Opinion ID: 506172
Heading Depth: 1
Heading Rank: 1

Heading: the self-evaluation provision

Text: 7 The final government-wide regulations contained a provision requiring all recipients of federal funds to complete a written self-evaluation of its compliance under the Act. 45 C.F.R. Sec. 90.43(b) (1987). They required recipients to identify and justify each age distinction imposed, to take corrective and remedial action whenever a self-evaluation indicates a violation of the Act, and to make the self-evaluation available on request to the agency and to the public for three years. Id. The self-evaluation requirement in the HHS-specific regulations proposed by the Secretary in September 1979 closely tracked the government-wide regulation; the only change was to substitute HEW (the predecessor agency's abbreviation, see supra note 1) for the general term agency. 44 Fed.Reg. 55,116. The final HHS-specific regulations, however, gave HHS discretion to require self-evaluation in particular cases. It stated: 8 As part of a compliance review ... or complaint investigation ... HHS may require a recipient ... to complete a written self-evaluation, in a manner specified by the responsible Department official, of any age distinction imposed in its program or activity receiving Federal financial assistance from HHS to assess the recipient's compliance with the Act. 9 45 C.F.R. Sec. 91.33(b)(1) (emphasis added). HHS explained the change as being 10 based upon HHS' determination that to be consistent with the requirements of the Paperwork Reduction Act of 1980, enacted after the publication of the NPRN [sic; NPRM?], the paperwork burden associated with the self-evaluation must be limited to recipients where circumstances indicate ... the need for the self-evaluation. 11 47 Fed.Reg. at 57,852. 12 Although this explanation was not false, it left out a few steps. First, between the publication of the proposed HHS-specific regulations in September 1979 and the promulgation of the final regulations in December 1980, the Office of Management and Budget had issued a memorandum disapproving of the mandatory self-evaluation requirement contained in the general regulations. Second, at that point OMB was in fact not operating under the Paperwork Reduction Act of 1980, Pub.L. No. 96-511, 94 Stat. 2812 (codified at 44 U.S.C. Sec. 3501 et seq. (1982) (the Paperwork Act), but under its predecessor, the Federal Reports Act, 44 U.S.C. Sec. 3501 et seq. (1976) (the Reports Act), which was in effect from 1942 until April 1, 1981. But, because of the relation between the Reports Act and the Paperwork Act, and OMB's role under both, the OMB memorandum compelled HHS's belief that if agency-specific regulations contained mandatory self-evaluation they would neither satisfy the consistency requirement of the Age Discrimination Act nor survive OMB scrutiny under the Paperwork Act. 13 This is why: The Reports Act denied legal effect to any compulsory agency collection of information unless the Director of OMB had approved the proposed collection. 44 U.S.C. Sec. 3509 (1976). 3 The Director could disapprove the proposed collection of information if he or she determined it to be unnecessary, for any reason. 44 U.S.C. Sec. 3506 (1976). 4 The Director so found in a memorandum issued February 14, 1980. (We deal below with a complaint based on his failure to use the word unnecessary.) 14 OMB's issuance of the memorandum of itself negated the general self-evaluation requirement. Two propositions followed. Any universal self-evaluation clause in agency-specific regulations would be most unlikely to win OMB sanction. Under the Paperwork Act (in effect at adoption of the final agency-specific regulations) OMB holds the same substantive power as it did under the Reports Act. Where it determines that collection of information is unnecessary, the agency may not proceed with the collection. 44 U.S.C. Sec. 3508 (1982). 5 Moreover, agency inclusion of such a clause in its own regulations would seem to violate 42 U.S.C. Sec. 6103(a)(4)'s requirement that agency-specific regulations be consistent with the general ones--which since February 1980 lacked any legally effective mandatory self-evaluation clause. (This second point assumes, of course, that Sec. 6103(a)(4)'s consistency was to be with the lawful aspects of the general ones, not with clauses promulgated but legally void.) 15 The Action Alliance nevertheless attacks the final HHS-specific regulation on a number of grounds. Four arguments, all relating to the legality of OMB's disapproval of the self-evaluation requirement, may be disposed of without extended comment. 