Amicus Curiae Brief — General Motors Corp. v. Thomas

Office- Supreme Court, UZ.

FFLED

No. 84-1098 ‘ MAR a 1985

ALEXANDER L. STEVAS,

CLERK

IN THE

SUPREME COURT OF THE UNITED STATES

October Term. 1984

GENERAL MOTORS CORPORATION,

Petitioner

i

LEE M. THOMAS. Acting Administrator,

United States Environmental Protection Agency,

Respondent

AMICUS CURIAE BRIEF OF

ALTOMOBILE IMPORTERS OF AMERICA,

INC. IN SUPPORT OF PETITION FOR

A WRIT OF CERTIORARI

Bernard G. Segal

James D. Crawford

Milton D. Andrews

Lance Fk. Tunick

SCHNADER, HARRISON,

SEGAL & LEWIS

1111-19th Street, N.W.

Washington, D.C. 20036

Attorneys for Amicus Curiae

Automobile Importers of

Of Counsel imerica, Inc.

Charles H. Lockwood, I

General Counsel

\utomobile Importers of

America, Inc

Counsel of Record

PACKARD PRESS LEGAL DIVISION. 10th & SPRING GARDEN STREETS, PHILA, PA 19123 (215) 236-2000

QUESTIONS PRESENTED

(1) Can interpretative rules be distinguished from

legislative rules by examining the agency’s intent rather

than the rule’s impact, so that the agency can expand the

interpretative rule exception to the notice and comment

requirement of the Administrative Procedure Act?

(2) Does due process preclude an interpretative rule

from being promulgated and reviewed under §307(b) of

the Clean Air Act, which denies judicial review in sub-

sequent enforcement proceedings?

(3) Is it proper for a court to apply a deferential

standard of judicial review when reviewing an interpre-

tative rule adopted without notice and comment?

TABLE OF CONTENTS

Page

GUESTIONS PRESSED vscccsccccusvswavenes i

TABLE OF AUT RGis See os cobs bee cee eeeas iv

INTEREST OF AMICUS CURIAE AUTOMOBILE

IMPORTERS OF AMERICA, INC. .......... 2

SUMMARY OF THE ARGUMENT.............. 5

REASONS WHY THE WRIT SHOULD BE

COURAIE BS TURD 0 oc 8 vc bc ct how cues eee 6

THE COURT OF APPEALS’ DECISION CON-

FLICTS WITH DECISIONS OF OTHER CIR-

CUITS AND PRESENTS IMPORTANT

QUESTIONS OF FEDERAL LAW WHICH

HAVE NOT BEEN, BUT SHOULD BE, SET-

FLED BY THise CORES. osc ccs coecpeeerees 6

A. What Are The Limits of the “Interpretative

Rule” Exception To the APA’s Notice and

Comment Requirement?................. 6

1. The Importance of the Question....... 7

2. The Conflict among the Circuits....... 8

B. Does Due Process Preclude an_ Inter-

pretativeRule from Being Promulgated and

Reviewed under §307(b) of the Clean Air

Act Because That Section Denies Judicial

Review in Subsequent Enforcement Pro-

COBGUREE? . on.cccccboucscess anaes 10

C. If a Rule Is Promulgated under the Inter-

pretative Rule Exception to the APA’s No-

tice and Comment Require ~ent, What Is

the Proper Standard of Review To Be Exer-

cised by a Reviewing Court?............. 14

1. The Importance of the Question....... 14

ii

TABLE OF CONTENTS— Continued )

Page

2. The Conflict among the Circuits....... 15

ee hsp abe seccocucecse. 17

ili

TABLE OF AUTHORITIES

Cases: Page

Adamo Wrecking Co. v. Unite.' States, 434 U.S. 275

DEERE Gace ce bce eee ee ek fe cise tee eas 13

Alcar: v. Block, 746 F.2d 593 (9th Cir. 1984).... 9

American Bancorp. v. Board of Governors of the

Federal Reserve System, 509 F.2d 29 (8th Cir.

Ps ne oe a ah ee ee ae aves 8

Cabais v. Egger, 690 F.2d 234 (D.C. Cir. 1982)... 9

Capitano v. Secretary of Health & Human Services,

432 F.20 1066 (2d Cir. 1064). .........62265. 15

Chevron USA v. NRDC, U.S. , 104 S.Ct.

eg 2. y ee eee eee rn erarw 6, 14, 15, 16

Chrysler Corp. v. Brown, 441 U.S. 281 (1979).... 10

Chrysler Corp. v. EPA, 600 F.2d 904 (D.C. Cir.

