4 Adjudication 4 Adjudication
4.1 APA Formal and Informal Adjudication 4.1 APA Formal and Informal Adjudication
4.1.1 APA §§ 554, 555, 558 4.1.1 APA §§ 554, 555, 558
§ 554. Adjudications (a) This section applies, according to the provisions thereof, in every case of adjudication required by statute to be determined on the record after opportunity for an agency hearing, except to the extent that there is involved - (1) a matter subject to a subsequent trial of the law and the facts de novo in a court; (2) the selection or tenure of an employee, except a (FOOTNOTE 1) administrative law judge appointed under section 3105 of this title; (FOOTNOTE 1) So in original. (3) proceedings in which decisions rest solely on inspections, tests, or elections; (4) the conduct of military or foreign affairs functions; (5) cases in which an agency is acting as an agent for a court; or (6) the certification of worker representatives. (b) Persons entitled to notice of an agency hearing shall be timely informed of - (1) the time, place, and nature of the hearing; (2) the legal authority and jurisdiction under which the hearing is to be held; and (3) the matters of fact and law asserted. When private persons are the moving parties, other parties to the proceeding shall give prompt notice of issues controverted in fact or law; and in other instances agencies may by rule require responsive pleading. In fixing the time and place for hearings, due regard shall be had for the convenience and necessity of the parties or their representatives. (c) The agency shall give all interested parties opportunity for - (1) the submission and consideration of facts, arguments, offers of settlement, or proposals of adjustment when time, the nature of the proceeding, and the public interest permit; and (2) to the extent that the parties are unable so to determine a controversy by consent, hearing and decision on notice and in accordance with sections 556 and 557 of this title. (d) The employee who presides at the reception of evidence pursuant to section 556 of this title shall make the recommended decision or initial decision required by section 557 of this title, unless he becomes unavailable to the agency. Except to the extent required for the disposition of ex parte matters as authorized by law, such an employee may not - (1) consult a person or party on a fact in issue, unless on notice and opportunity for all parties to participate; or (2) be responsible to or subject to the supervision or direction of an employee or agent engaged in the performance of investigative or prosecuting functions for an agency. An employee or agent engaged in the performance of investigative or prosecuting functions for an agency in a case may not, in that or a factually related case, participate or advise in the decision, recommended decision, or agency review pursuant to section 557 of this title, except as witness or counsel in public proceedings. This subsection does not apply - (A) in determining applications for initial licenses; (B) to proceedings involving the validity or application of rates, facilities, or practices of public utilities or carriers; or (C) to the agency or a member or members of the body comprising the agency. (e) The agency, with like effect as in the case of other orders, and in its sound discretion, may issue a declaratory order to terminate a controversy or remove uncertainty.
§ 555. Ancillary matters (a) This section applies, according to the provisions thereof, except as otherwise provided by this subchapter. (b) A person compelled to appear in person before an agency or representative thereof is entitled to be accompanied, represented, and advised by counsel or, if permitted by the agency, by other qualified representative. A party is entitled to appear in person or by or with counsel or other duly qualified representative in an agency proceeding. So far as the orderly conduct of public business permits, an interested person may appear before an agency or its responsible employees for the presentation, adjustment, or determination of an issue, request, or controversy in a proceeding, whether interlocutory, summary, or otherwise, or in connection with an agency function. With due regard for the convenience and necessity of the parties or their representatives and within a reasonable time, each agency shall proceed to conclude a matter presented to it. This subsection does not grant or deny a person who is not a lawyer the right to appear for or represent others before an agency or in an agency proceeding. (c) Process, requirement of a report, inspection, or other investigative act or demand may not be issued, made, or enforced except as authorized by law. A person compelled to submit data or evidence is entitled to retain or, on payment of lawfully prescribed costs, procure a copy or transcript thereof, except that in a nonpublic investigatory proceeding the witness may for good cause be limited to inspection of the official transcript of his testimony. (d) Agency subpoenas authorized by law shall be issued to a party on request and, when required by rules of procedure, on a statement or showing of general relevance and reasonable scope of the evidence sought. On contest, the court shall sustain the subpoena or similar process or demand to the extent that it is found to be in accordance with law. In a proceeding for enforcement, the court shall issue an order requiring the appearance of the witness or the production of the evidence or data within a reasonable time under penalty of punishment for contempt in case of contumacious failure to comply. (e) Prompt notice shall be given of the denial in whole or in part of a written application, petition, or other request of an interested person made in connection with any agency proceeding. Except in affirming a prior denial or when the denial is self-explanatory, the notice shall be accompanied by a brief statement of the grounds for denial.
§ 558. Imposition of sanctions; determination of applications for licenses; suspension, revocation, and expiration of licenses (a) This section applies, according to the provisions thereof, to the exercise of a power or authority. (b) A sanction may not be imposed or a substantive rule or order issued except within jurisdiction delegated to the agency and as authorized by law.
(c) When application is made for a license required by law, the agency, with due regard for the rights and privileges of all the interested parties or adversely affected persons and within a reasonable time, shall set and complete proceedings required to be conducted in accordance with sections 556 and 557of this title or other proceedings required by law and shall make its decision. Except in cases of willfulness or those in which public health, interest, or safety requires otherwise, the withdrawal, suspension, revocation, or annulment of a license is lawful only if, before the institution of agency proceedings therefore, the licensee has been given - (1) notice by the agency in writing of the facts or conduct which may warrant the action; and (2) opportunity to demonstrate or achieve compliance with all lawful requirements. When the licensee has made timely and sufficient application for a renewal or a new license in accordance with agency rules, a license with reference to an activity of a continuing nature does not expire until the application has been finally determined by the agency.
4.1.2 Chemical Waste Management, Inc. v. United States, 873 F.2d 1477 (D.C. Cir. 1989) 4.1.2 Chemical Waste Management, Inc. v. United States, 873 F.2d 1477 (D.C. Cir. 1989)
873 F.2d 1477
CHEMICAL WASTE MANAGEMENT, INC. and Waste Management of North America, Inc., Petitioners, v. U.S. ENVIRONMENTAL PROTECTION AGENCY and Lee M. Thomas, Administrator, Respondents.
No. 88-1490.
United States Court of Appeals, District of Columbia Circuit.
Argued March 6, 1989.
Decided May 5, 1989.
*221Daniel M. Darragh, of the bar of the State of New York, pro hac vice, by special leave of Court, for petitioners.
J. Brian Molloy and Joan Z. Bernstein, for petitioners.
William R. Weissman and Douglas H. Green, for intervenors Edison Elec. Institute, et al., were on the joint brief, for petitioners and intervenors.
Mark R. Haag, Attorney, Dept, of Justice, with whom Donald A. Carr, Acting Asst. Atty. Gen., Land and Natural Resources Div., Dept, of Justice, and Caroline H. Wehling, Attorney, U.S. E.P.A., were on the brief, for respondent.
Roger J. Marzulla, Attorney, Dept, of Justice, also entered an appearance, for respondent.
Before WALD, Chief Judge, and STARR and D.H. GINSBURG, Circuit Judges.
Opinion for the Court filed by Circuit Judge D.H. GINSBURG.
Petitioners Chemical Waste Management, Inc. and Waste Management of North America seek review of Environmental Protection Agency regulations, 40 C.F. R. Part 24 (1988), that establish informal procedures for administrative hearings concerning the issuance of corrective action orders under § 3008(h) of the Resource Conservation and Recovery Act (RCRA), as modified by the Hazardous and Solid Waste Amendments of 1984. 42 U.S.C. § 6928(h) (1982 & Supp.1985). We conclude that the regulations represent a reasonable interpretation of an ambiguous statutory provision and are not, on their face, inconsistent with the requirement of due process. Accordingly, we deny the petition for review.
I. Background
Congress enacted RCRA in 1976 to establish a comprehensive program for regulation of hazardous waste management and disposal. The statute requires generally that the operator of any hazardous waste treatment, storage, or disposal facility obtain a permit, RCRA § 3005, 42 U.S.C. § 6925, but facilities in existence as of 1980 may continue to operate as “interim facilities” pending agency action on their permit applications, RCRA § 3005(e), 42 U.S.C. § 6925(e).
A. Formal Adjudication under Part 22.
Subsection (a) of RCRA § 3008 authorizes EPA to enter orders assessing civil penalties, including suspension or revocation of permits, for violation of RCRA regulations. 42 U.S.C. § 6928(a). Subsection (b) provides that, upon request made within thirty days of the issuance of a subsection (a) order, EPA “shall promptly conduct a public hearing.” Accordingly, the agency is authorized to “issue subpoenas for the attendance and testimony of witnesses and the production of relevant papers, books, *222and documents, and may promulgate rules for discovery procedures.” RCRA § 3008(b), 42 U.S.C. § 6928(b).
In 1978, EPA promulgated procedural regulations to implement the “public hearing” provision of subsection (a). 40 C.F.R. Part 22. These procedures conform to the provisions of the Administrative Procedure Act for formal adjudication. 5 U.S.C. §§ 556 & 557. For example, an Administrative Law Judge presides at the hearing, 40 C.F.R. § 22.03(a), and each party has the right to call and to cross-examine witnesses, 40 C.F.R. § 22.22(b).
In the preamble accompanying these regulations, EPA explained its selection of formal adjudicatory procedures. Although, in EPA’s view, there are “many cases” in which the term “public hearing” should not be read to require formal adjudicatory procedures, EPA concluded that “the nature of the decision at issue in [subsection (a) ] cases indicates ... that such formal procedures were probably intended.” 43 Fed. Reg. 34738 (1978). In such cases, the agency “will be accusing someone of violating established legal standards through their past conduct, and will be seeking to impose a sanction for it____ In addition, the facts at issue will be specific ones involving the past conduct of regulated persons.” Id.
B. Informal Adjudication Under Part U
In the Hazardous and Solid Waste Amendments of 1984, Congress added to § 3008 a new subsection (h), authorizing the Administrator of EPA to issue “an order requiring corrective action” whenever he “determines that there is or has been a release of hazardous waste into the environment” from an interim facility. RCRA § 3008(h)(1), 42 U.S.C. § 6928(h)(1). Such orders must indicate “the nature of the required corrective action or other response measure, and ... specify a time for compliance,” and may include suspension or revocation of the facility’s authorization to operate as an interim facility. RCRA § 3008(h)(2), 42 U.S.C. § 6928(h)(2). The Administrator may assess a civil penalty of up to $25,000 per day for noncompliance with a corrective action order. Id. The 1984 Amendments also modified subsection (b) to make it clear that those subject to corrective action orders under the new subsection (h) have the right to a “public hearing.”
To govern subsection (h) hearings, EPA promulgated the procedural regulations here under review, 40 C.F.R. Part 24. Those rules specifically provide that the formal adjudicatory procedures of Part 22 shall be applicable only to challenges to subsection (h) corrective action orders that include a suspension or revocation of interim status or an assessment of civil penalties for noncompliance. 40 C.F.R. § 24.01. If the order calls upon the interim facility operator merely to undertake an investigation or to do so in combination with interim corrective measures, then, depending upon the burden entailed by such measures, the agency will use either the informal adjudicatory procedures provided in Subpart B of Part 24 (for interim corrective measures that are “neither costly nor technically complex,” 40 C.F.R. § 24.80) or those in Subpart C of Part 24.
The procedures in Subparts B and C are substantially similar insofar as is relevant to this case. The crucial point is that both subparts set forth informal rather than formal adjudicatory procedures. Under either subpart, the operator of a hazardous waste facility may submit written information and argument for inclusion in the record, 40 C.F.R. §§ 24.10(b) & 24.14(a)(1); make an oral presentation at the hearing itself, 40 C.F.R. §§ 24.11 & 24.15(a); and be assisted at hearing by legal and technical advisors, id. Direct examination and cross-examination of witnesses is not permitted, but the Presiding Officer may direct questions to either party. Id. The Presiding Officer is to be either “the Regional Judicial Officer ... or another attorney employed by the Agency, who has had no prior connection with the case, including performance of any investigative or prosecuting functions.” 40 C.F.R. §§ 24.09 & 24.13(a). With respect to both Subpart B and Subpart C proceedings, EPA, when issuing a corrective action order, shall deliver to the operator “all relevant doc*223uments and oral information (which has been reduced to writing), which the Agency considered in the process of developing and issuing the order, exclusive of privileged internal communications.” 40 C.F.R. § 24.03(b).
The Presiding Officer is to review the record and to file a recommended decision with the EPA Regional Administrator, 40 C.F.R. §§ 24.12 & 24.17. The Regional Administrator, in turn, is to receive comments from the parties and to render a final decision, 40 C.F.R. § 24.18, from which an aggrieved party may seek judicial review under the APA.
II. Chevron Analysis
Petitioners argue initially that the informal procedures of Part 24 are inconsistent with the intent of Congress in enacting and amending § 3008. To this end, petitioners make three specific contentions: first, that the language of subsection (b), as interpreted by EPA in its 1978 implementing regulations, requires formal procedures in all subsection (h) adjudications; second, that the legislative history of the 1984 Amendments demonstrates Congress’s intention that EPA use the same formal procedures for the issuance of the new subsection (h) orders as the agency had theretofore established for the issuance of subsection (a) orders; and, third, that precedent in this circuit erects a presumption that when Congress refers to an adjudication as a “hearing,” it intends that formal procedures be used.
We approach petitioners’ arguments within the framework that the Supreme Court decreed in Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), for judicial review of an agency’s interpretation of a statute under its administration. At the outset, we ask whether “Congress has directly spoken to the precise question at issue,” id. at 842, 104 S.Ct. at 2781; if so, then we “must give effect to the unambiguously expressed intent of Congress” and may not defer to a contrary agency interpretation, id. at 842-43, 104 S.Ct. at 2781-82. If the statute is “silent or ambiguous with respect to the specific issue,” however, we proceed to ask “whether the agency’s answer is based on a permissible construction of the statute,” id. at 843, 104 S.Ct. at 2782; if so, then we must defer to the agency’s construction.
A. Chevron Step One.
Before turning to petitioners’ principal arguments based on the requirement of a “public hearing,” we may briefly dispose of a related argument based on the provision in subsection (b) that the EPA “may promulgate rules for discovery procedures.” According to petitioners, this nominally permissive statement implies that Congress contemplated, and that the agency must therefore provide, formal procedures in which discovery plays a part. In response to a similar contention at the rule-making stage, EPA read subsection (b) to “suggest[] that [a] hearing which did not contain this feature most commonly associated with adjudicatory hearings would also be acceptable.” 53 Fed.Reg. at 12258. Given the implicit but presumably intentional distinction in the statute between things that the agency “shall” do (initiate a “public hearing” upon request) and those that it “may” do (promulgate discovery rules), we reject the argument that the statute compels the use of procedures involving discovery and do not reach the suggested inference from discovery to formal hearing procedures generally.
1. Prior Agency Interpretation. As to petitioners’ argument based upon the hearing requirement, we observe initially that the statutory language, taken alone, does not show that Congress “has directly spoken to the precise question at issue.” Subsection (b) requires a “public hearing” but does not, by its terms, indicate whether Congress intended that formal or informal hearing procedures be used. Petitioners claim, however, that in 1978 EPA interpreted the phrase “public hearing” to require formal adjudication when it promulgated procedures to govern hearings on orders issued under subsection (a). We think they misread the record in this regard.
*224Although EPA did believe that Congress “intended” it to use formal procedures for hearings on orders under subsection (a), the agency made clear that this conclusion rested upon the particular nature of the issues raised by such orders, not upon the force of the statutory language alone. 43 Fed.Reg. 34738 (1978). EPA thus did not adopt the view that the reference to a “public hearing” in subsection (b) necessarily or always imposes a requirement of formal procedures. Even if EPA had taken that position, moreover, it would remain free to change its interpretation in order to permit the use of informal procedures to implement the 1984 Amendments, provided that its new interpretation is otherwise legally permissible and is adequately explained. See United Technologies Corp. v. EPA, 821 F.2d 714, 723 (D.C.Cir.1987). We therefore turn to petitioners’ argument based upon the 1984 Amendments.
