Amicus Curiae Brief — General Motors Corp. v. Thomas

In THE CLERK

Supreme Court of the United States

OCTOBER TERM, 1984

GENERAL MorTors CORPORATION,

Petitioner,

Vv.

LEE M. THOMAS, ADMINISTRATOR OF THE

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

Respondent.

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

BRIEF FOR THE

MOTOR VEHICLE MANUFACTURERS ASSOCIATION

AS AMICUS CURIAE

Of Counsel: . HOWARD P. WILLENS

WILLIAM H. CRABTREE Counsel of Record

Vice President and ANDREW N. VOLLMER

Genera! Counsel STEPHEN J. SCHNABLY

Moror VEHICLE WILmer, CUTLER & PICKERING

MANUPACTURERS 1666 K Street, N.W.

ASSOCIATION Washington, D.C. 20006

800 New Center Building (202) 872-6000

Detroit, Michigan 48202 Counsel for the Motor Vehicle

Manufacturers Association

April 9, 1985

qW

TABLE OF CONTENTS

Page

IE I Pe II secretes ecreecsssceinceocnes ii

INTEREST OF AMICUS CURIAE .......02.222. 2.220 2

IIE cciiniersacalciecemcidsaaameitannscsala sousearsenclsasabinacenns ines 2

REASONS FOR GRANTING THE WRIT .................. 4

I. The Court Should Review the Decision Below

Because It Authorizes a Combined Administra-

tive and Judicial Review Procedure That Vio-

lates the Requirements of Due Process of Law.. 5

II. The Court Should Review the Decision Below

Because the Lower Court Ignored the APA in

Applying the Chevron Standard of Review to a

Rule That It Characterized As Interpretative... 9

III. The Court Should Review the Decision Below

Because the EPA Violated the APA and the

Clean Air Act in Denying Members of the Regu-

lated Industry Notice of and Opportunity To

Comment on a Rule Enlarging Their Recall Ob-

I ioe ee e e eeeee Seiniaeeiea 15

oe eR RE ROO ED TR oe 19

ii

TABLE OF AUTHORITIES

Cases Page

Adamo Wrecking Co. v. United States, 434 U.S.

2 SE: | nnn turer enee RRT SIE cat 9

Baldwin v. Hale, 68 U.S. (1 Wall.) 223 (1854)........ 6

Batterton v. Francis, 432 U.S. 416 (1977) _......... 13

Bell Lines, Inc. v. United States, 263 F. Supp. 40

CBB. We. Wik TBD ccvceinscsnisncrendcedaeeee ee, 12

Buckeye Power, Inc. v. EPA, 481 F.2d 162 (6th

CI, BTID cneenstnses.:+ -ssircineniiceeslicarasahasiaeeeeniaceane 14

Capitano v. Secretary of Health and Human Serv-

ices, 732 F.2d 1066 (2d Cir. 1984) 000. 13

Chemical Manufacturers Ass’n v. NRDC, Inc., 53

U.S.L.W. 4193 (U.S. February 27, 1985) (No.

TID sess csissimnvasuiceernssicacicaeeiaiacsaeasaeeeen 11

Cherry v. Mathews, 419 F. Supp. 922 (D.D.C.

DDD cccerssanstcincssnsessiccunigtenssameuceeiamea nn 14

Chevron, U.S.A., Inc. v. NRDC, Inc., 104 S. Ct.

Ef | NRT INIA ET Eine passim

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

POTD wstcinssninicticcininititaiiaiaieiactaiembiggacinlas ornate 2

Citizens to Preserve Overton Park, Inc. v. Volpe,

GOa TE. GOR CIBC ES cctccccticcineee 13

CPSC v. GTE Sylvania, Inc., 447 U.S. 102 (1980).. 13

Davies Warehouse Co. v. Bowles, 321 U.S. 144

(| IME Ra Are SR EL TT oe Peers 13

Detroit Edison Co. v. United States Environmental

Protection Agency, 496 F.2d 244 (6th Cir.

PRG snctecctciisinessnipicigmaica eee re 14

FEC v. Democratic Senatorial Campaign Commit-

tee, 454 U.S. 27 (1981) _...... ncsiaclilah tail ataeiah coladuatataes 11

Fuentes v. Shevin, 407 U.S. 67 (1972) ..................... 5, 6

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

2 ee Rene PS ment! 11, 13, 14

General Motors Corp. v. Ruckelshaus, 724 F.2d

See Teas Ss BD vectra 16

General Motors Corp. v. Ruckelshaus, 742 F.2d

1561 (D.C. Cir. 1984) (en banc) _..... passim

Harrison v. PPG Industries, Inc., 446 U.S. 578

feats ee TN CEN ets <5 > MEN TT 9

Lewis-Mota v. Secretary of Labor, 469 F.2d 478

CUE IG III nicccostscchnachscemntecetubieateianiacin neem 14

iii

TABLE OF AUTHORITIES—Continued

Page

Mathews v. Eldridge, 424 U.S. 319 (1976) _.......... 5

Mayburg v. Secretary of Health and Human Serv-

ices, 740 F.2d 100 (1st Cir. 1984) 00002. 13

Morton v. Ruiz, 415 U.S. 199 (1974) _...00002 13

Motor Vehicle Manufacturers Ass’n v. State Farm

Mutual Auto. Ins. Co., 463 U.S. 29 (1983) .......... 2

Mullane v. Central Hanover Bank & Trust Co.,

Neen el icesncvncsniane 6

NLRB v. Wyman-Gordon Co., 394 U.S. 759

a ath a a 12

Skidmore v. Swift & Co., 323 U.S. 134 (1944)....11, 12, 13,

14, 15

United States Steel Corp. v. United States Envi-

ronmental Protection Agency, 444 U.S. 1035

A lO SS ea a ee 6

Vermont Yankee Nuclear Power Corp. v. NRDC,

RE | ee 5

Weyerhaeuser Co. v. Costle, 590 F.2d 1011 (D.C.