Lc) RAGE RS a edt be Poteet ka a ery) te AME Neat 13

First Bancorporation v. Board of Governors of the

Federal Reserve System, 728 F.2d 434 (10th

EE gan 5 5 ods oer eee ad ae eae ee eg 9

Forrester v. CPSC, 559 F.2d 774 (D.C. Cir. 1977). 8

Frank Diehl Farms v. Secretary of Labor, 696 F.2d

Reet Ue RS RED eis che hae oon 16

General Electric Co. v. Gilbert, 429 U.S. 125

Pe os eee ess le ea re ba oes 15

Gross v. Lopez, 419 U.S. 565 (1975)............. 11

Harrison v. PPG Industries, 446 U.S. 578 (1980). 13

International Shoe Co. v. Washington, 326 U.S. 310

CReE so O Wee a eon sa ra ee ne eee eles 1]

Morton v. Ruiz, 415 U.S. 199 (1974) ............ iO

iv

TABLE OF AUTHORITIES—( Continued )

Cases: Page

National Distributing Co. v. United States Treas-

ury Department, 626 F.2d 997 (D.C. Cir.

PD kok sadsheiaundes eee Cree 16

NRDC v. EPA, 673 F.2d 400 (D.C. Cir. 1982), cert.

dented, 450 U.S. 870 (8G63)... occ icccccv cess 13

Shell Oil Co. v. FPC, 491 F.2d 82 (5th Cir. 1974).. 16

Sierra Club v. Costie, 657 F.2d 298 (D.C. Cir.

Skidmore v. Swift, 323 U.S. 134 (1944).... 14, 15, 16

Standard Oil Co. v. Johnson, 376 U.S. 481 (1942). 15

Statutes and Regulations

UT Bie 6 lc ok oe eee ree eros 7

42 U.S.C. §§7401-7642 (1982)

The Clean Air Act, P.L. 88-206.................. 2

42 U.S.C. §7522(a)( 1982)

Fe ee Rs ok cco eater eee 2

42 U.S.C. §7524 (1982) r

Pn ES Cre oa VEC ee ee roeees 2

42 U.S.C. §7541(c) (1982)

Pls I Daisies ee ae ae 2

42 U.S.C. §7550(1) (1982)

a oN cn see Sip 5 ear ty ete eee eee 2

42 U.S.C. §7607(b) (1982)

Fc Se OEE BA eens sale ao Falevia oi eawmees passim

eR Oe er rb er ren cr 3

Miscellaneous

45 Fed. Reg. 36.396 (May 30, 1980)............. 11

Vv

TABLE OF AUTHORITIES—( Continued )

Cases: Page

2 kK. Davis, Administrative Law Treatise,

§§7.8-7.13 (2d ed. 1979 & Supp. 1982)....... 9

IN THE

SUPREME COURT OF THE UNITED STATES

October Term, 1984

GENERAL MOTORS CORPORATION,

Petitione:

Vv.

LEE M. THOMAS, Acting Administrator,

United States Environmental Protection Agency,

Respondent

AMICUS CURIAE BRIEF OF

AUTOMOBILE IMPORTERS OF AMERICA,

INC. IN SUPPORT OF PETITION FOR

A WRIT OF CERTIORARI

Pursuant to Rule 36 of the Rules of this Court,! Au-

tomobile Importers of America, Inc. (“AIA”) respectfully

submits this amicus curiae brief in support of the peti-

tion for a writ of certiorari filed by General Motors Cor-

poration (“GM”). The writ should be granted because

this case involves important questions of federal admin-

istrative law which have not been, but should be, settled

by this Court, and because the decision of the D.C. Cir-

cuit conflicts with decisions of this Court and of other

Courts of Appeals.

1. Written consents of counsel for both parties have been filed

with the Clerk.

2

INTEREST OF AMICUS CURIAE

AUTOMOBILE IMPORTERS OF AMERICA, INC.

AIA is a trade association organized as a non-profit

District of Columbia corporation. Its Members are either

manufacturer-authorized U.S. importers of motor vehi-

cles or corporate affiliates of such importers.”