2. The 1984 Amendments. When Congress authorized EPA to issue corrective action orders under subsection (h), it also extended the right to a “public hearing” under subsection (b) to encompass such orders. According to petitioners, Congress’s decision to apply the existing hearing provision of subsection (b) — at a time when EPA had only formal adjudicatory procedures in effect — shows that Congress wished also to apply those formal procedures to hearings on orders issued pursuant to the new subsection (h). To support this inference, petitioners rely heavily on a statement by Senator Chafee, a sponsor of the 1984 Amendments, indicating that the “procedures set forth in subsection (b) are made applicable to orders issued under this new subsection [ (h) ].” 130 Cong.Rec. S39175 (daily ed. July 15, 1984) (emphasis added).
The short answer to petitioners’ argument is that the Senator referred not to the procedures set forth in Part 22 of EPA’s regulations implementing subsection (b), but to the “procedures set forth in” the statutory subsection itself. Absent a more specific reference to the formal procedures of Part 22, we may not infer that Senator Chafee and his colleagues intended to en-graft those regulations onto § 3008. See AFL-CIO v. Brock, 835 F.2d 912, 915 (D.C. Cir.1987) (“express congressional approval of an administrative interpretation [required] if it is to be viewed as statutorily mandated”).
Without distinguishing the AFL-CIO case, petitioners maintain that Senator Chafee’s failure to refer expressly to Part 22 is “immaterial,” since he did cite “the dispositive statutory [subjection.” This contention would be relevant if the language of the statute made clear the type of procedures intended. As we have seen, however, that is not the case. Absent a reference to Part 22, Senator Chafee’s statement remains, at best, ambiguous.
3. Circuit Precedent. Petitioners point to our statement in a footnote in Union of Concerned Scientists v. U.S. NRC, 735 F.2d 1437, 1444 n. 12 (D.C.Cir.1984) (UCS), that “when a statute calls for a hearing in an adjudication the hearing is presumptively governed by ‘on the record’ procedures,” notwithstanding omission of the phrase “on the record” in the statute. See also Seacoast Anti-Pollution League v. Costle, 572 F.2d 872, 877 (1st Cir.1978); Marathon Oil v. EPA, 564 F.2d 1253, 1264 (9th Cir. 1977). For the reasons set out below, however, we decline to adhere any longer to the presumption raised in UCS.
For perspective, we note first that the very footnote cited by petitioners makes clear that the issue in that case was “whether the NRC can, in its discretion, bypass [a statutory] hearing requirement altogether on issues material to its licensing decisions,” and that “we refrain[ed] from holding outright that [the hearing provision in question there] requires ‘on the record’ hearings.” 735 F.2d at 1444 n. 12. Our statement about the presumption to that effect was therefore dicta. We did not actually rely on the presumption we announced, but rather inferred that Congress intended the use of formal adjudicatory procedures based both upon NRC’s unsuccessful efforts to convince Congress to do away with such procedures and upon NRC’s consistent position, over a twenty year period, that the statute required for*225mal procedures. Id. No such contextual circumstances exist here.
More important, UCS and its kin, Seacoast and Marathon, all predate the Supreme Court's decision in Chevron. Under that decision, it is not our office to presume that a statutory reference to a “hearing,” without more specific guidance from Congress, evinces an intention to require formal adjudicatory procedures, since such a presumption would arrogate to the court what is now clearly the prerogative of the agency, viz., to bring its own expertise to bear upon the resolution of ambiguities in the statute that Congress has charged it to administer. In effect, the presumption in UCS truncates the Chevron inquiry at the first step by treating a facially ambiguous statutory reference to a “hearing” as though it were an unambiguous constraint upon the agency. We will henceforth make no presumption that a statutory “hearing” requirement does or does not compel the agency to undertake a formal “hearing on the record,” thereby leaving it to the agency, as an initial matter, to resolve the ambiguity.*
While an agency might not be able reasonably to read a requirement that it conduct a “hearing on the record” to permit informal procedures in the converse situation to that presented here, an agency that reasonably reads a simple requirement that it hold a “hearing” to allow for informal hearing procedures must prevail under the second step of Chevron. As usual in cases involving Chevron’s second step, the court will evaluate the reasonableness of the agency’s interpretation using the normal tools of statutory interpretation — such as legislative history, structural inferences, or exceptional circumstances of the type presented in UCS.
B. Chevron Step Two.
In the alternative, petitioners contend that EPA failed to provide a reasoned explanation, as required under the “arbitrary or capricious” standard of APA § 706, 5 U.S.C. § 706(2)(A), to support its conclusion that corrective action orders under subsection (h) are amenable to informal adjudicatory procedures. Since it would clearly be unreasonable for the agency to resolve a statutory ambiguity to support an arbitrary result, petitioners’ position is functionally a Chevron step two contention that EPA’s interpretation of the statute is unreasonable. This is the issue joined.
Specifically, petitioners attack EPA’s claims that subsection (h) orders will pose fewer factual issues than do subsection (a) orders; that any factual issues that do arise can be resolved by considering documents and oral statements without need of trial-type examination of witnesses; and that informal procedures will allow the agency to respond more quickly to releases of hazardous waste.
1. The Number and Nature of Factual Issues. In its preamble accompanying the Part 24 regulations, EPA predicts that “[subsection] (h) cases will present fewer factual issues than the typical case involving an RCRA [subsection] (a) compliance order,” since “questions as to whether certain events or violations occurred, the timing of certain events/violations, the seriousness of the violation, [and] the economic benefit to respondent of the violation” will arise less frequently. 53 Fed.Reg. at 12257. In addition, EPA said that those factual issues that do arise “will relate almost entirely to technical (or policy) matters” that create “little need to establish witness veracity or credibility through observation of a witness’s demeanor on cross-examination” and therefore “can just as easily (perhaps more effectively) be resolved through analysis of the administrative record and the written submissions and oral statements of the parties.” Id.
Petitioners argue first that EPA has ignored the additional benefits — in terms of increased accuracy, for example — that formal procedures may bring to fact finding. Second, petitioners observe that some subsection (h) orders may involve issues that *226could be “susceptible to varying interpretations.” The agency may safely demur to these charges; neither of them undercuts the validity of its decision to establish procedures based on the typical subsection (h) order. The Part 24 regulations, furthermore, leave the Presiding Officer with a degree of discretion to tailor hearing procedures to the needs of the particular case, see, e.g., 40 C.F.R. §§ 24.11 & 24.15(a) (Sub-parts B & C) (Presiding Officer “may address questions” to either party); § 24.11 (Subpart B) (Presiding Officer “may ... allow technical and legal discussions and interchanges between the parties, including responses to questions to the extent deemed appropriate”); § 24.24(d) (Subpart C) (respondent may request permission to submit up to 25 written questions to EPA “concerning issues of material fact”), which should be adequate to meet precisely the problems petitioners anticipate, in the event that they ever arise.
2. Necessity for Prompt Response. The preamble to the notice promulgating Part 24 also refers to the seemingly obvious “need to respond quickly to releases of hazardous waste.” 53 Fed.Reg. at 12257. More specifically, in its brief to this court, EPA also quotes Senator Chafee’s statement, introducing the 1984 Amendments, that “[sjince there are some 8,000 interim facilities, compared to 115 permitted facilities, it is most appropriate and necessary to extend the corrective action requirement to interim status facilities and to provide the Administrator with the authority to impose such requirements quickly.” 130 Cong. Rec. S9175 (daily ed. July 25, 1984).
As petitioners point out, however, Senator Chafee and his colleagues were concerned not with delays in the adjudication of corrective action orders but, instead, with impediments to EPA’s regulation of interim facilities; prior to the 1984 Amendments, EPA was authorized to order corrective action only with respect to permitted facilities. See id.; H.R.Conf.Rep. No. 1133, 98th Cong. 110 (1984), U.S.Code Cong. & Admin.News 1984, pp. 5576, 5681. Subsection (h) was intended to allow EPA to order corrective action with respect to an interim facility without having to wait for it to complete the permitting process, which Senator Chafee expected would take ten years to cover all interim facilities. 130 Cong.Rec. S9175. Accordingly, EPA cannot rely upon the need for swift adjudication to justify its use of informal hearing procedures.
Nonetheless, we conclude that the agency has provided a reasonable explanation for its choice of informal procedures in Part 24, based on the number and nature of factual issues expected in a typical subsection (h) proceeding.
III. Due Process
Finally, petitioners contend that Part 24 on its face denies them due process of law, in violation of the Fifth Amendment to the Constitution. When evaluating such an attack on the procedures used by an administrative agency to deprive a person of property, we must consider: (1) “the private interest that will be affected by agency action”; (2) “the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards”; (3) “the Government’s interest including the function involved and the fiscal and administrative burdens that the additional ... procedural requirement would entail.” Mathews v. Eldridge, 424 U.S. 319, 335, 96 S.Ct. 893, 903, 47 L.Ed.2d 18 (1976). In short, the Supreme Court directs us to analyze the anticipated benefits to private interests and costs to the Government of the procedures allegedly required by the Due Process Clause.
A. Private Interests.
Petitioners claim that subsection (h) orders may, in some instances, require the operator of an interim facility to undertake investigations and corrective measures that can have “a multi-million dollar impact.” Petitioners offer no response, however, to EPA’s observation that, over the run of orders issued under subsection (h), the costs of corrective action will vary widely. 53 Fed.Reg. at 12257. In light of this variance, we find no fault in EPA’s decision *227to design its Part 24 procedures based on the stakes that it expects will be involved in the great majority of corrective action proceedings that entail neither suspension of interim authorization nor assessment of civil penalties. The possibility that these procedures might prove inadequate to safeguard the interest of the operator in a particular case involving costly investigations or corrective measures does not count for much in the calculus of benefits and costs we make when asked to strike down administrative procedures in a facial due process challenge.
B. Risk of Error.
Under the second Eldridge factor, petitioners point to two distinct sources of error in the new procedural regulations.
1. Lack of Substantive Standards. Petitioners initially observe that the 1984 Amendments to RCRA require EPA to develop standards for corrective action, RCRA § 3004(u), 42 U.S.C. § 6924(u), and that the agency has not yet done so. From this, petitioners infer that the Presiding Officer in a subsection (h) hearing will lack any substantive standards to guide his decision. EPA, on the other hand, points to three available sources of guidance: (1) regulations for corrective action upon the release of hazardous waste from land disposal units, 40 C.F.R. Part 264, Subpart F; (2) various agency “guidance documents to aid decisions on RCRA corrective action”; and (3) regulations for remedial actions under the Comprehensive Environmental Response, Compensation, and Liability Act, 40 C.F.R. Part 300. Since, in reply, petitioners do not question the utility of these sources, we accept EPA’s representation that, until such time as the agency promulgates standards specifically for corrective actions pursuant to § 3004(u), Presiding Officers will find in these sources standards adequate to guide their decisions.
2. Lack of Formal Adjudicatory Procedures. Petitioners renew their claim, this time as a matter of due process, that EPA must use formal adjudicatory procedures. Petitioners fail to explain how such procedures will significantly advance the accuracy of an adjudicative process in which the issues typically do not require determinations of witness credibility but turn instead upon technical data and policy judgments. In Eldridge itself, the Court states that such proceedings present less of a need for trial-type procedures. 424 U.S. at 343-44, 96 S.Ct. at 906-07.
According to petitioners, due process requires that an ALJ conduct a subsection (h) hearing. Petitioners are particularly critical of the provisions of Part 24 that allow agency attorneys to serve as Presiding Officers, provided only that they have “had no prior connection with the case, including the performance of any investigative or prosecuting functions.” 40 C.F.R. §§ 24.09 & 24.13(a). Petitioners fear that even a Presiding Officer who meets this condition may be influenced by “institutional biases and prosecutorial zeal”; indeed, the Presiding Officer might, for all that the regulation requires, be a subordinate of the prosecuting attorney within EPA’s internal hierarchy.
The Supreme Court has held that even the combination, in a single administrative decision maker, of investigative and adjudicative functions — which the EPA regulations plainly forbid — “does not, without more, constitute a due process violation”; rather, “the special facts and circumstances of the case ... [must indicate] that the risk of unfairness is intolerably high.” Withrow v. Larkin, 421 U.S. 35, 58, 95 S.Ct. 1456, 1470, 43 L.Ed.2d 712 (1975). Moreover, in challenging a particular adjudication on this ground, the complaint must “overcome the presumption of honesty and integrity in those serving as adjudicators” by showing “a risk of actual bias or prejudgment.” Id. at 47, 95 S.Ct. at 1464. In light of Withrow’s stringent standard for an “as applied” attack on procedures that allow the combination of investigative and adjudicative functions, we find no basis for petitioners’ broad facial challenge, which by its nature deprives us of the particularized information necessary to evaluate a claim of probable bias.
Finally, petitioners attack the regulations on the ground that the Presiding Officer will be unable to resolve the intricate tech*228nical issues that may arise in a subsection (h) proceeding. They do not, however, explain why an agency attorney would be any less equal to that task than would be the ALT they prefer.
In sum, petitioners have shown little if any avoidable risk of error arising from the procedural regulations they challenge.
C. The Government’s Interest.
On the Government’s side of the Eldridge ledger, EPA estimates that “roughly half of the cost to the Agency of participating in full adjudicatory hearings will be saved by holding hearings under the [informal Part 24] procedures.” 53 Fed.Reg. at 12257. By contrast, the cost of formal procedures, according to EPA, would “significantly impair [its] ability to enforce” subsection (h). Id. at 12258.
Petitioners counter that the failure to use formal procedures will increase the risk that a court will subsequently find the administrative record inadequate for judicial review, thereby necessitating a costly remand for additional proceedings. Along similar line, petitioners claim that technical personnel involved in the hearing will produce “better” reports when they “know that their work may be tested” by formal procedures. Petitioners neglect, however, to compare the asserted increase in the cost of occasional remands against the substantial (and undisputed) savings to the agency that will accrue in all other cases. Without any experience to go by, we cannot infer that the effects described by petitioners will be more than a modest offset to the savings EPA will achieved by using informal procedures.
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In sum, the cost-benefit analysis mandated by Eldridge indicates that, to the modest extent that EPA’s Part 24 regulations do implicate the private interest in avoiding the expense of unnecessary corrective actions, formal procedures do not promise a sufficient lowering of the risk of error to justify their significant expense to the Government. We therefore hold that the Part 24 regulations are not inconsistent on their face with the requirements of due process.
We suppose that the absence of formal safeguards could prove troublesome in a case that involved both high financial stakes to the operator and either substantive issues that would benefit greatly from development through trial-type procedures, or a Presiding Officer with “actual bias.” That case has not yet arisen, however. From the face of the Part 24 regulations, neither petitioners nor we have any indication of how the agency will apply them in particular instances. There is no reason to doubt, however, that by being reasonably sensitive to the needs of each case, EPA can avoid the problems posited by petitioners.
IV. Conclusion
Because we conclude that the procedures for hearings on corrective action orders under subsection (h) reflect a reasonable interpretation of . an ambiguous statutory mandate and are not, on their face, inconsistent with the constitutional requirement of due process, the petition for review is
Denied.
4.1.3 Dominion Energy Brayton Point, LLC v. Johnson, 443 F.3d12 (1st Cir. 2006) 4.1.3 Dominion Energy Brayton Point, LLC v. Johnson, 443 F.3d12 (1st Cir. 2006)
DOMINION ENERGY BRAYTON POINT, LLC, Plaintiff, Appellant, v. Stephen L. JOHNSON, In His Capacity as Administrator of the United States Environmental Protection Agency, et al., Defendants, Appellees.
No. 05-2231.
