Court Opinion

ID: 3032428
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:47:47.911247+00
Date Added: 2024-06-11T11:48:18.192703
License: Public Domain

FOR PUBLICATION
 UNITED STATES COURT OF APPEALS
      FOR THE NINTH CIRCUIT

CLARENCE I. PAULSEN, III,             
              Petitioner-Appellee,
                                           No. 03-35337
               v.
                                            D.C. No.
CHARLES A. DANIELS, Warden, of            CV-99-01746-HA
FCI Sheridan,
            Respondent-Appellant.
                                      

JEFFREY D. PULLINS,                   
               Petitioner-Appellee,        No. 03-35360
                v.                          D.C. No.
CHARLES A. DANIELS, Warden,               CV-00-00174-HA
            Respondent-Appellant.
                                      

DENNIS W. BOHNER,                     
             Petitioner-Appellee,           No. 03-35356
              v.                             D.C. No.
CHARLES A. DANIELS, Warden,               CV-99-01116-ALH
           Respondent-Appellant.
                                      

RANDOLPH BROWN,                       
             Petitioner-Appellee,           No. 03-35355
              v.                             D.C. No.
CHARLES A. DANIELS, Warden,               CV-01-01250-ALH
           Respondent-Appellant.
                                      
                           7585
7586                 PAULSEN v. DANIELS

JEREMY E. JAMES,                       
              Petitioner-Appellee,           No. 03-35354
               v.                             D.C. No.
CHARLES A. DANIELS, Warden,                CV-99-00872-ALH
            Respondent-Appellant.
                                       

KARLOS LAMAR GRIER,                    
                Petitioner-Appellee,
                 v.                          No. 03-35352
JOSEPH CRABTREE, Warden, Federal              D.C. No.
Correction Instution, Sheridan,            CV-98-01544-ALH
OR,
             Respondent-Appellant.
                                       

SHAWN ROBERT LEE,                      
             Petitioner-Appellee,            No. 03-35351
              v.                             D.C. No.
ROBERT HOOD,                               CV-99-01747-HA
           Respondent-Appellant.
                                       

ADRIAN L. JOHNSON,                     
              Petitioner-Appellee,          No. 03-35350
               v.                            D.C. No.
CHARLES A. DANIELS, Warden,                CV-99-00802-HA
            Respondent-Appellant.
                                       
                     PAULSEN v. DANIELS                7587

SABIL M. MUJAHID,                     
             Petitioner-Appellee,          No. 03-35349
               v.                           D.C. No.
CHARLES A. DANIELS, Warden,               CV-99-00199-HA
           Respondent-Appellant.
                                      

JACOB JONES,                          
               Petitioner-Appellee,         No. 03-35347
                v.                           D.C. No.
CHARLES   A. DANIELS, Warden,             CV-99-00518-ALH
             Respondent-Appellant.
                                      

VINCENTE SUBIA,                       
              Petitioner-Appellee,          No. 03-35346
                v.                           D.C. No.
CHARLES A. DANIELS, Warden,               CV-99-00011-ALH
           Respondent-Appellant.
                                      

JASON ROBERT TUITE,                   
              Petitioner-Appellee,          No. 03-35344
               v.                            D.C. No.
ROBERT A. HOOD, Warden,                   CV-01-01259-ALH
           Respondent-Appellant.
                                      
7588                 PAULSEN v. DANIELS

SEAN MOORE,                           
               Petitioner-Appellee,         No. 03-35343
                v.                           D.C. No.
CHARLES   A. DANIELS, Warden,             CV-99-00596-ALH
             Respondent-Appellant.
                                      

EARL LEONARD,                         
               Petitioner-Appellee,         No. 03-35341
                v.                           D.C. No.
CHARLES   A. DANIELS, Warden,             CV-00-00888-ALH
             Respondent-Appellant.
                                      

CHARLES R. NORGAARD,                  
             Petitioner-Appellee,           No. 03-35340
              v.                            D.C. No.
CHARLES A. DANIELS, Warden,               CV-01-01094-HA
           Respondent-Appellant.
                                      

ROBERT ALLEN FURNAS,                      No. 03-35339
             Petitioner-Appellee,
              v.                            D.C. No.
                                          CV-99-00795-HA
CHARLES A. DANIEL, Warden,
                                             OPINION
           Respondent-Appellant.
                                      
       Appeal from the United States District Court
                for the District of Oregon
       Ancer L. Haggerty, District Judge, Presiding
              PAULSEN v. DANIELS                  7589
             Argued and Submitted
   April 11, 2005—San Francisco, California

              Filed June 27, 2005

Before: Robert R. Beezer, Sidney R. Thomas, and
      William A. Fletcher, Circuit Judges.

