Recent decisions of the United States Court of Appeals for the District of Columbia Circuit: Administrative law

George Washington Law Review

Volumn 74, Issue 4, 2006, Pages 619-659

  Fuller, Patrick A ^a   Friedman, Brett ^a   Gradison, Maile ^a  

^a NONE

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EID: 33749622435     PISSN: 00168076     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (401)

1. AFL-CIO v. Chao, 409 F.3d 377 (D.C. Cir. 2005).
2. Id. at 378-79.
3. Labor-Management Reporting and Disclosure Act of 1959 §§ 201(b), 208, 29 U.S.C. §§ 431(b), 438 (2000).
4. Id.
5. Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43 (1984).
6. AFL-CIO, 409 F.3d at 386.
7. Id. at 391.
8. Public Company Accounting Reform and Investor Protection (Sarbanes-Oxley) Act of 2002, Pub. L. No. 107-204, 116 Stat. 745 (codified in scattered sections of 15 U.S.C. and 18 U.S.C.).
9. Recent Regulation, Labor Law - Department of Labor Increases Union Financial Reporting Requirements, 117 HARV. L. REV. 1734, 1734 (2004).
10. Id.
11. AFL-CIO v. Chao, 298 F. Supp. 2d 104, 107 (D.D.C. 2004), aff'd in part, rev'd in part, vacated in part, 409 F.3d 377 (D.C. Cir. 2005).
12. AFL-CIO, 409 F.3d at 380.
13. AFL-CIO, 298 F. Supp. 2d at 107-08.
14. Recent Regulation, supra note 9, at 1736.
15. AFL-CIO, 298 F. Supp. 2d at 107-08. This dollar threshold eliminates all but the largest twenty percent of labor unions. Recent Regulation, supra note 9, at 1736.
16. AFL-CIO. 298 F. Supp. 2d at 108.
17. AFL-CIO, 409 F.3d at 386.
18. AFL-CIO, 298 F. Supp. 2d at 106 n.1. In the summer of 2005, four of the largest member unions defected from the AFL-CIO, reducing the federation's membership by 4.5 million workers. See Steven Greenhouse, 4th Union Quits A.F.L.-C.I.O. in a Dispute Over Organizing, N.Y. TIMES, Sept. 15, 2005, at A14.
19. AFL-CIO, 298 F. Supp. 2d at 106 n.1.
20. AFL-CIO, 409 F.3d at 378.
21. AFL-CIO, 298 F. Supp. 2d at 109.
22. See infra Part C.5.
23. Administrative Procedure Act, Pub. L. No. 79-404, 60 Stat. 237 (1946) (codified as amended in scattered sections of 5 U.S.C.).
24. AFL-CIO, 298 F. Supp. 2d at 106.
25. Id. at 119-26.
26. Id. at 106.
27. AFL-CIO v. Chao, 409 F.3d 377, 378 (D.C. Cir. 2005).
28. Labor-Management Reporting and Disclosure Act of 1959 § 2(b), 29 U.S.C. § 401(b) (2000) ("Congress further finds . . . that there have been a number of instances of breach of trust, corruption, disregard of the rights of individual employees, and other failures to observe high standards of responsibility and ethical conduct which require further and supplementary legislation that will afford necessary protection of the rights and interests of employees and the public generally as they relate to the activities of labor organizations . . . .").
29. United Bhd. of Carpenters v. Brown, 343 F.2d 872, 882-83 (10th Cir. 1965).
30. S. REP. No. 86-187, pt. 3 (1959), as reprinted in 1959 U.S.C.C.A.N. 2318, 2333.
31. See id.
32. 29 U.S.C. § 431(b).
33. AFL-CIO v. Chao, 409 F.3d 377, 379 (D.C. Cir. 2005).
34. Id. at 379-80.
35. Id. at 380.
36. See id.
37. Id.
38. Id.
39. Id.
40. Id. at 380, 386.
41. Id. at 386 (quotation omitted). The LMRDA defines a "[t]rust in which a labor organization is interested" as one "(1) which was created or established by a labor organization . . . and (2) a primary purpose of which is to provide benefits for the members of such labor organization or their beneficiaries." Labor-Management Reporting and Disclosure Act of 1959 § 3(l), 29 U.S.C. § 402(l) (2000).
