Court Opinion

ID: 9477652
Source: CourtListenerOpinion
Date Created: 2023-08-05 06:28:07.257147+00
Date Added: 2024-06-11T17:45:58.842721
License: Public Domain

WALD, Chief Judge,
dissenting in part:
I disagree with the majority’s conclusion that the Department of Health and Human Services’ (HHS) modification of its proposed regulations to implement the Age Discrimination Act (ADA), 42 U.S.C. § 6101, through self-evaluations of ADA compliance by recipients of federal monies, did not require notice and comment pursuant to § 553 of the Administrative Procedure Act (APA). 5 U.S.C. § 553.
The district court correctly held that the self-evaluation provisions are substantive rulemaking that require § 553 public notice and comment. See Joint Appendix (J.A.) at 149. HHS (then HEW) fulfilled this requirement when it first proposed the government-wide, mandatory self-evaluation clause on December 1, 1978. See 43 Fed.Reg. 56,437; 44 Fed.Reg. 33,770 (final general regulations published June 12, 1979). However, responding to the Office of Management and Budget’s (OMB) memorandum of disapproval (dated February 14, 1980), in its final agency-specific requirements, see J.A. at 89, HHS summarily revised the original self-evaluation requirement to make it discretionary with the agency. See 47 Fed.Reg. 57,858 (codified at 45 C.F.R. § 91). Specifically, HHS confined such discretionary requests to “compliance review[s] or complaint investigation[s]_” Id. at 57,852. No notice of the proposed revision, hence no invitation for public comment, was made between the time the agency regulations were proposed and finalized. Indeed, when HHS proposed its agency-specific regulations on September 24, 1979, the public was expressly told not to submit comments about the self-evaluation requirement, since it must fol*1459low the general model. See 44 Fed.Reg. 55,108 (September 24, 1979).
In general, agencies engaged in rulemak-ing must signal for notice and comment material changes between the proposed rule and the final rule, above all when those changes are unrelated to the comments received. HHS did not meet this obligation. The majority explains that it is reluctant to force HHS “through unpromising and unnecessary procedural hoops” of notice and comment because the OMB directive had foreclosed any alternatives to the discretionary requirement embodied in the final rule. See Majority Opinion at 1456. Yet, although § 553 itself allows agencies to dispense with notice and comment if “good cause” is shown that such proceedings are “unnecessary,”1 HHS made no such claim here;2 nor is the futility of allowing notice and comment on the modification apparent from the record.3 The majority speculates that OMB would have vetoed any more stringent record-keeping requirement than that promulgated, yet OMB’s own letter of disapproval is to the contrary. OMB’s reasons for its decision that the compulsory requirement could not stand all stress the inadequate commentary and justification for the mandatory requirement; specifically, OMB criticizes HHS for failing to consider “alternative methods” to the recordkeeping requirement. See J.A. at 89. Public comment would have permitted exploration of the “alternative measures” to which OMB alludes, for instance affected persons might have identified for the agency a variety of circumstances or situations when it is most urgent for HHS to require recipients to perform self-evaluations.
Because HHS failed to comply with § 553 when it promulgated its revised agency-specific regulations, and because, unlike the majority, I read the record, and particularly the OMB disapproval order, as supporting, not diminishing, the importance of public participation, I would remand with instructions that HHS seek comment on its proposed modification to the mandatory self-evaluation requirement.

. 5 U.S.C. § 553(b)(B) reads:
[Notice and comment is not required] when the agency for good cause finds (and incorporates the finding and a brief statement of reasons therefor in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.

. In fact, HHS did not even mention the OMB memorandum until appellants-Action Alliance, et al. pointed to its existence in this litigation, four years after the HHS actions.

. The majority cites Small Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506 (D.C.Cir. 1983), to suggest that the rule change was the '“logical outgrowth,’" of the proposed rules, hence unworthy of further public proceedings. In the majority’s words, “the plausible benefits of a new round of commentary could not justify the delay.’’ See Majority Opinion at 1456.
Small Refiner involved quite different circumstances. Whereas the modifications in Small Refiner clearly came about in response to public commentary, here the revision is obedience to a single, terse and unpublished OMB disapproval memorandum. And the revision in this case has weighty consequences. Under the first proposal, HHS was compelled to require recipients of federal monies to perform self-evaluations; yet under the HHS-specific regulations, HHS has discretion never to order any evaluations, which the record shows has indeed been HHS’s policy. Additionally, at the preceding HHS rulemaking stage, from which the revised rules are said to be a logical outgrowth, the public was expressly told not to submit comments; similarly, the affected public had no input into the OMB memorandum decision. The majority’s fear of a delaying “new round” of commentary is ironic: The affected public has yet to be allowed its first round.
The logical outgrowth exception to § 553, which assumes prior, comprehensive public participation, is thus inapposite. None of Small Refiner's three purposes underlying § 553 was satisfied here: (1) the revised regulation was not “ ‘tested by exposure to diverse public comment,’ ” 705 F.2d at 547 (citing BASF Wyandotte Corp., 598 F.2d 637 at 641); (2) senior citizen groups were unfairly silenced in forming the eventual regulations; (3) and the omission of notice and comment has compromised the evi-dentiary record for review, as is manifest in the confused chronology and sparse reasoning underlying this provision. See id.