          Opinion by Judge Thomas;
         Concurrence by Judge Beezer
                   PAULSEN v. DANIELS             7591

                      COUNSEL

Thomas M. Gannon, Department of Justice, Criminal Divi-
sion, Washington, D.C., for the respondents-appellants.

Stephen R. Sady, Chief Deputy Federal Public Defender,
Portland, Oregon, for the petitioners-appellees.
7592                  PAULSEN v. DANIELS
                          OPINION

THOMAS, Circuit Judge:

   We consider in this appeal whether the Bureau of Prisons
(“Bureau”) violated the Administrative Procedure Act
(“APA”) in adopting an interim regulation pertaining to an
early release incentive program for federal prisoners who had
successfully completed a substance abuse program. We con-
clude that the district court correctly held that the Bureau vio-
lated the APA, and that the petitioners were entitled to relief.

                                I

   This appeal is the latest chapter in a series of cases con-
cerning a program created by Congress for the purpose of
supplying substance abuse treatment to prisoners. In 1990,
faced with a burgeoning federal prison population incarcer-
ated for drug-related offenses and evidence that prison sub-
stance abuse treatment programs sharply reduce recidivism,
Congress required the Bureau to “make available appropriate
substance abuse treatment for each prisoner the Bureau deter-
mines has a treatable condition of substance addiction or
abuse.” Crime Control Act of 1990, Pub. L. 101-647, § 2903,
104 Stat. 4789, 4913 (codified as amended at 18 U.S.C.
§ 3621(b)). Concerned by an apparent lack of program inter-
est, Congress amended the statute in 1994 to provide federal
prisoners with incentives to complete a Bureau substance
abuse treatment program by authorizing the reduction of
incarceration for prisoners “convicted of a nonviolent
offense” who successfully completed such a program. The
incentive provision reads: “The period a prisoner convicted of
a nonviolent offense remains in custody after successfully
completing a treatment program may be reduced by the
Bureau of Prisons, but such reduction may not be more than
one year from the term the prisoner must otherwise serve.”
Violent Crime Control and Law Enforcement Act of 1994,
                      PAULSEN v. DANIELS                    7593
Pub. L. 103-322, § 32001, 108 Stat. 1796, 1897 (codified at
18 U.S.C. § 3621(e)(2)(B)).

   The Bureau published a regulation to implement the early
release incentive one year later. The Bureau defined prisoners
who had not been convicted of a nonviolent offense and thus
were ineligible for early release as those prisoners who were
currently incarcerated for committing a crime of violence as
defined in 18 U.S.C. § 924(c)(3). 28 C.F.R. § 550.58 (1995);
see 60 Fed. Reg. 27,692, at 27,695. Following the promulga-
tion of the 1995 regulation, the Courts of Appeals reached dif-
fering conclusions on the question of whether the Bureau had
discretion to further define a crime of violence as an offense
involving a firearm, and thus exclude from eligibility for the
early release incentive those prisoners who were incarcerated
for such offenses. See Lopez v. Davis, 531 U.S. 230, 234-35
(2001).

   In light of the split among the Circuits, the Bureau promul-
gated an interim regulation, which is the subject of this litiga-
tion, on October 15, 1997 and made the regulation effective
approximately one week prior, on October 9, 1997. 28 C.F.R.
§ 550.58(a)(1)(vi)(B) (1997); 62 Fed. Reg. 53,690. The 1997
interim regulation, like the one it superceded, made ineligible
for the early release incentive those prisoners currently incar-
cerated for an offense that involved the possession, use, or
carrying of a firearm. 28 C.F.R. § 550.58(a)(1)(vi)(B). The
1997 interim regulation differs from the 1995 regulation by
relying on “the discretion allotted to the Director of the
Bureau of Prisons in granting a sentence reduction to exclude
[enumerated categories of] inmates,” 62 Fed. Reg. at 53,690,
rather than defining the statutory terms “prisoner convicted of
a nonviolent offense” or “crime of violence.”

