Opinion ID: 173022
Heading Depth: 1
Heading Rank: 4

Heading: The May 17, 2007, Letter Was Final for Purposes of Judicial Review.

Text: The APA provides for judicial review of final agency action for which there is no other adequate remedy in a court. 5 U.S.C. § 704. The DOL argues that the May 17 decision was not a final agency action because the City, through its July 24 letter, sought reconsideration of the decision at the same time it filed its complaint in the district court. Therefore, the DOL contends, when the complaint was filed, the decision was not final and ripe for judicial review. Section 704 states: Except as otherwise expressly required by statute, agency action otherwise final is final for the purposes of this section whether or not there has been presented or determined an application ... for any form of reconsideration.... But this provision does not mean that a petition for reconsideration cannot affect the finality of an agency action. That language has long been construed by this and other courts merely to relieve parties from the requirement of petitioning for rehearing before seeking judicial review ... but not to prevent petitions for reconsideration that are actually filed from rendering the orders under reconsideration nonfinal. I.C. C. v. Bhd. of Locomotive Eng'rs, 482 U.S. 270, 284-85, 107 S.Ct. 2360, 96 L.Ed.2d 222 (1987). Accordingly, in most circumstances a case is not ripe for judicial review where a petition for reconsideration has been filed within a discretionary review period specifically provided by the agency. Id. at 279, 107 S.Ct. 2360. As construed in Locomotive Engineers ... the APA ... embrace[s] a tolling rule: The timely filing of a motion to reconsider renders the underlying order nonfinal for purposes of judicial review. In consequence, pendency of reconsideration renders the underlying decision not yet final, and it is implicit in the tolling rule that a party who has sought rehearing cannot seek judicial review until the rehearing has concluded. Stone v. I.N.S., 514 U.S. 386, 392, 115 S.Ct. 1537, 131 L.Ed.2d 465 (1995). But the tolling rule is not applicable in this case because the DOL has not established a rehearing or reconsideration procedure for § 13(c) certifications. Thus, there is no discretionary review period specifically provided by the agency of which the City could avail itself. Further, as the district court noted in granting the City's motion to strike, it is not clear that the July 24 letter intended to seek reconsideration of the May 17 decision, as opposed to suggesting a procedure for moving forward during the pendency of the City's challenge to that decision. Accordingly, we conclude that the DOL's May 17 decision was a final agency action subject to judicial review.
We take an independent review of the agency's action and are not bound by the district court's factual findings or legal conclusions. Utah Envtl. Cong. v. Bosworth, 439 F.3d 1184, 1188 (10th Cir.2006) (quotation omitted). Informal agency action is reviewed under the standard set forth in 5 U.S.C. § 706(2)(A), requiring agency action be set aside if it is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. See Overton Park, 401 U.S. at 414, 91 S.Ct. 814; McAlpine, 112 F.3d at 1436. The critical question in answering this inquiry is `whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.' McAlpine, 112 F.3d at 1436 (quoting Overton Park, 401 U.S. at 416, 91 S.Ct. 814). `Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. The court is not empowered to substitute its judgment for that of the agency.' Id. (quoting Overton Park, 401 U.S. at 416, 91 S.Ct. 814).
The City contends that the certification decision was arbitrary and capricious because (1) the DOL failed to follow its precedent and did not explain its departure from prior decisions; (2) the DOL's decision provided absolutely no discussion, explanation, or rationale for its conclusion that the City's objections were not sufficient, Aplt. Br. at 48; and (3) the Guidelines should not be interpreted to require, for an objection to be sufficient, that the objection address employee protections, rights, or interests. [2]
The City argues that the Agreement's provisions concerning interest arbitration, new jobs, minimum economic value, and successor employers are not required by § 13(c). In its administrative objections, the City cited numerous proceedings in which the DOL upheld objections to, and allowed parties to renegotiate, such provisions. The City complains that the DOL's failure to deem the City's objections sufficient resulted from a failure to follow such precedent, and the DOL then compounded its offense by failing to explain why it was departing from its precedent. Thus, the City contends, the DOL is requiring the City to continue shouldering burdensome obligations from which it has relieved other municipalities. For these reasons, the City argues that the DOL's decision was arbitrary and capricious. As the district court recognized, it appears that the City is correct that § 13(c) does not require the provisions to which the City objects. City of Colo. Springs, 587 F.Supp.2d at 1192. Further, we agree with the City that [a]gencies are under an obligation to follow their own regulations, procedures, and precedents, or provide a rational explanation for their departures. Big Horn Coal Co. v. Temple, 793 F.2d 1165, 1169 (10th Cir.1986) (quotation omitted); see also Midwestern Transp., Inc. v. Interstate Commerce Comm'n, 635 F.2d 771, 777 (10th Cir.1980) ([T]he