All motor vehicles imported into the United States

must comply with emission standards established under

the Clean Air Act (P.L. 88-206, 42 U.S.C. §§7401-7642,

as amended). P.L. 88-206 §203(a)(1), 42 U.S.C. §7522

(a)(1). Moreover, under the Clean Air Act (hereinafter

“the Act” or “CAA”), importers are considered to be man-

ufacturers and must comply with the duties and respon-

sibilities imposed on manufacturers by the Act. P.L.

88-206 §216(1), 42 U.S.C. §7550(1). An AIA Member

must therefore recall a class of its vehicles upon an EPA

determination that ari emissions nonconformity exists in

a substantial number of vehicles in that class. P.J.

88-206 §207(c), 42 U.S.C. §7541(c). The Act also pro-

hibits AJA Members from refusing or failing to comply

with the recall provisions of §207 (P.L. 88-206

§203(a)(4), 42 U.S.C. §7522(a)(4)), and in the event of

a violation, AIA Members are subject to the Act’s penalty

provisions. P.L. 88-206 §205, 42 U.S.C. §7524.

2. The Members of AIA are:

Alfa Romeo, Inc. Peugeot Motors of America,

BMW of North America, Inc. _ Inc.

Fiat Auto U.S.A., Inc. Porsche Cars North America,

American Honda Motor Inc.

Company, Inc. Renault USA, Inc.

American Isuzu Motors, Inc. Rolls-Royce Motors Inc.

Jaguar Cars, Inc. Saab-Scania of America,

Lotus Performance Cars Inc.

Mazda Motors of America Subaru of America, Inc.

(Central) Inc. Toyota Motor Sales U.S.A.,

Mitsubishi Motor Sales of Inc.

America, Inc. Volvo North America

Nissan Motor Corporation Corporation

In U.S.A.

3

This litigation concerns the validity of an Environ-

mental Protection Agency (“EPA”) rule specifying a mo-

tor vehicle manufacturer’s recall and repair obligations

under the CAA (the “rule” or the “recall/repair rule’).

AIA is interested in this action because it presents im-

portant questions regarding EPA rulemaking procedures

and judicial review of EPA rules. The answers to these

questions directly and significantly affect AIA Members.

The rule at issue was adopted by EPA without notice

and comment as a “nationally applicable regulation” un-

der §307(b) of the CAA (42 U.S.C. §7607(b))

(“§307(b)”).3 40 C.F.R. §1803 app a, 45 Fed. Reg. 36,396

(May 30, 1980). The rule requires a manufacturer to re-

pair a recalled vehicle free of charge even if the vehicle

is beyond its statutory 5 year/50,000 mile useful life un-

der 42 U.S.C. §7521(d)(1) at the time of repair.

The rule clearly affects AIA Members. First, it was

promulgated as a “nationally applicable regulation” im-

posed on motor vehicle manufacturers, and AIA Mem-

bers are thus reguired to comply with it. Second, because

the rule specifies the class of vehicles which a manufac-

turer must repair free of charge, it defines a potentially

significant economic burden imposed on AIA Members

by the CAA’s recall requirement.

The procedural issues in this case, however, are of

particular concern to AIA. There are three questions of

federal administrative law which affect AIA Members

3. This section provides in relevant part:

(b)(1) A petition for review of... any... nationally appli-

cable regulations promulgated ... by the Administrator under

this chapter may be filed only in the United States Court of Ap-

peais for the District of Columbia... . Any petition for review

under this subsection shall be filed within sixty days from the

date notice of such promulgation, approval, or action appears in

the Federal Register, except that if such petition is based solely

on grounds arising after such sixtieth day, then any petition for

review under this subsection shall be filed within sixty days af-

ter such grounds arise.

and give rise to the need for Supreme Court review. They

are: (1) what are the limits of the “interpretative rule

exception” to the notice and comment requirement of

the Administrative Procedure Act (“APA”); (2) does due

process preclude the EPA from promulgating an inter-

pretative rule under §307(b) of the CAA, because that

section forecloses judicial review in subsequent enforce-

ment proceedings;' and (3) what is the proper standard

of review to be exercised by a court reviewing an inter-

pretative rule adopted without notice and comment?

