American Federation of Government Emp., AFL CIO v. Block

Decision Date18 March 1981
Docket NumberAFL-CIO,No. 79-2128,79-2128
Citation655 F.2d 1153
PartiesAMERICAN FEDERATION OF GOVERNMENT EMPLOYEES,, et al., Appellants, v. John R. BLOCK, Secretary of Agriculture, et al.
CourtU.S. Court of Appeals — District of Columbia Circuit

Mitchell Jay Notis, Washington, D. C., with whom James R. Rosa, Washington, D. C., was on the brief, for appellants.

Anne M. Gulyassy, Washington, D. C., of the bar of the Supreme Court of Michigan, pro hac vice, by special leave of court, with whom Alice Daniel, Asst. Atty. Gen., Charles F. C. Ruff, U. S. Atty., and William G. Kanter, Atty., Dept. of Justice, Washington, D. C., were on the brief, for appellee Secretary of Agriculture.

James F. Rill and David W. Burling, Washington, D. C., were on the brief for appellee National Broiler Council.

Before TAMM and ROBINSON, Circuit Judges, and HARLINGTON WOOD, Jr., Circuit Judge, United States Court of Appeals for the Seventh Circuit. *

Opinion for the court filed by Circuit Judge TAMM.

TAMM, Circuit Judge:

At issue in this case is the response by the Department of Agriculture to a judicial directive to employ uniform standards in the enforcement of inspection rates in poultry processing plants. Because we find that an unusual emergency situation arose as a result of this directive, we hold that the Department possessed good cause to publish regulations that were immediately effective. Given the breadth of these regulations, however, justification did not exist for their promulgation as final and permanent regulations without the public procedures required by the Administrative Procedure Act. We therefore affirm the judgment of the district court as modified and direct the Department to institute rulemaking proceedings forthwith.

I. BACKGROUND

In November of 1978 certain Arkansas poultry processors and the Attorney General of the State of Arkansas brought suit against the Department of Agriculture (USDA or Department) in the District Court for the Eastern District of Arkansas alleging discrimination in the enforcement of inspection rates in processing plants. No formal regulations existed governing these rates; instead, USDA had made available informal guidelines that by virtue of varying interpretations had resulted in the enforcement of different maximum allowable inspection rates. 1 This variation in rates had then been frozen by a "status-quo order" issued by the Department in late 1976 or early 1977. Finding no justification for this disparity, the District Court for the Eastern District of Arkansas ordered then Secretary Bergland and the Department "to use uniform inspection rate standards and to apply and enforce same uniformly" and not to permit "to exist any practice which results in disparate inspection rate standards for same or similar situations." Arkansas Poultry Federation v. Bergland, No. LR-C-78-395 (E.D. Ark. Apr. 3, 1979), reprinted in Joint Appendix (J.A.) at 17. The court further ordered the defendants to file a report on April 16, 1979 "setting forth in detail the manner and form in which defendants have complied with the injunctive provisions of this order." Id., J.A. at 17-18.

On April 13, 1979, the Department complied with this order by publishing two final and immediately effective regulations based upon recommendations made by a study group of inspection officials in a November 1978 report. The first rule, entitled "Young Chicken Slaughter Inspection Rate Maximums," established as uniform maximum inspection rates those currently in effect in the Southwest region, increased by five percent. 2 44 Fed.Reg. 22,047 (1979) (codified in 9 C.F.R. § 381.67), J.A. at 19-21. The second rule, "Modified Traditional Poultry Inspection," established an alternate method of poultry inspection to be used whenever inspection efficiency would increase as a result. 44 Fed.Reg. 22,049 (1979) (codified in 9 C.F.R. § 381.76), J.A. at 21-23. In this rule, the Department proposed that "considerable time savings" would result from a procedure that reduces the number of motions required of an inspector and splits the inspection task so that each young chicken is examined by two inspectors. J.A. at 21.

USDA noted that the regulation establishing uniform inspection rates had already been prepared as a proposed rule. In order to comply with the court order noted above, however, "and to assure that the consumer is adequately protected," the Department asserted that "this regulation providing for national uniform maximum inspection rates must be issued immediately." J.A. at 20. The Department further claimed for both regulations that their emergency nature constituted good cause to forego "notice and other public procedure" and to make them immediately effective. USDA did solicit, however, written or oral comments upon these regulations for a period of ninety days after their promulgation.