United States Court of Appeals, First Circuit.
Heard Jan. 13, 2006.
Decided March 30, 2006.
*13John M. Stevens, with whom Wendy B. Jacobs, Elisabeth M. DeLisle, and Foley Hoag LLP were on brief, for appellant.
Kristen L. Gustafson, Attorney, Environment and Natural Resources Division, United States Department of Justice, with whom Matthew J. McKeown, Deputy Assistant Attorney General, Greer Goldman and John Bryson, Attorneys, were on brief, for appellees.
Before SELYA, LIPEZ and HOWARD, Circuit Judges.
USGen New England, Inc., now Dominion Energy Brayton Point, LLC (Dominion), filed suit against the U.S. Environmental Protection Agency, its administrator, and its regional office (collectively, the EPA), alleging that the EPA failed to perform a non-discretionary duty when it refused to grant Dominion’s request for a formal evidentia-ry hearing after issuing a proposed final National Pollution Discharge Elimination System (NPDES) permit. The district court dismissed the case for want of subject matter jurisdiction. On appeal, the central question presented concerns the effect of this court’s decision in Seacoast Anti-Pollution League v. Costle, 572 F.2d 872 (1st Cir.1978), in light of the Supreme Court’s subsequent decision in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Concluding, as we do, that Seacoast does not control, we affirm the judgment below.
I. BACKGROUND
Dominion owns an electrical generating facility in Somerset, Massachusetts (the station). The station opened in the 1960s and, like most power plants of its era, utilizes an “open-cycle” cooling system. Specifically, the station withdraws water from the Lees and Taunton Rivers, circulates that water through the plant’s generating equipment as a coolant, and then discharges the water (which, by then, has attained an elevated temperature) into Mount Hope Bay.
The withdrawals and discharges of water are regulated by the Clean Water Act (CWA), 33 U.S.C. §§ 1251-1387. For the last three decades, these actions have been authorized by a series of NPDES permits issued by the EPA pursuant to section 402(a) of the CWA. See id. § 1342(a). The standards incorporated into those permits are determined under the thermal variance procedures laid out in section 316(a). See id. § 1326(a).
In 1998, the station applied for renewal of its NPDES permit and thermal variance authorization. The EPA issued a proposed final permit on October 6, 2003, in *14which it rejected the requested thermal variance. On November 4, Dominion sought review before the Environmental Appeals Board (the Board), see 40 C.F.R. § 124.19(a) (authorizing Board review), and asked for an evidentiary hearing. The Board accepted the petition for review but declined to convene an evidentiary hearing. See In re USGen New Eng., Inc. Brayton Point Station, 11 E.A.D. 525, 525 (EAB July 23, 2004).
On August 11, 2004, Dominion notified the EPA of its intent to file a citizen’s suit under section 505(a)(2) of the CWA, 33 U.S.C. § 1365(a)(2), to compel the Board to hold an evidentiary hearing. Receiving no reply, Dominion proceeded to file its complaint in the United States District Court for the District of Massachusetts. The EPA moved to dismiss.
The district court granted the motion on jurisdictional grounds. See Fed.R.Civ.P. 12(b)(1). In a bench decision, it concluded that it was without subject matter jurisdiction because the suit, though billed as a citizen’s suit, constituted a direct challenge to the EPA’s hearing rule and, thus, came within the exclusive jurisdiction of the circuit court under 33 U.S.C. § 1369(b)(1)(E). This timely appeal followed.1
II. THE LEGAL LANDSCAPE
We set the stage for our substantive discussion by undertaking a brief review of the legal rules that frame the controversy at hand.
Before the EPA either issues an NPDES permit or authorizes a thermal variance,2 it must offer an “opportunity for public hearing.” 33 U.S.C. §§ 1326(a), 1342(a). No definition of “public hearing” is contained within the four corners of the CWA.
The Administrative Procedure Act (APA), 5 U.S.C. § 551 et seq., is also part of the relevant legal landscape. Most pertinent here are those sections that combine to describe the procedures for formal administrative adjudications. See id. §§ 554, 556, 557.. These procedures apply “in every case of adjudication required by statute to be determined on the record after opportunity for an agency hearing.” Id. § 554(a). The APA does not directly address whether these procedures apply when a statute simply calls for an “opportunity for public hearing” without any specific indication that the hearing should be “on the record.”
In Seacoast, this court interpreted “public hearing” (as used in sections 402(a) and 316(a) of the CWA) to mean “evidentiary hearing” — in other words, a hearing that comports with the APA’s requirements for a formal adjudication. 572 F.2d at 878. Examining the legislative history of the APA, we adopted a presumption that “unless a statute otherwise specifies, an adjudicatory hearing subject to judicial review must be [an evidentiary hearing] on the record.” Id. at 877. Applying that presumption to the CWA, we concluded that “the statute certainly does not indicate *15that the determination need not be on the record.” Id. at 878 (emphasis in original).
So viewed, Seacoast established a rebut-table presumption that, in the context of an adjudication, an organic statute that calls for a “public hearing” should be read to require an evidentiary hearing in compliance with the formal adjudication provisions of the APA. Two other circuit courts reached the same conclusion, albeit through different reasoning. See Marathon Oil Co. v. EPA, 564 F.2d 1253, 1264 (9th Cir.1977); U.S. Steel Corp. v. Train, 556 F.2d 822, 833-34 (7th Cir.1977). Acquiescing in this construction, the EPA promulgated regulations that memorialized the use of formal evidentiary hearings in the NPDES permit process. See NPDES; Revision of Regulations, 44 Fed.Reg. 32,-854, 32,938 (June 7,1979).
In 1984, a sea change occurred in administrative law and, specifically, in the interpretation of organic statutes such as the CWA. The Supreme Court held that “[w]hen a court reviews an agency’s construction of the statute which it administers,” the reviewing court first must ask “whether Congress has directly spoken to the precise question at issue.” Chevron, 467 U.S. at 842, 104 S.Ct. 2778. If Congress’s intent is clear, that intent governs — both the court and the agency must give it full effect. Id. at 842^13, 104 S.Ct. 2778. If, however, Congress has not directly addressed the question and the agency has stepped into the vacuum by promulgating an interpretive regulation, a reviewing court may “not simply impose its own construction on the statute,” but, rather, ought to ask “whether the agency’s answer is based on a permissible construction of the statute.” Id. at 843, 104 S.Ct. 2778.
This paradigm, sometimes called the Chevron two-step, increases the sphere of influence of agency action. If congressional intent is unclear and an agency’s interpretation of a statute that it administers is reasonable, an inquiring court must defer to that interpretation. See id. at 843-44, 104 S.Ct. 2778. That is so even if the agency’s interpretation is not the one that the court considers to be the best available interpretation. See id. at 843, 104 S.Ct. 2778.
Armed with the Chevron decision and a presidential directive to streamline regulatory programs, see Remarks on Regulatory Reform, 31 Weekly Comp. Pres. Doc. 278 (Feb. 21, 1995), the EPA advanced a proposal to eliminate formal evidentiary hearings from the NPDES permitting process. See Amendments to Streamline the NPDES Program Regulations: Round Two, 61 Fed.Reg. 65,268, 65,276 (Dec. 11, 1996). In due course, the EPA adopted that proposal as a final rule. See Amendments to Streamline the NPDES Program Regulations: Round Two, 65 Fed.Reg. 30,-886, 30,900 (May 15, 2000).
This revision depended heavily on a Chevron analysis. The agency began by “finding no evidence that Congress intended to require formal evidentiary hearings or that the text [of section 402(a) ] precludes informal adjudication of permit review petitions.” Id. at 30,896. Then, it weighed the risks and benefits of employing informal hearing procedures for NPDES permit review, “determining that these procedures would not violate the Due Process Clause.” Id. Finally, it “concluded that informal hearing procedures satisfy the hearing requirement of section 402(a).” Id.
It was under this new regulatory scheme that the EPA considered Dominion’s request to renew its NPDES permit and to authorize a thermal variance. Thus, it was under this scheme that the EPA denied Dominion’s request for an evidentiary hearing.
*16III. ANALYSIS
The court of appeals reviews a dismissal for want of subject matter jurisdiction de novo. Gabriel v. Preble, 396 F.3d 10, 12 (1st Cir.2005). In doing so, the court accepts the well-pleaded factual allegations of the plaintiffs complaint and indulges all reasonable inferences in the plaintiffs favor. Muniz-Rivera v. United States, 326 F.3d 8, 11 (1st Cir.2003). The appellate court is not wedded to the lower court’s reasoning, but may affirm the order of dismissal on any ground fairly presented by the record. See InterGen N.V. v. Grina, 344 F.3d 134, 141 (1st Cir.2003).
Here, Dominion’s claim on appeal rests on the premise that it has satisfied the jurisdictional requirements for a citizen’s suit under section 505(a)(2) of the CWA. Subject to a notice requirement— suit may not be commenced “prior to sixty days after the plaintiff has given notice of such [proposed] action,” 33 U.S.C. § 1365(b)(2) — the statute invoked by Dominion grants federal district courts jurisdiction over any citizen’s suit brought “against the Administrator [of the EPA] where there is alleged a failure of the Administrator to perform any act or duty under [the CWA] which is not discretionary,” id. § 1365(a)(2). There is no question but that Dominion satisfied the applicable notice requirement. The crux of the case, therefore, is whether Dominion has pleaded the flouting of a non-discretionary duty.
One thing is crystal clear: on their face, the current EPA regulations do not establish a non-discretionary duty to provide the evidentiary hearing that Dominion seeks. Prior to the date of Dominion’s request, the EPA vitiated the preexisting rule introducing evidentiary hearings into the NPDES permitting process. See 40 C.F.R. § 124.21(b) (explaining that the “EPA eliminated the previous requirement for NPDES permits to undergo an eviden-tiary hearing after permit issuance ... on June 14, 2000”). Dominion concedes this fact, but nonetheless relies on Seacoast as the source of a non-discretionary duty to convene an evidentiary hearing.
This reliance is misplaced. Even if Seacoast established a non-discretionary duty for section 505(a)(2) purposes when it was decided' — a matter upon which we need not opine — Dominion’s position ignores two important post-Seacoast changes in the legal landscape: the Supreme Court’s decision in Chevron and the agency’s subsequent promulgation of the current “no evidentiary hearing” rule.
We anticipated this situation in Citizens Awareness Network, Inc. v. United States, 391 F.3d 338 (1st Cir.2004), in which we noted that “while the type of hearing required by a statute turns on congressional intent, Chevron adds a new dimension, requiring that the agency’s reasonable interpretation be accorded deference if there is any ambiguity as to that intent.” Id. at 348 n. 4. We also recognized Chevron’s possible ramifications for Seacoast, but did not have the occasion to confront the issue squarely. See id. (reserving the question “[t]o what extent (if at all) [Chevron ] erodes Seacoast’s rationale”). Now, with guidance from the Supreme Court’s last term lighting our path, we address the matter and conclude that, as to the CWA’s public hearing language, the Chevron doctrine trumps the potential application of stare decisis principles.
For present purposes, the critical precedent is National Cable & Telecommunications Ass’n v. Brand X Internet Services, — U.S. -, 125 S.Ct. 2688, 162 L.Ed.2d 820 (2005). There, the Court examined the relationship between the stare decisis effect of an appellate court’s statutory interpretation and the Chevron deference *17due to an administrative agency’s subsequent, but contrary, interpretation. Echoing Chevron, the Court reiterated that “Hilling [statutory] gaps ... involves difficult policy choices that agencies are better equipped to make than courts.” Id. at 2699. Then, concluding that Chevron’s application should not turn on the order in which judicial and agency interpretations issue, the Justices held squarely that “[a] court’s prior judicial construction of a statute trumps an agency construction otherwise entitled to Chevron deference only if the prior court decision holds that its construction follows from the unambiguous terms of the statute and thus leaves no room for agency discretion.” Id. at 2700. This approach “hold[s] judicial interpretations contained in precedents to the same demanding Chevron ... standard that applies if the court is reviewing the agency’s construction on a blank slate.” Id.
Brand X demands that we reexamine pre-Chevron precedents through a Chevron lens. The Chevron two-step applies. At the first step, a court “must look primarily to the plain meaning of the statute, drawing its essence from the particular statutory language at issue, as well as the language and design of the statute as a whole.” Strickland v. Comm’r, Me. Dep’t of Human Servs., 48 F.3d 12, 16 (1st Cir. 1995) (citation and internal quotation marks omitted). At this step, the court may “examine the legislative history, albeit skeptically, in search of an unmistakable expression of congressional intent.” Id. at 17. If the precedent at issue finds clarity at step one — that is, if the holding of the case rests on a perception of clear and unambiguous congressional intent — that precedent will govern. See Brand X, 125 S.Ct. at 2700. If, however, the precedent operates at Chevron step two — that is, if the case holds, in effect, that congressional intent is less than pellucid and proceeds to choose a “best reading” rather than “the only permissible reading,” id. at 2701 (emphasis in original) — its stare decisis effect will, through Chevron deference, yield to a contrary but plausible agency interpretation, see id. at 2700.
Once this mode of analysis is understood and applied, Dominion’s argument collapses. Seacoast simply does not hold that Congress clearly intended the term “public hearing” in sections 402(a) and 316(a) of the CWA to mean “evidentiary hearing.” To the contrary, the Seacoast court based its interpretation of the CWA on a presumption derived from the legislative history of the APA — a presumption that would hold sway only in the absence of a showing of a contrary congressional intent. Seacoast, 572 F.2d at 877-78. In other words, the court resorted to the presumption only because it could find no sign of a plainly discernible congressional intent. Id. at 878. A statutory interpretation constructed on such a negative finding is antithetic to a conclusion that Congress’s intent was clear and unambiguous.
The short of it is that the Seacoast court, faced with an opaque statute, settled upon what it sensibly thought was the best construction of the CWA’s “public hearing” language. Such a holding is appropriate at step two of the Chevron pavane, not at step one. Consequently, under Brand X, Seacoast must yield to a reasonable agency interpretation of the CWA’s “public hearing” requirement. See Brand X, 125 S.Ct. at 2700.
The only piece left to this puzzle is to confirm that the EPA’s new regulations are, in fact, entitled to Chevron deference. This inquiry is a straightforward one. As our earlier discussion suggests (and as the Seacoast court correctly deduced), Congress has not spoken directly to the precise question at issue here. See, e.g., United States v. Fla. E. Coast Ry. Co., 410 U.S. *18224, 239, 93 S.Ct. 810, 35 L.Ed.2d 223 (1973) (“The term ‘hearing’ in its legal context undoubtedly has a host of meanings.”); Chem. Waste Mgmt., Inc. v. U.S. EPA 873 F.2d 1477, 1480-82 (D.C.Cir. 1989) (concluding that Congress’s intent behind the words “public hearing” in section 3008 of the RCRA was ambiguous for Chevron purposes). Accordingly, we must defer to the EPA’s interpretation of the CWA as long as that interpretation is reasonable. See Chevron, 467 U.S. at 843-44, 104 S.Ct. 2778.
In this instance, the administrative interpretation took into account the relevant universe of factors. See 65 Fed.Reg. at 30,898-30,900 (considering “(1) [t]he private interests at stake, (2) the risk of erroneous decision-making, and (3) the nature of the government interest,” and concluding that its new regulation was a reasonable interpretation of the CWA); see also Chem. Waste Mgmt., 873 F.2d at 1483 (concluding that the EPA’s choice of informal adjudicatory procedures under RCRA was reasonable). The agency’s conclusion that evidentiary hearings are unnecessary and that Congress, in using the phrase “opportunity for public hearing,” did not mean to mandate evidentiary hearings seems reasonable — and Dominion, to its credit, has conceded the point.