   The commentary accompanying the 1997 interim regula-
tion noted that the Bureau was “publishing this change as an
interim rule in order to solicit public comment while continu-
ing to provide consideration for early release to qualified
7594                  PAULSEN v. DANIELS
inmates.” 62 Fed. Reg. at 53,690. However, the effect of the
implemented interim regulation was to deny program eligibil-
ity to certain categories of inmates, including the petitioners.
The commentary further provided that comments on the
interim rule were due on December 15, 1997, and that the
comments would be considered before final action was taken.
Id.

   On December 22, 2000, the Bureau replaced the 1997
interim regulation with a final regulation, which adopted the
1997 regulation without change. See 65 Fed. Reg. 80,745. The
commentary accompanying the final regulation noted that the
Bureau had received approximately 150 comments from indi-
viduals and organizations, 138 of them identical. Id. at
80,747. The Bureau’s summary of those comments did not
mention any challenge by any commenter to the procedural
regularity of the 1997 regulation. See id. at 80,747-80,748.

   The petitioners are a group of sixteen prisoners or former
prisoners who were convicted of various offenses involving
the carrying, possession, or use of firearms, and who were
sentenced to terms of imprisonment, at least in part, at the
Federal Correctional Institution in Sheridan, Oregon (“FCI
Sheridan”). Between December 1997 and October 2000,
while the petitioners were serving their terms of imprisonment
at FCI Sheridan, they were informed that they were eligible
to participate in the Bureau’s in-prison substance abuse treat-
ment program. The petitioners were further informed that
because their offenses involved the carrying, possession, or
use of firearms, they were not eligible for early release under
the Bureau’s 1997 interim regulation. Between December
1998 and August 2001, the petitioners filed for habeas corpus
relief under 28 U.S.C. § 2241, asserting that they were cate-
gorically eligible for a sentence reduction for participation in
the treatment program under 18 U.S.C. § 3621(e).

  After we issued our decision in Bowen v. Hood, 202 F.3d
1211 (9th Cir. 2000) — in which we held that the Bureau, in
                           PAULSEN v. DANIELS                          7595
its 1997 interim regulation, validly exercised its discretion in
making prisoners who were convicted of an offense involving
the carrying, possession, or use of a firearm ineligible for the
early release incentive — the petitioners moved for leave to
amend their habeas petitions to add a claim challenging the
procedural regularity of the 1997 regulation. The United
States District Court for the District of Oregon denied the
motions and dismissed the petitions. See Gavis v. Hood, 2001
WL 34039136 (D. Or. 2001). We reversed the district court
in Grier v. Hood, 46 Fed. Appx. 433, 440 (9th Cir. 2002),
holding that the petitioners should have been allowed to
amend their habeas petitions pursuant to Fed. R. Civ. P. 15(b),
as allowing such amendments would not be futile.

   In Bohner v. Daniels, 243 F. Supp.2d 1171 (D. Or. 2003),
the district court on remand considered the petition of Dennis
W. Bohner and held that the Bureau’s 1997 regulation vio-
lated section 553(b) and (d) of the APA,1 the APA violations
  1
   5 U.S.C. § 553 provides, in relevant part:
      (b) General notice of proposed rule making shall be published
      in the Federal Register, unless persons subject thereto are named
      and either personally served or otherwise have actual notice
      thereof in accordance with law. The notice shall include—
          (1) a statement of the time, place, and nature of public rule
          making proceedings;
          (2) reference to the legal authority under which the rule is
          proposed; and
          (3) either the terms or substance of the proposed rule or a
          description of the subjects and issues involved.
      Except when notice or hearing is required by statute, this subsec-
      tion does not apply—
          (A) to interpretative rules, general statements of policy, or
          rules of agency organization, procedure, or practice; or
          (B) when the agency for good cause finds (and incorpo-
          rates 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.
7596                       PAULSEN v. DANIELS
were not harmless under 5 U.S.C. § 706, and therefore the
regulation was invalid. Id. at 1175-77. The district court
granted the petitioner’s motion to amend his habeas petition
and granted his petition for a writ of habeas corpus. Id. at
1179. Following the reasoning in Bohner, the district court
ordered habeas relief for the remainder of the petitioners.
These timely appeals followed. In December 2003, we
ordered the appeals in the cases of all sixteen petitioners con-
solidated.