US ES ea a 14

Yakus v. United States, $21 U.S. 414 (1944)... 6

Constitution, Statutes and Regulations

U.S. Constitution, Amendment V 4, 5, 8, 12

rr smenmessoceeceseavesne 6

i EE ) | eee ES LITT 6

a 12

SEER 2,16

OO sc scapuwnsmewvseeacsousnens 2,16

Neen cccilaguoususubs 3

Se 7

en 8

42 U.S.C. § 7607 (d) (1) ............ 5: SPREE Ree ee ED 6

SS) 17

Ss Fae 17

ee 8

Ee 8

Clean Air Act Amendments of 1977, Pub. L. No.

95-95, § 305, 91 Stat. 685, 772-77, 42 U.S.C.

Na conecunmonss 16

40 C.F.R. § 85.1803 App. A (1984) 0000000000. 3

iv

TABLE OF AUTHORITIES—Continued

Miscellaneous

Administrative Procedure Act: Legislative His-

tory, 8. Doc. No. 248, 79th Cong., 2d Sess.

FEE READ ODA Re PO TSA» RAT CORO)

Conference Report No. 1783, 91st Cong., 2d Sess.

(1970), reprinted in 1970 U.S. Code Cong. &

Sy a as ee

ies TO, GE CID aairesecrsccccsessenewcdccotsecneness

MU Bs Ts EP CIO ci cicisecseseccrnccmssnodcoxeaonrcs

BD TO, BN Ie COD moissesinirscccosesecekissensevrccetseneoss

| aC eee ae

General Motors Corporation’s Petition for Writ of

Certiorari to the United States Court of Appeals

for the District of Columbia Circuit (filed Jan-

Nt MN sic ta e e

H.R. Rep. No. 294, 95th Cong., 1st Sess. (1977),

reprinted in 1977 U.S. Code Cong. & Ad. News

OE | ceniainssaicsvyprndte eateneiadeiacieasiiacdenpeemiaod 8,

H.R. Conference Rep. No. 564, 95th Cong., 1st

Sess. (1977), reprinted in 1977 U.S. Code Cong.

es I enced canis hac

Report of the Committee on Administrative Proce-

dure Appointed by the Attorney General, Ad-

ministrative Procedures in Government Agencies

PD cetccaoassadtondeinsicncmraeeneeme arene ae ee

10, 15

17, 18

IN THE

Supreme Court of the United States

OCTOBER TERM, 1984

No. 84-1098

GENERAL MOTORS CORPORATION,

Petitioner,

LEE M. T'HOMAS, ADMINISTRATOR OF THE

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

Respondent.

On Petition for Writ of Certiorari to the

United States Court of Appeals

for the District of Columbia Circuit

BRIEF FOR THE

MOTOR VEHICLE MANUFACTURERS ASSOCIATION

AS AMICUS CURIAE

On behalf of certain of its member companies, the

Motor Vehicle Manufacturers Association (“MVMA”)

submits this brief amicus curiae in support of General

Motors Corporation’s petition for a writ of certiorari

to review the decision of the United States Court of

Appeals for the District of Columbia Circuit.’ That de-

cision is reprinted in the appendices to the petition and

is reported at 742 F.2d 1561.

1 By letters filed with the Clerk of the Court, both General Motors

Corporation (“GM”) and the Administrator of the Environmental

Protection Agency (“EPA”) consented to the filing of this brief.

2

INTEREST OF AMICUS CURIAE

MVMA is an incorporated, not-for-profit trade associa-

tion of major automobile and truck manufacturers.’ Its

members have a substantial interest in this Court’s re-

view of the decision below because (1) the EPA rule at

issue dramatically increases their recall and repair obli-

gations, (2) the procedures used by the agency and the

reviewing court denied MVMA members an adequate

opportunity to challenge the rule, which threatens to

bind them forever, and (3) MVMA member companies,

regulated under many health and safety laws adminis-

tered by federal agencies,* have a broad interest in the

administrative law questions presented by the petition.

STATEMENT

The issues in this case arise out of a dispute between

GM and the EPA over the proper scope of a recall of

certain 1975 Cadillacs. Under section 207(c) (1) of the

Clean Air Act, EPA has authority to order the recall and

repair, at the manufacturer’s expense, of vehicles failing

to conform to prescribed emissions standards during their

“useful life.” * GM contended that this authority did not

2 MVMA files this brief on behalf of its following members: AM

General Corporation, American Motors Corporation, Chrysler Cor-

poration, Ford Motor Company, International Harvester Company,

M.A.N. Truck and Bus Corporation, PACCAR Inc., Volkswagen of

America, Inc., and Volvo North America Corporation. The petitioner

General Motors Corporation is aiso a member of MVMA.