On July 3, 1979, appellants filed a complaint in the United States District Court for the District of Columbia against Robert Bergland, Secretary of the Department of Agriculture, alleging the invalidity of these regulations on both procedural and substantive grounds. On July 27, 1979, the district court granted summary judgment for the defendants. The plaintiffs then filed this appeal.

II. DISCUSSION

The procedural 3 question in this case is simply stated: whether the Department possessed good cause to forego the rulemaking requirements of section 553 of the Administrative Procedure Act (APA). 5 U.S.C. § 553 (1976). Two specific requirements are pertinent here, the notice requirement of section 553(b) and that of 553(d). Section 553(b) requires that general notice of proposed rulemaking be published in the Federal Register; section 553(d) requires that a rule be published not less than thirty days before its effective date. To each of these requirements, however, the APA provides a good cause exception. An agency may avoid the 553(b) requirement if it "for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest." 5 U.S.C. § 553(b)(B) (1976). An agency may also avoid its 553(d) notice obligation "for good cause found and published with the rule." 5 U.S.C. § 553(d)(3) (1976).

We begin our examination of the Department's assertion of these exceptions with the firm understanding that the exceptions to the provisions of section 553 "will be narrowly construed and only reluctantly countenanced." State of New Jersey, Department of Environmental Protection v. EPA, 626 F.2d 1038, 1045 (D.C.Cir.1980). See generally Note, The "Good Cause" Exceptions: Danger to Notice and Comment Requirements Under the Administrative Procedure Act, 68 Geo.L.J. 765 (1980). As the legislative history of the APA makes clear, moreover, the exceptions at issue here are not "escape clauses" that may be arbitrarily utilized at the agency's whim. S.Rep.No. 752, 79th Cong., 1st Sess. (1945), reprinted in Administrative Procedure Act, Legislative History, 79th Cong. 1944-46 at 200, 201. Rather, use of these exceptions by administrative agencies should be limited to emergency situations, id. at 200; furthermore, the grounds justifying the agency's use of the exception should be incorporated within the published rule.

As we stated above, two specific requirements of section 553 are at issue here. Both the requirement of 553(b) that notice of proposed rulemaking be published in the Federal Register and the requirement of 553(d) that publication of a rule be made at least thirty days prior to its effective date serve the laudable purpose of informing affected parties and affording them a reasonable time to adjust to the new regulation. Section 553(b) serves, however, the even more significant purpose of allowing interested parties the opportunity of responding to proposed rules and thus allowing them to participate in the formulation of the rules by which they are to be regulated. The more expansive the regulatory reach of these rules, of course, the greater the necessity for public comment. See National Nutritional Foods Association v. Kennedy, 572 F.2d 377, 385-86 (2d Cir. 1978).

In light of the different purposes served by these two requirements, we believe that different standards govern the applicability of the good cause exceptions to these requirements. Further support for this view is found in the more detailed language of section 553(b)(B) which provides that an agency may forego notice-and-comment procedures in this context only upon a finding that such procedures are "impracticable, unnecessary, or contrary to the public interest." We do not break new ground when we hold, based upon the language of the APA and the underlying purposes of the subsections at issue, that what may constitute good cause to forego one notice requirement may not satisfy the other. See Rowell v. Andrus, 631 F.2d 699, 703 (10th Cir. 1980); Kollett v. Harris, 619 F.2d 134, 145 & n.15 (1st Cir. 1980); State of New Jersey, Department of Environmental Protection v. EPA, 626 F.2d at 1047; United States Steel Corp. v. EPA, 605 F.2d 283, 289-90 (7th Cir. 1979), cert. denied, 444 U.S. 1035, 100 S.Ct. 710, 62 L.Ed.2d 672 (1980); 4 United States v. Gavrilovic, 551 F.2d 1099, 1104 & n.9 (8th Cir. 1977).

In this case the Department found itself subject to court order to institute uniform inspection rate standards. The Department had argued before the District Court for the Eastern District of Arkansas that the suit brought by the poultry processors should be dismissed or, alternatively, that proceedings should be stayed based in part upon the impending rulemaking proceedings. The Department informed the court by its memorandum filed March 27, 1979, that it expected proposed rules to receive final departmental approval and to be published for notice-and-comment by the end of April. ...

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