Opinion ID: 730842
Heading Depth: 2
Heading Rank: 2

Heading: Procedural Challenges to the Regulation

Text: Statute of Limitations 30 Pennsylvania asserts that HHS's interest rate regulation, adopted over eight years ago, is invalid because it was adopted pursuant to inadequate notice and comment procedures. The applicable statute of limitations for civil actions against the United States under the Administrative Procedures Act (APA) is six years. See, e.g., Dougherty v. United States Navy Bd., 784 F.2d 499, 500-01 (3d Cir.1986). The regulation at issue was promulgated in final form in January 1987, and this suit was brought in October 1994. Hence, Pennsylvania has to demonstrate that the statute of limitations was tolled for its claim to survive. We agree with the district court that Pennsylvania failed this task. 31 The essence of Pennsylvania's argument that the statute of limitations has not run is that its claim was not ripe until less than six years before suit was filed. Ripeness is largely a prudential doctrine designed to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements over administrative policies, and also to protect the agencies from judicial interference until an administrative decision has been formalized and its effects felt in a concrete way by the challenging parties. Abbott Laboratories v. Gardner, 387 U.S. 136, 148-49, 87 S.Ct. 1507, 1515, 18 L.Ed.2d 681 (1967). In conducting a ripeness analysis, the court must consider whether or not the question is purely legal and easy to resolve, whether the agency or court has an interest in postponing review, and the extent to which the parties will be caused hardship if review is withheld. See Eagle-Picher Indus., Inc. v. EPA, 759 F.2d 905, 915 (D.C.Cir.1985); Erwin Chemerinsky, Federal Jurisdiction, §§ 2.4.2 & 2.4.3, 116-125 (1994); Cf. Artway v. Attorney General of N.J., 81 F.3d 1235, 1247 (3d Cir.1996). 32 Pennsylvania provides us with little assistance in evaluating its ripeness challenge. Its opening brief does not even mention the term ripeness, let alone make a substantial argument as to why its claim was not ripe at the time of promulgation of the regulation. Instead, Pennsylvania's opening brief merely states conclusorily that suit could not have been realistically brought at the time of promulgation of the regulation because there was no substantial threat of real or immediate harm at that time. (Pennsylvania Br. at 23) The first time that Pennsylvania mentioned the term ripeness was in its reply brief, but once again that brief contains nothing except a conclusory assertion that there was no substantial threat of real and immediate enforcement of the regulation at the time of its promulgation. (Pennsylvania Reply Br. at 9) These conclusory assertions are not enough. We hold the ripeness argument waived. See Laborers' Int'l Union of N. Am. v. Foster Wheeler Corp., 26 F.3d 375, 398 (3d Cir.) (An issue is waived unless a party raises it in its opening brief, and for those purposes 'a passing reference to an issue ... will not suffice to bring that issue before this court.'  (citation omitted) (ellipsis in original)), cert. denied, 513 U.S. 946, 115 S.Ct. 356, 130 L.Ed.2d 311 (1994); Service Employees Int'l Union v. Local 1199 N.E., 70 F.3d 647, 653 n. 7 (1st Cir.1995) (argument mentioned in passing, but not squarely argued, is waived). 33 In any event, Pennsylvania's ripeness challenge fails on its merits. As a threshold matter, we note that the ripeness challenge here arises in an unusual setting. Pennsylvania's argument isn't the typical argument that its claim is ripe today and should be adjudicated. Rather, the argument is that Pennsylvania's claim was not ripe in 1987, when HHS's interest rate regulation was promulgated. In effect, Pennsylvania wants us to conduct a hypothetical retrospective ripeness analysis. As a general matter, courts are not well suited to decide hypothetical questions about what they might have done in the past. See Eagle-Picher, 759 F.2d at 914. If courts were to routinely conduct retrospective ripeness analyses where a late petitioner offers no compelling justification for not having filed his claim in a timely manner, [it] ... would wreak havoc with the congressional intention that repose be brought to final agency action. Id. 34 In this case, however, we can make the ripeness determination easily. The Abbott Laboratories ripeness test involves consideration of: (I) the hardship to the parties of withholding consideration and (II) the fitness of the issues for judicial decision. 387 U.S. at 149, 87 S.Ct. at 1515-16; Pic-A-State Pa., Inc. v. Reno, 76 F.3d 1294, 1298 (3d Cir.1996). We evaluate these factors in light of the circumstances that were in existence at the time of the promulgation of HHS's interest rate regulation. 