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"Vacation" at Sea
by Ronald M. Levin
Washington University School of Law
Campus Box 1120
St. Louis, MO 63130
Normally, when a reviewing court finds that an administrative rule or order is unlawful,
the action is vacated and remanded to the agency for further proceedings. But does the court have
the option of remanding the action without vacating it? If so, when (if ever) should the court
exercise that option?
These questions, which have recently generated controversy in the D.C. Circuit,
implicate a host of practical issues about which members of the bar could be expected to have
useful insights. Accordingly, the Judicial Review Committee of the Section is now examining the
practice of remand without vacation and hopes to present a report on that subject to the Council of
the Section in the near future. This article provides an overview of the committee's inquiry and
will serve as an invitation to readers who may wish to comment.
The judicial technique of allowing an administrative action to remain in force during
remand proceedings has obvious appeal, at least in some situations. Consider, for example, a rule
that has been on the books a long time, generating large reliance interests. A court might find that
the rule was improperly promulgated, but that there is a good chance that the agency can cure the
error through further deliberations. Under these circumstances, the court's decision to leave the
rule in place pending further agency process might permit the agency to avoid a disruptive
interruption in the regulatory regime. Nevertheless, the policy implications of the technique do not
all point on one direction, and its very legality is subject to debate.
Is It Legal?
The potential legal obstacle to the availability of this practice came into focus in
Checkosky v. SEC, 23 F.3d 452 (D.C. Cir. 1994). The SEC had suspended two
accountants for "improper professional conduct." On appeal, Judge Silberman concluded that the
case should be remanded to the commission for further analysis, but that the suspensions should
remain in effect during the coming proceedings. But Judge Randolph denied that the court could
let the suspensions stand during the remand proceedings, because the Administrative Procedure
Act states that a reviewing court "shall . . . hold unlawful and set aside agency action" that is found
to be arbitrary and capricious, procedurally defective, etc. 5 U.S.C. Sec. 706.
In reply, Judge Silberman explained that he did not need to reach the "shall . . . set aside" language
of Sec. 706 in that case, because he had only found that the agency action might be arbitrary.
Until the agency had explained the suspension orders more explicitly, he could not decide whether
it was arbitrary. He cited dozens of cases in which his court had similarly remanded agency
decisions for clarification without vacating those decisions immediately.
Judge Silberman's analysis does appear to provide one escape route from the seemingly mandatory
language of Sec. 706. Indeed, since Checkosky the court has continued to invoke the technique of
remand without vacation in the precise circumstances he described. A.L. Pharma, Inc. v.
Shalala, 62 F.3d 1484, 1492 (D.C. Cir. 1995). But his argument does not cover all of
the situations in which the equities favoring the remedy of remand without vacation may be
present. A court might well find an agency's rationale to be arbitrary and capricious, yet wish to
minimize disruption by leaving the action in place while the agency tries to frame an acceptable
rationale for it. See Independent U.S. Tanker Owners Committee v. Dole, 809
F.2d 847 (D.C. Cir.), cert. denied, 484 U.S. 819 (1987). Nor does his reasoning provide a
satisfactory justification for decisions that have remanded but not vacated rules that had been
issued without proper notice and comment procedures. AMA v. Reno, 57 F.3d
1129, 1135 (D.C. Cir. 1995) (finessing Checkosky issue because parties had not
raised it); Idaho Farm Bureau Fed'n v. Babbitt, 58 F.3d 1392, 1405-06 (9th Cir.
1995); Fertilizer Institute v. USEPA, 935 F.2d 1303, 1312 (D.C. Cir. 1991).
These latter cases illustrate the importance of the question that Judge Silberman did not
squarely reach: does the "shall" in Sec. 706 really mean that a reviewing court must "set aside" an
agency action when the court finds that the action transgresses one of the standards of review listed
in that provision? Judge Randolph's plain-meaning reading of Sec. 706 obviously has persuasive
force. But perhaps it is not unassailable.
A contrary reading might rest upon the federal courts' entrenched tradition of broad
equitable remedial discretion. Congress has essentially given appellate courts a free hand to
fashion appropriate remedies when they review the decisions of lower courts. 28 U.S.C. Sec.
2106. And in the APA itself Congress has given reviewing courts equally broad leeway to decide
whether or not to stay administrative actions pending adjudication. 5 U.S.C. Sec. 705. In view of
these provisions in closely related contexts, one might fairly doubt that Congress really meant to
confine the courts' remedial discretion in Sec. 706 as severely as the words of that provision seem
In fact, the courts have gone so far as to create a presumption against finding that Congress has
placed curbs on their remedial discretion. The leading case of Hecht v. Bowles,
321 U.S. 321 (1943), rejected an interpretation of price control legislation that would have
compelled district courts to issue an injunction whenever they found a violation of that law. The
Court asserted that "equity practice with a background of several hundred years of history"
militated in favor of a more flexible judicial role; only an "unequivocal statement of [legislative]
purpose" would suffice to establish that Congress had meant to override that tradition. Id.