court must require the agency to adhere to its own pronouncements or explain its departure from them; an agency must apply criteria it has announced as controlling or otherwise satisfactorily explain the basis for its departure therefrom.). But the other basic premises of the City's argument are flawed for at least two reasons. First, the DOL did not depart from its applicable precedents without explanation. With only one exception, the DOL decisions upon which the City relies were issued before the adoption of the Guidelines. As discussed above, in lieu of the prior procedure, the Guidelines implemented a requirement that objections be sufficient to trigger the DOL-overseen negotiation process. In light of the adoption of the Guidelines, and the implementation of a new, more stringent standard, the DOL was not necessarily bound by decisions rendered under the more lenient standard. And given the obvious change in the legal landscape, the DOL is not required to provide a particularized explanation for its failure to follow pre-Guidelines decisions. See Midwestern Transp., 635 F.2d at 777 (holding that any departure from prior criteria was adequately supported and justified by newly enacted statute and policy). The City did cite one post-Guidelines decision in which the DOL directed negotiations over interest dispute procedures because an interest arbitration procedure was not enforceable under state law. See Metro. Tulsa Transit Auth., No. OK-03-0022 (Dep't of Labor Nov. 4, 2003) (final certification). But the DOL's May 17 letter effectively distinguished that precedent by indicating it was not convinced that interest arbitration was unavailable under Colorado law. Second, the City fails to recognize the narrow scope of the § 13(c) certification procedure. As the DOL states on appeal, the City seeks to enlist DOL in the City's effort to extricate itself from provisions to which the City agreed when, in 1981, it concluded an agreement to which the parties did not attach an expiration date. Apparently, the Union has been unwilling to renegotiate them. And, understandably, the City is frustrated. DOL Aplee. Br. at 30. But as the district court recognized, [t]he purpose of Section 13(c) is not ... to invalidate overly-protective terms in a Section 13(c) agreement, but rather `to prevent federal funds from being used to destroy the collective-bargaining rights of organized workers.' City of Colo. Springs, 587 F.Supp.2d at 1192 (quoting Jackson Transit Auth., 457 U.S. at 17, 102 S.Ct. 2202). To that end, § 13(c) establishes minimal standards, Burke, 462 F.3d at 1258, and does not concern itself with other provisions to which the parties might agree. It is undisputed that the Agreement satisfies § 13(c)'s requirements. City of Colo. Springs, 587 F.Supp.2d at 1192. Once the DOL determines § 13(c) is satisfied, its role is at an end. We are not convinced by the City's vigorous complaints that it has no remedy other than the certification procedure because it is prohibited from renegotiating the Agreement outside of the Guidelines process. We perceive nothing in the Guidelines that precludes parties from renegotiating a 13(c) agreement. In fact, it appears that the Guidelines encourage parties to negotiate their own arrangements wherever possible. See 60 Fed.Reg. 62964 (The new guidelines continue to encourage local negotiations or discussions for the development of employee protection terms.); see also 29 C.F.R. § 215.3(d)(1) (encouraging parties to negotiate during the objection period with the aim of arriving at a mutually agreeable solution to objections any party has to the terms and conditions of the referral); id. § 215.3(g) (providing for substitution of terms and conditions if the parties subsequently reach agreement). And the DOL informs us that parties are free to renegotiate 13(c) agreements outside of the Guidelines context. Moreover, it is not apparent to us that the Guidelines would foreclose any other alternative the City may have for relieving itself of obligations that it no longer wishes to fulfill. The question of the City's potential remedies is not before us, and we are not deciding that issue. But just as we see nothing in the Guidelines precluding the City from vigorously seeking renegotiation under the threat of foregoing any further federal assistance (which, presumably, would negatively affect the Union as well as the City), we see nothing precluding the City from pursuing state-law theories of relief in state court. See Jackson Transit Auth., 457 U.S. at 23-24, 102 S.Ct. 2202 (Section 13(c) evinces no congressional intent to upset the decision in the National Labor Relations Act to permit state law to govern the relationships between local governmental entities and the unions representing their employees. ... A consistent theme runs throughout the consideration of § 13(c): Congress intended that labor relations between transit workers and local governments would be controlled by state law.). [3] Contrary to the City's protest, the DOL has not improperly imposed perpetual burdensome requirements on the City. See Burke, 462 F.3d at 1258 (quoting Donovan, 767 F.2d at 947, for the proposition that Section 13(c) does not prescribe mandatory labor standards for the states, but rather dictates the terms of federal mass transit assistance. States are free to forego such assistance and thus to adopt any collective bargaining scheme they desire.). The DOL simply restricted itself to its proper, limited role with regard to § 13(c) certifications.