                                     II

                                     A

   [1] The Bureau plainly violated the APA in its promulga-
tion of the 1997 interim regulation. The APA requires agen-
cies to follow certain procedures when it decides to issue a
rule, including: (1) publishing notice of the proposed rule-
making in the Federal Register, 5 U.S.C. § 553(b); (2) provid-
ing a period for interested persons to comment on the
proposed rule, which comments will be considered by the
agency prior to adopting the rule, id. at § 553(c); and (3) pub-
lishing the adopted rule not less than thirty days before its
effective date, with certain exceptions that are not applicable
here, id. at § 553(d).

   ...
   (d) The required publication or service of a substantive rule
   shall be made not less than 30 days before its effective date,
   except—
         (1) a substantive rule which grants or recognizes an
         exemption or relieves a restriction;
         (2)   interpretative rules and statements of policy; or
         (3) as otherwise provided by the agency for good cause
         found and published with the rule.
                          PAULSEN v. DANIELS                          7597
   [2] “In enacting the APA, Congress made a judgment that
notions of fairness and informed administrative decisionmak-
ing require that agency decisions be made only after affording
interested persons notice and an opportunity to comment.”
Chrysler Corp. v. Brown, 441 U.S. 281, 316 (1979); see also
Riverbend Farms, Inc. v. Madigan, 958 F.2d 1479, 1485 (9th
Cir. 1992) (“[T]he notice and comment requirements . . . are
designed to ensure public participation in rulemaking.”). It is
antithetical to the structure and purpose of the APA for an
agency to implement a rule first, and then seek comment later.
The district court correctly concluded that the Bureau violated
§ 553(b) and (d). Bohner, 243 F. Supp.2d at 1175.2

                                    B

   [3] Although the Bureau does not seriously contest that it
violated the APA in promulgating the 1997 interim rule, it
argues that the petitioners lack standing to challenge the rule.
“To satisfy the injury in fact requirement, a [petitioner] assert-
ing a procedural injury must show that ‘the procedures in
question are designed to protect some threatened concrete
interest of his that is the ultimate basis of his standing.’ ”
Cantrell v. City of Long Beach, 241 F.3d 674, 679 (9th Cir.
2001) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555,
573 n.8 (1992)). The Bureau argues that petitioners cannot
demonstrate that they suffered an injury in fact, contending
that petitioners’ only concrete interest was in receiving
advance notice of the Bureau’s promulgation of the interim
rule and having an opportunity to comment on the rule before
it was applied to them. The Bureau argues that this require-
ment was satisfied because each petitioner had at least thirty
days notice between when the 1997 regulation was made
effective and when the regulation was applied to him.
  2
   Although in oral argument Daniels seemed to question whether the
APA was violated, Daniels did not raise this issue in his opening brief;
therefore, Daniels has waived this issue. See United States v. Kama, 394
F.3d 1236, 1238 (9th Cir. 2005) (“Generally, an issue is waived when the
appellant does not specifically and distinctly argue the issue in his or her
opening brief.”).
7598                        PAULSEN v. DANIELS
   [4] The Bureau’s 1997 interim regulation was made effec-
tive prior to its publication in the Federal Register. Although
the Bureau solicited comments, those comments were not
taken into account before the 1997 interim regulation was
made effective; rather, these comments were considered prior
the promulgation of the 2000 final regulation. These proce-
dural violations of the APA threatened petitioners’ concrete
interest to have the public participate in the rulemaking that
made them ineligible for a sentence reduction. The effect of
the regulation was to deny them sentence reduction. The peti-
tioners clearly have sustained an injury in fact affording them
standing to file their habeas petitions.3