42. AFL-CIO, 409 F.3d at 386.
43. 29 U.S.C. § 438.
44. AFL-CIO, 409 F.3d at 380.
45. Administrative Procedure Act § 10(e)(2)(A), 5 U.S.C. § 706(2)(A) (2000).
46. Citizens to Pres. Overton Park, Inc. v. Volpe, 401 U.S. 402, 416 (1971).
47. Small Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506, 521 (D.C. Cir. 1983).
48. AFL-CIO v. Chao, 298 F. Supp. 2d 104, 110 (D.D.C. 2004) (quoting Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)), aff'd in part, rev'd in part, vacated in part, 409 F.3d 377 (D.C. Cir. 2005).
49. Id.
50. Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (1984).
51. AFL-CIO v. Chao, 409 F.3d 377, 381 (D.C. Cir. 2005).
52. Clean Air Act §§ 111(a)(3), 172(b)(6), 302(j), 42 U.S.C. §§ 7411(a)(3), 7502(b)(6), 7602(j) (2000); Chevron, 467 U.S. at 841-42.
53. Chevron, 467 U.S. at 859.
54. Id. at 842-43.
55. Id. at 842. If the reviewing court determines that "Congress had an intention on the precise question at issue, that intention is the law and must be given effect." Id. at 843 n.9.
56. See AFL-CIO, 409 F.3d at 381-83.
57. Chevron, 467 U.S. at 843.
58. AFL-CIO, 409 F.3d at 384.
59. Chevron, 467 U.S. at 843.
60. Id. at 843 n.11.
61. AFL-CIO, 409 F.3d at 392-93 (Roberts, J., concurring in part and dissenting in part).
62. Id. at 378 (majority opinion).
63. See id. at 381-84.
64. Id. at 381-82.
65. Id. at 381.
66. See id. at 381-82.
67. Id. at 382.
68. Labor-Management Relations (Taft-Hartley) Act of 1947, 29 U.S.C. §§ 141-88 (2000).
69. AFL-CIO, 409 F.3d at 382.
70. Id. at 383.
71. Id.
72. Id.
73. Id. at 383-84.
74. Id. at 383. Section 201(b) required disclosure of (1) assets and liabilities at the beginning and end of the fiscal year; (2) receipts of any kind and the sources thereof; (3) salary, allowances, and other direct or indirect disbursements (including reimbursed expenses) to each officer and also to each employee who, during such fiscal year, received more than $10,000 in the aggregate from such labor organization and any other labor organization affiliated with it or with which it is affiliated, or which is affiliated with the same national or international labor organization; (4) direct and indirect loans made to any officer, employee, or member, which aggregated more than $250 during the fiscal year, together with a statement of the purpose, security, if any, and arrangements for repayment; (5) direct and indirect loans to any business enterprise, together with a statement of the purpose, security, if any, and arrangements for repayment; and (6) other disbursements made by it including the purposes thereof . . . . Labor-Management Reporting and Disclosure Act of 1959 § 202(b), 29 U.S.C. § 432(b) (2000).
75. AFL-CIO, 409 F.3d at 383.
76. Id.
77. 29 U.S.C. § 431(b).
78. AFL-CIO, 409 F.3d at 383. The court also noted that a similar provision in section 208 also "le[ft] undefined the level of detail that may be required." Id.
79. Id. at 383-84.
80. Id. at 384.
81. Id. at 386.
82. Id. at 385.
83. Id.
84. Id. at 385-86 (quoting Labor Organization Annual Financial Reports, 68 Fed. Reg. 58,374, 58,420 (Oct. 9, 2003) (to be codified at 29 C.F.R. pts. 403, 408)).