Because AIA Members are subject to EPA rules reg-

ulating the motor vehicle industry, they are directly af-

fected by the rulemaking procedures used by that

agency and are interested in protecting their right to par-

ticipate in EPA proceedings through the notice and com-

ment process. Because the rule at issue was labeled an

“interpretative rule,” it was promulgated without either

the publication of a notice in the Federal Register or an

opportunity for the public to comment. The agency's fail-

ure to provide notice and comment is particularly dis-

turbing in this case because the recall/repair rule creates

an obligation which is not set forth in the Act and which

directly affects the costs of doing business of AIA Mem-

bers (since it dictates the number of cars which a man-

ufacturer must fix free of charge).

AIA Members also have a great interest both in pre-

serving their right to judicial review of EPA rules (espe-

cially in enforcement proceedings) and in assuring that

the courts apply the proper standard of review. This is

especially true when, as here, the agency adopts a rule

without notice and comment, thereby precluding com-

ment by AIA Members at the administrative level.

4. Section 307(b\ 2) provides:

(bx 2) Action of the Administrator with respect to which

review could have been obtained under paragraph (1) shall not

be subject to judicial review in civil or criminal proceedings for

enforcement

5

By accepting EPA's contention that the rule was a

“nationally applicable regulation” reviewable only under

§307(b)(1) of the CAA, the D.C. Circuit's decision cre-

ates a rule of law in violation of AIA Members’ due proc-

ess rights. Because §307(b)(2) denies judicial review in

enforcement proceedings, the court's opinion creates an

unconscionable situation: AIA Members can be denied

notice and comment during rulemaking and then can be

precluded from challenging the validity of the rule when

it is applied to them in subsequent enforcement actions.

Finally, despite the absence of notice and comment,

the D.C. Circuit examined the EPA rule at issue under

the very “narrow” or lenient standard of review applica-

ble to rules adopted after notice and comment. If EPA

can enjoy a deferential standard of judicial review with

respect to a rule promulgated without notice or com-

ment, AIA Members not only will be denied the right to

a hearing before the agency, but also will be denied the

right to meaningful judicial review. In this way, AIA

Members will be denied not one, but two procedural

safeguards which are the cornerstones of our system of

administrative law.

SUMMARY OF ARGUMENT

In this case, the Court of Appeals for the District of

Columbia Circuit decided three important questions of

federal administrative law which have not been, but

should be, decided by this Court. Moreover, this Court's

decisions suggest that the D.C. Circuit decided these is-

sues incorrectly.

Specifically, the D.C. Circuit began by approving the

promulgation of a far-reaching administrative rule with-

out the APA's normal notice and comment procedures.

According to the Court of Appeals, the rule, although

certainly an important expansion of the EPA's governing

statute, was not legislative, but merely interpretative.

6

Having permitted EPA to avoid notice and comment,

the D.C. Circuit also drastically limited the opportunity

of the affected public to challenge the rule. The court

upheld the rule as a nationally applicable regulation

which could only be overturned by a challenge within

sixty days of promulgation and could not be attacked in

a subsequent enforcement proceeding.

Finally, despite the denial of both the opportunity to-

comment and the right to challenge the rule in later en-

forcement proceedings, the D.C. Circuit held that the

proper standard of review in this case — the only chal-

lenge the rule would ever face — was the deferential

standard developed by this Court in Chevron USA v.

NRDC, U.S. ___, 104 S.Ct. 2778 (1984) (a case in-

volving legislative regulations adopted after notice and

comment). Each and all of these actions by the D.C. Cir-

cuit cry out for this Court's review.

Furthermore, the Court of Appeals decision conflicts

with the opinions of other circuits on two important is-

sues — the proper scope of the “interpretative rule ex-

ception” to the APA’s notice and comment requirement

and whether the Chevron standard should be applied by

a court reviewing an interpretative rule. It is important

for this Court to grant the requested writ of certiorari in

order to settle these conflicts among the circuits.

REASONS WHY THE WRIT SHOULD BE GRANTED

THE COURT OF APPEALS’ DECISION CON-

FLICTS WITH DECISIONS OF OTHER CIR-

CUITS AND PRESENTS IMPORTANT QUES-

TIONS OF FEDERAL LAW WHICH HAVE NOT

BEEN, BUT SHOULD BE, SETTLED BY THIS

COURT

A. What Are the Limits of the “Interpretative

Rule” Exception to the APA’s Notice and Com-

ment Requirement?

