Opinion ID: 209692
Heading Depth: 1
Heading Rank: 4

Heading: The Regulation Is Arbitrary And Capricious

Text: Were we to conclude that the regulation did not directly conflict with the statute, we would nevertheless strike it down because it is arbitrary and capricious. As noted above, the Supreme Court in Mead delineated three grounds upon which a regulation in circumstances like these might be invalidated. Mead, 533 U.S. at 227, 121 S.Ct. 2164. Those grounds are that the regulation is (1) procedurally defective; (2) arbitrary or capricious in substance; or (3) manifestly contrary to the statute. Id. No argument is made, and nothing in the record suggests, that there were any procedural infirmities surrounding the promulgation of this regulation. Separate and apart from our finding that the regulation conflicts with the statute, we also conclude that the Nonreconciliation Regulation is arbitrary and capricious. This is an independent basis for invalidating the regulation. The Government faced a predicament in seeking to defend this regulation. The difficulty centers on the way in which the Government answers the following question: Was OPM endeavoring to implement Congress' rate-setting directionembodied in § 8902(i)when it promulgated the Nonreconciliation Regulation? This is a perilous exercise because, ultimately, neither a yes nor a no provides much of a defense for the regulation. If the Government were to try to answer yes, it would then have to explain how abandoning reconciliation in the Final Year helps to achieve rates that reasonably and equitably reflect costs. For the reasons set forth above, we do not believe that Government can do so. If the Government were to answer no, and concede, in effect, that it ignored Congress' clear command when promulgating this regulation, then the regulation must likewise be invalidated. Judicial deference is premised upon the proposition that the agency will be construing and interpreting the statute when it promulgates regulations. See Mead, 533 U.S. at 226-27, 121 S.Ct. 2164 ([A]dministrative implementation of a particular statutory provision qualifies for Chevron deference when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority.); Rust v. Sullivan, 500 U.S. 173, 184, 111 S.Ct. 1759, 114 L.Ed.2d 233 (1991) (holding that courts should defer to an agency's construction of the statute if it reflects a plausible construction of the plain language of the statute. . . .). Courts generally defer to administrative agencies when those agencies construe federal statutes. If an agency promulgates a regulation without regard for what Congress has said on the matter, however, the purpose for deference evaporates. In sum, irrespective of whether OPM promulgated the Nonreconciliation Regulation with § 8902 in mind or not, the result is the same: the regulation is invalid. None of the Government's explanations in support of the Nonreconciliation Regulation adequately justifies it. An agency action is arbitrary and capricious if a court determines that the agency: relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise. Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Automobile Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983). It is not our place to compensate for any deficiencies that may exist with the agency's proffered explanations. We are only to evaluate the agency's stated rationales, not supply our own. See SEC v. Chenery Corp., 332 U.S. 194, 196, 67 S.Ct. 1575, 91 L.Ed. 1995 (1947) (We may not supply a reasoned basis for the agency's action that the agency itself has not given.). The Nonreconciliation Regulation is arbitrary and capricious for two reasons. First, OPM has been unable to establish that the problem the Nonreconciliation Regulation was supposedly designed to address actually exists. And second, even if the problem did exist, the connection between that problem and the solution OPM devised is too attenuated to sustain the regulation.