85. See id.
86. Id. at 386.
87. Id. at 386-87.
88. Id. at 386.
89. Id. at 387.
90. Id. at 386.
91. Securities and Exchange Act of 1934, 15 U.S.C. §§ 78a-78mm (2000).
92. AFL-CIO, 409 F.3d at 387.
93. Id. Specifically, the AFL-CIO argued that the Secretary was required to "determine that certain transactions are being rendered unreportable by reason of the fact they are being carried out by a trust in which a union is interested." Id.
94. Id.
95. Id. at 387-88. The Secretary provided four illustrations to show how three kinds of union transactions go unreported by nature of the union's involvement in a trust. Id. "The first example involved the use of joint training funds to host extravagant parties for trustees and to pay union officials supplementary salaries." Id. at 387. The second example involved union contributions to a strike fund going unreported because no one union wholly owned the fund. Id. The third example involved a union's building fund that was partially financed by union pension funds. Id. at 387-88. "Lastly, the Secretary pointed to the example of a credit union that was 97% financed by a local union and which made large loans to union officials, employees, and their family members." Id. at 388.
96. See id.
97. Id. at 388.
98. Id. at 387.
99. Id. at 388.
100. Id. at 389.
101. Id. For example, the court noted that "where the union's management role is limited to selecting a single member of a trust's governing board and neither the related union's financial contribution nor that of other unions to the trust dominates the trust's revenues, Form T-1 nonetheless requires the union to report on the trust's other receipts over $10,000." Id. at 390.
102. See id.
103. Id. at 390-91.
104. Id. at 391. The court, however, did not address the merits of the single-entity test. See id.
105. Id. (Roberts, J., concurring in part and dissenting in part).
106. Id.
107. Id. at 393.
108. Id.
109. Id. (quoting Labor-Management Reporting and Disclosure Act of 1959 § 208, 29 U.S.C. § 438 (2000)) (alteration in original) (emphasis omitted).
110. Id.
111. Id.
112. Id.
113. Id. at 394.
114. Id.
115. Id.
116. Id. at 395.
117. See id.
118. For ease of reading and because this Part focuses on the portion of Judge Roberts's opinion dissenting from the majority, I will refer to Judge Roberts's opinion, concurring in part and dissenting in part, as a dissenting opinion.
119. AFL-CIO, 409 F.3d at 391 (majority opinion); id. (Roberts, J., concurring in part and dissenting in part).
120. Compare id. at 390-91 (majority opinion), with id. at 393-95 (Roberts, J., concurring in part and dissenting in part).
121. See William N. Eskridge, Jr. & Philip P. Frickey, Statutory Interpretation as Practical Reasoning, 42 STAN. L. REV. 321, 321-24 (1990).
122. Id. at 324-25.
123. See id. at 345.
124. Id. at 340-41.
125. See WILLIAM N. ESKRIDGE, JR., PHILIP P. FRICKEY, & ELIZABETH GARRETT, CASES AND MATERIALS ON LEGISLATION: STATUTES AND THE CREATION OF PUBLIC POLICY 755-58 (3d ed. 2001) (discussing and reproducing portions of Justice Scalia's Tanner Lectures on textualism delivered at Princeton University).
126. Eskridge & Frickey, supra note 121, at 354.
127. AFL-CIO v. Chao, 409 F.3d 377, 389-90 (D.C. Cir. 2005).
128. The "whole act" rule explains statutory interpretation as a holistic endeavor, whereby all sections in a statute are read together. See ESKRIDGE, FRICKEY, & GARRETT, supra note 125, at 830; see also United Sav. Ass'n of Tex. v. Timbers of Inwood Forest Assocs., 484 U.S. 365, 371 (1988). The Supreme Court explained that "[a] provision that may seem ambiguous in isolation is often clarified by the remainder of the statutory scheme." Id. at 371.
129. See AFL-CIO, 409 F.3d at 389-90.
130. Id.
131. Id.
132. See id. at 386-91.
133. See id. at 382-83.
134. See id. at 386-91.
135. Eskridge & Frickey, supra note 121, at 343, 355-56.
136. See AFL-CIO, 409 F.3d at 394-95 (Roberts, J., concurring in part and dissenting in part).
137. See Eskridge & Frickey, supra note 121, at 345-54.
138. Id. at 348.
139. See id. at 322-23. Eskridge and Frickey also describe the pragmatic approach with a "cable" metaphor where the different threads or theories will not all run in the same direction, but "in these cases the result will depend upon the strongest overall combination of the threads." Id. at 351.