16 First, appellants object that the mandatory self-evaluation requirement did not entail a collection of information within the meaning of the Reports Act. 44 U.S.C. Secs. 3506, 3509 (1976). The clause that OMB nullified, they say, only required recipients to perform a self-evaluation and to make the self-evaluation available on request to the agency and to the public, 45 C.F.R. Sec. 90.43(b)(4), not to submit the data to the agency. The claim is pure pettifoggery. Appellants cannot seriously believe that in enacting the Reports Act Congress was concerned solely or primarily with private parties' costs of mailing data to Washington; it is the record-keeping and data-gathering that constitute the burden. Moreover, OMB and its predecessor, the Bureau of the Budget, have interpreted the statutory term collection of information for nearly half a century to encompass [a]ny general or specific requirement for the establishment or maintenance of records ... which are to be used or be available for use in the collection of information. Regulation A, Federal Reporting Services, Clearance of Plans and Reports Forms, Title I(1)(e) (February 13, 1943), reprinted in Appendix to HHS Brief (Regulation A). Even under the deference we owe the agency, Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 842-45, 104 S.Ct. 2778, 2781-83, 81 L.Ed.2d 694 (1984), we doubt we could uphold a view of the Reports Act that made physical delivery to an agency essential to the notion of collection of information. Happily we confront no such oddity. 17 Second, appellants note that the Reports Act authorized OMB to bar collection of information only where it found the collection unnecessary, 44 U.S.C. Sec. 3506 (1976), and object that OMB's memorandum of disapproval did not employ that term. But the Director's memorandum found that HHS had failed to show the practical utility of the requirement. J.A. at 89. OMB has since 1943 used the practical utility standard to determine whether collections of information are unnecessary, Regulation A, Title II(3)(c), and its regulations specify that withholding of clearance shall constitute ... a determination in pursuance of section [3506] of the [Reports Act] that the collection of information in the manner proposed is unnecessary, id. at Title I(1)(h). OMB pushed the magic button as well as it needed to. 18 Third, appellants claim the existence of an unwritten exception to OMB's power under the Reports Act (and, by implication, the Paperwork Act) for what it calls duly promulgated legislative rules. Appellants' Reply Brief at 2; see also Appellants' Brief at 13-14. We find no basis whatever for this view. The Reports Act contains no suggestion of an exception for legislative rules: on its face it applies to any collection of information by an agency. 44 U.S.C. Secs. 3506, 3509 (1976); for the Paperwork Act, see 44 U.S.C. Sec. 3502(4) (1982). Nor would a legislative rules exception further the Reports Act's purpose. Were we to manufacture such an exception, it would allow agencies to circumvent OMB review of burdensome information requirements merely by proposing them as rules published in the Code of Federal Regulations and inviting comment. 6 This outcome would be directly contrary to the Reports Act's goal that OMB ensure that [i]nformation needed by Federal agencies ... be obtained with a minimum burden upon business enterprises ... and other persons. 44 U.S.C. Sec. 3501 (1976). 19 The Paperwork Act confirms this view. It assumes that rules entailing collection of information will be adopted pursuant to notice-and-comment rulemaking. See 44 U.S.C. Sec. 3504(h)(1) (1982) (requiring agency so proposing to forward a copy to the Director of OMB). Under the Administrative Procedure Act, as Congress obviously knew, such rulemaking exists primarily for legislative rules, since most alternatives--interpretive rules or rules of agency procedure--are exempt. 5 U.S.C. Sec. 553(b)(3)(A) (1982). It would be a bizarre anomaly to find a legislative rules exception to the Reports Act now that it has run its course, when its successor plainly contemplates no such exception. 20 The Alliance raises a fourth claim closely related to its proposed legislative rules exception. Noting that the Paperwork Act says that nothing in it shall be interpreted as increasing or decreasing the authority of the [OMB Director] with respect to the substantive policies and programs of departments ... including the substantive authority of any Federal agency to enforce the civil rights laws, 44 U.S.C. Sec. 3518(e) (1982), it suggests that OMB lacks Paperwork Act authority to restrict data-collection programs undertaken with respect to civil rights laws. But such a view of Sec. 3518(e) would completely exempt any civil rights activity from OMB's data collection supervision; Sec. 3518(e)'s language is inadequate to carve so large a slice from OMB's authority. 21 We finally turn to appellants' most interesting challenge. They argue that HHS's change in the self-evaluation provisions created such a gap between the proposed and final HHS-specific rules as to have required HHS to have issued a new notice and opened a new round of comment, in order to comply with the informal rulemaking provisions of the Administrative Procedure Act, 5 U.S.C. Sec. 553(b) (1982). They also claim that HHS's explanation of the change falls short of Sec. 553(c)'s requirement that agencies incorporate in adopted rules a concise general statement of their basis and purpose. 