3 See, e.g., Motor Vehicle Manufacturers Ass’n v. State Farm Mu-

tual Auto. Ins. Co., 463 U.S. 29 (1988) (concerning passive restraint

regulations issued under the National Traffic and Motor Vehicle

Safety Act) ; Chrysler Corp. v. EPA, 600 F.2d 904 (D.C. Cir. 1979)

(concerning noise regulations issued under the Noise Control Act).

442 U.S.C. § 7541(c) (1) (1982). Section 202(d) of the Clean Air

Act, id. § 7521(d), sets forth guidelines for determining the useful

life of various types of vehicles and is incorporated by reference in

section 207(c) (1).

3

permit EPA to order the recall and repair of cars that

exceeded the age or mileage defining their “useful life.”

To the industry’s surprise, EPA enforced its contrary

view on May 30, 1980, by issuing what it called an in-

terpretative rule. The rule provided that, when a recall

is ordered, the manufacturer must repair at its expense

“all properly maintained and used vehicles which experi-

enced the nonconformity during their useful lives regard-

less of their age or mileage at the time of repair.” ® EPA

declared the rule to be “a final rule effective upon publi-

cation” without any prior notice of the rulemaking and

without any opportunity for comments from the public.°

EPA also pronounced the rule “a ‘nationally applicable

regulation’ under section 307(b)(1) of the Clean Air

Act,” 7 thus specifically invoking the preclusive review

provision of the statute, which forbids any challenge to

such EPA action other than by appeal to the District of

Columbia Circuit within sixty days.* The agency imme-

diately applied the May 30 rule to the recall of GM’s

1975 Cadillacs.

On appeal by GM, the United States Court of Appeals

for the District of Columbia Circuit reviewed EPA’s rule

under the highly deferential standard set out in Chevron,

U.S.A., Inc. v. NRDC, Inc., 104 8S. Ct. 2778 (1984).

Under Chevron, appellate inquiry is limited to whether

an agency’s construction of a statute is “sufficiently

reasonable” to be accepted.® Applying that test, the court

below sustained the May 30 rule. It erroneously failed

to exercise its own independent judgment on the merits

of the rule as an interpretation of the Clean Air Act and

‘40 C.F.R. § 85.1803 App. A (emphasis added).

6 45 Fed. Reg. 36396, 36398 (1980).

7 Id.

8 See 42 U.S.C. § 7607(b) (1982) ; Part I infra.

9 See 742 F.2d at 1567 (citations omitted).

4

on the adequacy of the procedures used by EPA during

the rulemaking process.

REASONS FOR GRANTING THE WRIT

The Court should review the decision below for two

reasons. First, parties affected by the May 30 rule have

been deprived of procedural rights protected by the

Fifth Amendment to the Constitution. EPA _ substan-

tially extended the recall obligations of vehicle manufac-

turers with a final regulation protected by the preclusive

review provision of the Clean Air Act, even though the

agency had provided no prior notice of the rulemaking

and no opportunity to comment on the rule. The lower

court then denied the manufacturers an effective oppor-

tunity to participate during appellate review by testing

the May 30 rule against a deferential] standard that im-

posed no meaningful check on the substantive or proce-

dural decisions made by the agency. As Part I of this

brief shows, MVMA’s position is that this Court’s review

is necessary because the Constitution does not permit a

combination of agency and judicial action that produces

an onerous, binding regulation through a process that so

totally excludes affected members of the public.

As we show in Parts II and III of this brief, the con-

stitutional defect resulted from two errors of statutory

interpretation. One was the decision of the appellate

court to ignore the requirements of the Administrative

Procedure Act (“APA”) and use the deferential Chevron

standard to review an interpretative rule issued without

prior notice or comment. The other was the EPA’s vio-

lation of both the APA and the Clean Air Act in failing

to follow notice-and-comment procedures before issuing

the May 380 rule.

The second reason that this Court should review the

decision below is that it has far-reaching, adverse con-

sequences for public participation in the administrative

process. As the Court has recognized, administrative law

decisions of the District of Columbia Circuit “serve as

5

precedent for many more proceedings for judicial review

of agency actions than would the decision of another

Court of Appeals.” ?® Allowing the decision below to

stand therefore will sanction and encourage, in disregard

of the procedural rights of the public, agency use of

“interpretative rules” in conjunction with an unaccept-

ably deferential standard of judicial review.

I. THE COURT SHOULD REVIEW THE DECISION

BELOW BECAUSE IT AUTHORIZES A COMBINED

ADMINISTRATIVE AND JUDICIAL REVIEW PRO-

CEDURE THAT VIOLATES THE REQUIREMENTS

OF DUE PROCESS OF LAW.

Whether labeled an “interpretative” or “legislative”

rule, EPA’s May 30 rule imposed onerous new require-

ments on all vehicle manufacturers subject to the recall

provision of the Clean Air Act. Because of the proce-

dures followed by the agency and uncritically embraced

by the court below, these manufacturers had no mean-

ingful opportunity to present their views regarding the

EPA rule to either tne agency or the reviewing court.

That fundamental unfairness was aggravated by EPA’s

declaration that the preclusive review provisions of the

Clean Air Act will bar vehicle manufacturers from chal-

lenging the rule in any future enforcement proceeding

directed at them. The cumulative effect was a denial of

the due process of law guaranteed by the Fifth Amend-

ment.

