Opinion ID: 1357742
Heading Depth: 3
Heading Rank: 2

Heading: The Inapplicability of Chenery

Text: The Supreme Court's decision in SEC v. Chenery Corp. stands for the proposition that a reviewing court may not affirm an agency decision based on reasoning that the agency itself never considered. See SEC v. Chenery Corp., 318 U.S. 80, 87, 63 S.Ct. 454, 87 L.Ed. 626 (1943). The Partial Dissent characterizes our decision as holding: Forest Guardians is barred from challenging the Agua-Caballos project on the ground that the agency changed its rationale when the project was challenged in court. See Partial Dissent at 1131. The Partial Dissent thus suggests that our holding bars Forest Guardians from raising a Chenery challenge. We respectfully disagree. Chenery is largely inapposite, and the Partial Dissent's misguided reliance on its analytic rubric results in an incorrect interpretation of our holding. Forest Guardians' appeal does not center on the district court's failure to apply Chenery. Instead, it has presented a merits challenge based upon the purported failure of the USFS to consider and apply the 2000 BAS standard; it has contended that this failure effected a NFMA violation. It raises Chenery in an effort to bolster its merits argumentspecifically, to prevent the USFS from defending the project on the basis of the 2000 BAS standard. Aplt. Opening Br. at 44-45 (noting that it was undisputed that the USFS consistently applied the 1982 NFMA regulations throughout the planning and decision-making processes for the A-C project and, consequently, there can be no doubt that the USFS's A-C project decision must be vacated pursuant to the Chenery rule). The district court simply determined that Forest Guardians' overarching BAS merits argumentnot its subsidiary Chenery contentionis barred because Forest Guardians failed to exhaust it. And we agree, detailing in this decision the administrative developments related to the implementation of the 2000 BAS standard and noting that those developments should have put Forest Guardians on notice that the 2000 BAS standard might be applicable and that, consequently, it should challenge before the agency the USFS's purported failure to consider and apply that standard. Chenery probably would have been directly at issue if (1) the district court instead of resolving the matter on exhaustion groundshad reached the merits of the USFS's argument that the USFS in fact properly applied the 2000 BAS standard and endorsed this view; and (2) we then subsequently affirmed on that basis. But that is not the situation here. The district court did not reach the merits. See Aplt. Opening Br. Attach. at 39 (The Plaintiffs failed to exhaust the administrative process, and because exhaustion of the administrative process is mandatory, the Court will not address the merits of the Plaintiffs' claims that the USFS did not apply the `best available science' standard); see also Aplt. Opening Br. at 32-33 (recognizing that the district court did not reach the merits). As noted above, we also have expressly declined to reach the merits and do not affirm on that basis. In other words, we do not uphold the USFS's decision on reasoning that was never presented to and considered by the agency which would run afoul of Chenery. Like the district court's, ours is an exhaustion ruling. And it bears underscoring that this ruling relates to Forest Guardians' merits argument concerning the 2000 BAS standard; beyond that, we do not stray. Therefore, we need not quarrel with the Partial Dissent's assertion that a Chenery claim is never barred for failure to exhaust administrative remedies, Partial Dissent at 1132, because our exhaustion ruling does not relate to any purported Chenery claim by Forest Guardians. The exhaustion and Chenery doctrines involve distinct but related inquiries. The exhaustion doctrine furthers this [Chenery] principle by ensuring that an agency always has an opportunity to justify its action. Etelson v. Office of Pers. Mgmt., 684 F.2d 918, 925 n. 9 (D.C.Cir. 1982); cf. Skubel v. Sullivan, 925 F.Supp. 930, 944 (D.Conn.1996) (reflecting a relationship between Chenery and exhaustion by noting that the agency defendants' substantive arguments ... in their briefs technically fall into the category of impermissible post-hoc rationalizations under the Chenery principle, but presuming that the agency defendants would have raised the arguments in a denial of a petition for rulemaking given that this Court has excused the plaintiffs' failure to exhaust their remedies by petitioning for rulemaking), aff'd as modified on other grounds sub nom. Skubel v. Fuoroli, 113 F.3d 330, 335 (2d Cir.1997) ([W]e find that the district court properly exercised its discretion in excusing plaintiffs' failure to exhaust their administrative remedies.). The exhaustion doctrine, however, is independently operational and may in fact eliminate the need for further inquiry into a possible Chenery problem. For instance, it seems quite clear as a matter of logic that if the agency rationale that is alleged to be late-blooming as contemplated by Chenery relates to a claim that a plaintiff has not exhausted and the agency asserts exhaustion as a defense, then this would be at least one situation where application of the exhaustion doctrine might well negate the need to reach the possible Chenery problem. That is the situation before us here. [8] In large part, our disagreement with the Partial Dissent relates to the framing of the question in light of the two distinct inquiries (i.e., concerning exhaustion and Chenery ). As the Partial Dissent would have it, the question is the following: whether the district court may affirm the USFS on a substantive rationale that the USFS did not raise before the agency. The Partial Dissent suggests that our holding prevents Forest Guardians from raising the Chenery problem to bar this district court action. We respectfully submit that the Partial Dissent is asking the wrong question and that doing so leads it to incorrectly interpret the effect of our holding. Generally, the question is whetherpossessing adequate notice of a claim for relief, i.e., the possible applicability of the 2000 BAS standard and USFS's purported failure to consider and apply it Forest Guardians is precluded from pursuing that claim in federal court, when Forest Guardians failed to raise the claim before the administrative agency. Under this framing of the question, there is no Chenery problem. The district court simply answered the question in the affirmative through a straightforward application of exhaustion principles, and we affirm on the same basis. These exhaustion rulings do not relate to any purported Chenery claim of Forest Guardians, and neither the district court nor we reach the merits of the BAS argument. For the foregoing reasons, we believe that our exhaustion holding is sound and respectfully disagree with the approach of the Partial Dissent.