140. Id. at 354-55.
141. AFL-CIO, 409 F.3d at 393 (Roberts, J., concurring in part and dissenting in part).
142. Id. (quoting Labor-Management Reporting and Disclosure Act of 1959 § 208, 29 U.S.C. § 438 (2000)) (alteration in original).
143. Eskridge & Frickey, supra note 121, at 356-58.
144. Id. at 356.
145. AFL-CIO, 409 F.3d at 394 (Roberts, J., concurring in part and dissenting in part) (emphasis added).
146. See id.
147. See id.
148. See Eskridge & Frickey, supra note 121, at 358-59.
149. Id. at 359.
150. Id.
151. AFL-CIO, 409 F.3d at 395 (Roberts, J., concurring in part and dissenting in part).
152. See id.
153. See id.
154. El Rio Santa Cruz Neighborhood Health Ctr., Inc. v. HHS, 396 F.3d 1265 (D.C. Cir. 2005).
155. Federal Tort Claims Act, 28 U.S.C. § 1346 (2000).
156. El Rio, 396 F.3d at 1267.
157. Id. at 1277.
158. Id. at 1278.
159. Id. at 1269.
160. Federally Supported Health Centers Assistance Act of 1995, 42 U.S.C. § 233 (2000).
161. El Rio, 396 F.3d at 1269.
162. Id. at 1275 (quotation omitted).
163. Id. at 1267.
164. El Rio Santa Cruz Neighborhood Health Ctr., Inc. v. HHS, 300 F. Supp. 2d 32, 34-35 (D.D.C. 2004), aff'd, 396 F.3d 1265 (D.C. Cir. 2005).
165. Id. El Rio had already been "deemed" a Public Health Service clinic in 1996 and, therefore, had FTCA coverage. Id. at 38 n.5. The controversy arose solely over the physicians' eligibility for FTCA coverage. Id. at 35.
166. Id. at 38-39.
167. Id. at 39.
168. Id.
169. El Rio Santa Cruz Neighborhood Health Ctr., Inc. v. HHS, 396 F.3d 1265, 1268 (D.C. Cir. 2005) (quoting Letter from Elizabeth Gianturco, Chief of the Claims and Employment Branch, HHS (Jan. 23, 2003), which denied coverage).
170. Id.
171. Id. at 1268-69, 1274; see 28 U.S.C. § 1446(b) (2000) ("The notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant . . . of a copy of the initial pleading . . . . [or] of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is . . . removable . . . .").
172. El Rio, 300 F. Supp. 2d at 35.
173. El Rio, 396 F.3d at 1269.
174. Id.
175. El Rio, 300 F. Supp. 2d at 43.
176. Id. at 41-43.
177. Id. at 42.
178. Id. (quoting Bracco Diagnostics, Inc. v. Shalala, 963 F. Supp. 20, 27-28 (D.D.C. 1997)).
179. 28 U.S.C. §§ 1346(b), 2671-80 (2000); see also 35A AM. JUR. 2D Federal Tort Claims Act §§ 1-10 (2001). Plaintiffs pursuing claims against the United States under the FTCA face significant disadvantages when compared to a private tort action. See, e.g., 28 U.S.C. § 2674 (barring punitive damages); 28 U.S.C. § 2675 (requiring administrative disposition of claim prior to suit); 28 U.S.C. § 2678 (limiting attorney fees).
180. 28 U.S.C. § 1346(b)(1).
181. 28 U.S.C. § 2679(b)(1) ("The remedy against the United States . . . is exclusive of any other civil action or proceeding for money damages by reason of the same subject matter against the employee whose act or omission gave rise to the claim . . . ."); see also Unites States v. Smith, 499 U.S. 160, 163 (1991) (discussing the "absolute immunity" from civil suit that the FTCA provides for "torts committed by Government employees in the scope of their employment").
