C & W Fish Co., Inc. v. Fox
931 F.2d 1556 (1991)
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Rule of Law:
A superior agency official retains authority to overrule a subordinate's decision if internal delegation orders, read as a whole, reserve that authority. An agency may reverse a prior policy decision if it provides a new, rational basis for the change that is supported by the administrative record, even if its other stated rationales are inadequately explained.
Facts:
- The South Atlantic and Gulf Regional Fishery Management Councils repeatedly sought to ban the use of drift gillnets in the Atlantic King Mackerel Fishery.
- The Councils first requested an emergency ban, which the NMFS Southeast Regional Director denied because no 'emergency' existed.
- The Councils then attempted to implement the ban via a regulatory amendment intended for resolving 'gear conflicts,' which the Regional Director also denied.
- The Councils formally proposed 'Amendment 3,' which included the drift gillnet ban. The Regional Director rejected the ban for Atlantic king mackerel, and this partial rejection was approved by his superiors.
- In January 1990, the Councils resubmitted the rejected portion of the amendment.
- A newly appointed Regional Director again declined to approve the unconditional ban on drift gillnets.
- This decision went to Dr. William Fox, the newly appointed NOAA Assistant Administrator, who had been a vocal proponent of the ban prior to his appointment.
- Assistant Administrator Fox reversed the Regional Director's decision and approved the full amendment, which was subsequently approved by the Under Secretary and the Secretary of Commerce, resulting in a final rule banning the nets.
Procedural Posture:
- The Department of Commerce issued a final rule banning the use of drift gillnets in the Atlantic King Mackerel Fishery.
- Two fish wholesalers and two fishermen sued the Secretary of Commerce and the NOAA Assistant Administrator in the U.S. District Court for the District of Columbia, seeking declaratory and injunctive relief.
- Following cross-motions for summary judgment, the district court (trial court) granted summary judgment in favor of the government defendants.
- The plaintiffs (now appellants) appealed the district court's decision to the U.S. Court of Appeals for the District of Columbia Circuit.
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Issue:
Does a superior agency official retain the authority to approve a regulatory plan rejected by a subordinate where internal agency orders reserve the power 'to be advised' before final action, and is the resulting rule arbitrary and capricious if the agency provides a new, rational basis supported by the record to justify its change in position?
Opinions:
Majority - Henderson, Circuit Judge
Yes. A superior agency official retains the authority to approve a plan rejected by a subordinate when the agency's delegation orders, interpreted together, manifest an intent to reserve that authority, and the resulting rule is not arbitrary and capricious if the agency provides at least one new, rational basis for its change in position that is supported by the record. First, the court held that Assistant Administrator Fox had the authority to approve the plan. Although the internal agency order only reserved the power 'to be advised,' the court interpreted this language in the context of the entire delegation scheme. By referencing another manual section that explicitly reserved the Secretary's power to approve or disapprove plans, the court concluded that the power 'to be advised' was intended to include the substantive authority to approve or disapprove, as a reservation of authority merely to receive notice would be ineffectual. Second, the court found the agency's reversal of its prior decision was not arbitrary and capricious. The agency provided three reasons for the ban: (1) threat of overfishing, (2) displacement of traditional fishermen, and (3) excessive by-catch. The court found the agency failed to provide a reasoned explanation for changing its mind on the first two rationales. However, the third rationale—excessive by-catch—was a new justification not considered in the initial decision and was consistent with a new agency objective to minimize waste. Because this single rationale was supported by sufficient evidence in the record, it provided an adequate basis for the agency's change in position. The court also found the rule complied with statutory standards and that Assistant Administrator Fox did not have an 'unalterably closed mind' that would violate the appellants' due process rights.
Analysis:
This decision clarifies the scope of intra-agency authority and the requirements for an agency policy reversal. It establishes that courts will interpret ambiguous internal delegation orders holistically to give them substantive effect, reinforcing the hierarchical structure of executive agencies. More significantly, the ruling provides a clear precedent that an agency can justify reversing a prior decision by articulating just one new, valid, and record-supported rationale, even if its other justifications are weak or unexplained. This holding offers agencies considerable flexibility in adapting policies, while still holding them to the standard of reasoned decision-making for at least part of their justification, thereby influencing how agencies document and defend policy changes.
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