                                      C

   [5] The Bureau contends that its violations of the APA’s
notice and comment requirements were harmless because no
petitioner was advised of his ineligibility for early release
under the 1997 interim regulation until after a reasonable
advance notice-and-comment period would have expired, had
the Bureau complied with the APA. The APA requires us to
take “due account” of the harmless error rule. See 5 U.S.C.
§ 706; Riverbend, 958 F.2d at 1487. However, as we stated in
Riverbend, we:

     must exercise great caution in applying the harmless
   3
     The Bureau also contends that we lack jurisdiction over petitioner Boh-
ner’s appeal because he is now serving a term of supervised release out-
side the District of Oregon. The Bureau is mistaken. “[J]urisdiction
attaches on the initial filing for habeas corpus relief, and it is not destroyed
by a transfer of the petitioner and the accompanying custodial change.”
Francis v. Rison, 894 F.2d 353, 354 (9th Cir. 1990) (quoting Santillanes
v. United States Parole Comm’n, 754 F.2d 887, 888 (10th Cir. 1985))
(internal quotations marks omitted). The Bureau also argues that Bohner’s
case is moot. However, it concedes the possibility that Bohner’s term of
supervised release might be reduced or modified as a result of the deci-
sion; therefore, this case is not moot as to Bohner. Gunderson v. Hood,
268 F.3d 1149, 1153 (9th Cir. 2001).
                      PAULSEN v. DANIELS                      7599
    error rule in the administrative rulemaking context.
    The reason is apparent: Harmless error is more read-
    ily abused there than in the civil or criminal trial
    context. An agency is not required to adopt a rule
    that conforms in any way to the comments presented
    to it. So long as it explains its reasons, it may adopt
    a rule that all commentators think is stupid or unnec-
    essary. Thus, if the harmless error rule were to look
    solely to result, an agency could always claim that it
    would have adopted the same rule even if it had
    complied with the APA procedures. To avoid gutting
    the APA’s procedural requirements, harmless error
    analysis in administrative rulemaking must therefore
    focus on the process as well as the result. We have
    held that the failure to provide notice and comment
    is harmless only where the agency’s mistake “clearly
    had no bearing on the procedure used or the sub-
    stance of decision reached.”

958 F.2d at 1487 (quoting Sagebrush Rebellion, Inc. v. Hodel,
790 F.2d 760, 764-65 (9th Cir. 1986)).

   [6] Here, the Bureau’s mistake clearly had a bearing on the
procedure used. The Bureau’s violation of the APA was not
merely technical; the Bureau failed to provide the required
notice-and-comment period before effectuating the 1997
interim regulation, thereby precluding public participation in
the rulemaking. Therefore, the situation here is not similar to
situations that were before us in Idaho Farm Bureau Federa-
tion v. Babbitt, 58 F.3d 1392 (9th Cir. 1995), Riverbend, or
Sagebrush Rebellion, in which we found harmless error.

  In Idaho Farm Bureau, we held that the Fish and Wildlife
Service’s (“FWS”) failure to abide by the Endangered Species
Act (“ESA”) and give actual notice of the proposed regulation
— the listing of the Bruneau Hot Springs Snail as an endan-
gered species under the ESA — to the Commissioner of one
county in which the Springs Snail was believed to inhabit was
7600                  PAULSEN v. DANIELS
a harmless error under the APA. Id. at 1405. The failure to
provide actual notice to the Commissioner was harmless
because, although the Commissioner did not receive actual
notice, he was aware of the proposed regulation, as demon-
strated by his presenting a petition opposing the listing and
testifying at the public hearings on the matter. Id. Therefore,
the FWS’s procedural violation had no bearing on the proce-
dure used, rendering the FWS’s mistake harmless.