=

The first question which should be decided by this

Court concerns the scope of the “interpretative rule ex-

ception” to the notice and comment requirement of 5

U.S.C. §553. Under this section, an agency wishing to

adopt a “legislative rule” must publish its proposal in the

Federal Register and must provide the public with an

opportunity to comment. Notice and comment need not

be provided, however, if the rulemaking involves merely

an “interpretative rule.” Yet the APA fails to define the

terms “interpretative rule” and “legislative rule.” Over

the years, the distinction between these two types of

rules has been the subject of numerous, and at times

conflicting, Court of Appeals decisions, as agencies have

sought to avoid notice and comment. Only this Court can

clarify which kinds of rules are legislative (and can be

promulgated only after notice and comment) and which

kinds are interpretative (and thus can be adopted in the

absence of such procedures).

1. The Importance of the Question

In this case, EPA adopted, without notice and com-

ment, a rule specifying motor vehicle recall and repair

obligations that are not apparent on the face of the CAA.

Moreover, even though the agency adopted the rule in

response to a particular factual situation (a GM recall of

1975 Cadillacs), it made the rule applicable to all man-

ufacturers in all cases, regardless of the facts involved.

Nevertheless, the D.C. Circuit held that the rule was in-

terpretative. If this is correct, notice and comment were

indeed unnecessary. If EPA and the Court of Appeals

were incorrect, the affected public was wrongfully de-

prived of its right to be heard.

The scope of the interpretative rule exception, how-

ever, is important for reasons beyond this case and even

beyond EPA's regulation of the motor vehicle industry.

To a large extent, the exception defines federal admin-

istrative procedure. Under the APA, legislative rulemak-

8

ing is the norm; interpretative rules are the exception. If

courts are not mindful of decisions which expand the

exception, at some point the exception — the absence of

notice and comment — will become the norm. This not

only would frustrate the intent of Congress in enacting

the APA’s notice and comment requirement, it also

would infringe upon the affected public’s constitutional

right to be heard. See Forrester v. CPSC, 559 F.2d 774.

787 (D.C. Cir. 1977); Sierra Club v. Costle, 657 F.2d 298,

392 n.462 (D.C. Cir. 1981) (regarding a Fitth Amend-

ment right to notice and comment). The en banc D.C.

Circuit in this case recognized the need tor guidance in

this area when it stated that the standards for distin-

guishing between interpretative and legislative rules are

“enshrouded in considerable smog.” General Motors

Corp. v. Ruckelshaus 742 F.2d at 1561, 1565 (1984). It

is thus important for this Court to define the limits of the

“interpretative rule exception” to the APA's notice and

comment requirements.

2. The Conflict among the Circuits

Guidance from this Court is also needed in order to

resolve a split among the circuits created by the decision

in this case. The test applied by the D.C. Circuit to de-

termine whether a rule is interpretative or legislative

conflicts with the tests that have been used by other

Courts of Appeals. According to the D.C. Circuit,

whether a rule is interpretative or legislative depends

upon: (1) the agency’s own label; and (2) whether the

agency intended to create new law. 742 F.2d at 1565.

Other Circuits have enunciated different tests, all of

which seem to focus on the actual impact of the rule.

regardless of the agency's intent:

(i) Eighth Circuit: Whether a rule is legislative

or interpretative depends upon the impact on the af-

fected parties. American Bancorp. v. Board of Gov-

9

ernors of Federal Reserve System, 509 F.2d 29, 33

(8th Cir. 1974).

(ii) Ninth Circuit: Legislative rules are those

which effect a change in existing law or policy, cre-

ate new law, and impose general, extra-statutory ob-

ligations pursuant to authority delegated by the leg-

islature. Interpretative rules “go more to what the

administrative officer thinks the statute ... means”

and “are used more for discretionary fine-tuning

than for general law making.” Alcaraz v. Block, 746

F.2d 593, 613 (9th Cir. 1984).

(iii) Tenth Circuit: An interpretative rule is

merely a clarification or explanation of an existing

statute or rule while a legislative rule effects a policy

change. First Bancorporation v. Board of Governors

of Federal Reserve System, 728 F.2d 434, 438 (10th

Cir. 1984).°

The D.C. Circuit has expressly declined to use the

substantial impact test for distinguishing between leg-

islative and interpretative rules. Cabais v. Egger, 690

F.2d 234, 237 (D.C. Cir. 1982).