35 (i) Hardship to the Parties 36 The central question here is the extent to which denying the plaintiff judicial review would cause it hardship. See Chemerinsky, Federal Jurisdiction § 2.4.2, 116-23. We conclude that had Pennsylvania made its procedural challenges at the time of the promulgation of the regulation, a federal court would have determined that postponing review would cause Pennsylvania hardship. 37 At the outset, we note that Pennsylvania does not dispute that it had notice of HHS's regulations more than six years before October 1994, when the instant suit was commenced. HHS had proposed the repeal of its former regulation in the Federal Register in 1985 and had received public comment on its proposed rule changes that same year. Further, in April 1988, HHS issued an Action Transmittal Memorandum to all state agencies administering programs under Title IV of the Social Security Act (which covers AFDC), alerting them that, in accordance with its regulations, HHS was going to charge interest on disallowed paid claims for which states had received federal financial participation. 38 Pennsylvania argues that its claim was not ripe at the time of promulgation of the regulation because it had no outstanding debts at the time and hence was not immediately subject to an interest charge. In essence, the claim is that there was no hardship at the time of the promulgation of the regulation. That is like saying that an increase in the interest rate charged for late payments on a credit card presents no hardship to the customer because the customer has not yet made a delayed payment under the new and higher interest rate. We disagree with that premise. Instead, we think it more likely that the customer will have to change his behavior at the time he is informed of the rate hike in order to avoid the risk of having to pay the higher interest rate and hence will suffer a direct hardship at the time of the rate hike. The fact that the new, higher interest rate is a contingent future charge does not preclude it from causing harm to the party at the time it is put into place. 6 Cf. Riva v. Massachusetts, 61 F.3d 1003, 1012 (1st Cir.1995) (fact that harm from adoption of a plan negatively affected payments that plaintiff was to receive many years into the future did not preclude adjudication of claim at the current time; the plan concretely harmed plaintiff in creating uncertainty regarding his future income stream); Lorance v. AT & T Technologies, Inc., 490 U.S. 900, 906-08, 109 S.Ct. 2261, 2266-67, 104 L.Ed.2d 961 (1989) (in suit challenging a seniority system that allegedly discriminated against women, Court ruled that plaintiffs could sue at the time the system was put into place without waiting for the system's adverse effects because the very adoption of the plan imposed a concrete harm on the plaintiffs). 39 Had Pennsylvania challenged the regulation at the time of its promulgation, that would have eliminated the uncertainty as to its obligations thereunder. The elimination of this uncertainty as to whether or not it could be charged a rate of interest as high as the rate applicable on the private consumer market would have made it easier for Pennsylvania to decide how long it wanted to delay on payments it owed HHS. Concurrently, HHS would also have benefitted from the resolution of uncertainty regarding the validity of its regulation. 40 (ii) Fitness of the Issues for Resolution 41 Once again we look retrospectively to the time of promulgation of the regulation. The question is whether the issues were fit to be resolved at the time and whether the agency or court would have had an interest in postponing review. See Eagle-Picher, 759 F.2d at 915; Artway, 81 F.3d at 1249 (The more that the question presented is purely one of law, and the less that additional facts will aid the court in its inquiry, the more likely the issue is to be ripe, and vice-versa.) Pennsylvania's challenge would have been to whether HHS followed the proper notice and comment procedures in the enactment of its regulation. All the facts pertaining to such a challenge would have been fully developed and available at the time of the promulgation of the regulation. Delay would not have allowed the development of additional facts, and would only have served to make the relevant facts harder to retrieve. 42 In sum, the injury to Pennsylvania occurred at the time of the alleged procedural improprieties, and Pennsylvania was aggrieved at the time of promulgation of the regulation. See JEM Broadcasting v. FCC, 22 F.3d 320, 326 (D.C.Cir.1994); Shiny Rock Mining Corp. v. United States, 906 F.2d 1362, 1365-66 (9th Cir.1990). Hence, Pennsylvania's procedural challenge should have been brought within six years of the promulgation of the regulation. 43