   In Riverbend, we considered the claim of a group of
domestic handlers of navel oranges who challenged the proce-
dure used by the Secretary of Agriculture to regulate the navel
orange market. 958 F.2d at 1482-83. We determined that the
Secretary’s rulemaking failed to satisfy the APA’s require-
ments because (1) the Secretary did not demonstrate good
cause for failing to give sufficient notice in the Federal Regis-
ter of the weekly Naval Orange Administrative Committee
(“NOAC”) meetings in which NOAC settles on what recom-
mendation to give to the Secretary for the following week’s
volume restrictions; and (2) the Secretary failed to allow the
public to comment by means other than personal participation
at the NOAC meetings. Id. at 1487. We provided the follow-
ing explanation as to why the Secretary’s error was harmless:

    all parties before us knew the ground rules: that there
    would be an annual position paper setting proposed
    weekly volume restrictions; that the NOAC would
    meet every Tuesday during the season; that the start-
    ing point for debate at those Tuesday meetings
    would be the figure listed for that week in the annual
    position paper (or in the NOAC’s updated versions
    of it); that there would be opportunity for public
    comment at the Tuesday meetings; and that the final
    volume restrictions would be issued by the Secretary
    soon afterwards. This system of regulation existed
    for decades without challenge; it was only after some
    handlers ran into trouble with the Department of
    Agriculture that, in looking for an escape, they came
                      PAULSEN v. DANIELS                    7601
    up with this challenge. While they are right that the
    Secretary must comply with some of the APA’s
    technical requirements, their belated challenge is
    evidence of the lack of prejudice resulting from the
    Secretary’s failure to do so in the past thirty-five
    years.

Id. at 1487-88 (footnotes omitted).

   In Sagebrush Rebellion, we determined that the notice pro-
vided by the Secretary of the Interior concerning the proposed
withdrawal of the Snake River Birds of Prey National Conser-
vation Area from the operation of the public and mining laws
was technically deficient under the Federal Land Policy and
Management Act of 1976, drawing on the standard for suffi-
ciency of notice of rulemaking under the APA. 790 F.2d at
764. Nonetheless, we decided that the notice’s failure to state
that the lands might be withdrawn by administrative action,
which would limit the withdrawal to a maximum of twenty
years, rather than by congressional action, which would be in
perpetuity, did not prejudice the public’s ability to participate
in the decision-making process. Id. at 764-65. We noted that
“[t]he same public that would comment on a proposed admin-
istrative withdrawal would in all likelihood comment on a
congressional withdrawal, since the impact of both actions on
all concerned persons would be identical for a substantial
period of time at least.” Id. at 765 (footnote omitted). In addi-
tion, the hearings provided the public with the opportunity to
comment on both administrative and congressional with-
drawal. Id. Therefore, we held that the procedures used were
unaffected by the notice’s deficiency. Id.

   [7] The distinction between Idaho Farm Bureau, River-
bend, Sagebrush Rebellion and the situation we consider here
is quite clear, and it is this distinction that makes the differ-
ence between a procedural violation of the APA that is harm-
less and one that is not. Whereas in the three aforementioned
cases, interested parties received some notice that sufficiently
7602                   PAULSEN v. DANIELS
enabled them to participate in the rulemaking process before
the relevant agency adopted the rule, here, petitioners were
given no such opportunity. In fact, the petitioners received no
notice of any kind until after the Bureau made the 1997
interim rule effective. That petitioners had an opportunity to
protest an already-effective rule prior to the time it was
applied to each of them does not render the APA violation
harmless. See Chrysler, 441 U.S. at 313-16; Riverbend, 958
F.2d at 1485, 1487. Thus, here, the Bureau’s mistake had a
bearing on the procedure used, and this mistake was not
harmless.

   Buschmann v. Schweiker, 676 F.2d 352 (9th Cir. 1982),
demonstrates the correctness of this conclusion, and more-
over, requires us to hold that the Bureau’s error was not harm-
less. In Buschmann, we determined that the Secretary of the
Department of Health, Education and Welfare failed to con-
form to the procedures required by section 553(b) and (d) of
the APA when proposing an amendment to a regulation con-
cerning the valuation of support and maintenance in house-
hold situations that affected certain individuals’ eligibility for
Social Security Income benefits. Id. at 356. The Secretary did
not give thirty-day advance notice of or provide an opportu-
nity for the public to comment on the proposed amendment
prior to its effective date. Id. We concluded that this error was
not harmless and held that the interim amendment was
invalid. Id. at 358. Buschmann provides the critical analysis
for our inquiry and leads to the inevitable determination that
the APA violation was not harmless in this case.