22 First we address an ancillary theory. The Alliance argues that HHS illegally modified the general regulations without an amending rulemaking. Rule rescissions, it says, are subject to the same requirements as rule adoptions. Motor Vehicle Manufacturers Ass'n v. State Farm Mutual Automobile Ins. Co., 463 U.S. 29, 41, 103 S.Ct. 2856, 2866, 77 L.Ed.2d 443 (1983). The point is indisputable but irrelevant. HHS didn't rescind that part of the general regulations. (In fact, it still has not tidied up the books. The mandatory version is printed in the current edition of the Code of Federal Regulations.) OMB, acting under the Reports Act, drained the mandatory provision of legal effect. Appellants do not even argue that OMB was required to proceed by notice-and-comment rulemaking; their complaint never attacked the general regulations at all. (We note that under the Paperwork Act OMB's role is fitted into the agency's notice-and-comment procedure. It may comment on proposed data collection rules. If the agency perseveres despite negative OMB comments, OMB may invalidate the collection provision if it finds that the agency's response to its comments was unreasonable. 44 U.S.C. Sec. 3504(h)(5)(C) (1982). But it is not required to initiate a notice-and-comment procedure of its own.) 23 In evaluating whether a change in rules between proposal and final adoption calls for a new round of notice-and-comment, 7 we have long acknowledged practical reality. In International Harvester Co. v. Ruckelshaus, 478 F.2d 615 (D.C.Cir.1973), we recognized that an agency could make changes responding to comments without embarking on a new round. Judge Leventhal observed that a contrary rule would lead to the absurdity that in rule-making under the APA the agency can learn from the comments ... only at the peril of starting a new procedural round of commentary. Id. at 632 n. 51. This has crystallized in the view that changes from the proposals do not require an additional round where the final rules represent a logical outgrowth of the proposals. See, e.g., Small Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506, 547 (D.C.Cir.1983) (reviewing circuit authority.) As Judge Wald there pointed out, the task is fundamentally one of balancing the advantages of additional comment--improvements in the quality of rules, fairness for affected parties, and facilitation of judicial review--against the burden on the public interest in expedition and finality. Id. at 546-47. 24 Here of course the change arose not from comment on proposals but from a supervening external force--the OMB memorandum. But we have no doubt that the principle applies with the same force here, as it would with a dispositive judicial decision or statutory change. Life is still short, and the interest in getting on with it still weighs against judges forcing agencies through unpromising and unnecessary procedural hoops. 25 Here we think HHS clearly justified in its implicit view that the plausible benefits of a new round of commentary could not justify the delay. In disapproving the mandatory self-evaluation provision of the general regulations, OMB stated that the addition of the Age Discrimination Act to the standard assurances used in conjunction with Federal grants and increased publicity of the provisions of the Act would be less burdensome and costly than the proposed one-time self-evaluation. J.A. at 89. It noted also that HHS should have examined methods of heighten[ing] awareness of the Act other than a recordkeeping requirement. Id. The comments strongly suggest that OMB would have vetoed any recordkeeping requirement more onerous than the one HHS promulgated in its final agency-specific rules. 26 Finding error in HHS's failure to open a new round of comment would necessarily rest on an expectation that commenters in such a round would have proposed some recordkeeping requirements more stringent than the one adopted--allowing the agency to demand self-evaluation when appropriate--yet moderate enough to pass OMB scrutiny. It must also assume that this hypothetical middle position would represent some substantial enhancement in HHS's extraction of data from recipients. The appellants' briefs in this case render such expectations implausible. Nowhere there--or at oral argument--have they even hinted at any alternative self-evaluation requirement, much less one with a serious prospect of passing OMB's guardpost. 27 In its original notice of its proposed agency-specific regulations HHS (really HEW--this was before HEW split into Education and HHS) asked reviewers not to comment on the proposals identical to those in the general regulations, including, of course, the self-evaluation requirement. 44 Fed.Reg. 55,108 (September 24, 1979). This does not alter our view that HHS was free to adopt final rules without a new round of comment. Under the consistency requirement of 42 U.S.C. Sec. 6103(a)(4), HHS's task on that issue was simple conformity to the general regulations--already adopted after full notice and opportunity to comment. Further, quite apart from the ample opportunity afforded by the earlier proceeding, comments made in ignorance of the as-yet unissued OMB memorandum would have shed no light on the options open to HHS after its issuance. 28 Accordingly we reject appellants' contention that HHS erred in failing to start a second round of notice-and-comment on the self-evaluation issue. 29 Finally, we reject appellants' claim that HHS's explanation of the change fell short of Sec. 553's requirement of a concise general statement of [the rules'] basis and purpose. We have described above the effect of the OMB memorandum. See supra pp. 1452-53. HHS rather telescoped the exact legal connections. The result was indeed very concise and general, but good enough under the circumstances.