182. Public Health Service Act, 42 U.S.C. §§ 201-300 (2000).
183. Id. § 233(a).
184. 28 U.S.C. § 2679(c) ("The Attorney General shall defend any civil action . . . against any employee . . . for any such damage or injury."); id. § 2679(d) (providing for substitution of the United States as a defendant and removal from state court "[u]pon certification by the Attorney General that the defendant employee was acting within the scope of his office or employment"). 185 El Rio Santa Cruz Neighborhood Health Ctr., Inc. v. HHS, 396 F.3d 1265, 1267 (D.C. Cir 2005) (citing 42 U.S.C. § 233(g)(1)(A) (2000)).
185. 42 U.S.C. § 233(g)(1)(E).
186. The statute specifies two circumstances for removal. Id. § 233(l)(1). First, the Attorney General is instructed to appear in court within fifteen days of being notified of a suit against a covered entity or individual and to advise the court that the defendant is deemed an employee of the Public Health Service. Id. This will result in removal to district court and the substitution of the United States as a defendant. Id. If the Attorney General fails to appear, the case can be removed upon petition, at which time the proceeding "shall be stayed in such court until such court conducts a hearing, and makes a determination, as to the appropriate forum or procedure for the assertion of the claim." Id. § 233(l)(2).
187. See Rooker v. Fid. Trust Co., 263 U.S. 413, 414-16 (1923) (holding that a district court has no jurisdiction to overturn a state court judgment as unconstitutional because district court jurisdiction is "strictly original"); D.C. Court of Appeals v. Feldman, 460 U.S. 462, 479 (1983) (holding that the district court had no jurisdiction to review proceedings from the District of Columbia Court of Appeals that were "judicial in nature," but that it did have jurisdiction to review legislative and administrative actions of that court).
188. Rooker, 263 U.S. at 414-16; Feldman, 460 U.S. at 479.
189. There has been some controversy over whether Rooker-Feldman is coextensive with claim and issue preclusion, or whether at times it might have a broader or narrower reach. See 18B CHARLES ALAN WRIGHT, ARTHUR R. MILLER & EDWARD H. COOPER, FEDERAL PRACTICE AND PROCEDURE § 4469.1 at 99-100 (2d ed. 2002); see also Moccio v. N.Y. State Office of Court Admin., 95 F.3d 195, 199-200 (2d Cir. 1996) ("[A]t a minimum, [when] a federal plaintiff had an opportunity to litigate a claim in a state proceeding . . . , subsequent litigation of the claim will be barred under the Rooker-Feldman doctrine if it would be barred under the principles of preclusion.").
190. Gray v. Poole, 275 F.3d 1113, 1119 (D.C. Cir. 2002).
191. El Rio Santa Cruz Neighborhood Health Ctr., Inc. v. HHS, 396 F.3d 1265 (D.C. Cir. 2005) (decided February 8, 2005).
192. Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280 (2005) (decided March 30, 2005).
193. Id. at 284 (holding that the Rooker-Feldman doctrine is confined to "cases brought by state-court losers complaining of injuries caused by state-court judgments rendered before the district court proceedings commenced and inviting district court review and rejection of those judgments").
194. 5 U.S.C. § 704 (2000).
195. Abbott Labs. v. Gardner, 387 U.S. 136, 141 (1967) (citations omitted).
196. Bowen v. Massachusetts, 487 U.S. 879, 903 (1988).
197. 5 U.S.C. § 706(2)(A).
198. Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) (quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)).
199. El Rio Santa Cruz Neighborhood Health Ctr., Inc. v. HHS, 396 F.3d 1265, 1269 (D.C. Cir. 2005).
200. Id.
201. Id.
202. See supra Part C.3; see also Bowen v. Massachusetts. 487 U.S. 879, 903 (1988); Abbott Labs. v. Gardner, 387 U.S. 136, 141 (1967).
