 46. Perhaps so, but that justification appears nowhere in
either the Directive or Memorandum. EPA was required to
“provide an explanation that will enable the court to evaluate
the agency’s rationale at the time of decision,” Pension Benefit
Guaranty Corp. v. LTV Corp., 496 U.S. 633, 654 (1990), and
counsel may not now “supply a reasoned basis for the agency’s
action that the agency itself has not given,” Bowman
Transportation, Inc. v. Arkansas-Best Freight System, Inc., 419
U.S. 281, 285–86 (1974).
Of course, nothing prevents EPA from developing an
appointment policy that excludes individuals it previously
allowed to serve. To do so, however, EPA must explain the
basis for its decision. Because the Directive contains no
discussion of OGE’s or EPA’s prior conclusion at all, the
Directive “cross[ed] the line from the tolerably terse to the
intolerably mute.” Greater Boston Television Corp., 444 F.2d
at 852.
22
C.
This brings us to the Scientists’ argument that the
Directive is procedurally invalid and therefore contrary to law.
In support, they rely on OGE regulations that provide a
dedicated procedural mechanism for allowing “[e]ach agency
. . . [to] issue regulations not inconsistent with this part and this
subchapter,” using a specific process and “subject to the prior
approval of the Office of Government Ethics.” 5 C.F.R.
§ 2638.602. Pursuant to those procedures, an agency may
promulgate such “[s]upplemental agency regulations which the
agency determines are necessary and appropriate, in view of its
programs and operations, to fulfill the purposes of [Part 2635].”
Id. § 2635.105(a). To do so, however, the agency must “prepare
and submit” the supplemental regulations to OGE “for its
concurrence and joint issuance” in the Federal Register. Id.
EPA does not claim to have complied with this process.
Instead, it argues that the Directive falls outside the
regulations’ purview altogether. According to EPA, “the
Directive does not seek to amend [ethics requirements] or to
impose legally binding ethical requirements on EPA
employees” but instead “is a statement of EPA’s discretionary
policies and priorities for selecting the agency’s advisory-
committee members, who ‘serve at the pleasure of’ the
agency.” Appellee’s Br. 33 (quoting 41 C.F.R. § 102-3.130(a)).
In other words, like its contention that the Directive affects
only grantee “independence,” EPA argues that the Directive is
so far afield of an “ethics rule” that OGE’s process is simply
inapplicable.
This argument fails for the same reasons as EPA’s
contention that it had no obligation to address its prior ethics
policy: regardless of how EPA describes its new policy, the
Directive invokes “the appearance or reality of potential
23
interference” to exclude individuals whom OGE concluded
were allowed to serve. Directive at 1. That policy falls squarely
within OGE’s ethics wheelhouse, and OGE guidance, cited by
EPA, confirms this understanding. As the guidance explains,
“[i]mplementation . . . [of a] policy requiring the expansion of
restrictions on agency employees set by the Standards of
Ethical Conduct is likely to implicate the supplemental
regulation process,” as are policies that touch on “outside
activity restrictions, prior approval requirements for outside
activities, [or] prohibited financial holdings.” Memorandum
from Don W. Fox, General Counsel, to Designated Agency
Ethics Officials 2 (Oct. 31, 2011), Appellants’ Br. Add. 76.
And although the Guidance clarifies that compliance with the
supplemental process is unnecessary where “agencies . . .
advise employees to uphold a stricter standard of ethical
conduct voluntarily as a best practice,” an agency “may not
implement . . . [a] policy requiring some or all of its employees
[to] receive prior approval before engaging in outside activities
without issuing a supplemental ethics regulation.” Id.
(emphasis added).
Set between the poles of agency policies “advis[ing]
employees” on “best practice[s]” (which do not require joint
issuance) and those “requir[ing] . . . employees [to] receive
prior approval” (which do), the Directive clearly falls into the
latter category. It speaks in mandatory, not advisory terms:
“[m]embers shall be independent from EPA, which shall
include a requirement that no member of an EPA federal
advisory committee be currently in receipt of EPA grants.”
Directive at 1 (emphasis added). This, moreover, is precisely
how the Directive was understood. In a declaration filed by the
Scientists, a former Director of EPA’s Science Advisory Board
states that he “understood that the requirement that a member
of an advisory committee not be a recipient of an EPA grant
24
was mandatory and that EPA staff were required to apply it.”
Zarba Decl. 6, Joint Appendix 124.
EPA has one more argument up its sleeve. Even were it
required to comply with the OGE process, it argues, failure to
do so cannot form the predicate for an APA challenge because
of a disclaimer contained in the OGE regulations stating:
A violation of this part or of supplemental
agency regulations, as such, does not create any
right or benefit, substantive or procedural,
enforceable at law by any person against the
United States, its agencies, its officers or
employees, or any other person.
5 C.F.R. § 2635.106(c). EPA interprets this language to
preclude judicial review of any failure to comply with OGE’s
process. We disagree.
The disclaimer applies only to individuals seeking to
enforce “rights or benefits” created by the regulations; it has
nothing to say about challenges brought under the
Administrative Procedure Act. Nor could it. A properly
promulgated regulation, standing alone, cannot thwart judicial
review otherwise available under the APA. Our court has made
clear that agencies “cannot adopt regulations erasing the
presumption of reviewability embodied in the APA unless [the
underlying statute] reveals clear and convincing evidence that
Congress intended to foreclose judicial review.” Ball, Ball &
Brosamer, Inc. v. Reich, 24 F.3d 1447, 1450 (D.C. Cir. 1994)
(internal quotation marks omitted). Neither the Ethics in
Government Act nor the federal conflict-of-interest statute
contains such “clear and convincing evidence.”
True, as EPA points out, we have read language like the
disclaimer to preclude judicial review of executive orders or
25
informal, internal agency documents. See Appellee’s Br. 34–
35 (citing, e.g., Air Transportation Association of America v.
FAA, 169 F.3d 1, 8 (D.C. Cir. 1999) (holding that an executive
order requiring a “systematic analysis of expected benefits and
costs” is “not subject to judicial review”)). But for APA
purposes at least, an executive order is a far cry from a final
rule “adopted pursuant to notice and comment rulemaking and
undoubtedly . . . intended to carry the force of law.” Aid
Association for Lutherans v. U.S. Postal Service, 321 F.3d
1166, 1174 (D.C. Cir. 2003). And, as explained above, such a
final rule cannot preclude judicial review on its own. An
agency’s failure to comply with OGE’s process is therefore
subject to judicial review irrespective of the disclaimer.
IV.
For the foregoing reasons, we reverse the district court’s
dismissal of the complaint and remand for further proceedings
consistent with this opinion.
So ordered.