Dominion makes two final attempts to resuscitate Seacoast. First, it asseverates that a refusal to follow Seacoast offends the “law of the circuit” rule. That rule (a branch of the stare decisis doctrine) holds that, “[ojrdinarily, newly constituted panels in a multi-panel circuit should consider themselves bound by prior panel decisions” closely on point. Eulitt v. Me., Dep’t of Educ., 386 F.3d 344, 349 (1st Cir.2004). However, the “law of the circuit” rule, like most rules of general application, is subject to exceptions. One such exception “comes into play when a preexisting panel opinion is undermined by subsequently announced controlling authority, such as a decision of the Supreme Court.” Id. In this instance, the Supreme Court’s decisions in Chevron and Brand X counsel against a mechanical application of Seacoast.
Second, Dominion exhorts us to find that Seacoast’s holding is actually an interpretation of the APA, not the CWA (and, therefore, the EPA’s regulation is also an interpretation of the APA, not entitled to Chevron deference). See, e.g., Metro. Stevedore Co. v. Rambo, 521 U.S. 121, 137 n. 9, 117 S.Ct. 1953, 138 L.Ed.2d 327 (1997) (noting that Chevron deference is inappropriate vis-á-vis an agency interpretation of the APA’s burden-of-proof provision). Such a reading of Seacoast is plainly incorrect. While the Seacoast court relied on a presumption borrowed from the APA, the court’s holding is an interpretation of the CWA and, specifically, of the term “public hearing” contained in sections 402(a) and 316(a). The EPA’s regulations are also derived from the CWA. See 40 C.F.R. § 122.1(a) (explaining that 40 C.F.R. § 124 implements sections of the CWA). Because those changes implicate the statute that the EPA administers (i.e., the CWA), Chevron deference is appropriate. See Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778.
IV. CONCLUSION
We summarize succinctly. Although we in no way disparage the soundness of Seacoast’s reasoning, the Chevron and Brand X opinions and the interposition of a new and reasonable agency interpretation of the disputed statutory language have changed the picture. Because we, like the Seacoast court, cannot discern a clear and unambiguous congressional intent behind the words “public hearing” in the CWA and because the EPA’s inter*19pretation of that term constitutes a reasonable construction of the statute, deference is due. It follows inexorably that no non-discretionary duty to grant Dominion an evidentiary hearing on its permit application exists. Consequently, the jurisdictional requirements of section 505(a)(2) have not been satisfied.
We need go no further.3 For the reasons elucidated above, we conclude that the district court did not err in dismissing Dominion’s action.
Affirmed.
4.2 Adjudication - APA Formal Adjudication 4.2 Adjudication - APA Formal Adjudication
4.2.1 Institutional vs. Judicial Models of Administrative Adjudication and the Role of ALJs 4.2.1 Institutional vs. Judicial Models of Administrative Adjudication and the Role of ALJs
4.2.1.1 Morgan v. United States, 298 U.S. 468 (1936) 4.2.1.1 Morgan v. United States, 298 U.S. 468 (1936)
MORGAN et al. v. UNITED STATES et al.
No. 686.
Argued April 29, 30, 1936.
Decided May 25, 1936.
*469Messrs. Frederick H. Wood and John B.. Gage for appellants.
Assistant Attorney General Dickinson, with whom Solicitor General Reed and Messrs. Wendell Berge, Henry McClernan, and G. N. Dagger were on the brief, for the United States et al., appellees.
delivered the opinion of the Court.
These are fifty suits, consolidated for the purpose off trial, to restrain the enforcement of an order of the Secretary of Agriculture, fixing the maximum rates to be charged by market agencies for buying and selling livestock at the Kansas City Stock Yards. Packers and Stockyards Act, 1921, 42 Stat. 159, 7 U. S. C. 181-229.
*472The proceeding was instituted by an order of the Secretary of Agriculture in April, 1930, directing an inquiry into the reasonableness of existing rates. Testimony was taken and an order prescribing- rates followed in May, 1932. An application for rehearing, in view of changed economic conditions, was granted in July, 1932. After the taking of voluminous testimony, which was concluded in November, 1932, the order in question was made on June 14, 1933. Rehearing was refused on July 6, 1933.
Plaintiffs then brought these suits attacking the order, so far as it prescribed maximum charges for selling livestock, as illegal and arbitrary and as depriving plaintiffs of their property without due process of law in violatiqn of the Fifth Amendment of the Constitution. The District Court of three judges entered decrees sustaining the order and dismissing the bills of complaint. 8 F. Supp. 766. Motions for rehearing were denied and, by stipulation, the separate, decrees were set aside and a joint ¿nd final decree was entered to the same effect. Plaintiffs bring this direct appeal. 7 U. S. C. 217; 28 U. S. C. 47.
On- the merits, plaintiffs assert that the ultimate basis for the reduction, in commission rates is the Secretary’s opinion that there are too many market agencies, too many salesmen, and too much competition in the business; that the Secretary has departed entirely from the evidence as to the actual cost of employing salesmen in selling cattle at these yards and has made an allowance for salaries which is based on pure speculation and is wholly inadequate to meet the cost of the service; that he has substituted in place of his accountants’ figures as to actual expenditures, with respect to the item entitled “Business Getting and Maintaining Expense,” a hypothetical allowance greatly less than actual cost; and that the Secretary has thus made findings without evidence and an order, essentially arbitrary, which prescribes *473unreasonable rates. The Government answers that, while the Secretary is not authorized expressly to prescribe or limit the number of firms that may engage in the market agency business, he is under a duty to take cognizance of evidence tending to show that, under present competitive conditions, certain costs actually incurred are unreasonable; that in determining what are just and reasonable rates, he must give consideration to evidence of the excessiveness of costs and if such evidence shows that there are many market agencies not receiving a sufficient volume of business to entitle their costs to be regarded as reasonable, the Secretary must take cognizance of that fact; that it was in this view that the -Secretary made certain findings as to the inadequacy of the present business at the stockyards to support economically all the firms now striving to make a profit; that his findings, supported by evidence, were directly pertinent to the determination of reasonable costs, and so determining the Secretary was authorized to fix the rates prescribed in his order.
Before reaching these questions we meet at the threshold of the controversy plaintiffs’ additional contention that they have not been accorded the hearing which the statute requires. They rightly assert that the granting of that hearing is a prerequisite to the making of a valid order. The statute provides (42 Stat. 159, 166, § 310; 7 U. S. C. 211):
“Sec. 310. Whenever after full hearing upon a complaint made as provided in section 309, or after full hearing under an order for' investigation and hearing made by the Secretary on his own initiative, either in extension of any pending complaint or without - any complaint whatever, the Secretary is of the opinion that any rate, charge, regulation, or practice of a stockyard owner or market agency, for or in connection, with the furnishing of stockyard services, is or will be unjust, unreasonable, or discriminatory, the Secretary—
*474(a) May determine and prescribe what will be the just and reasonable rate or charge, or rates or charges, to be thereafter observed in such case, or the maximum or minimum, or maximum and minimum, to be charged, and what regulation or practice is or will be just; reasonable, and non-discriminatory to be thereafter followed; . .
The allegations as to the failure to give a proper hearing are set forth in Paragraph IV of the bill of complaint, quoted in full .in the margin.1 The allegations in substance are: That separate hearings were not accorded tó the respective respondents (plaintiffs here). That at the *475conclusion of the taking of the testimony before an examiner, a request was made that the examiner prepare a tentative report, which should be subject to oral argument and exceptions, so that a hearing might be had before the Secretary without undue inconvenience to him, but that the.request was denied and no tentative report was exhibited to plaintiffs and no oral argument upon the issues presented by the order of inquiry and the evidence was at any time had before the Secretary. That the Secretary) without warrant of law, delegated to Acting Secretaries the determination of issues *476with respect to the reasonableness of the rates involved. That when the oral arguments were presented after the original.hearing, and after the'rehearing, the Secretary was neither sick, absent, nor otherwise disabled, -but was at his office in the Department of Agriculture and the appointment of - any other person as Acting Secretary was illegal. That the Secretary at the time he signed the order in question had not personally heard or read any of the evidence presented at any hearing in connection with the proceeding and had not heard or considered oral arguments relating thereto or briefs submitted on behalf of the plaintiffs, but that the sole information of the Secretary with respect to the proceeding was derived from consultation with employees in the Department of Agriculture out of the presence of the plaintiffs or any of their representatives.
On motion of the Government, the District Court struck out all the allegations in Paragraph IV of the bill of complaint and the plaintiffs were thus denied opportunity to require an answer to these allegations or' to prove the facts alleged.
Certain facts appear of record. The testimony was taken before an examiner. At its conclusion, counsel for respondents stated “that he would continue to demand that the Secretary hear personally the argument off the evidence in behalf of the individual respondents, or at íeast have some definite course of procedure adopted whereby the examiner, or some one else, should formulate a report on the evidence '.so that the respondents could have the character of hearing and right to present their side of the issues in this case, which they believe the law entitles them to.” The Government does not suggest that this request was granted and plaintiffs say . that it was denied. Oral argument upon the evidence was had before the Acting Secretary of Agriculture. Subsequently, brief was filed on plaintiffs’ be*477half. Thereafter, reciting “careful consideration of .the entire record in this proceeding,” findings of fact and conclusions, and an order prescribing rates, were signed by the Secretary of Agriculture.
First.—The Packers and Stockyards Act makes the provisions of all laws relating to the “suspending or restraining the enforcement”, or the “setting aside” of the orders of the Interstate Commerce Commission applicable to the “jurisdiction, powers and duties of the Secretary” in enforcing the provisions of the Act. § 316; 7 U. S. C. 217. These suits for the review of the administrative action were thus directly authorized and appeal lies under the Urgent Deficiencies Act of October 22, 1913. 38 Stat. 219, 220; 28 U. S. C. 47. Tagg Bros. & Moorhead v. United States, 280 U. S. 420, 443; Acker v. United States, ante, p. 426. All questions touching the regularity and validity of the proceeding before the Secretary are open to review. United States v. Abilene & Southern Ry. Co., 265 U. S. 274, 286-290; Florida v. United States, 282 U. S. 194, 212-215. When the Secretary acts within the authority conferred by the statute, his findings of fact are conclusive. Tagg Bros. & Moorhead v. United States, supra; St. Joseph Stock Yards Co. v. United States, ante, p. 38; Acker v. United States, supra. But, in determining whether in conducting an administrative proceeding of this sort the Secretary has complied with the statutory prerequisites, the recitals of his procedure cannot be regarded as conclusive. Otherwise the statutory conditions could be set at naught by mere assertion. If upon the facts alleged, the “full hearing” required by the statute was not given, plaintiffs were entitled to prove the facts and have the Secretary’s order set aside. Nor is it necessary to go beyond-the terms of the-statute in order to consider the constitutional requirement of due process as to notice and hearing. For the statute itself demands a full hearing and the order is void if such a .hearing was *478denied. Interstate Commerce Comm’n v. Louisville & Nashville R. Co., 227 U. S. 88, 91; United States v. Abilene & Southern Ry. Co., supra; Florida v. United States, supra; United States v. B. & O. R. Co., 293 U. S. 454, 464.
Second.—The outstanding allegation, which thé District Court struck out, is that the Secretary made the rate order without having heard or read any of the evidence, and without having heard the oral arguments or having read or considered the briefs which the plaintiffs submitted. That the only information which the Secretary had. as to the proceeding was what he derived from consultation with employees of the Department.
The other allegations of the stricken paragraph do not go to the root of the matter. Thus, it cannot be said that the failure to hear the respondents separately was' an abuse of discretion. Again, while it would have been good practice to have the examiner prepare a report and submit it to the Secretary and the parties, and to permit exceptions and arguments addressed to the points thus presented,—a practice found to be of great value in proceedings before the Interstate Commerce Commission— we cannot say that , that particular type of procedure was essential to the validity of the hearing. The. statute does not require it and what the statute does require relates to substance and not form.
Nór should the fundamental question be confused with one of mere delegation of authority. The Government urges that the Acting Secretary who heard the oral argument was in'fact the Assistant. Secretary of Agriculture whose duties are prescribed by the Act of February 9, 1889 (5 U. S. C. 517), providing for his appointment and authorizing him to perform such duties in the conduct of the business of the Department of Agriculture as may be assigned to him by the Secretary. If 'the Secretary had assigned to the Assistant Secretary the duty of holding the hearing, and the Assistant Secretary accordingly *479had received the evidence taken by the examiner, had heard argument thereon and had then found the essential facts and made the order upon his findings, we should have had simply the question of delegation. But while the Assistant Secretary heard argument he did not make the decision. The Secretary who, according to the allegation. had neither heard nor read evidence or argument, undertook to make the findings and fix the rates. The Assistant Secretary, who had heard, assumed no responsibility for the findings or order, and the Secretary, who had not heard, did assume that responsibility.
We may likewise put aside the contention as to the circumstances in which an Acting Secretary may take the place of his chief. In the course of administrative routine, the disposition of official matters by an Acting. Secretary is frequently necessary and the integrity of administration demands that credit be given to his action in that capacity. We have no such question here. The Acting Secretary did not assume to make the order.
Third.—What is the essential quality of the proceeding under review, and what is the nature of the hearing which the statute prescribes?
The proceeding is not one of ordinary administration, conformable to the standards governing duties of a purely executive character.' It is a proceeding looking to legislative action in the fixing of rates of market agencies. And, while the order is legislative and gives to the proceeding its distinctive character (Louisville & Nashville R. Co. v. Garrett, 231 U. S. 298, 307), it is a proceeding which by virtue of the authority conferred has special attributes. The Secretary, as the agent of Congress in making the rates, must make them in accordance with the standards and under the limitations which Congress has prescribed. Congress has required the Secretary to determine, as a condition of his action, that the existing rates are or will be “unjust, unreasonable, or discrimina *480tory.” If and when he so finds, he may “determine and prescribe” what shall be the just and reasonable rate, or the maximum or minimum rate, thereafter to be charged. That duty is widely different from ordinary .executive action. It is a duty which carries with it fundamental procedural requirements. There must be a full hearing. There must be evidence adequate to support pertinent and necessary findings of fact. Nothing can be treated as evidence which is not introduced as such. United States v. Abilene & Southern Ry. Co., supra. Facts and circumstances which ought to. be considered must not be excluded. Facts and circumstances must not be considered which should not legally influence the conclusion. Findings based on the evidence must embrace the basic, facts which are needed to sustain the order. Interstate Commerce Comm’n v. Louisville & Nashville R. Co., supra; Chicago Junction Case, 264 U. S. 258, 263; Unite-States v. Abilene & Southern Ry. Co., supra; Florida v. United States, supra; United States v. B. & O. R. Co., supra.
A proceeding of this sort requiring the taking and weighing of evidence, determinations of fact based upon the consideration of the evidence, and the making of an order supported by such findings, has a quality resembling that of a judicial proceeding. Hence it is frequently described as a proceeding of a quasi-judicial character. The requirement of a “full hearing” has obvious reference to the tradition of judicial proceedings in which evidence is received and weighed by the trier of the facts. The “hearing” is designed to afford the safeguard that the one who decides shall be bound in good conscience to consider the evidence, to be guided by that alone, and to reach his conclusion uninfluenced by extraneous considerations which in other fields might have play in determining purely executive action. The “hearing” is the hearing of evidence and argument. If the one who de*481termines the facts'which underlie the order has not considered'evidence or argument, it is manifest that the hearing has'not been given.
There is thus no basis for the contention that the authority conferred by § 310 of the Packers and Stockyards Act is given to the Department of Agriculture, as a department in the administrative sense, so that One official may examine evidence, and another official who has not considered the evidence may make the findings and order. In such a view, it would be possible, for example, for one official to hear the evidence and argument and arrive at certain conclusions of fact, and another official who had not heard or ^considered either evidence or argument to overrule those conclusions and for reasons of policy to announce entirely different ones; It is no answer to say that the question for the court is whether the evidence supports the findings and the findings support the order. For the weight ascribed by the law to the findings—their coneíusiveness when made within the sphere of the authority conferred—rests upon the assumption that the officer who makes .the findings has addressed himself to the evidence and upon that evidence has conscientiously reached the. Conclusions which he deems it to justify. That duty cannot be performed by one who has not considered evidence or argument. It is not an impersonal obligation. It is a duty akin to that of a judge. The one who decides must hear.