The purpose of the Due Process Clause “is to protect

[the] use and possession of property from arbitrary

encroachment—to minimize substantively unfair or mis-

taken deprivations of pr -ty.”*™ In the rulemaking

context, due process requires that affected persons have

a reasonable opportunity to present their views to the

10 Vermont Yankee Nuclear Power Corp. v. NRDC, Inc., 435 U.S.

519, 535-37 n.14 (1978).

11 Fuentes v. Shevin, 407 U.S. 67, 81 (1972); see Mathews v.

Eldridge, 424 U.S. 319, 3382 (1976).

6

agency or reviewing court.’* A meaningful opportunity

to be heard can be afforded by allowing affected persons

to present comments to the agency before it adopts the

rule or, if prior notice and opportunity to comment are

not afforded, by making the rule subject to plenary in-

dependent judicial scrutiny. Neither opportunity was

provided here.

The EPA’s invocation of the “interpretative rule” ex-

ception to the notice-and-comment requirements of the

APA and the Clean Air Act’ completely excluded the

public from agency deliberations. EPA unexpectedly pub-

lished the rule as a final, binding regulation during its

recall dispute with GM and denied MVMA member com-

panies any timely opportunity to persuade the agency

that the May 30 rule was unauthorized by statute, im-

practical, or otherwise deficient. Not only did the agency

fail to seek comments before issuing the rule, it did not

even request public comment after publication.’* The

12 See Yakus v. United States, 321 U.S. 414, 483 (1944) (persons

affected by agency action must be given “a reasonable opportunity

to be heard” at some point in the administrative process). See

also, e.g., Mullane v. Central Hanover Bank & Trust Co., 339 U.S.

306, 314 (1950) (“An elementary and fundamental requirement of

due process in any proceeding which is to be accorded finality is

notice reasonably calculated, under all the circumstances, to apprise

interested parties of the pendency of the action and afford them an

opportunity to present their objections”); Fuentes v. Shevin, 407

U.S. 67, 80 (1972) (“Parties whose rights are to be affected are

entitled to be heard”) (quoting Baldwin v. Hale, 68 U.S. (1 Wall.)

223, 233 (1854) ).

148The APA exempts interpretative rules from notice-and-

comment procedures, 5 U.S.C. §553(b) (A) (1982), and the Clean

Air Act incorporates the exemption, 42 U.S.C. § 7607(d) (1) (1982).

14 Thus this case differs from those occasions when, to meet an

emergency, EPA uses the good cause exception to notice-and-

comment rulemaking, 5 U.S.C. §553(b)(B) (1982), and then

solicits comments after issuing the rule. See, ¢.g., United States

Steel Corp. v. United States Environmental Protection Agency, 444

U.S. 1035, 1036 (1980) (Rehnquist, J., dissenting from the denial

7

public was excluded even though the rule had, and was

intended to have, a substantial impact on manufacturers’

recall obligations and addressed conflicting policy con-

siderations left unresolved by Congress.” In so excluding

the public, EPA ignored a lesson of its own experience,

which is that notice-and-comment rulemaking proceedings

frequently result in improved regulations, reflecting the

suggestions of affected manufacturers and other inter-

ested parties.”

The D.C. Circuit compounded the adverse effects of

EPA’s action by improperly applying the deferential

Chevron standard of review. Using Chevron to review the

May 30 rule denied vehicle manufacturers an effective

opportunity to challenge in court the substantive or pro-

cedural deficiencies of a rule issued without notice or

comment. The court below did not seriously test EPA’s

decision to use the “interpretative rule” exception to no-

tice-and-comment rulemaking and then accepted the sub-

stance of the May 30 rule as a not unreasonable methvd

of effectuating public policy goals.

The threatened operation of the preclusive judicial re-

view section of the Clean Air Act exacerbates the un-

fairness that results from the proceedings below. Sec-

tion 307(b) provides for exclusive judicial review of “na-

tionally applicable regulations” in the D.C. Circuit within

sixty days of publication in the Federal Register.’ Such

of certiorari and noting that EPA amended its action in light of

subsequent comments).

15 See pages 15-16 infra.

16 Issuing regulations on the useful life of certain engines, EPA

recently said that the final rules were “shaped considerably by the

public participation during the course of the rulemaking.” 49 Fed.

Reg. 52170, 52175, 52179 (1983). See also 39 Fed. Reg. 44370

(1974) (issuing final recall rules and discussing comments received

from the public).

1742 U.S.C. § 7607(b) (1) (1982). The only exception is for a

petition “based solely on grounds arising after such sixtieth

day.” Id.

8

EPA action is not subject to challenge either on proce-

dural * or substantive grounds” in any later proceeding,

specifically including “civil or criminal proceedings for

enforcement.” *° The EPA, in promulgating its interpre-

tative rule, specifically invoked this preclusive review sec-

tion,” and the court below accepted the determination.

Review by this Court to reaffirm the protection of the

Due Process Clause in this setting is therefore especially

urgent. If the May 30 rule is subject to the preclusive

review provision, a motor vehicle manufacturer will be

unable to argue in a later recall proceeding that the EPA

unlawfully failed to use notice-and-comment rulemaking,

that it imposed recall obligations on manufacturers not

18 See id. § 7607 (d) (8).

19 The legislative history of the 1977 amendments to the Clean

Air Act makes clear that Congress intended the preclusion to apply

to all challenges:

[T]he committee wishes to reaffirm its intent to strictly iimit

section 307 challenges to those which are actually filed within

that time. The only instance in which the sommittee intends

that later challenges may be entertained by the court of appeals

are those in which the grounds arise solely after the 60th day.