The court below focused on whether an agency in-

tends a rule to create new rights and duties rather than

on whether the rule in fact does so. Under this “intention

test,” the D.C. Circuit found the recall/repair rule to be

interpretative and not legislative. 742 F.2d at 1565. The

5. Professor Davis has discussed another test to distinguish be-

tween legislative and interpretative rules. Where the agency acts

under a specific power, the rule is legislative. A rule is interpretative

when there is no such delegation and the agency acts only upon its

inherent power to issue rules interpreting its enabling statute. K.

Davis, Administrative Law Treatise, §7.8 (2d ed. 1979 & Supp.

1982). Petitioner sets forth a more exhaustive discussion of the var-

ious tests the numerous Circuits have devised. See GM's Petition at

pp. 9-15.

10

opposite result would attain under the “impact test,”

however, due to the recall/repair rule’s significant effect

on the duties of motor vehicle manufacturers.

This Court has never definitively explained the dif-

ference between legislative and interpretative rules. In

Chrysler Corp. v. Brown, 441 U.S. 281, 302 (1979), the

Court seemed to endorse the “creation of new rights” or

“impact test” when it stated that an inherent character-

istic of a legislative rule is that it “affect{s| individual

rights and obligations.” See also Morton v. Ruiz, 415

U.S. 199, 232 (1974). The guidance and direction of this

Court is needed in order to settle the conflict among the

circuits and to establish a test for distinguishing these

two types of rules upon which our system of administra-

tive law is based.

B. Does Due Process Preclude an Interpretative

Rule from Being Promulgated and Reviewed

under §307(b) of the Clean Air Act Because

That Section Denies Judicial Review in Subse-

quent Enforcement Proceedings?

Under §307(b)(1) of the CAA, a petition for judicial

review of any EPA rule promulgated as a “nationally ap-

plicable regulation” must be filed in the D.C. Circuit

within sixty days from the date the rule is published in

the Federal Register.” Section 307(b)(2) then states that

an EPA action which could have been reviewed under

§$307(b)(1) is not subject to judicial review in civil or

criminal proceedings for enforcement.

In this case, EPA maintained that the recall/repair

rule was a nationally applicable regulation and was

reviewable only under §307(b)( 1). The agency's Federal

Register notice stated:

6. If such a petition is based solely on grounds occurring after

such sixtieth day, however, the petition may be filed within 60 days

after such grounds arise. §307(b)( 1).

4

1]

NOTE: This rulemaking constitutes a “nationally

applicable regulation” under Section 307(b)(1) of

the Clean Air Act, as amended. 42 U.S.C.

§7607(b)(1). Any judicial review of this section is,

accordingly, governed by that provision.

45 Fed. Reg. 36,396 (May 30, 1980).

EPA’s brief before the D.C. Circuit was consistent

with its Federal Register notice. The agency argued that

the recall/repair rule was an interpretative rule and that

such rules can be promulgated as “nationally applicable

regulations” which: (1) can be reviewed only by the D.C.

Circuit; (2) can be reviewed only by a petition for review

filed within 60 days of promulgation; and (3) under

§307(b)(2), cannot be challenged in subsequent en-

forcement actions. EPA brief at pp. 42-46.

The D.C. Circuit agreed with EPA and sustained the

rule. The court thus ‘held that interpretative rules can be

promulgated under §307(b)(1) and that such rules are

reviewable only under that section. As a result, interpre-

tative rules are now subject to the denial of judicial re-

view set forth in §307(b)(2) (7.e., they cannot be attacked

in subsequent enforcement actions).

This situation is contrary to the “traditional notions

of fair play and substantial justice” on which our legal

system is based.’ International Shoe Co. v. Washington,

326 U.S. 310, 316 (1945).* Ifa rule is promulgated with-

out notice and comment, the Fifth Amendment should

guarantee any party the right to challenge the rule in a

subsequent enforcement action. Due process should

therefore prohibit promulgation and review of interpre-

7. The Court of Appeals decision also flies in the face of one of

the basic tenets of administrative law — that interpretative sules

have no binding effect and are not controlling upon a court (such as

when a court is hearing an enforcement action). 2 K. Davis, Ad-

ministrative Law Treatise, §§7.8-7.13 (2d ed. 1979 & Supp. 1982).

8. See also Goss v. Lopez, 419 U.S. 565, 574 (1975), where the

Court speaks of the constitutional requirement of administrative

procedures to be “fundamentally fair”.

12

tative rules under §307(b) because of that section’s pre-

clusion of judicial review in later enforcement proceed-

ings.”