This necessary rule does not preclude practicable administrative procedure in' obtaining the aid of assistants in the department. Assistants may prosecute inquiries. Evidence may be taken by an examiner. Evidence thus taken may be sifted and analyzed by competent subordinates. Argument may be oral or written. The requirements are not technical. But there must be a hearing in a substantial sense. And to give the substance of a''hearing, which is for the purpose of making deter*482minations upon evidence, the officer who makes the determinations must consider and appraise the evidence which justifies them. That duty undoubtedly may be an onerous one, but the performance of it in a substantial manner is inseparable from the exercise of the important authority conferred.
The Government presses upon our attention the case of Local Government Board v. Arlidge [1915] A. C. 120, reversing King v. Local Government Board [1914] 1 K. B. 160. That ease has provoked much discussion, but we do not think it necessary to review it, as it relates to a different sort of administrative action and is not deemed to be pertinent to a proceeding under the statute before us and to the hearing which is required by the- principles established by our decisions.
Our conclusion is that the District Court erred in striking out the allegations of Paragraph IV of the bill of complaint with respect to the Secretary’s action. The defendants should be required to answer these allegations and the question whether plaintiffs had a proper hearing should be determined.
The decree is reversed and the cause is remanded for further proceedings in conformity, with this opinion.
Reversed.
4.2.2 Notice, Hearing, Right to Counsel 4.2.2 Notice, Hearing, Right to Counsel
4.2.2.1 APA §§ 554, 556, 557 4.2.2.1 APA §§ 554, 556, 557
§ 554. Adjudications
(a) This section applies, according to the provisions thereof, in every case of adjudication required by statute to be determined on the record after opportunity for an agency hearing, except to the extent that there is involved - (1) a matter subject to a subsequent trial of the law and the facts de novo in a court; (2) the selection or tenure of an employee, except a administrative law judge appointed under section 3105 of this title; (3) proceedings in which decisions rest solely on inspections, tests, or elections; (4) the conduct of military or foreign affairs functions; (5) cases in which an agency is acting as an agent for a court; or (6) the certification of worker representatives.
(b) Persons entitled to notice of an agency hearing shall be timely informed of - (1) the time, place, and nature of the hearing; (2) the legal authority and jurisdiction under which the hearing is to be held; and (3) the matters of fact and law asserted. When private persons are the moving parties, other parties to the proceeding shall give prompt notice of issues controverted in fact or law; and in other instances agencies may by rule require responsive pleading. In fixing the time and place for hearings, due regard shall be had for the convenience and necessity of the parties or their representatives.
(c) The agency shall give all interested parties opportunity for - (1) the submission and consideration of facts, arguments, offers of settlement, or proposals of adjustment when time, the nature of the proceeding, and the public interest permit; and (2) to the extent that the parties are unable so to determine a controversy by consent, hearing and decision on notice and in accordance with sections 556 and 557 of this title.
(d) The employee who presides at the reception of evidence pursuant to section 556 of this title shall make the recommended decision or initial decision required by section 557 of this title, unless he becomes unavailable to the agency. Except to the extent required for the disposition of ex parte matters as authorized by law, such an employee may not - (1) consult a person or party on a fact in issue, unless on notice and opportunity for all parties to participate; or (2) be responsible to or subject to the supervision or direction of an employee or agent engaged in the performance of investigative or prosecuting functions for an agency.
An employee or agent engaged in the performance of investigative or prosecuting functions for an agency in a case may not, in that or a factually related case, participate or advise in the decision, recommended decision, or agency review pursuant to section 557 of this title, except as witness or counsel in public proceedings. This subsection does not apply - (A) in determining applications for initial licenses; (B) to proceedings involving the validity or application of rates, facilities, or practices of public utilities or carriers; or (C) to the agency or a member or members of the body comprising the agency. (e) The agency, with like effect as in the case of other orders, and in its sound discretion, may issue a declaratory order to terminate a controversy or remove uncertainty
§ 556. Hearings; presiding employees; powers and duties; burden of proof; evidence; record as basis of decision
(a) This section applies, according to the provisions thereof, to hearings required by section 553 or 554of this title to be conducted in accordance with this section.
(b) There shall preside at the taking of evidence - (1) the agency; (2) one or more members of the body which comprises the agency; or (3) one or more administrative law judges appointed under section 3105 of this title. This subchapter does not supersede the conduct of specified classes of proceedings, in whole or in part, by or before boards or other employees specially provided for by or designated under statute. The functions of presiding employees and of employees participating in decisions in accordance with section 557 of this title shall be conducted in an impartial manner. A presiding or participating employee may at any time disqualify himself. On the filing in good faith of a timely and sufficient affidavit of personal bias or other disqualification of a presiding or participating employee, the agency shall determine the matter as a part of the record and decision in the case.
(c) Subject to published rules of the agency and within its powers, employees presiding at hearings may - (1) administer oaths and affirmations; (2) issue subpoenas authorized by law; (3) rule on offers of proof and receive relevant evidence; (4) take depositions or have depositions taken when the ends of justice would be served; (5) regulate the course of the hearing; (6) hold conferences for the settlement or simplification of the issues by consent of the parties or by the use of alternative means of dispute resolution as provided in subchapter IV of this chapter; (7) inform the parties as to the availability of one or more alternative means of dispute resolution, and encourage use of such methods; (8) require the attendance at any conference held pursuant to paragraph (6) of at least one representative of each party who has authority to negotiate concerning resolution of issues in controversy; (9) dispose of procedural requests or similar matters; (10) make or recommend decisions in accordance with section 557 of this title; and (11) take other action authorized by agency rule consistent with this subchapter.
(e) The transcript of testimony and exhibits, together with all papers and requests filed in the proceeding, constitutes the exclusive record for decision in accordance with section 557 of this title and, on payment of lawfully prescribed costs, shall be made available to the parties. When an agency decision rests on official notice of a material fact not appearing in the evidence in the record, a party is entitled, on timely request, to an opportunity to show the contrary.
§ 557. Initial decisions; conclusiveness; review by agency; submissions by parties; contents of decisions; record
(a) This section applies, according to the provisions thereof, when a hearing is required to be conducted in accordance with section 556 of this title.
(b) When the agency did not preside at the reception of the evidence, the presiding employee or, in cases not subject to section 554(d) of this title, an employee qualified to preside at hearings pursuant to section 556 of this title, shall initially decide the case unless the agency requires, either in specific cases or by general rule, the entire record to be certified to it for decision. When the presiding employee makes an initial decision, that decision then becomes the decision of the agency without further proceedings unless there is an appeal to, or review on motion of, the agency within time provided by rule. On appeal from or review of the initial decision, the agency has all the powers which it would have in making the initial decision except as it may limit the issues on notice or by rule. When the agency makes the decision without having presided at the reception of the evidence, the presiding employee or an employee qualified to preside at hearings pursuant to section 556 of this title shall first recommend a decision, except that in rule making or determining applications for initial licenses - (1) instead thereof the agency may issue a tentative decision or one of its responsible employees may recommend a decision; or (2) this procedure may be omitted in a case in which the agency finds on the record that due and timely execution of its functions imperatively and unavoidably so requires.
(c) Before a recommended, initial, or tentative decision, or a decision on agency review of the decision of subordinate employees, the parties are entitled to a reasonable opportunity to submit for the consideration of the employees participating in the decisions - (1) proposed findings and conclusions; or (2) exceptions to the decisions or recommended decisions of subordinate employees or to tentative agency decisions; and (3) supporting reasons for the exceptions or proposed findings or conclusions. The record shall show the ruling on each finding, conclusion, or exception presented. All decisions, including initial, recommended, and tentative decisions, are a part of the record and shall include a statement of - (A) findings and conclusions, and the reasons or basis therefore, on all the material issues of fact, law, or discretion presented on the record; and (B) the appropriate rule, order, sanction, relief, or denial thereof.
(d)(1) In any agency proceeding which is subject to subsection (a) of this section, except to the extent required for the disposition of ex parte matters as authorized by law - (A) no interested person outside the agency shall make or knowingly cause to be made to any member of the body comprising the agency, administrative law judge, or other employee who is or may reasonably be expected to be involved in the decisional process of the proceeding, an ex parte communication relevant to the merits of the proceeding; (B) no member of the body comprising the agency, administrative law judge, or other employee who is or may reasonably be expected to be involved in the decisional process of the proceeding, shall make or knowingly cause to be made to any interested person outside the agency an ex parte communication relevant to the merits of the proceeding; (C) a member of the body comprising the agency, administrative law judge, or other employee who is or may reasonably be expected to be involved in the decisional process of such proceeding who receives, or who makes or knowingly causes to be made, a communication prohibited by this subsection shall place on the public record of the proceeding: (i) all such written communications; (ii) memoranda stating the substance of all such oral communications; and (iii) all written responses, and memoranda stating the substance of all oral responses, to the materials described in clauses (i) and (ii) of this subparagraph; (D) upon receipt of a communication knowingly made or knowingly caused to be made by a party in violation of this subsection, the agency, administrative law judge, or other employee presiding at the hearing may, to the extent consistent with the interests of justice and the policy of the underlying statutes, require the party to show cause why his claim or interest in the proceeding should not be dismissed, denied, disregarded, or otherwise adversely affected on account of such violation; and (E) the prohibitions of this subsection shall apply beginning at such time as the agency may designate, but in no case shall they begin to apply later than the time at which a proceeding is noticed for hearing unless the person responsible for the communication has knowledge that it will be noticed, in which case the prohibitions shall apply beginning at the time of his acquisition of such knowledge. (2) This subsection does not constitute authority to withhold information from Congress.
TBD
4.2.3 Separation of Functions, Ex Parte Communications 4.2.3 Separation of Functions, Ex Parte Communications
4.2.3.1 PATCO v. FLRA, 685 F.2d 547, 570 (D.C. Cir. 1982) 4.2.3.1 PATCO v. FLRA, 685 F.2d 547, 570 (D.C. Cir. 1982)
Ex parte communications in agency adjudication
[Judge Edwards] [On August 3, 1981, over 11,000 air traffic controllers, employees of the Federal Aviation Administration, went on strike over significant workplace stress and salary/benefits issues. This action caused the cancellation of of thousands of flights and prompted President Ronald Reagan to issue a statement directing the controllers (represented by the Professional Air Traffic Controllers Organization or PATCO) to return to work or face dismissal. The White House took the position that strikes by public employees were inherently unlawful and refused to bargain. PATCO officers instructed the membership to hold fast and not return to work.
After 48 hours, all of the controllers were fired. PATCO leaders were jailed for contempt for a time. Within a week, more than half of the scheduled flights resumed as the FAA and members of the military took over air traffic control tasks. An executive order was issued, banning rehiring of the fired controllers. Several weeks after the strike, a union decertification fight ensued when the Federal Labor Relations Authority’s (FLRA) regional director sought to revoke PATCO’s certification under the Civil Service Reform Act. The dispute came before the FLRA in the fall.
The PATCO decertification fight drew in the White House, Congress, the FAA and leaders of public labor unions (e.g., teachers and postal worker unions). The feeling was that the future of public labor movement was at stake. At one point, there was a discussion between a public labor advocate and one of the administrative law judges charged with rendering an initial decision in the decertification case. That discussion, among others, was at issue in the case.
Within a year, the PATCO decertification dispute reached the D.C. Circuit, but not on the question of public employees’ right to strike. The case involved a challenge to the numerous ex parte discussions that had taken place, including a dinner between two long time friends: an administrative law judge on the FLRA panel in the case and an AFL-CIO council member. At the direction of the FLRA, an administrative fact-finder was appointed to determine whether the discussions had violated the rules limiting ex part communications in the contested administrative adjudication. The report of the administrator was submitted to the court and became the basis for the court’s opinion.]
C. Applicable Legal Standards
1. The Statutory Prohibition of Ex Parte Contacts and the FLRA Rules
…Since FLRA unfair labor practice hearings are formal adjudications within the meaning of the APA, see 5 U.S.C. § 551(7) (1976), section 557(d) governs ex parte communications. Id. § 557(d).
Section 557(d) was enacted by Congress as part of the Government in the Sunshine Act. The section prohibits ex parte communications “relevant to the merits of the proceeding” between an “interested person” and an agency decisionmaker, 5 U.S.C. § 557(d)(1)(A), (B), requires the agency decisionmaker to place any prohibited communications on the public record, id. § 557(d)(1)(C), grants the agency the authority to require an infringing party “to show cause why his claim or interest should not be dismissed, denied, disregarded, or otherwise adversely affected on account of [a] violation,” § 557(d)(1)(D), and defines the time period during which the statutory prohibitions are applicable, § 557(d)(1)(E). The FLRA has adopted rules that, with minor variations, parallel the requirements of section 557(d).
Three features of the prohibition on ex parte communications in agency adjudications are particularly relevant to the contacts here at issue. First, by its terms, section 557(d) applies only to ex parte communications to or from an “interested person.” Congress did not intend, however, that the prohibition on ex parte communications would therefore have only a limited application. A House Report explained:
The term “interested person” is intended to be a wide, inclusive term covering any individual or other person with an interest in the agency proceeding that is greater than the general interest the public as a whole may have. The interest need not be monetary, nor need a person to [sic] be a party to, or intervenor in, the agency proceeding to come under this section. The term includes, but is not limited to, parties, competitors, public officials, and nonprofit or public interest organizations and associations with a special interest in the matter regulated. The term does not include a member of the public at large who makes a casual or general expression of opinion about a pending proceeding.
[…]
Second, the Government in the Sunshine Act defines an “ex parte communication” as “an oral or written communication not on the public record to which reasonable prior notice to all parties is not given, but ... not including] requests for status reports on any matter or proceeding . . .. ”
… Third, and in direct contrast to status reports, section 557(d) explicitly prohibits communications “relevant to the merits of the proceeding.” …
In sum, Congress sought to establish common-sense guidelines to govern ex parte contacts in administrative hearings, rather than rigidly defined and woodenly applied rules. The disclosure of ex parte communications serves two distinct interests. Disclosure is important in its own right to prevent the appearance of impropriety from secret communications in a proceeding that is required to be decided on the record. Disclosure is also important as an instrument of fair decisionmaking; only if a party knows the arguments presented to a decisionmaker can the party respond effectively and ensure that its position is fairly considered. . . . .
2. Remedies for Ex Parte Communications
Section 557(d) contains two possible administrative remedies for improper ex parte communications. The first is disclosure of the communication and its content. The second requires the violating party to “show cause why his claim or interest in the proceeding should not be dismissed, denied, disregarded, or otherwise adversely affected on account of [the] violation.” Congress did not intend, however, that an agency would … dismiss a party’s interest more than rarely. See S.Rep.No. 354, supra, at 37-39, Sunshine Act Sourcebook at 232-34. Indeed, the statutory language clearly states that a party’s interest in the proceeding may be adversely affected only “to the extent consistent with the interests of justice and the policy of the underlying statutes.” n. 30
Under the case law in this Circuit, improper ex parte communications, even when undisclosed during agency proceedings, do not necessarily void an agency decision. Rather, agency proceedings that have been blemished by ex parte communications have been held to be voidable. In enforcing this standard, a court must consider whether, as a result of improper ex parte communications, the agency’s decisionmaking process was irrevocably tainted so as to make the ultimate judgment of the agency unfair, either to an innocent party or to the public interest that the agency was obliged to protect. In making this determination, a number of considerations may be relevant: the gravity of the ex parte communications; whether the contacts may have influenced the agency’s ultimate decision; whether the party making the improper contacts benefited from the agency’s ultimate decision; whether the contents of the communications were unknown to opposing parties, who therefore had no opportunity to respond; and whether vacation of the agency’s decision and remand for new proceedings would serve a useful purpose. Since the principal concerns of the court are the integrity of the process and the fairness of the result, mechanical rules have little place in a judicial decision whether to vacate a voidable agency proceeding. Instead, any such decision must of necessity be an exercise of equitable discretion.