Thus, unless a petitioner can show that the basis for his chal-

lenge did not exist or was not reasonably to be anticipated

before the expiration of 60 days, the court of appeals is with-

out jurisdiction to consider a petition filed later than 60 days

after the publication of the promulgated rule.

H.R. Rep. No. 294, 95th Cong., 1st Sess. 322 (1977), reprinted in

1977 U.S. Code Cong. & Ad. News 1401. This aspect of the judicial

review provision discussed in the Report was not altered during the

legislative process. See H.R. Conference Rep. No. 564, 95th Cong.,

1st Sess. 177-78 (1977), reprinted in 1977 U.S. Code Cong. & Ad.

News 1558.

20 42 U.S.C. § 7607(b) (2) (1982). See also id. §7607(e) (pro-

hibiting other methods of judicial review of EPA regulations).

21 It stated: “This rulemaking constitutes a ‘nationally applicable

regulation’ under section 307(b)(1) .... Any judicial review of

this action is, accordingly, governed by that provision.” 45 Fed.

Reg. 36396, 36398 (1980).

9

intended by Congress, or that the reviewing court im-

properly deferred to the agency action.** This Court has

previously taken note of the serious due process concerns

raised by preclusive judicial review statutes.** These con-

stitutional concerns are surely raised by the circum-

stances of this case—where the rulings of the agency and

court below coalesced to deny the affected parties any

meaningful opportunity to present their views regarding

an “interpretative rule” that vitally affects their inter-

ests.

II. THE COURT SHOULD REVIEW THE DECISION

BELOW BECAUSE THE LOWER COURT IGNORED

THE APA IN APPLYING THE CHEVRON STAND-

ARD OF REVIEW TO A RULE THAT IT CHARAC-

TERIZED AS INTERPRETATIVE.

Two separate errors of statutory construction that in-

dependently justify review by this Court caused the

deprivation of the constitutionally protected procedural

rights of the MVMA members and other affected parties.

This part of the brief discusses the first: the D.C. Cir-

cuit’s decision to review the May 30 interpretative rule

under the Chevron standard. The court below overlooked

the context in which the Chevron standard was developed,

repudiated the longstanding and more rigorous standard

of review applicable to interpretative rules, and thereby

denied interested parties the rights guaranteed them by

the APA. This Court should review the decision below in

22 Issues open for litigation would be the applicability of the

narrow exception that Congress provided, that is, whether “the

basis for [a] challenge did not exist or was not reasonably to be

anticipated before the expiration of 60 days,” the applicability of

the preclusion to interpretative rules, and the constitutionality of

the judicial review limitations. See note 23 infra.

23 See Harrison v. PPG Industries, Inc., 446 U.S. 578, 592 n.9

(1980) (recognizing the “constitutional question” of due process

raised by section 307(b) of the Clean Air Act but deferring resolu-

tion) ; id. at 594-95 (Powell, J., concurring) ; Adamo Wrecking Co.

v. United States, 434 U.S. 275, 289-91 (1978) (Powell, J., con-

curring).

10

order to resolve the conflict that has developed among

the lower courts regarding the Chevron standard of re-

view and to deny the applicability of Chevron to agency

interpretative rules.”

Because of Chevron, the court below accorded great

deference to “an administrative construction of a statute

that the agency administers,” ** even though that con-

struction was contained in an interpretative rule issued in

the absence of prior notice and comment. The D.C. Cir-

cuit reasoned that

reviewing courts should respect the policy choices of

administrative agencies. See Chevron,... 104 S. Ct.

at 2793-94. The question presented today is whether

the agency’s action is a reasonable one in light of the

existing statutory constraints, and it is not the job

of the courts to propose rules that they would prefer

the agency to adopt.”

Inhibited by its own job description, the court never

reached an independent judgment about a manufacturer’s

recall liability under the statute; it simply deferred on

the ground that EPA’s May 30 rule was a reasonable

policy choice.

The lower court was incorrect in believing that Chevron

required such deference to EPA’s May 30 rule. Chevron

was decided in the context of a rule subject to full notice-

and-comment procedures and was premised on the fact

that the agency had acted only after resolving the differ-

ing views on policy presented before the rule was

24 GM’s petition describes the conflict among the circuits over the

application of the Chevron standard of review to interpretative

rules. See General Motors Corporation’s Petition for Writ of Cer-

tiorari to the United States Court of Appeals for the District of

Columbia Circuit 26 (filed January 7, 1985) (“GM Petition’).

25 742 F.2d at 1566.

26 Jd. at 1567 n.8.

11

adopted.*? In these circumstances a high degree of defer-

ence to the agency entails no denial of due process to

affected parties, who have received an opportunity to be

heard before the agency. The court below failed to con-

sider whether according such deference to an “interpre-

tative rule’ promulgated without any such opportunity

was consistent with other decisions of this Court and the

requirements of the APA.

In misapplying Chevron, the D.C. Circuit disregarded

the standard of review for interpretative rules estab-

lished by this Court in Skidmore v. Swift & Co., 323 U.S.

