Prof. John Harrison: Do Statutes Offering Pre-Enforcement Review Support Remand Without Vacatur?

This is the fourth in a series of posts summarizing an article titled Remand Without Vacatur and the Ab Initio Invalidity of Unlawful Regulations in Administrative Law, which is forthcoming in the BYU Law Review. The current draft is available on SSRN.

Earlier posts described the doctrine of remand without vacatur and argued that as applied to regulations imposing duties of conduct on private people the doctrine rests on a false premise. Courts that embrace the doctrine assume that unlawful regulations are binding on regulated parties until displaced by a court, the way lower-court decrees that rest on error are binding until displaced. In general, however, unlawful regulations are void ab initio.

This post broadens the inquiry in two directions. First, it extends the analysis concerning regulations that impose duties on private people to statutes that limit enforcement-stage judicial review. Second, this post discusses remand without vacatur and agency activities other than regulation of private conduct.

As discussed in the preceding post, one reason to conclude that unlawful regulations are void when adopted is the availability of judicial review in enforcement proceedings. Some statutes, however, provide a form of pre-enforcement review and make it the exclusive mode of judicial review, barring enforcement-stage review. A statute that allows only prospective judicial relief might be thought to imply that regulations are binding until a court acts. The reviewing court might be seen as displacing the regulation, the way an appellate court displaces a lower court's order. Congress's decisions about judicial review, however, are distinct from its decisions about agency power and procedure. Rules about the former do not imply changes to rules about the latter.

Barring enforcement-stage review is a strong measure, and the case that approved it, Yakus v. United States, 321 U.S. 414 (1944), has long been controversial. The World War II price control statute at issue in Yakus provided for pre-enforcement review of regulations and barred enforcement-stage review. Yakus was prosecuted for violating the price regulations, and sought to raise objections that were barred under the statute because he had not used the pre-enforcement proceeding. The Court, through Chief Justice Stone, approved the statutory arrangement, with some caveats. Even constitutional rights are subject to forfeiture, the Court reasoned, and by foregoing pre-enforcement review, Yakus had forfeited his right to a judicial hearing as to the regulations' lawfulness.

Yakus relied on forfeiture. The Court did not hold that Congress had provided that unlawful regulations would be binding until displaced by a court. Rather, the Court explained that it was not addressing the situation in which a regulated party is prosecuted while pursuing the statutory pre-enforcement review process. Chief Justice Stone recognized that statutory rules about litigation structures are distinct from statutory rules about agency power. Yakus-type review structures do not imply that unlawful regulations are binding until displaced by a court.

Today, the most important statute that uses a Yakus-type structure is probably the Clean Air Act. In the article on which these posts are based, I discuss issues specific to that statute, in addition to the implications of Yakus-type review in general. As to the Clean Air Act, I argue that it provides for ab initio invalidity of unlawful regulations, and that if it does not, the Act requires that reviewing courts provide a remedy for unlawful regulations. Either way, that statute does not support remand without vacatur.

So far, these posts have focused on regulations that impose duties on private people. Agencies engage in many other kinds of activities, and the vast bulk of them are subject to judicial review. Agencies often take steps that affect private legal positions but that do not impose general duties the way many regulations do. In addition to imposing general duties, agencies impose duties specific to parties, as in FTC cease-and-desist orders. Besides imposing duties, agencies often free private people from duties, as when they give licenses or other permissions. Sometimes agencies impose duties that are not about conduct, for example by charging user fees. In addition to governing future conduct, agencies impose sanctions for prior conduct, as in Checkosky v. SEC, 23 F. 3d 452 (D.C. Cir. 1994), in which Judge Randolph in a separate opinion rejected the doctrine of remand without vacatur, although not on the grounds I advance. Many agency activities do not purport to change private legal positions but do affect private people in other ways, as when the government builds a road or a naval base.

Agencies make decisions through different procedures, including formal adjudicatory proceedings, notice-and-comment rulemaking, and less structured processes. Judicial review takes place in different forms of proceeding, including suits in district courts by the government or regulated parties and special review proceedings brought in courts of appeals. The latter resemble review of one court by another, in that they proceed in appellate courts and fact-finding is largely the task of the agency.

The resemblance between special statutory review proceedings and appeals from lower courts is one reason courts have embraced remand without vacatur, analogizing all judicial review to that form of judicial review and analogizing that form of judicial review to appeals from one court to another. Analogizing agencies to lower courts fosters the assumption that unlawful agency action is binding until displaced. I have argued that that assumption is wrong as to regulations of private conduct. As to some agency activities, that assumption might be correct under the applicable statute. The SEC might be empowered to withdraw permission to practice before it as a punishment, as the agency did in Checkosky, with its decision being effective until countermanded by a reviewing court. Whether the SEC has that power depends on the securities statutes. The analogy between courts and agencies obscures the statutory issue, and leads courts to rely on an undefended assumption about agency action in general.

The assumption that unlawful agency action is legally binding is often wrong, it may sometimes be correct, and it is sometimes inapposite. Not all agency actions purport to bind private parties as to their legal positions. For actions that do not claim binding force, the question of ab initio invalidity does not arise, and vacatur is not a meaningful remedial option. Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402 (1971), a leading case about judicial review of agency decisions, involved the construction of a highway. Concerned About Trident v. Rumsfeld, 555 F.2d 817 (D.C. Cir. 1976), a D. C. Circuit case that is now often regarded as an early example of remand without vacatur, involved a plan to build a submarine base. Concerned About Trident is seen as an example of remand without vacatur, because the court of appeals told the Navy to correct flaws in its Environmental Impact Statement, but did not enjoin the project while the Navy did so. The plaintiffs in those cases sought injunctions against physical acts, and the remedial principles applicable to those requests were the principles governing injunctions. Operation of bulldozers can be enjoined, but not vacated. Here too, the misleading analogy between agencies and lower courts obscures analysis.

Courts should recognize the variety of agency activities, of agency decision processes, and of forms of proceeding for judicial review. If courts treat all review of agencies as if it were appellate review of one court by another, they risk doing for administrative law what Procrustes did for his guests.