D. Analysis of the Alleged Ex Parte Communications with FLRA Members
[T]he vast majority of the reported contacts between FLRA Members and persons outside the Authority are not troubling. They relate to inquiries about the expected date of issuance of the FLRA’s opinion. . . and other communications unrelated to the merits of the case.
After extensive review of the three troubling incidents … we believe that they too provide insufficient reason to vacate the FLRA Decision . . . We conclude that at least one and possibly two of the contacts documented by the A. L. J. probably infringed the statutory prohibitions on ex parte communications. . . . Nevertheless, we agree with A. L. J. Vittone that the ex parte contacts here at issue had no effect on the ultimate decision of the FLRA. Moreover, we conclude that . . . .to vacate and remand would be a gesture of futility.
[Discussion of ALJ Vittone’s section of the report]
. . . I have found that the telephone calls on August 13, 1981 from Secretary Lewis to Members Frazier and Applewhaite may have had some undetermined effect on their decision to limit the time for filing exceptions to the administrative law judge’s decision. Both members testified that the calls had no effect on their August 18, 1981 decision. However, the Secretary told Member Frazier that he wanted expeditious processing of the case within the FLRA’s rules and he stated his concern to Member Applewhaite that the case not be delayed. Both members described the Secretary’s call as unusual. Later that same day, August 13, the FAA filed a motion to limit the time for filing exceptions from 25 to 7 days. It is quite likely that the FAA motion was filed in accordance with the advice concerning the FLRA regulations given to Mr. Lewis by Member Applewhaite. . .. However, it should be noted that I do not believe that the Secretary’s calls had any effect on the merits of final decision in the PATCO case.
I find that the meeting between Member Applewhaite, General Counsel Gordon, and Ellen Stern on August 10, 1981 may have been a prohibited ex parte communication. It is clear that the Stern memorandum concerned the PATCO case. . .. As noted, Mr. Gordon is the FLRA General Counsel. The General Counsel is defined as a “person outside this agency” when his representative is prosecuting an unfair labor practice proceeding. . .. Even Member Applewhaite testified at that time that he expected exceptions to be filed to the judge’s decision. (Tr. 944) In view of all of the above, and even though Applewhaite and Gordon described the discussion as abstract, the discussion may have been a prohibited ex parte communication. However, the discussion was very short, general in nature, and very early in the processing of the PATCO case. Accordingly, I do not believe that it had any effect upon Member Applewhaite’s deliberations and final decision in the PATCO case.
. . . .
Mr. Shanker is closely associated with the AFL-CIO. He is president of one of the AFL-CIO’s affiliated unions and sits on the Executive Council of the AFL-CIO. The AFL-CIO was an amicus curiae party to the proceeding and participated in the oral argument before the FLRA. The AFL-CIO is clearly an interested party in the PATCO proceeding. Therefore Mr. Shank-er may also be an interested party outside the FLRA.
It is for those reasons that the Shanker-Applewhaite dinner may have been an unauthorized communication in violation of the FLRA ex parte communications regulations…. It is clear that Mr. Shanker’s message to Mr. Applewhaite was that revocation of certification was a drastic remedy out of proportion to the violation. However, as stated in my findings, I do not believe that the dinner had any effect on the final decision of the FLRA in the PATCO case. …
The most troubling part of this proceeding has been the conflict between the testimony of Members Frazier and Applewhaite with respect to the Shanker-Applewhaite dinner. On the whole, I find Mr. Shanker’s testimony regarding that dinner to be credible. There is no direct evidence that Mr. Shanker … made any promises or threats to Applewhaite. . . .I believe that Member Frazier was troubled by Member Applewhaite’s statements at the September 22 meeting and left that meeting with the impression that the events at the dinner has caused Applewhaite to change his position from revocation to suspension of PATCO’s certification. . . . On the other hand, Member Applewhaite’s testimony, in substantial parts, was confusing, contradictory, and in some respects, incredible
. . . . . Member Applewhaite disputed many of the statements attributed to him in the FBI report. (ALJ, Ex. 1) However, . . .. both agents who interviewed Member Applewhaite testified credibly that it was an accurate reflection of the interview. Member Applewhaite testified that he never thought about reappointment until last December or January, 1982. Yet he … raised the subject with Mr. Shanker on September 21. Further, he discussed the possibility of becoming Chairman with Senator Laxalt’s Administrative Aide on August 6, 1981 . . . Further, Member Applewhaite could not recall any of the details of his 12 minute phone call with Mr. Frazier on October 7. Finally, Member Applewhaite testified that the FBI agents appeared to understand his situation and … praised him and told him he had courage. Agent Knisley denied making any such statements, and it is extremely doubtful that FBI agents praise the people they are investigating.
SUMMARY
Accordingly, it is found that the possible ex parte contacts and approaches described at the hearing did not have any effect on the final decision of the members of the FLRA in the PATCO cáse.
[MacKINNON,'Circuit Judge]
(concurring).
. . . .
The number of ex parte contacts that were disclosed at the remand hearing is appalling, as are the statements by counsel that such contacts were nothing more than what is normal and usual in administrative agencies . . . In deciding such cases the government officials act in a quasi-judicial capacity and ex parte contacts that attempt to “back door” the adjudicative process, with respect to the merits or discipline, are highly improper and illegal. In this connection 18 U.S.C. § 1505 should be noted. This section of the Criminal Code provides that it is an offense if one “corruptly ... endeavors to influence, obstruct or impede the due and proper administration of the law under which [a] proceeding is being had before [an] ... agency of the United States ...” (emphasis added). . . . Shanker argues that his dinner with … Applewhaite “had no effect on the decision” and hence is of no moment. That is like the man charged with attempted murder asserting the indictment should be dismissed because his shot missed the intended victim. . . .
[Some years after the PATCO strike, the order banning the rehiring of the fired controllers was lifted. Few controllers ever returned to their previous positions.]
4.2.4 APA Formal Adjudication: Investigations, Discovery, Evidence, Administrative Subpoenas 4.2.4 APA Formal Adjudication: Investigations, Discovery, Evidence, Administrative Subpoenas
4.2.4.1 FTC v. Boehringer Ingelheim Pharmaceuticals, Inc., 898 F.Supp.2d 171 (2012) 4.2.4.1 FTC v. Boehringer Ingelheim Pharmaceuticals, Inc., 898 F.Supp.2d 171 (2012)
FEDERAL TRADE COMMISSION, Petitioner, v. BOEHRINGER INGELHEIM, PHARMACEUTICALS, INC., Defendant.
Misc. Action No. 09-564 (JMF).
United States District Court, District of Columbia.
Oct. 16, 2012.
*172Imad Dean Abyad, Robert Babak Mahini, Federal Trade Commission, Washington, DC, for Petitioner.
Lawrence D. Rosenberg, Peter Biersteker, Washington, DC, Michael Sennett, Pamela L. Taylor, William F. Dolan, Jones Day, Chicago, IL, for Defendant.
MEMORANDUM OPINION
This matter was assigned to me for all purposes. Before me is the remaining issue in the Petition of the Federal Trade Commission for an Order Enforcing a Subpoena Duces Tecum [# 1], I resolved the privilege issues presented in that petition and subsequent status reports in my recent Memorandum Opinion [# 69]. Federal Trade Commission v. Boehringer Ingelheim Pharmaceuticals, Inc., 286 F.R.D. 101 (D.D.C.2012). I will now turn to the FTC’s argument that Boehringer Ingelheim Pharmaceuticals, Inc. (“BIPI”) did not conduct an adequate search of its electronically stored information because it refused to search back-up tapes in accordance with the subpoena’s demands.
I. Background
BIPI first filed the executed settlement agreements from the Barr-BIPI litigation 1 with the Department of Justice and *173the Federal Trade Commission in August of 2008. Response of Boehringer Ingelheim Pharmaceuticals, Inc. to the Order to Show Cause [# 34] at 5. Five months later, on February 9, 2009, the FTC served BIPI with the subpoena at issue in this case. Id. BIPI responded to the subpoena by initiating a custodian-directed search, “whereby the inside legal department and outside counsel [were directed to] review the subpoena, identify potentially relevant custodians, ask them about their files, gather potentially responsive files both in electronic and hard copy as appropriate, and review the fruits of the search.” Id. BIPI also “instituted a document preservation notice for persons who were deemed likely to have any responsive documents,” which included placing responsive e-mails in a “hold file” to be “retained indefinitely until the legal hold is lifted.” Id. at 5-6. BIPI identified “over 66 employees” who received the document preservation notice. Id. at 7.
The e-mail system used by BIPI “automatically deleted emails from its employees’ inboxes 90 days after the email was sent or received,” and the FTC argues that this automatic deletion feature was not turned off once the subpoena was served. Reply of the Federal Trade Commission In Further Support of Status Memorandum Advising the Court of New Developments [# 33] at 19. The FTC also complains that some relevant e-mails were inappropriately deleted manually or otherwise lost. Id. at 20. As a whole, argues the FTC, BIPI’s efforts to retain documents through manual archiving of relevant e-mails was not sufficient to prevent all relevant e-mails from being deleted under the 90-day automatic deletion program. Id. Consequently, the FTC requests a search of the back-up tapes “due to the document preservation obligations in this investigation and other litigations.” Id.
Originally, the FTC requested that BIPI search “all of Boehringer’s Electronically Stored Information,” including backup tapes and servers dating back to 2003. See [# 1] at 8-12. BIPI, however, maintains that the “disaster recovery backup tapes ... do not separate [ ] working documents such as spreadsheets, documents, PowerPoints, and other types of materials ... [n]or are' they easily segregable by author or custodian.” [# 34] at 20-21. As such, BIPI estimated that a search of all the backup tapes from January 2003 to October 2010 would cost over $25 million dollars. Id. at 21. This estimate did not include the cost of searching hard drives, which also fell under the FTC’s request that BIPI search “all” databases and archives. Id. at 19-20. During oral argument, however, the FTC conceded that it is “willing to forgo the F & G drive at this point, in favor of the backup tapes.” See Transcript of Status Hearing [# 59] at 70. The FTC also noted that the relevant period for which backup tapes must be searched is February through August, 2008, [#59] at 70, and that a search of four tapes would be sufficient, rather than the 24 originally subpoenaed, id. at 52.
Despite the concessions at oral argument, the FTC retains its position that BIPI did not conduct an adequate search of its records, in that it declined to search any server back-up tapes for responsive documents. See Status Report of the Federal Trade Commission [# 41] at 12-13. BIPI, on the other hand, contends that it has done a full and thorough search and that the FTC’s request for additional electronic searches remains “unnecessary and unduly burdensome.” Response of Boehringer Ingelheim Pharmaceuticals, Inc. to *174the Federal Trade Commission’s Status Report [# 44] at 13.
Fueling this disagreement is a debate among the parties regarding the standard of review for the FTC’s request. The FTC asserts that its request for a search of the backup tapes should be analyzed under the standards of FTC v. Texaco, Inc., 555 F.2d 862 (D.C.Cir.1977). [# 41] at 13. BIPI, on the other hand, points to the “good cause” standard set forth in Federal Rule of Civil Procedure 26(b)(2)(B). [# 44] at 13. This opinion, therefore, must resolve two distinct issues: 1) what law governs requests submitted via administrative subpoena to search information stored on backup tapes; and 2) whether BIPI should be required to conduct a search of the backup tapes, and, if so, under what terms.
II. Legal Standard
Under Federal Rule of Civil Procedure 26(b)(2)(B), “[a] party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost.” Fed. R.Civ.P. 26(b)(2)(B). If the producing party can make such a showing, the court may “nonetheless order discovery from such sources if the requesting party shows good cause.” Fed.R.Civ.P. 26(b)(2)(B). It follows, therefore, that the court will not consider a requesting party’s “good cause” unless the producing party has first met her burden of showing “undue burden or cost.”
In the administrative subpoena context, however, a much stronger showing of “undue burden” is required. See Texaco, 555 F.2d at 882. When evaluating an administrative subpoena enforcement petition, the court should enforce the subpoena “if the inquiry is within the authority of the agency, the demand is not too indefinite and the information sought is reasonably relevant.” Id. at 872 (citing United States v. Morton Salt Co., 338 U.S. 632, 652, 70 S.Ct. 357, 94 L.Ed. 401 (1950)). See also Linde Thomson Langworthy Kohn & Van Dyke, P.C. v. Resolution Trust Corp., 5 F.3d 1508, 1517 (D.C.Cir.1993) (“The burden of proving undue hardship ‘is not easily met where ... the agency inquiry is pursuant to a lawful purpose and the requested documents are relevant to that purpose.’ ”).2
To that end, to reject a petition to enforce an administrative subpoena, this Circuit requires a showing that compliance with the subpoena “threatens to unduly disrupt or seriously hinder normal operations of a business.” Texaco, 555 F.2d at 882. “The burden of showing that the request is unreasonable is on the subpoenaed party.” Id. This does not mean the Court’s hands are tied to the exact terms of the subpoena request; indeed, “in formulating protective conditions for administrative subpoenas, courts may resort analogously to techniques conventional to judicial subpoenas.” Sec. & Exch. Comm’n v. Arthur Young & Co., 584 F.2d 1018, 1033 (D.C.Cir.1978) (citing the- Federal Rules of Civil Procedure as one such technique).
III. Analysis
There is no doubt that the breadth of the search requested in the FTC’s original subpoena would have consumed much of BIPI’s time and money. Many of the *175status updates and other submissions to the Court on this issue addressed whether the search, as requested, constituted an undue burden on BIPI. Although both sides raised interesting arguments in this regard, the request as it stands today is on a different scale. Developments between the parties, both on their own and before me during the last status conference, indicate that the scope of the search requested by the FTC has been narrowed significantly, and as a result, it appears that the request is, in its modified form, not unduly burdensome for BIPI. See Texaco, 555 F.2d at 882-83.
I am not convinced, having reviewed the status reports of both the FTC and BIPI, that such a limited search would be the kind of burden upon BIPI described in the Texaco case — “threaten[ing] to unduly disrupt or seriously hinder normal operations of a business.” Texaco, 555 F.2d at 882. BIPI bears the burden of establishing such a disruption and it has not demonstrated to the Court, either through filings or during the November 2011 status conference, that complying with this request, as modified, would meet that burden. Instead, “some burden on the subpoenaed party is to be expected.” Federal Trade Commission v. Church & Dwight Co., Inc., 747 F.Supp.2d 3, 8 (D.D.C.2010), aff'd 665 F.3d 1312 (D.C.Cir.2011). BIPI is a large pharmaceutical company, and, although it does not have unlimited resources, it certainly has the ability to conduct the limited search requested here.
More to the point, the burden or lack thereof in doing the search is a function of how efficiently it is conducted. Obviously, to the extent that documents found on the backup tapes are duplicative or near-duplicative of documents already disclosed or deemed privileged, production is unnecessary and unwarranted. The parties should meet and confer to determine the appropriate method of searching the relevant backup tapes to render the process as efficient as possible. Additionally, if they deem it appropriate, I will ask the mediator who assisted them previously to meet with them again to guide their discussions as to how to conduct the search. If the parties still cannot agree, they will have to submit their disagreement to me for resolution.
Additionally, any documents produced by this search and claimed to be privileged will be subject to the same principles and holdings laid out in my recent opinion in this case. See Memorandum Opinion [# 69]. Thus, to the extent that the documents produced in the backup tape search fall under the work product or attorney-client privileges, as I have interpreted them in that opinion, they would be protected from disclosure. Searching for them again would result in a needless expenditure of resources.