203. El Rio, 396 F.3d at 1271-75.
204. Id. at 1270-71.
205. Id. at 1270.
206. Envtl. Def. Fund v. Reilly, 909 F.2d 1497, 1505 (D.C. Cir. 1990).
207. El Rio, 396 F.3d at 1270-71.
208. Id. at 1271-75.
209. Id. at 1269.
210. Id. at 1271-72.
211. Id. at 1271.
212. Id.
213. Id.; see supra note 187 for a description of the removal procedure.
214. El Rio, 396 F.3d at 1272 (citing 42 U.S.C. § 233(g)(1)(E) (2000)).
215. Id.
216. Id.
217. Women's Equity Action League v. Cavazos, 906 F.2d 742, 751 (D.C. Cir. 1990) (noting that "a congressional judgment that a remedy other than review under the APA was adequate" was not necessary to preclude APA review if the remedies available were nevertheless "of the same genre" as remedies that had previously been held to preclude APA review).
218. El Rio, 396 F.3d at 1272.
219. Id. at 1273.
220. HHS's practice was to provide coverage determinations to health centers within thirty days of receiving their applications, but to wait until a lawsuit was filed to provide coverage determinations for individual providers. El Rio Santa Cruz Neighborhood Health Ctr., Inc. v. HHS, 300 F. Supp. 2d 32, 37 n.4 (D.D.C. 2004), aff'd, 396 F.3d 1265 (D.C. Cir. 2005). The result was that where a physician has not insisted on being hired as an employee of a center, the physician must either risk exposure to personal liability, incur or require the health center to incur potentially redundant medical malpractice insurance costs, contrary to the purpose of the FSHCAA, or forego providing services to the health center altogether. El Rio, 396 F.3d at 1273.
221. El Rio, 396 F.3d at 1273. According to the court, "Congress enacted the FSHCAA to relieve publicly funded health centers of the burden of rising malpractice insurance costs." Id. at 1268. Construing the FSHCAA in a way that would impose extra burdens and expenses on these centers and their physicians would seem contrary to this purpose. Id. at 1273.
222. Id.
223. Id. at 1274.
224. Id.
225. Id. at 1275.
226. Id.
227. Id.
228. Id. at 1275-76.
229. Id. at 1276.
230. Id. at 1269.
231. Id. at 1276.
232. Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 169 (1962) ("[A]n agency's discretionary order [will] be upheld, if at all, on the same basis articulated in the order by the agency itself . . . .").
233. El Rio, 396 F.3d at 1276.
234. Id. at 1277 (quotation omitted); see also id. ("The PIN [Policy Identification Notice] cited in the letter stated, in relevant part, that '[a] contract between a deemed Health Center and a provider's corporation does not confer FTCA coverage on the provider.'")
235. (quoting Bureau of Primary Health Care, Policy Information Notice 99-08, § IV (Apr. 12, 1999)).
236. Id.
237. Id. at 1278.
238. Id.
239. Id.
240. Id. at 1278 (Henderson, J., concurring).
241. Id.
242. See id. at 1278-79.
243. The court concluded that (1) "any remedy afforded by § 233(l)(2) [would be] too doubt-ful" to preclude APA review, (2) APA review would not duplicate § 233(l)(2)'s removal procedures, (3) there was no alternate private right of action against a third party, and (4) there was no "clear and convincing evidence" of congressional intent to bar APA review. Id. at 1274-75 (majority opinion); see also supra Part D.1.
244. In light of the Supreme Court's decision in Exxon Mobil Corp. v. Saudi Basic Industries Corp., the court could also have dismissed HHS's Rooker-Feldman defense on the grounds that the APA action was filed before the Arizona state court ruled on the defendants' disputed status under the FTCA. See Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005) (holding that the Rooker-Feldman doctrine only applies to "state-court judgments rendered before the district court proceedings commenced").
245. Christenberry v. Thompson, No. 03-14703 (11th Cir. July 30, 2004).
246. Brief for the Appellants at add. C, El Rio Santa Cruz Neighborhood Health Ctr., Inc. v. HHS, 396 F.3d 1265 (D.C. Cir. 2005) (No. 04-5089). According to the appellants' brief: Rule 28(c)(2) of the Rules of the D.C. Circuit permits citation of unpublished dispositions of other courts of appeals under the circumstances and for the purposes permitted by the court issuing the disposition ***. Rule 36-2 of the Rules of the Eleventh Circuit permits unpublished opinions to be cited as persuasive authority provided that a copy of the unpublished opinion is attached to *** the brief *** in which such citation is made. Id. at 18 n.5 (quotations omitted).