The denial of judicial review set forth in §307(b)(2)

raises serious constitutional questions when applied to a

rule, such as the recall/repair rule, which is adopted

without notice and comment. Two examples are enough

to make these constitutional questions obvious:

1. An interpretative rule is promulgated under

§307(b)(1); a party is not yet in the business affected

by the rule and thus fails to challenge the rule within

60 days; EPA then takes the position that the party

is barred from challenging the rule in an enforce-

ment action years later.

2. EPA promulgates an interpretative rule un-

der §307(b)(1); a party institutes an action for re-

view commenced within 60 days; EPA prevails in

that action and then takes the position that another

party is precluded from attacking the rule in a sub-

sequent enforcement action.

One Justice of this Court has expressed doubt about

the constitutionality of § 307(b)’s limitation on judicial

review when applied to rules adopted with notice and

comment. Justice Powell has noted that there is a serious

question as to whether a party con be precluded by

§307(b) from challenging an EPA legislative rule, espe-

cially if the person did not realize that the rule had been

promulgated because he had not read the Federal Reg-

9. It would thus seem that by finding the rule to be interpre-

tative and then upholding it on the merits the D.C. Circuit erred in

one of two significant ways. The Court either (1) was wrong in find-

ing the rule to be interpretative; or (2) properly found the rule to be

interpretative, but failed to recognize that due process prevented it

from exercising jurisdiction under §307(b). In the latter case, the

D.C. Circuit lacked subject matter jurisdiction to review the merits

and the proper forum for GM’s challenge was perhaps a United

States District Court.

13

ister notice.'° See, e.g., Adamo Wrecking Co. v. United

States, 434 U.S. 275, 289 (1978) (Powell, J., concurring)

(“If the constitutionality of the validity of §307(b) of the

Clean Air Act had been raised. . . , I think it would have

merited serious consideration.”); Harrison v. PPG In-

dustries, 446 U.S. 578, 594 (1980) (Powell, J., concur-

ring) (“I continue to have reservations about the consti-

tutionality of the notice and review preclusion provisions

of §307(b).”).!! Surely this constitutional question is

even more serious where, as here, opportunity for notice

and comment is not provided. '

It is necessary for this Court to establish that the

denial of judicial review set forth in §307(b)(2) cannot

apply to interpretative rules, and thus that such rules

cannot be promulgated or reviewed under §307(b)(1).

Indeed, the Court should take this opportunity to strike

down §307(b)(2) as unconstitutional. The Court should

confirm that due process guarantees any person the

right to challenge an administrative rule (and especially

an interpretative rule) in judicial enforcement proceed-

ings, irrespective of whether suit was previously brought

against the rule by another party and irrespective of the

outcome of any such suit.

10. This question also arises in the situation where at the time

of a rule’s promulgation a person has not yet even established a busi-

ness affected by the rule and thus had no reason to be interested in

the Federal Register notice.

11. In Harrison, this Court discussed EPA “final actions” that

are reviewable under §307(b)(1). The Court did not address, how-

ever, either the reviewability under § 307(b)(1) of an interpretative

rule promulgated as a “nationally applicable regulation” or the con-

° stitutionality of § 307(b)(2).

12. The existence of this substantial constitutional question

has also been recognized by the lower courts. Chrysler Corp. v. EPA,

600 F.2d 904, 912-13 (D.C. Cir. 1979) (acknowledging a “nagging

presence of a substantial due process question” with respect to a

provision of the Noise Control Act of 1972 virtually identical to

§307(b) of the CAA); NRDC v. EPA, 673 F.2d 400, 406 (D.C. Cir.

1982), cert. denied, 459 U.S. 879 (1983) (noting the same consti-

tutional question arising under the Clean Water Act).

itll

14

C. If a Rule Is Promulgated under the Interpre-

tative Rule Exception to the APA’s Notice and

Comment Requirement, What Is the Proper

Standard of Review To Be Exercised by a Re-

viewing Court?

This Court recently held that a highly deferential

standard of review is appropriate when a court reviews a

legislative rule promulgated after notice and comment.

Chevron USA v. NRDC, supra. The case at bar presents

the question of whether such deference is proper when

the subject of a court’s review is an interpretative rule

which was promulgated without notice and comment.

Although there was absolutely no suggestion in Chevron

that deference is proper in such cases, the D.C. Circuit

nonetheless held that the Chevron standard is indeed ap-

propriate when reviewing interpretative rules.

