Opinion ID: 428535
Heading Depth: 1
Heading Rank: 3

Heading: Good Cause Exception

Text: 28 Because the new definition is substantive, the interim rule is invalid unless, as the Secretary announced, there was good cause for dispensing with section 553 procedures. The Secretary's argument before this court centers on his contention that his only substantive decision was the selection of an implementation date. We have rejected that argument, and therefore we must determine whether the reasons the Secretary gave in the September 1981 notice but largely ignored here--essentially lack of time and a desire to save money--provide good cause to dispense with section 553 procedures. 29 The issue of what constitutes good cause is not new in this circuit. We have stated that this exception is narrowly construed. Kollett v. Harris, 619 F.2d 134, 145 (1st Cir.1980). We noted in Kollett that time constraints rising from the need to implement new legislation [is] a factor to consider, id., but found the justification inadequate in that case, as had several other courts in various circumstances, see, e.g., American Iron & Steel Institute v. EPA, 568 F.2d 284, 292 (3d Cir.1977). We also analyzed the three bases the statute provides for a claim of good cause: impracticability, lack of necessity, and the public interest, 5 U.S.C. Sec. 553(b)(B) (1982). Impracticability was said to exist when the agency could not both follow section 553 and execute its statutory duties. See 619 F.2d at 145. Public procedures are unnecessary, we concluded, when the regulation is technical or minor. See id. Finally,  '[p]ublic interest' supplements the terms 'impracticable' or 'unnecessary'; it requires that public rule-making procedures shall not prevent an agency from operating and that, on the other hand, lack of public interest in rule-making warrants an agency to dispense with public procedure. S.Rep. No. 752, 79th Cong., 1st Sess. 14 (1945), reprinted in Senate Judiciary Committee, 79th Cong., 2d Sess., Administrative Procedure Act Legislative History 185, 200 (1946), quoted in Kollett, 619 F.2d at 145. 30 None of these factors suggest that good cause existed in this case. First, Congress never suggested that it intended for the Secretary to abandon public participation in making these rules. Although there is reason to believe that Congress wanted USDA to act with dispatch, the language used in the statute left the effective and implementation dates wholly within the Secretary's discretion, subject only to the requirement that they be selected with a view toward orderly implementation. OBRA Sec. 117, 7 U.S.C. Sec. 2012 note (1982). Other courts, moreover, have evolved a presumption that Congress expects agencies to comply with the APA, even at the expense of short statutory time constraints, unless the statute expressly dictates otherwise. See Philadelphia Citizens in Action v. Schweiker, 669 F.2d 877, 885 (3d Cir.1982) (citing Sharon Steel Corp. v. EPA, 597 F.2d 377, 380 (3d Cir.1979)). Thus had Congress mandated implementation by October 1, there would still be some question whether that fact alone would provide good cause for dispensing with section 553 procedures. But Congress did not set any time constraints. The October 1 deadline the Secretary followed was his own creation and of no relevance to the question of good cause. We conclude, therefore, that compliance with the APA was not impracticable; plainly the Secretary could have complied with section 553 without interfering with his duties under OBRA. 31 It is equally clear that public participation was not unnecessary. The Secretary announced that the new rule was major, with a significant impact on the economy and on the eligibility of many participants and applicants. It is hard to imagine that this is the sort of technical or minor rule that Congress had in mind when speaking of unnecessary rulemaking. 32 Finally, there is the question of whether notice-and-comment rulemaking would have been contrary to the public interest, which the Secretary emphasized most in promulgating the rule. He suggested that OBRA expressed a congressional determination that the public interest inhered in saving money and that immediate implementation therefore was necessary. We believe that although Congress obviously intended to save money through OBRA, see generally Dickenson v. Petit, 692 F.2d 177, 181 (1st Cir.1982) (cost-saving intent), its expressed concern was for orderly, not immediate, implementation. See supra pp. 178, 184. The notion of orderly implementation is by no means at odds with compliance with section 553. Cf. Philadelphia Citizens in Action, 669 F.2d at 882-84 (because OBRA made AFDC amendments effective on October 1, there was good cause to dispense with section 553 procedures). 5 Delay of a few months for rulemaking, moreover, would not have prevented savings throughout the remainder of the fiscal year. 33 The Secretary also suggested that it was in the public interest to end or reduce benefits for some participants immediately rather than to have to reduce benefits for all participants later, due to budget shortfalls. 46 Fed.Reg. at 44,712; see supra p. 178. Perhaps this is so, but if Congress was troubled by that prospect, it could have mandated immediate implementation. Moreover, the passage quoted above from the Senate report suggests that Congress meant something different by using public interest in section 553. Congress's view seems to have been that any time one can expect real interest from the public in the content of the proposed regulation, notice-and-comment rulemaking will not be contrary to the public interest. This is such a case. Not only did plaintiffs show interest in the content of the regulation, but many commentators participated in the final rulemaking when given an opportunity, and the household definition in question here generated responses from fifteen commentators. See 47 Fed.Reg. at 52,329-30. The Secretary saw fit to modify some of the interim rules, including the household definition, in light of the comments received. See id. Under these circumstances, we cannot conclude that the public interest as conceived of in section 553 was served by circumventing section 553's procedures. 34 Promulgation of the interim rule was not exempt from the requirements of section 553 due to good cause, and the interim rule's amendment to the household definition, found in 7 C.F.R. Sec. 273.1(a)(2)(ii) (1982), is void for failure to comply with section 553.