                                D

  [8] Given that the Bureau violated the APA, and that the
violation was not harmless, we turn to the question of remedy.
“Ordinarily when a regulation is not promulgated in compli-
ance with the APA, the regulation is invalid.” Idaho Farm
Bureau, 58 F.3d at 1405; see W.C. v. Bowen, 807 F.2d 1502,
1505 (9th Cir. 1987), amended by, 819 F.2d 237 (9th Cir.
                      PAULSEN v. DANIELS                    7603
1987); Buschmann, 676 F.2d at 355-56; Western Oil & Gas
Ass’n v. EPA, 633 F.2d 803, 813 (9th Cir. 1980); see also
Grier, 46 Fed. Appx. at 439 n.2. On occasion, we have deter-
mined that equity requires an invalid rule to stay in place
while “a strict reconstruction of procedural rights” and “a
reenactment of the deliberative process with correct provision
for the petitioners’ participation” is achieved. Western Oil,
633 F.2d at 813.

   [9] This is not one of those occasions because such a recon-
struction is impossible. See Idaho Farm Bureau, 58 F.3d at
1405-06 (holding that equity demands the designation of the
Springs Snail as an endangered species be left in place while
FWS remedies its procedural error in order to prevent the
potential extinction of the Springs Snail); Western Oil, 633
F.2d at 813 (leaving in effect the challenged designation —
that designated certain geographical areas in California as
failing to meet federal air quality standards — during reenact-
ment of the deliberative process “to avoid thwarting in an
unnecessary way the operation of the Clean Air Act in the
State of California during the time the deliberative process is
reenacted”). The district court correctly concluded that the
proper remedy was to hold the Bureau’s 1997 interim regula-
tion invalid.

   [10] The effect of invalidating an agency rule is to reinstate
the rule previously in force. Action on Smoking & Health v.
Civil Aeronautics Bd., 713 F.2d 795, 797 (D.C. Cir. 1983).
Because the rule previously in force, the 1995 regulation,
erroneously interpreted 18 U.S.C. § 3621(e)(2)(B), see Dow-
ney, 100 F.3d at 668, the applicable rule is the final rule that
was effectuated on December 22, 2000. The subsequent
enactment of the final rule can only have prospective effect.
Georgetown Univ. Hosp. v. Bowen, 821 F.2d 750, 758 (D.C.
Cir. 1987), aff’d on other grounds, 488 U.S. 204 (1988).
Therefore, the 1997 interim regulation is invalid as to those
persons disqualified by it prior to the issuance of the final
rule.
7604                  PAULSEN v. DANIELS
                               III

   In sum, the district court was entirely correct in its conclu-
sion. We affirm the judgments of the district court in the con-
solidated cases granting the habeas corpus petitions.

  AFFIRMED.

BEEZER, Circuit Judge, concurring:

   I concur in the opinion of the court. The last time this con-
solidated appeal was before us, I wrote separately to observe
a tension in our case law over the application of the Adminis-
trative Procedures Act (“APA”) to a Bureau of Prison’s Pro-
gram Statement. See Grier v. Hood, 46 Fed. Appx. 433, 440
(9th Cir. 2002) (Beezer, J., concurring). I write separately
once again to note that this tension remains unresolved.

                               I

   This court’s invalidation of the Bureau’s 1997 interim regu-
lation marks the culmination of a series of challenges to the
Bureau’s actions that year concerning prisoner eligibility for
an early release program. The Bureau detailed the eligibility
criteria for this program in two separate documents, issued
within a week of each other in 1997. See Gunderson v. Hood,
268 F.3d 1149, 1151 (9th Cir. 2001). The documents con-
sisted of an interim regulation and a new Program Statement.
Prisoners have been arguing with the Bureau over the validity
of these documents, which the government on appeal refers to
collectively as the “1997 interim rule,” ever since.

   The first challenges to the 1997 interim rule were on sub-
stantive grounds. Prisoners argued that the Bureau exceeded
its discretion in establishing certain early release require-
ments. We held that the 1997 actions were a proper use of the
                      PAULSEN v. DANIELS                   7605
Bureau’s discretion. Bowen v. Hood, 202 F.3d 1211, 1220
(9th Cir. 2000). The Supreme Court agreed. See Lopez v.
Davis, 531 U.S. 230, 238 (2001).