134 (1944). In Skidmore, this Court held that:

the 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 guidance. The

weight of such a judgment in a particular case will

depend upon the thoroughness evident in its consid-

eration, the validity of its reasoning, its consistency

with earlier and later pronouncements, and all those

factors which give it power to persuade, if lacking

power to control.

Id. at 140. This Court has repeatedly reaffirmed the

Skidmore test as the proper standard against which in-

terpretative rules must be measured.”

*7 See Chevron, 104 S. Ct. at 2787-90. In Chemical Manufacturers

Ass’n v. NRDC, Inc., 58 U.S.L.W. 4193 (U.S. February 27, 1985)

(No. 83-1013), the Court applied the Chevron standard of review

to another EPA regulation. That regulation, like the one in Chevron,

was issued after full notice-and-comment rulemaking and reconciled

competing policy concerns. Jd. at 4195 n.10 (citing 43 Fed. Reg.

27736 (1978)), 4197-98. As a result, the Court in CMA did not

address the questions presented in GM’s petition.

28 See, e.g., FEC v. Democratic Senatorial Campaign Committee,

454 U.S. 27, 37 (1981) (citing Skidmore); General Electric Co. v.

Gilbert, 429 U.S. 125, 141 (1976) (Skidmore is “[t]he most com-

12

By uncritically substituting Chevron’s deference for

Skidmore’s more rigorous criteria, the court below de-

nied MVMA companies procedural rights protected by

the AP’ The APA, which embodies Congress’ determi-

nation of what minimal procedural requirements must

be satisfied to protect due process rights,” directs review-

ing courts to subject interpretative rules to independent

and close scrutiny. An interpretative rule is merely the

agency’s view as to the meaning of the statute it ad-

ministers, and the APA specifically provides that “the

reviewing court shall decide all relevant questions of

ae.” =

The legislative history of the APA reflects the under-

standing that it would be fundamentally unfair for a rule

to be promulgated in the absence both of notice and com-

ment and of independent judicial scrutiny. The framers

of the APA understood that legislative rules promulgated

under congressionally delegated authority could properly

be given binding effect because affected persons had an

prehensive statement of the role of interpretative rulings’). See

also Chevron, 104 S. Ct. at 2793 n.40 (citing Skidmore with

approval).

29 The framers of the APA intended the legislation to protect the

purposes that animate the Due Process Clause. They called the

APA “a comprehensive charter of private liberty and a solemn

undertaking of official fairness. It is intended as a guide to him

who seeks fair play and equal rights under law.” Adminisv-rative

Procedure Act: Legislative History, S. Doc. No. 248, 79th Cong., 2d

Sess. iii (1946). See also id. at 217 (APA sets “the minimum re-

quirements of fair administrative procedure”). The courts have

also viewed the APA as protecting due process rights. E.g., NLRB

v. Wyman-Gordon Co., 394 U.S. 759, 764 (1969) (“The rule-making

provisions of [the APA] . .. were designed to assure fairness and

mature consideration of rules of general application”); Bell Lines,

Inc. v. United States, 263 F. Supp. 40, 46 (S.D. W.Va. 1967) (“the

requirements of the Administrative Procedure Act are fundamental

to due process’).

30 Section 10(e) of the APA, 5 U.S.C. § 706 (1982).

13

opportunity to participate in the agency’s rulemaking.”

Interpretative rules, on the other hand, were exempt from

notice-and-comment requirements precisely because “as

merely interpretations of statutory provisions . . . [they]

are subject to plenary judicial review, whereas ‘substan-

tive’ rules involve a maximum of administrative discre-

tion.” *

The courts have consistently implemented the APA’s

requirements by reviewing interpretative rules under

Skidmore.** Such scrutiny includes not only an independ-

ent judgment of the correctness of the agency position

but also an examination of “whether the [agency’s] ac-

tion followed the necessary procedural requirements,” *

31 See Report of the Committee on Administrative Procedure

Appointed by the Attorney General, Administrative Procedures in

Government Agencies 101-02 (1941).

82 Administrative Procedure Act: Legislative History, S. Doc.

No. 248, 79th Cong., 2d Sess. 18 (1946).

33 F.9., CPSC v. GTE Sylvania, Inc., 447 U.S. 102, 120 (1980)

(finding CPSC interpretative rule to be “far from authoritative as

an expression of congressional will under the oft-quoted factors enun-

ciated in Skidmore,” and deciding issue of statutory construction °

for itself); General Electric Co. v. Gilbert, 429 U.S. 125 (1976)

(same in reviewing EEOC interpretation); Morton v. Ruiz, 415

U.S. 199, 237 (1974) (same in reviewing Bureau of Indian Affairs

interpretation) ; Davies Warehouse Co. v. Bowles, 321 U.S. 144, 156

(1944) (pre-Skidmore case employing similar criteria, and refusing

to defer to agency’s interpretation of statute in context of general

ruling on utility rates). See also Batterton v. Francis, 482 U.S. 416,

425 n.9 (1977) (citing Skidmore in dictum).

The lower courts have also long recognized that “under Skidmore

the agency ultimately must depend upon the persuasive power of its

argument. The simple fact that the agency has a position, in and

of itself, is of only marginal significance.” Mayburg v. Secretary of

Health and Human Services, 740 F.2d 100, 106 (1st Cir. 1984)

(substituting own interpretation of statute for agency’s). See also,

e.g., Capitano v. Secretary of Health and Human Services, 732 F.2d

1066, 1076 (2d Cir. 1984) (same).