Any documents found on the backup tapes that are responsive and not privileged must be turned over immediately. As stated previously, however, if a document contains some factual work product and some opinion work product, and the opinion work product can be excised from the rest of the document, BIPI should redact the privileged material and disclose the rest. If, at the end of this process, there remains a dispute as to whether any of these documents may be privileged, they may be submitted to me for in camera review.
An Order accompanies this Memorandum Opinion.
4.2.4.2 Manual for Administrative Law Judges, 23 J. Nat'l Ass'n Admin. L. Judges I, 39–42 (2004) 4.2.4.2 Manual for Administrative Law Judges, 23 J. Nat'l Ass'n Admin. L. Judges I, 39–42 (2004)
III. DISCOVERY
If authorized by statute and agency rule, the ALJ may require the parties to submit to discovery. This may consist of subpoenas ad testificandum and duces tecum, depositions, written interrogatories, cross-interrogatories, inspections, physical or mental examinations, requests for admissions, production of documents or things, or permission to enter upon land or other property, or the preparation of studies, summaries, forecasts, surveys, polls, or other relevant materials.
Discovery rulings may be made if the ALJ finds it necessary to apply compulsion to obtain the necessary information.113 Supplemental discovery orders may be issued as needed. The ALJ should be attentive, throughout the discovery stage, to the possibility of delay resulting from abuse of the discovery process.
In some agencies, the ALJ must issue a subpoena upon request, subject to a motion to quash.114 In other agencies, the ALJ may refuse to issue a subpoena absent a showing of relevance or related requirements.115 In either case, to prevent evasion of service, the subpoena usually is granted ex parte and its signing is not disclosed until either service has been accomplished or the party who obtained the subpoena chooses to disclose it.
Even if reimbursed for travel expenses and compensated by witness fees, a witness who is required to travel far from home will be inconvenienced at best, and may undergo severe hardship. Furthermore, subpoenas duces tecum may compel the transportation of bulky documents and may deprive a business of records and files needed for its daily operation. These burdens should not be lightly imposed.116 The ALJ may in appropriate cases, and subject to agency rules, shift some of these burdens to the party seeking documents by permitting inspecting and copying of them on the premises where they are regularly kept. The ALJ also may encourage agreements between the parties providing for the submission of copies of specified material at the hearing, subject to verification procedures agreeable to the parties.
Sometimes subpoenas will be requested for material the ALJ has previously ruled need not be produced. Upon learning of this, the ALJ should deny the request unless it appears that the earlier ruling should be changed. It is not usually worthwhile, however, to search the record of a lengthy pre-hearing conference or other pre-hearing actions to determine whether the matter has already been considered. The subpoenaed witness can always move to quash.
Sooner or later an ALJ will encounter a party who refuses to comply with a subpoena. When that happens, the agency probably will have to file an enforcement action in federal district court.117 The ensuing litigation can delay the agency’s adjudication considerably,118 but Supreme Court precedents strongly tend toward upholding an agency’s subpoenas.119 Moreover, the APA states, ‘On contest, the court shall sustain the subpoena or similar process or demand to the extent that it is found to be in accordance with law.‘120 Once the agency’s statutory authority to issue the challenged subpoenas is established, the subpoena generally will be found to be in accordance with law ‘if the inquiry is within the authority of the agency, the demand is not too indefinite and the information sought is reasonably relevant.
4.3 Adjudication – Informal Adjudication, Streamlined Adjudication 4.3 Adjudication – Informal Adjudication, Streamlined Adjudication
4.3.1 Basic Agency Obligations in Adjudication 4.3.1 Basic Agency Obligations in Adjudication
4.3.1.1 Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402 (1971) 4.3.1.1 Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402 (1971)
Citizens to Preserve Overton Park v. Volpe
401 U.S. 402 (1971)
Opinion of the Court by MR. JUSTICE MARSHALL, announced by MR. JUSTICE STEWART.
The growing public concern about the quality of our natural environment has prompted Congress in recent years to enact legislation designed to curb the accelerating destruction of our country’s natural beauty. We are concerned in this case with § 4(f) of the Department of Transportation Act of 1966 and § 18(a) of the Federal-Aid Highway Act of 1968. These statutes prohibit the Secretary of Transportation from authorizing the use of federal funds to finance the construction of highways through public parks if a “feasible and prudent” alternative route exists. If no such route is available, the statutes allow him to approve construction through parks only if there has been “all possible planning to minimize harm” to the park.
Petitioners, private citizens as well as local and national conservation organizations, contend that the Secretary has violated these statutes by authorizing the expenditure of federal funds for the construction of a six-lane interstate highway through a public park in Memphis, Tennessee. Their claim was rejected by the District Court, which granted the Secretary’s motion for summary judgment, and the Court of Appeals for the Sixth Circuit affirmed. After oral argument, this Court granted a stay that halted construction and, treating the application for the stay as a petition for certiorari, granted review. We now reverse the judgment below and remand for further proceedings in the District Court.
Overton Park is a 342-acre city park located near the center of Memphis. The park contains a zoo, a nine-hole municipal golf course, an outdoor theater, nature trails, a bridle path, an art academy, picnic areas, and 170 acres of forest. The proposed highway, which is to be a six-lane, high-speed, expressway, will sever the zoo from the rest of the park [...]
In April 1968, the Secretary announced that he concurred in the judgment of local officials that I-40 should be built through the park. And in September 1969 the State acquired the right-of-way inside Overton Park from the city. Final approval for the project—the route as well as the design— was not announced until November 1969 [...] Neither announcement approving the route and design of I-40 was accompanied by a statement of the Secretary’s factual findings. He did not indicate why he believed there were no feasible and prudent alternative routes or why design changes could not be made to reduce the harm to the park.
Petitioners contend that the Secretary’s action is invalid without such formal findings and that the Secretary did not make an independent determination but merely relied on the judgment of the Memphis City Council. They also contend that it would be “feasible and prudent” to route I-40 around Overton Park either to the north or to the south. And they argue that if these alternative routes are not “feasible and prudent,” the present plan does not include “all possible” methods for reducing harm to the park. Petitioners claim that I-40 could be built under the park by using either of two possible tunneling methods [...]
[The standard of review in] § 706 of the Administrative Procedure Act provides that a “reviewing court shall . . . hold unlawful and set aside agency action, findings, and conclusions found” not to meet six separate standards. In all cases agency action must be set aside if the action was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law” or if the action failed to meet statutory, procedural, or constitutional requirements. In certain narrow, specifically limited situations, the agency action is to be set aside if the action was not supported by “substantial evidence.” And in other equally narrow circumstances the reviewing court is to engage in a de novo review of the action and set it aside if it was “unwarranted by the facts.”
Petitioners argue that the Secretary's approval of the construction of I-40 through Overton Park is subject to one or the other of these latter two standards of limited applicability. First, they contend that the "substantial evidence" standard of § 706(2)(E) must be applied. In the alternative, they claim that § 706(2)(F) applies and that there must be a de novo review to determine if the Secretary’s action was “unwarranted by the facts.” Neither of these standards is, however, applicable.
Review under the substantial-evidence test is authorized only when the agency action is taken pursuant to a rulemaking provision of the Administrative Procedure Act itself, 5 U.S.C. § 553, or when the agency action is based on a public adjudicatory hearing. See 5 U.S.C. §§ 556, 557. The Secretary’s decision to allow the expenditure of federal funds to build I-40 through Overton Park was plainly not an exercise of a rulemaking function. And the only hearing that is required by either the Administrative Procedure Act or the statutes regulating the distribution of federal funds for highway construction is a public hearing conducted by local officials for the purpose of informing the community about the proposed project and eliciting community views on the design and route. The hearing is nonadjudicatory, quasi-legislative in nature. It is not designed to produce a record that is to be the basis of agency action—the basic requirement for substantial-evidence review.
Petitioners’ alternative argument also fails. De novo review of whether the Secretary’s decision was “unwarranted by the facts” is authorized by § 706(2)(F) in only two circumstances. First, such de novo review is authorized when the action is adjudicatory in nature and the agency fact finding procedures are inadequate. And, there may be independent judicial fact finding when issues that were not before the agency are raised in a proceeding to enforce nonadjudicatory agency action. Neither situation exists here.
Even though there is no de novo review in this case and the Secretary’s approval of the route of I-40 does not ultimately have to meet the substantial-evidence test, the generally applicable standards of § 706 require the reviewing court to engage in a substantial inquiry [...]
The court is first required to decide whether the Secretary acted within the scope of his authority. This determination naturally begins with a delineation of the scope of the Secretary’s authority and discretion [...] Also involved in this initial inquiry is a determination of whether on the facts the Secretary’s decision can reasonably be said to be within that range. The reviewing court must consider whether the Secretary properly construed his authority to approve the use of parkland as limited to situations where there are no feasible alternative routes or where feasible alternative routes involve uniquely difficult problems. And the reviewing court must be able to find that the Secretary could have reasonably believed that in this case there are no feasible alternatives or that alternatives do involve unique problems.
Scrutiny of the facts does not end, however, with the determination that the Secretary has acted within the scope of his statutory authority. Section 706(2)(A) requires a finding that the actual choice made was not “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” To make this finding the court must consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment. Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. The court is not empowered to substitute its judgment for that of the agency.
The final inquiry is whether the Secretary’s action followed the necessary procedural requirements. Here the only procedural error alleged is the failure of the Secretary to make formal findings and state his reason for allowing the highway to be built through the park.
Undoubtedly, review of the Secretary’s action is hampered by his failure to make such findings, but the absence of formal findings does not necessarily require that the case be remanded to the Secretary. Neither the Department of Transportation Act nor the Federal-Aid Highway Act requires such formal findings. Moreover, the Administrative Procedure Act requirements that there be formal findings in certain rulemaking and adjudicatory proceedings do not apply to the Secretary’s action here [...]
Moreover, there is an administrative record that allows the full, prompt review of the Secretary’s action that is sought without additional delay which would result from having a remand to the Secretary.
That administrative record is not, however, before us. The lower courts based their review on the litigation affidavits that were presented. These affidavits were merely “post hoc” rationalizations which have traditionally been found to be an inadequate basis for review. And they clearly do not constitute the “whole record” compiled by the agency: the basis for review required by § 706 of the Administrative Procedure Act.
Thus it is necessary to remand this case to the District Court for plenary review of the Secretary’s decision. That review is to be based on the full administrative record that was before the Secretary at the time he made his decision. But since the bare record may not disclose the factors that were considered or the Secretary's construction of the evidence it may be necessary for the District Court to require some explanation in order to determine if the Secretary acted within the scope of his authority and if the Secretary's action was justifiable under the applicable standard.
The court may require the administrative officials who participated in the decision to give testimony explaining their action. Of course, such inquiry into the mental processes of administrative decisionmakers is usually to be avoided. And where there are administrative findings that were made at the same time as the decision, there must be a strong showing of bad faith or improper behavior before such inquiry may be made. But here there are no such formal findings and it may be that the only way there can be effective judicial review is by examining the decisionmakers themselves.
The District Court is not, however, required to make such an inquiry. It may be that the Secretary can prepare formal findings [...] that will provide an adequate explanation for his action. Such an explanation will, to some extent, be a “post hoc rationalization” and thus must be viewed critically. If the District Court decides that additional explanation is necessary, that court should consider which method will prove the most expeditious so that full review may be had as soon as possible.
Reversed and remanded.
4.3.1.2. Peter L. Strauss, Citizens to Preserve Overton Park – Race-Inflected Below Its Surface
4.3.2 Streamlining Agency Adjudication 4.3.2 Streamlining Agency Adjudication
4.3.2.1 Heckler v. Campbell, 461 U.S. 458 (1983) 4.3.2.1 Heckler v. Campbell, 461 U.S. 458 (1983)
HECKLER, SECRETARY OF HEALTH AND HUMAN SERVICES v. CAMPBELL
No. 81-1983.
Argued February 28, 1983
Decided May 16, 1983
*459Powell, J., delivered the opinion of the Court, in which Burger, C. J., and Brennan, White, Blackmun, Rehnquist, Stevens, and O’Con-nor, JJ., joined. Brennan, J., filed a concurring opinion, post, p. 470. Marshall, J., filed an opinion concurring in part and dissenting in part, post, p. 473.
John H. Garvey argued the cause for petitioner. With him on the briefs were Solicitor General Lee, Assistant Attorney General McGrath, Deputy Solicitor General Getter, and Anne Buxton Sobol.
Ruben Nazario argued the cause for respondent. With him on the brief were Toby Golick and Jane Greengold Stevens*
delivered the opinion of the Court.
The issue is whether the Secretary of Health and Human Services may rely on published medical-vocational guidelines to determine a claimant’s right to Social Security disability benefits.
I
The Social Security Act defines “disability” in terms of the effect a physical or mental impairment has on a person’s abil*460ity to function in the workplace. It provides disability benefits only to persons who are unable “to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment.” 81 Stat. 868, as amended, 42 U. S. C. § 423(d)(1)(A). And it specifies that a person must “not only [be] unable to do his previous work but [must be unable], considering his age, education, and work experience, [to] engage in any other kind of substantial gainful work which exists in the national economy, regardless of whether such work exists in the immediate area in which he lives, or whether a specific job vacancy exists for him, or whether he would be hired if he applied for work.” 42 U. S. C. § 423(d)(2)(A).
In 1978, the Secretary of Health and Human Services promulgated regulations implementing this definition. See 43 Fed. Reg. 55349 (1978) (codified, as amended, at 20 CFR pt. 404, subpt. P (1982)). The regulations recognize that certain impairments are so severe that they prevent a person from pursuing any gainful work. See 20 CFR § 404.1520(d) (1982) (referring to impairments listed at 20 CFR pt. 404, subpt. P, app. 1). A claimant who establishes that he suffers from one of these impairments will be considered disabled without further inquiry. Ibid. If a claimant suffers from a less severe impairment, the Secretary must determine whether the claimant retains the ability to perform either his former work or some less demanding employment. If a claimant can pursue his former occupation, he is not entitled to disability benefits. See §404.1520(e). If he cannot, the Secretary must determine whether the claimant retains the capacity to pursue less demanding work. See §404.1520(f)(1).
■ The regulations divide this last inquiry into two stages. First, the Secretary must assess each claimant’s present job qualifications. The regulations direct the Secretary to consider the factors Congress has identified as relevant: physical ability, age, education, and work experience.1 See 42 *461U. S. C. § 423(d)(2)(A); 20 CFR § 404.1520(f) (1982). Second, she must consider whether jobs exist in the national economy that a person having the claimant’s qualifications could perform. 20 CFR §§ 404.1520(f), 404.1566-404.1569 (1982).
Prior to 1978, the Secretary relied on vocational experts to establish the existence of suitable jobs in the national economy. After a claimant’s limitations and abilities had been determined at a hearing, a vocational expert ordinarily would testify whether work existed that the claimant could perform. Although this testimony often was based on standardized guides, see 43 Fed. Reg. 9286 (1978), vocational experts frequently were criticized for their inconsistent treatment of similarly situated claimants. See Santise v. Schweiker, 676 F. 2d 925, 930 (CA3 1982); J. Mashaw, C. Goetz, F. Goodman, W. Schwartz, P. Verkuil, & M. Carrow, Social Security Hearings and Appeals 78-79 (1978). To improve both the uniformity and efficiency2 of this determination, the Secretary promulgated medical-vocational guidelines as part of the 1978 regulations. See 20 CFR pt. 404, subpt. P, app. 2 (1982).