The City further argues that the DOL's decision was arbitrary and capricious because it did not provide an adequate explanation for the denial. Particularly, the City contends that the DOL did not explain its decision so that a reviewing court can discern its rationale. In holding that a court must judge the propriety of [agency] action solely by the grounds invoked by the agency, the Supreme Court also stated, [i]f the administrative action is to be tested by the basis upon which it purports to rest, that basis must be set forth with such clarity as to be understandable. SEC v. Chenery Corp., 332 U.S. 194, 196, 67 S.Ct. 1575, 91 L.Ed. 1995 (1947). The APA, however, does not require formal findings in informal adjudicatory proceedings. See Overton Park, 401 U.S. at 417, 91 S.Ct. 814. Rather, the APA states, [e]xcept in affirming a prior denial or when the denial is self-explanatory, the notice shall be accompanied by a brief statement of the grounds for denial. 5 U.S.C. § 555(e). Thus, while the DOL was required to provide some written explanation of its reasons for denying the City's objection, such explanation need only conform to the APA's requirements. See Pension Benefit Guar. Corp. v. LTV Corp., 496 U.S. 633, 653, 110 S.Ct. 2668, 110 L.Ed.2d 579 (1990) (applying to informal adjudications the rule of Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, 435 U.S. 519, 98 S.Ct. 1197, 55 L.Ed.2d 460 (1978), that when the Due Process Clause is not implicated and an agency's governing statute contains no specific procedural mandates, the APA establishes the maximum procedural requirements a reviewing court may impose on agencies). [T]he agency's statement of reasons need not include detailed findings of fact but must inform the court and the petitioner of the grounds of decision and the essential facts upon which the administrative decision was based. Citizens' Comm. to Save Our Canyons v. U.S. Forest Serv., 297 F.3d 1012, 1035 (10th Cir.2002) (quotation omitted). The DOL's May 17 denial admittedly was terse, but it was sufficient for review. It identified the relevant legal criteria and the DOL's determination that the City's objections did not meet them. And with regard to the interest-arbitration issue, it added an additional explanation of the reasons underlying its decision. While we may not supply a reasoned basis for the agency's action that the agency itself has not given, we will uphold a decision of less than ideal clarity if the agency's path may reasonably be discerned. Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 285-86, 95 S.Ct. 438, 42 L.Ed.2d 447 (1974) (citation omitted); see also Citizens' Comm. to Save Our Canyons, 297 F.3d at 1034-35. Moreover, it appears that, even if the May 17 letter and the administrative record were inadequate for judicial review, in these circumstances such inadequacy would not justify reversing the district court's decision. The Supreme Court has held that, where an agency decision and administrative record is insufficient for judicial review, a court may require the agency to explain its decision. See Camp v. Pitts, 411 U.S. 138, 142-43, 93 S.Ct. 1241, 36 L.Ed.2d 106 (1973) (per curiam) (If ... there was such failure to explain administrative action as to frustrate effective judicial review, the remedy was not to hold a de novo hearing but, as contemplated by Overton Park, to obtain from the agency, either through affidavits or testimony, such additional explanation of the reasons for the agency decision as may prove necessary.); Overton Park, 401 U.S. at 420, 91 S.Ct. 814 (noting that the district court could take testimony or could allow the Secretary to make formal findings). In the August 16 letter, which was issued by the same DOL decisionmaker close to the time of the initial decision, the DOL provided a more detailed explanation why it determined that the City's objections were not sufficient. Accordingly, to the extent this court were to conclude that the May 17 letter and the administrative record lacked sufficient information to permit judicial review, it appears that the August 16 letter would provide a basis for judicial review. [4]
Finally, the City argues that § 215.3(d)(3) should not be interpreted to require, for an objection to be sufficient, that the objection involve employee protections, rights, or interests. [5] The City contends that a transit agency clearly has the right to object to the certification of a 13(c) agreement, see 29 C.F.R. § 215.3(d)(1), and that the DOL has indicated that [t]he definition [of sufficient] does not favor either party over the other, 60 Fed.Reg. 62965. Review of an agency's interpretation of its own regulations is substantially deferential. St. Anthony Hosp. v. U.S. Dep't of Health & Human Servs., 309 F.3d 680, 691-92 (10th Cir.2002) (citing Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512, 114 S.Ct. 2381, 129 L.Ed.2d 405 (1994)). [T]he agency's interpretation must be given controlling weight unless it is plainly erroneous or inconsistent with the regulation. In other words, we must defer to the Secretary's interpretation unless an alternative reading is compelled by the regulation's plain language or by other indications of the Secretary's intent at the time of the regulation's promulgation. Id. at 692 (quoting Thomas Jefferson Univ., 512 U.S. at 512, 114 S.Ct. 2381). The Guidelines provide: The Department of Labor will consider an objection to be sufficient when: (i) The objection raises material issues that may require alternative employee protections under 49 U.S.C. 5333(b); or (ii) The objection concerns changes in legal or factual circumstances that may materially affect the rights or interests of employees. 29 C.F.R. § 215.3(d)(3). The plain language of the Guidelines is solicitous toward employees, specifying alternative employee protections in § (d)(3)(i) and changes... that may materially affect the rights or interests of employees  in § (d)(3)(ii) (emphasis added). Accordingly, we conclude that an interpretation that emphasizes employee protections, interests, and rights is not plainly erroneous or inconsistent with the Guidelines. This is particularly true in light of § 13(c) itself, which was included in UMTA specifically to protect employees' rights and interests. See Jackson Transit Auth., 457 U.S. at 17, 102 S.Ct. 2202.