34 Citizens To Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402,

417 (1971).

14

and the courts have not hesitated to invalidate a rule for

improperly failing to follow notice-and-comment proce-

dures.*®> Indeed, the court below had itself earlier recog-

nized this duty:

Even more so than our review of EPA’s statutory

interpretations, our review of its procedural in-

tegrity in promulgating the regulations before us

is the product of our independent judgment, and our

main reliance in ensuring that, despite its broad dis-

cretion, the [EPA] has not acted unfairly or in dis-

regard of the statutorily prescribed procedures. Our

assertion of judicial independence in carrying out

the procedural aspect of the review function derives

from this country’s historic reliance on the courts

as the exponents of procedural fairness.**

The lower court’s failure to follow the APA by apply-

ing the Chevron standard in place of Skidmore seriously

prejudiced MVMA member companies. By carrying def-

erence to the point of “total abdication in construing the

statute,” *7 the court below failed to discharge its essential

judicial obligations. It made no effort, of course, to assess

the May 30 rule under the Skidmore criteria, which

would have demonstrated that the rule did not deserve

35 F.g., Buckeye Power, Inc. v. EPA, 481 F.2d 162, 171 (6th Cir.

1973) (vacating informal rulemaking and remanding for notice-

and-comment procedures); Detroit Edison Co. v. United States

Environmental Protection Agency, 496 F.2d 244, 249 (6th Cir.

1974) (same); Lewis-Mota v. Secretary of Labor, 469 F.2d 478,

482 (2d Cir. 1972) (same); Cherry v. Mathews, 419 F. Supp. 922,

924 (D.D.C. 1976) (same).

36 Weyerhaeuser Co. v. Costle, 590 F.2d 1011, 1027 (D.C. Cir.

1978) (citation and footnote omitted). The court also required

assurances that the agency provide for public “participation com-

mensurate with the complexity and intrusiveness of the resulting

regulations.” Id. at 1028 (footnote omitted).

37 General Electric Co. v. Gilbert, 429 U.S. 125, 145 (1976) (re-

jecting deference to EEOC interpretative regulations).

15

the deference it received.** Further, the court below

made no effort to determine whether EPA was author-

ized to issue the May 380 rule without prior notice and

opportunity to comment. Had the court addressed that

question, it would have concluded, as we now show, that

EPA had a statutory duty to use notice-and-comment

rulemaking before it could lawfully implement the May

30 rule.

lil. THE COURT SHOULD REVIEW THE DECISION

BELOW BECAUSE THE EPA VIOLATED THE APA

AND THE CLEAN AIR ACT IN DENYING MEM-

BERS OF THE REGULATED INDUSTRY NOTICE

OF AND OPPORTUNITY TO COMMENT ON A

RULE ENLARGING THEIR RECALL OBLIGA-

TIONS.

By promulgating the May 30 rule as an interpretation

without following notice-and-comment procedures, the

EPA violated its statutory duty, embodied in both the

APA and the Clean Air Act itself, to use such procedures

before issuing a rule expanding a manufacturer’s recall

obligations. Review by the Court therefore is necessary

to correct this error and thereby avoid the constitutional

issue otherwise raised by the actions of EPA and the

court below.

As GM persuasively demonstrates in its petition, the

May 30 regulation is a legislative rule, and the EPA vio-

lated the APA by issuing it without prior notice and

comment.*® EPA’s so-called “interpretative rule” did not

merely construe or interpret language in the Clean Air

38 The opinions in the court below show that review under

Skidmore would have produced a different result. J udge Wald for

the en banc majority applied Chevron and sustained the May 30

rule; Judge Bazelon in dissent applied Skidmore standards, 742

F.2d at 1573, and would have vacated the May 30 rule.

39 See GM Petition 15-21. As noted above, the Clean Air Act

incorporates the provision of the APA that exempts interpretative

rules from notice-and-comment procedures. See note 13 supra.

16

Act; it embodied the agency’s resolution of conflicting

policy objectives.*° Moreover, these policy choices were

necessary because of gaps in the language of the statute

that Congress intended the agency to fill pursuant to

specific grants of rulemaking authority.*

The language and legislative history of the Clean Air

Act eliminate any doubt that EPA was required to use

notice-and-comment procedures before promulgating the

May 30 rule. In 1977 Congress amended the Clean Air

Act, specifying detailed procedural steps for EPA to fol-

low before issuing a rule—such as providing notice of

proposed rulemaking and opportunity for oral and written

public comments **—and adding a section to the Clean Air

Act that listed “the rules and actions to which such proce-

40 See 742 F 2d at 1567 n.8 (Wald, J.) (noting that the court

“should respect the policy choices” of the EPA) ; id. at 1582 (Baze-

lon, J., dissenting) (disagreeing with the agency’s and GM’s inter-

pretations of the statute and suggesting his own interpretation) ;

General Motors Corp. v. Ruckelshaus, 724 F.2d 979, 999 (D.C. Cir.

1983) (Wilkey, J., concurring in the original panel decision) (say-

ing four “interpretations of the statute appear to be possible”).