These guidelines relieve the Secretary of the need to rely on vocational experts by establishing through rulemaking the types and numbers of jobs that exist in the national economy. They consist of a matrix of the four factors identified by Con*462gress — physical ability, age, education, and work experience3 — and set forth rules that identify whether jobs requiring specific combinations of these factors exist in significant numbers in the national economy.4 Where a claimant’s qualifications correspond to the job requirements identified by a rule,5 the guidelines direct a conclusion as to whether work exists that the claimant could perform. If such work exists, the claimant is not considered disabled.
t — I HH
In 1979, Carmen Campbell applied for disability benefits because a back condition and hypertension prevented her from continuing her work as a hotel maid. After her application was denied, she requested a hearing de novo before an Administrative Law Judge.6 He determined that her back *463problem was not severe enough to find her disabled without further inquiry, and accordingly considered whether she retained the ability to perform either her past work or some less strenuous job. App. to Pet. for Cert. 28a. He concluded that even though Campbell’s back condition prevented her from returning to her work as a maid, she retained the physical capacity to do light work. Ibid. In accordance with the regulations, he found that Campbell was 52 years old, that her previous employment consisted of unskilled jobs, and that she had a limited education. Id., at 28a-29a. He noted that Campbell, who had been born in Panama, experienced difficulty in speaking and writing English. She was able, however, to understand and read English fairly well. App. 42. Relying on the medical-vocational guidelines, the Administrative Law Judge found that a significant number of jobs existed that a person of Campbell’s qualifications could perform. Accordingly, he concluded that she was not disabled.7 App. to Pet. for Cert. 29a.
This determination was upheld by both the Social Security Appeals Council, id., at 16a, and the District Court for the Eastern District of New York, id., at 15a. The Court of Appeals for the Second Circuit reversed. Campbell v. Secretary of Dept. of Health and Human Services, 665 F. 2d 48 (1981). It accepted the Administrative Law Judge’s determination that Campbell retained the ability to do light work. And it did not suggest that he had classified Campbell’s age, *464education, or work experience incorrectly. The court noted, however, that it
“has consistently required that ‘the Secretary identify specific alternative occupations available in the national economy that would be suitable for the claimant’ and that ‘these jobs be supported by “a job description clarifying the nature of the job, [and] demonstrating that the job does not require” exertion or skills not possessed by the claimant.’” Id., at 53 (quoting Decker v. Harris, 647 F. 2d 291, 298 (CA2 1981)).
The court found that the medical-vocational guidelines did not provide the specific evidence that it previously had required. It explained that in the absence of such a showing, “the claimant is deprived of any real chance to present evidence showing that she cannot in fact perform the types of jobs that are administratively noticed by the guidelines.” 665 F. 2d, at 53. The court concluded that because the Secretary had failed to introduce evidence that specific alternative jobs existed, the determination that Campbell was not disabled was not supported by substantial evidence. Id., at 54.
We granted certiorari to resolve a conflict among the Courts of Appeals.8 Schweiker v. Campbell, 457 U. S. 1131 (1982). We now reverse.
*465III
The Secretary argues that the Court of Appeals’ holding effectively prevents the use of the medical-vocational guidelines. By requiring her to identify specific alternative jobs in every disability hearing, the court has rendered the guidelines useless. An examination of both the language of the Social Security Act and its legislative history clearly demonstrates that the Secretary may proceed by regulation to determine whether substantial gainful work exists in the national economy. Campbell argues in response that the Secretary has misperceived the Court of Appeals’ holding. Campbell reads the decision as requiring only that the Secretary give disability claimants concrete examples of the kinds of factual determinations that the administrative law judge will be making. This requirement does not defeat the guidelines’ purpose; it ensures that they will be applied only where appropriate. Accordingly, respondent argues that we need not address the guidelines’ validity.
A
The Court of Appeals held that “[i]n failing to show suitable available alternative jobs for Ms. Campbell, the Secretary’s finding of ‘not disabled’ is not supported by substantial evidence.” 665 F. 2d, at 54. It thus rejected the proposition that “the guidelines provide adequate evidence of a claimant’s ability to perform a specific alternative occupation,” id., at 53, and remanded for the Secretary to put into evidence “particular types of jobs suitable to the capabilities of Ms. Campbell,” id., at 54. The court’s requirement that additional evidence be introduced on this issue prevents the Secretary from putting the guidelines to their intended use and implicitly calls their validity into question.9 Accord*466ingly, we think the decision below requires us to consider whether the Secretary may rely on medical-vocational guidelines in appropriate cases.
The Social Security Act directs the Secretary to “adopt reasonable and proper rules and regulations to regulate and provide for the nature and extent of the proofs and evidence and the method of taking and furnishing the same” in disability cases. 42 U. S. C. § 405(a). As we previously have recognized, Congress has “conferred on the Secretary exceptionally broad authority to prescribe standards for applying certain sections of the [Social Security] Act.” Schweiker v. Gray Panthers, 453 U. S. 34, 43 (1981); see Batterton v. Francis, 432 U. S. 416, 425 (1977). Where, as here, the statute expressly entrusts the Secretary with the responsibility for implementing a provision by regulation,10 our review is limited to determining whether the regulations promulgated exeeded the Secretary's statutory authority and whether they are arbitrary and capricious. Herweg v. Ray, 455 U. S. 265, 275 (1982); Schweiker v. Gray Panthers, supra, at 44.
*467We do not think that the Secretary’s reliance on medical-vocational guidelines is inconsistent with the Social Security Act. It is true that the statutory scheme contemplates that disability hearings will be individualized determinations based on evidence adduced at a hearing. See 42 U. S. C. § 423(d)(2)(A) (specifying consideration of each individual’s condition); 42 U. S. C. § 405(b) (1976 ed., Supp. V) (disability determination to be based on evidence adduced at hearing). But this does not bar the Secretary from relying on rulemaking to resolve certain classes of issues. The Court has recognized that even where an agency’s enabling statute expressly requires it to hold a hearing, the agency may rely on its rulemaking authority to determine issues that do not require case-by-case consideration. See FPC v. Texaco Inc., 377 U. S. 33, 41-44 (1964); United States v. Storer Broadcasting Co., 351 U. S. 192, 205 (1956). A contrary holding would require the agency continually to relitigate issues that may be established fairly and efficiently in a single rulemaking proceeding. See FPC v. Texaco Inc., supra, at 44.
The Secretary’s decision to rely on medical-vocational guidelines is consistent with Texaco and Storer. As noted above, in determining whether a claimant can perform less strenuous work, the Secretary must make two determinations. She must assess each claimant’s individual abilities and then determine whether jobs exist that a person having the claimant’s qualifications could perform. The first inquiry involves a determination of historic facts, and the regulations properly require the Secretary to make these findings on the basis of evidence adduced at a hearing. We note that the regulations afford claimants ample opportunity both to present evidence relating to their own abilities and to offer evidence that the guidelines do not apply to them.11 The sec*468ond inquiry requires the Secretary to determine an issue that is not unique to each claimant — the types and numbers of jobs that exist in the national economy. This type of general factual issue may be resolved as fairly through rulemaking as by introducing the testimony of vocational experts at each disability hearing. See American Airlines, Inc. v. CAB, 123 U. S. App. D. C. 310, 319, 359 F. 2d 624, 633 (1966) (en banc).
As the Secretary has argued, the use of published guidelines brings with it a uniformity that previously had been perceived as lacking. To require the Secretary to relitigate the existence of jobs in the national economy at each hearing would hinder needlessly an already overburdened agency. We conclude that the Secretary’s use of medical-vocational guidelines does not conflict with the statute, nor can we say on the record before us that they are arbitrary and capricious.
B
We now consider Campbell’s argument that the Court of Appeals properly required the Secretary to specify alternative available jobs. Campbell contends that such a showing informs claimants of the type of issues to be established at the hearing and is required by both the Secretary’s regulation, 20 CFR §404.944 (1982), and the Due Process Clause.
By referring to notice and an opportunity to respond, see 665 F. 2d, at 53-54, the decision below invites the interpretation given it by respondent. But we do not think that the decision fairly can be said to present the issues she raises.12 *469The Court of Appeals did not find that the Secretary failed to give sufficient notice in violation of the Due Process Clause or any statutory provision designed to implement it. See 42 U. S. C. §405(b) (1976 ed., Supp. V) (requiring that disability claimants be given “reasonable notice and [an] opportunity for a hearing”). Nor did it find that the Secretary violated any duty imposed by regulation. See 20 CFR § 404.944 (1982) (requiring the administrative law judge to “loo[k] fully into the issues”). Rather the court’s reference to notice and an opportunity to respond appears to be based on a principle of administrative law — that when an agency takes official or administrative notice of facts, a litigant must be given an adequate opportunity to respond.13 See 5 U. S. C. § 556(e); McDaniel v. Celebrezze, 331 F. 2d 426 (CA4 1964).
*470This principle is inapplicable, however, when the agency has promulgated valid regulations. Its purpose is to provide a procedural safeguard: to ensure the accuracy of the facts of which an agency takes notice. But when the accuracy of those facts already has been tested fairly during rulemaking, the rulemaking proceeding itself provides sufficient procedural protection.14 See, e. g., Rivers v. Schweiker, 684 F. 2d 1144, 1156 (CA5 1982); Broz v. Schweiker, 677 F. 2d 1351, 1362 (CA11 1982); Torres v. Secretary of Health and Human Services, 677 F. 2d 167, 169 (CA1 1982).
> HH
The Court of Appeals’ decision would require the Secretary to introduce evidence of specific available jobs that respondent could perform. It would limit severely her ability to rely on the medical-vocational guidelines. We think the Secretary reasonably could choose to rely on these guidelines in appropriate cases rather than on the testimony of a vocational expert in each case. Accordingly, the judgment of the Court of Appeals is
Reversed.
concurring.
I join the Court’s opinion. It merits comment, however, that the hearing respondent received, see ante, at 462-463, if it is in any way indicative of standard practice, reflects *471poorly on the Administrative Law Judge’s adherence to what Chief Judge Godbold has called his “duty of inquiry”:
“[T]here is a ‘basic obligation’ on the ALJ in these nonadversarial proceedings to develop a full and fair record, which obligation rises to a ‘ “special duty ... to scrupulously and conscientiously explore for all the relevant facts’” where an unrepresented claimant has not waived counsel. This duty of inquiry on the ALJ would include, in a case decided under the grids, a duty to inquire into possible nonexertional impairments and into exertional limitations that prevent a full range of work.” Broz v. Schweiker, 677 F. 2d 1351, 1364 (CA11 1982).1
In her brief to this Court, the Secretary acknowledges that the Social Security regulations embody this duty and relies upon it in answering respondent’s due process contentions. Brief for Petitioner 42 (citing Broz v. Schweiker, supra)] see 20 CFR § 404.944 (1982); ante, at 468, and n. 12. The Administrative Law Judge’s “duty to inquire” takes on special urgency where, as here, the claimant has little education and limited fluency in English, and, given that the claimant already has a right to a hearing, the additional cost of pursuing relevant issues at the hearing is minimal.
*472In order to find that respondent was not disabled, the Secretary had to determine that she had the physical capacity to do “light work,” compare 20 CFR pt. 404, subpt. P, app. 2, §201.10 (1982), with id., §202.10, a determination that required a finding that she was capable of frequent lifting or carrying of objects weighing up to 10 pounds and sometimes lifting up to 20 pounds, 20 CFR §404.1567(b) (1982). The hearing record included one disinterested doctor’s report of a medical examination of respondent that concluded with the unexplained statement “Patient may return to light-duty work,” App. 11, and a subsequent report by a second disinterested doctor stating that respondent could lift and carry only “up to 10 pounds,” id., at 32. In finding that respondent could perform “light work,” the Administrative Law Judge rejected the second doctor’s report as “without basis.” App. to Pet. for Cert. 23a-25a. Yet he failed entirely to adduce evidence relevant to this issue at respondent’s hearing. At several points during the hearing, respondent stated that she could not lift things, but the Administrative Law Judge did not question her on the subject at all,2 nor did he make any inquiry whether by “light-duty work” the first doctor meant the same thing as the Secretary’s term “light work.”
The Administrative Law Judge further failed to inquire whether factors besides strength, age, or education, combined with her other impairments, rendered respondent disabled. See 20 CFR pt. 404, supra, § 200.00(e)(2); ante, at 462, n. 5. Apparently such factors could have been dispositive of *473the case before us: The Secretary has since determined that respondent is in fact disabled, see ante, at 463, n. 7, based on consideration of severe emotional complications not explored at all by the Administrative Law Judge in the hearing that led to her petition for review in this case.3
This issue was not presented to the Court of Appeals, nor passed upon by it. See ante, at 468-469, n. 12. In terms of ensuring fair and accurate determinations of disability claims, the obligation that the Court of Appeals would have placed on administrative law judges was a poor substitute for good-faith performance of the “duty of inquiry” they already have. The federal courts have been successful in enforcing this duty in the past, see n. 1, supra, and I respectfully suggest that the Secretary insist upon its faithful performance in future cases.
concurring in part and dissenting in part.
While I agree that the Secretary’s medical-vocational guidelines are valid, I believe that this case presents the additional question whether the Administrative Law Judge fulfilled his obligation to “loo[k] fully into the issues.” 20 CFR §404.944 (1982). See Richardson v. Perales, 402 U. S. 389, 410 (1971) (at the hearing the administrative law judge is required to “ac[t] as an examiner charged with developing the facts”). I would therefore remand this case for further proceedings.
I do not agree with the Court, ante, at 468-469, that the decision below does not question the adequacy of the Administrative Law Judge’s inquiry at the hearing. Although the Court of Appeals’ opinion is not entirely clear, the court ap*474pears to have concluded that Campbell was not given an adequate opportunity to demonstrate that she was unable to perform “light work.” The court explained as follows:
“ ‘The key consideration in the administrative proceeding must be that the claimant be given adequate opportunity to challenge the suitability ... of the jobs noticed. . . .’ [0]ur major concern is that the claimant be given adequate notice of the nature and demands of the types of jobs allegedly available. Absent sufficient notice, the claimant is deprived of any real chance to present evidence showing that she cannot in fact perform the types of jobs that are administratively noticed by the guidelines. This is particularly true in Ms. Campbell’s case where the ALJ gave no indication of any specific ‘light work’ jobs that she was capable of performing . . . .” Campbell v. Secretary of Dept. of Health and Human Services, 665 F. 2d 48, 53-54 (CA2 1981), quoting Decker v. Harris, 647 F. 2d 291, 298 (CA2 1981).1
The Court of Appeals remanded the case for further administrative proceedings at which Campbell would be given “a listing of particular types of jobs suitable to the capabilities of Ms. Campbell.” 665 F. 2d, at 54.
The Court of Appeals’ concern was amply justified in light of the hearing that was conducted in this case. The central *475issue at respondent’s hearing was whether she was capable of performing “light work.”2 If Campbell had shown that she was unable to perform “light work,” she would have been entitled to disability benefits under the Secretary’s guidelines. Although Campbell was afforded a hearing to determine whether she was disabled, she was never apprised of this central issue either in advance of or during the hearing. She was not represented by counsel, and the Administrative Law Judge who conducted the hearing never explained to her what “light work” entailed. Moreover, although the judge inquired at length into respondent’s medical problems, he conducted little inquiry into the effect of her medical problems on her capacity to perform work. Yet reasonably complete questioning concerning the claimant’s ability to function in her daily activity was essential to resolving this question in a fair manner.3
*476The above-quoted portions of the Court of Appeals’ decision demonstrate to my satisfaction that the question whether respondent received an adequate hearing is fairly raised by the decision below. It would have been well within the Court of Appeals’ authority under 42 U. S. C. § 405(g) (1976 ed., Supp. V) to order a new hearing if the court concluded that the Administrative Law Judge failed to conduct an adequate inquiry.4 That appears to be just what the court did when it remanded the case. The court required the judge to fulfill his obligation to elicit testimony concerning respondent’s capacity to perform “light work” by giving her a few examples of specific types of “light work” and allowing her to explain why she is unable to perform such work.