Judge Randolph might respond that the wording of Sec. 706 is indeed "unequivocal" -- but in
truth, the words of the statute construed in Hecht were scarcely any less so. And if one looks
beyond the APA's language to its legislative background, one sees little if any indication that
Congress ever paid attention to the precise implications of the "shall . . . set aside" language of the
Act. One respected source assures us, in fact, that Sec. 706 was viewed as "restat[ing] the present
law as to the scope of judicial review." Attorney General's Manual on the APA 108
(1947). Part of the "present law" at that time was the Hecht case itself, which was handed down
while the APA was being drafted. Some of the authors of the Act must have been aware of it. In
the context of the overall legislative record, it would not be terribly difficult for today's courts to
hold that the evidence of Congress' desire to displace the courts' traditional remedial discretion
is insufficient to meet the standard set forth in the Hecht line of cases. Indeed, at least one modern
Supreme Court case appears to assume that the equity tradition described in
Hecht does remain viable in APA cases. Webster v. Doe, 486
U.S. 592, 604-05 (1988).
Is It Desirable?
Let us now inquire whether policy considerations support the judicial technique of
remanding an agency action without vacating it. Those considerations could affect the courts'
resolution of the interpretive issue examined above. They would also bear upon the question of
whether, if the Randolph interpretation of Sec. 706 ultimately prevails, the APA should be
amended to override that interpretation.
As already discussed, the case for recognizing (or, if necessary, legislatively creating)
judicial authority to leave an agency action in place during remand proceedings revolves primarily
around the disruption and instability that can stem from interruption of a regulatory program.
Private parties and the agency itself may have arranged their activities around the existence of the
administrative scheme. The opportunity to minimize the disruption attending the transition from
an invalid agency action to a valid one can be very attractive to a court, especially if the court has
reason to believe that the error it discerns can be cured through further proceedings.
The case for remands without vacation has become stronger in the wake of the Supreme
Court's decision in Bowen v. Georgetown University Hospital, 488 U.S. 204
(1988), which held that an agency cannot adopt a rule that applies retroactively to completed
transactions unless Congress has explicitly conferred such authority. Before Georgetown, an
agency whose rule had been vacated could decide on the best way to respond to the court's
concerns, promulgate a new rule (or the old one with a new justification), and make this rule
retroactive to the date of the court's action, thus ensuring that some rule would be in place
throughout the affected period.
Georgetown renders this strategy unworkable, except in those rare situations in which Congress
has specified that the agency's rules may be retroactive.
To be sure, even where a court does vacate an agency rule, the agency can take steps to minimize
discontinuity in its program. For example, it can issue an interim rule to maintain the status quo
until it has developed a new rule to meet the court's objections. The agency can claim that it has
"good cause" to issue the rule without notice and comment. See Shell Oil Co. v.
950 F.2d 741, 752 (D.C. Cir. 1991); Mid-Tex Elec. Coop. v. FERC, 822 F.2d
1123, 1131-34 (D.C. Cir. 1987). However, this is not an entirely satisfactory alternative to
remand without vacation. Several months may elapse before the agency decides whether and how
to issue an interim rule, and even then the claim of "good cause" may not stand up in court.
Moreover, under Georgetown the interim rule will probably have to be prospective only; as such, it
will not save enforcement actions stemming from the period during which the now-vacated rule
was supposedly in force.
Despite all of these points, several doubts have been raised about the merits of the
remand without vacation technique. The effect of the technique may be to deny any meaningful
relief to a litigant who has demonstrated that an agency action is unlawful, an outcome that may
strike some as unfair. Moreover, judicial reluctance to disturb administrative actions even if they
are poorly reasoned or procedurally defective could unduly reduce the public's incentive to
challenge agency mistakes and perhaps would encourage agencies to do their work less carefully in
the first instance. In addition, some observers mistrust the kind of open-ended balancing of
equities that the remand without vacation practice entails. They suspect that it may lead courts into
making fundamentally administrative decisions that exceed judicial competence.
When Should It Be Used?
One's reaction to the policy objections to the remand without vacation technique may
depend in part on whether convincing criteria can be devised to guide the courts' exercise of
discretion in applying the technique. According to one leading case, the decision whether to vacate
depends on "the seriousness of the order's deficiencies . . . and the disruptive consequences of an
interim change that may itself be changed." Allied-Signal, Inc. v. USNRC, 988
F.2d 146, 150-51 (D.C. Cir. 1993). This formula seems reasonable as far as it goes, but perhaps
the courts could go further and create presumptions that would regularize their responses to
For example, the case for remand without vacation may be particularly strong in a
situation in which a court holds unlawful a longstanding rule on which a substantial regulatory
regime has been constructed. On the other hand, one presumably would not expect an agency
action to be kept alive during remand proceedings if the court has identified an error that the
agency cannot possibly cure, such as a violation of a flat statutory ban on regulation of a particular
subject area. It may also make sense to encourage courts to vacate an administrative action that
turns out to be unlawful if leaving the action in place would inflict a particularly severe or
irreparable injury on the party who challenged it. Cf. Ryder v. United States,
115 S.Ct. 2031 (1995) (declining to use the equitable "de facto officer" doctrine to validate a
court-martial sentence imposed by military judges who had been appointed unconstitutionally).
In devising criteria of this sort, one ideally would want to draw upon the lessons of
experience. Thus it is perhaps best to stop here and repeat the invitation to readers to share their
thoughts about the remand without vacation issue.
To register your views on any of the above issues, please write to: Professor Ronald M. Levin,
Washington University School of Law, Campus Box 1120, St. Louis, MO 63130 (fax
314-935-6490, e-mail firstname.lastname@example.org), or use the e-mail option below.
The Judicial Review Committee would welcome your input.
At the Section of Administrative Law & Regulatory Practice
we are always looking for new and better ways to serve our members, the bar and the public.
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