Moreover, EPA apparently concedes that its interpretation needs

further ciarification to resolve open policy questions about the

extent of a manufacturer’s repair obligation. See 724 F.2d at 991-92

(discussing agency explanation that cars beyond their useful life

would not need to be repaired to meet the same standards as

newer cars).

41 Section 202(d) requires EPA to prescribe regulations imple-

menting the useful life definition “for purposes of” the recall and

remedy provision. 42 U.S.C. §7521(d) (1982). See Conference

Rep. No. 1783, 91st Cong., 2d Sess. 49 (1970), reprinted in 1970

U.S. Code Cong. & Ad. News 5381 (“Administrator shall prescribe

regulations to implement [the useful life] definition”). The recall

and remedy provision then incorporates that definition by relating

to nonconforming vehicles “when in actual use throughout their

useful life (as determined under section 7521(d)).” 42 U.S.C.

§ 7541(c) (1) (1982).

42 Clean Air Act Amendments of 1977, Pub. L. No. 95-95, § 305, 91

Stat. 685, 772-77 (codified at 42 U.S.C. § 7607(d) (1)-(7) (1982)).

17

dures will apply.” ** This new section provided that the

notice-and-comment procedures would govern the promul-

gation of rules implementing the provision on useful life *

and the recall and remedy provision.*® In explaining the

EPA’s duties under the new procedural requirements,

Congress said: “In promulgating any rule referred to in

this section,” the EPA must respond “to the significant

comments, criticisms and data submitted during the com-

ment period” in sufficient depth “to show that the Admin-

istrator did consider public comments . . . and to permit

any court reviewing the rule under section 307(b) to be

fairly apprised of the basis for the Administrator’s ac-

tion.” *

The intent of Congress in amending the Clean Air Act

in 1977 to require legislative rulemaking for rules affect-

43 H.R. Rep. No. 294, 95th Cong., Ist Sess. 27 ( 1977), reprinted in

1977 U.S. Code Cong. & Ad. News 1105. This House Report pro-

vides the most comprehensive explanation for the 1977 amendments.

The Senate passed a bill that differed from the House bill but,

after a conference, agreed to the House bill with some changes not

relevant here. See H.R. Conference Rep. No. 564, 95th Cong., 1st

Sess. 177-78 (1977), reprinted in 1977 U.S. Code Cong. & Ad. News

1558.

44 42 U.S.C. § 7607(d) (1) (J) (1982) (procedures apply in the

“promulgation or revision of regulations under section 7521”).

49 Jd. §7607(d)(1)(L) (procedures apply in the “promulga-

tion or revision of any regulations promulgated under section

[207] (relating to warranties and compliance by vehicles in actual

use)” (emphasis added). At the conference between the House and

Senate managers, the Senate persuaded the House not to apply the

special procedures to EPA review of certain state action required

under the Act. H.R. Conference Rep. No. 564, 95th Cong., 1st Sess.

177 (1977), reprinted in 1977 U.S. Code Cong. & Ad. News 1558.

This legislative history demonstrates that Congress specifically con-

sidered the sorts of agency action that should be covered by the

notice-and-comment procedures and concluded that the procedures

were to be used in the recall area.

46 H.R. Rep. 294, 95th Cong., Ist Sess. 821 (1977), reprinted in

1977 U.S. Code Cong. & Ad. News 1400 (emphasis added).

18

ing a manufacturer’s recall liability was to prevent just

what happened here—a complete exclusion of interested

parties from the decisionmaking process. Congress in-

tended “to insure more effective, informed public involve-

ment in decisionmaking under the Act’ and to establish

“procedural rights and opportunities for public participa-

tion in the rulemaking process.” *7 The House Interstate

and Foreign Commerce Committee, which initiated the

bill that later was s bstantially adopted, had found that

EPA’s rulemaking procedures were “inadequate” and

“needed to be remedied.” The Committee stated:

{[A]ppropriately broad administrative discretion «°

promulgate regulations to protect health or the en-

vironment must be restrained by thorough and care-

ful procedural safeguards that insure an effective

opportunity for public participation in the rulemak-

ing process.*®

Against this background of congressional intent and

action, there is no doubt that the EPA breached its stat-

utory mandate in issuing the May 30 rule without first

following notice-and-comment procedures. The rule re-

flects precisely the kind of agency judgments that should

have been informed and enlightened by the full participa-

tion of interested parties, and the lower court erred in

unduly deferring to the agency’s decisionmaking process.

47 H.R. Rep. No. 294, 95th Cong., Ist Sess. 2, 27 (1977), reprinted

in 1977 U.S. Code Cong. & Ad. News 1079, 1105.

48 Jd. at 319, reprinted in 1977 U.S. Code Cong. & Ad. News

1398 (emphasis added).

19

CONCLUSION

For the foregoing reasons, the Court should issue a writ

of certiorari to review the decision of the District of

Columbia Circuit.

Respectfully submitted,

Of Counsel: HOWARD P. WILLENS

WILLIAM H. CRABTREE Counsel of Record

Vice President and ANDREW N. VOLLMER

General Counsel STEPHEN J. SCHNABLY

Moror VEHICLE WILMER, CUTLER & PICKERING

MANUFACTURERS 1666 K Street, N.W.

ASSOCIATION Washington, D.C. 20006

300 New Center Building (202) 872-6000

Detroit, Michigan 48202 Counsel for the Motor Vehicle

Manufacturers Association

Apri! 9, 1985