1. The Importance of the Question

The D.C. Circuit’s application of the Chevron stand-

ard of review in this case (742 F.2d at 1566-67) is in

direct conflict with prior decisions of this Court regard-

ing the proper standard to be used when reviewing in-

terpretative rules. In Skidmore v. Swift, 323 U.S. 134,

140 (1944), this Court stated:

|t|he rulings, interpretations and opinions of the Ad-

ministrator . .. , while not controlling upon the

courts by reason of their authority, do constitute a

body of experience and informed judgment to which

courts and litigants may properly resort for guid-

ance. The weight of such a judgment in a particular

case will depend upon the thoroughness evident in

its consideration, the validity of its reasoning, its con-

sistency with earlier and later pronouncements, and

all those factors which give it power to persuade, if

lacking power to control.

eee eee

15

This Court has further stated that guidelines (i.e.,

interpretative rules promulgated without legislative au-

thority) should be accorded less weight by a reviewing

court than regulations which Congress has declared are

to have the force and effect of law (7.e., legislative rules).

General Electric Co. v. Gilbert, 429 U.S. 125, 141-42

(1976), citing Standard Oil Co. v. Johnson, 376 U.S.

481, 484 (1942) (interpretative rules are reviewable un-

der the Skidmore standard).

If the D.C. Circuit’s holding stands, a party denied

notice and comment by an agency will find its right to

judicial review “limited to the narrower inquiry into

whether the agency’s [rule] was ‘sufficiently reasonable’

to be accepted.” 742 F.2d at 1567. This situation threat-

ens two of the most important procedural due process

safeguards that our system of administrative law has de-

veloped and that our Constitution guarantees: the right

to be heard and the right to meaningful judicial review.

This Court should therefore confirm that the Chevron

standard is not applicable to judicial review of interpre-

tative rules. ;

2. The Conflict among the Circuits

The standard of review used by the D.C. Circuit in

this case also conflicts with the standards applied by

other Circuits when reviewing other interpretative rules.

First, the D.C. Circuit’s decision to extend the deferen-

tial Chevron standard to review of interpretative rules is

in direct conflict with the recent decision in Capitano v.

Secretary of Health & Human Services, 732 F.2d 1066,

1076 (2d. Cir. 1984). The Second Circuit expressly held

in that case that the Chevron standard is not applicable

to interpretative rules.

Second, there is a substantial body of pre-Chevron

case law from numerous Courts of Appeals to the effect

that the standard of review for interpretative rules is

more stringent than the standard for legislative rules.

16

There is also nothing in the Chevron decision which sug-

gests that those earlier decisions are invalid.

For example, the 11th Circuit has stated that “an

agency's interpretative rules are accorded less deference

than its legislative rules.” Frank Diehl Farms v. Secre-

tary of Labor, 696 F.2d 1325, 1329 (11th Cir. 1983). The

Fifth Circuit has taken the same position. Shell Oil Co. v.

FPC, 491 F.2d 82, 88 (5th Cir. 1974). Indeed, prior to the

Chevron decision, the D.C. Circuit itself recognized that

interpretative rules are subject to a greater scrutiny than

legislative rules. National Distributing Co. v. United

States Treasury Department, 626 F.2d 997, 1019 (D.C.

Cir. 1980).

There is thus an irreconcilable split between Cir-

cuits with respect to the applicability of the Chevron

standard of review to interpretative rules. The D.C. Cir-

cuit opinion also conflicts with pre-Chevron decisions of

both this Court and other Courts of Appeals. It is there-

fore necessary for this Court to settle the important ques-

tion of whether the Chevron or Skidmore standards

should be applied when a court reviews an interpretative

rule.

mateo © (he puna wt des

17

CONCLUSION

For the foregoing reasons, General Motors’ petition

for a writ of certiorari should be granted.

Of Counsel:

Charles H. Lockwood, II

General Counsel

Automobile Importers of

America, Inc.

Dated: March 11, 1985

Respectfully submitted,

Bernard G. Segal

James D. Crawford

Milton D. Andrews*

Lance E. Tunick

SCHNADER, HARRISON,

SEGAL & LEWIS

1111-19th Street, N.W.

Washington, D.C. 20036

Attorneys for Amicus Curiae

Automobile Importers of

America, Inc.

“Counsel of Record