   Prisoners next challenged the procedural validity of the
interim rule. The first challenge occurred in Grassi v. Hood,
251 F.3d 1218 (9th Cir. 2001). We construed the petitioner in
Grassi as contesting whether the 1997 interim regulation
complied with APA procedural requirements. Id. at 1221. We
declined, however, to decide that issue because the petitioner
failed to also challenge the procedural validity of the 1997
Program Statement, an “independent document[ ]” that, as
relevant here, separately excluded from the early release pro-
gram the same class of prisoners described in the interim reg-
ulation. Id. We held that the petitioner was not entitled to
relief because the interim regulation’s compliance with the
APA had “no effect” on the “continuing validity” of the Pro-
gram Statement. Id. at 1221-22.

   Given this result, it is perhaps not surprising that the 1997
Program Statement itself next became the subject of an APA
challenge. We held in Gunderson v. Hood, 268 F.3d 1149,
1155 (9th Cir. 2001), that the 1997 Program Statement need
not comply with the APA because it was merely interpreting
a substantive regulation (the 1997 interim regulation) that was
subject to the APA. Far from reading the Program Statement
as a separate authority capable of outlining a policy for dis-
qualifying prisoners independent of the interim regulation, we
concluded that the Program Statement “did no more than clar-
ify or explain existing law.” Id. (internal quotation marks and
citation omitted). We again denied relief to the prisoner.

                               II

  These prior cases set the stage for the present lawsuit. The
goal of the current petitioners, like that of the petitioners in
Grassi and Gunderson, is to invalidate the application of the
7606                       PAULSEN v. DANIELS
1997 Bureau policy to their prison sentences.1 The difference,
of course, between the previous challenges and this one is that
here we hold in favor of the petitioners. But I note that in so
holding, we once again avoid addressing the tension between
Grassi and Gunderson. In particular, we do not explain how
invalidating the interim regulation qualifies these petitioners
for relief when, under Gunderson, the Program Statement is
not itself subject to the APA procedural requirements and,
under Grassi, remains an adequate basis for excluding prison-
ers from the early release program, independent of the interim
regulation. See 46 Fed. Appx. at 441 (Beezer, J., concurring).

   There is a simple answer to this question, at least as far as
the cases before us are concerned: no one on appeal chal-
lenges the district court’s conclusion that “the program state-
ment[ ] may not be used to deny petitioner[s] early release.”
Bohner v. Daniels, 243 F. Supp. 2d 1171, 1179 (D. Or. 2003).2
I remain unconvinced that the language in Grassi supports
this conclusion, but recognize that any other solution may be
even more at odds with either Grassi or Gunderson. More
importantly, by not contesting this point of the district court’s
holding, the government appears to concede that Grassi does
  1
     As noted in the opinion of the court, the 1997 policy was not the agen-
cy’s first attempt to disqualify from the early release program prisoners
incarcerated for crimes involving the possession of a firearm. But it was
the first regulation held to be a substantively valid basis for excluding this
class of prisoners. See Bowen, 202 F.3d at 1217 (discussing Davis v. Crab-
tree, 109 F.3d 566 (9th Cir. 1997); Downey v. Crabtree, 100 F.3d 662, 670
(9th Cir. 1996)). It is this fact that makes the procedural challenge here so
important to the current petitioners.
   2
     The court reasoned that for the 1997 Program Statement to be capable
of independently barring relief to petitioners as per Grassi, the Program
Statement must be treated as a “legislative rule,” which would require
compliance with APA procedures. See Bohner, 243 F. Supp. 2d at 1178-
79. The Bureau’s failure to follow these procedures prevented it from rely-
ing on this argument. Alternatively, under Gunderson, if it was not neces-
sary for the Program Statement to comply with the APA, it must be
because the Program Statement is dependent on the validity of the interim
regulation that gives it legitimacy. See id.
                      PAULSEN v. DANIELS                   7607
not prevent us from granting relief to the petitioners. I see no
reason to take issue with such a concession.