247. Christenberry, No. 03-14703, slip op. at 2.
248. Id.
249. Id.
250. Id. at 9.
251. See, e.g., D.C. CIR. R. 28(c)(1)-(2); 11TH CIR. R. 36-2.
252. El Rio Santa Cruz Neighborhood Health Ctr., Inc. v. HHS, 396 F.3d 1265, 1276 (D.C. Cir. 2005).
253. Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005) (holding that the Rooker-Feldman doctrine only applies to "state-court judgments rendered before the district court proceedings commenced").
254. El Rio, 396 F.3d at 1269.
255. Christenberry, No. 03-14703, slip op. at 2-4. Losing a motion to dismiss may still be sufficient to make the defendants "state-court losers complaining of injuries caused by state-court judgments," Exxon Mobil, 544 U.S. at 284, in some cases. See Federación de Maestros de P.R. v. Junta de Relaciones del Trabajo de P.R., 410 F.3d 17, 26 (1st Cir. 2005) (holding that in light of Exxon Mobil, "Rooker-Feldman applies where the state proceeding has ended with respect to the issues that the federal plaintiff seeks to have reviewed in federal court, even if other matters remain to be litigated"). But see Truserv Corp. v. Flegles, Inc., 419 F.3d 584, 590-91 (7th Cir. 2005) (holding that in light of Exxon Mobil, "an interlocutory ruling does not evoke the [Rooker-Feldman] doctrine" in the case of a motion to dismiss in state court based on a forum selection clause).
256. See Gilbert v. Ferry, 413 F.3d 578, 579-80 (6th Cir. 2005) (vacating a previous decision that applied the Rooker-Feldman doctrine to preclude federal jurisdiction in light of Exxon Mobil, but affirming the dismissal of the case because collateral estoppel also barred plaintiffs' attempt to get district court review of the Michigan Supreme Court's denial of a motion to recuse).
257. See 28 U.S.C. § 1346(b) (2000); see also 35A AM. JUR. 2D Federal Tort Claims Act § 1 (2001).
258. See 28 U.S.C. § 1346(b).
259. 28 U.S.C. § 2679(b)(1).
260. 42 U.S.C. § 233(g) (2000).
261. Id.
262. Consider the asymmetrical outcomes possible when a state court, during a malpractice proceeding, reviews a negative coverage determination under the FTCA. If the court decides that the defendant is covered, it must dismiss the case for lack of jurisdiction because the FTCA remedy against the United States is exclusive of all other remedies. The plaintiffs are then placed in the unfortunate position of having nowhere to press their claim. They cannot sue the United States in federal court because their defendant is not covered by the FTCA, but they also cannot sue in state court because the state thinks the defendant is covered by the FTCA. If the state court finds that the defendant is not covered by the FTCA, then it may effectively preclude a federal court from reviewing that decision. This asymmetry has pitfalls for both parties; the plaintiffs might lose the opportunity to pursue a claim against either potential defendant (the United States or the physician defendants), and the physician defendants might be forced to defend against a malpractice action in a state court which would not have had jurisdiction to hear the claim if the FTCA coverage decision had been reviewed and reversed in district court.
263. The possibility of a permissible collateral attack on state court jurisdiction is outside the scope of this case note. See Kalb v. Feuerstein, 308 U.S. 433, 439-40 (1940) (permitting collateral attack on state court jurisdiction where Congress had explicitly removed all jurisdiction over the matter from state courts).
264. As the D.C. Circuit noted, this approach was adopted by the U.S. District Court for the District of Arizona. El Rio Santa Cruz Neighborhood Health Ctr., Inc. v. HHS, 396 F.3d 1265, 1274 (D.C. Cir. 2005).
265. See Allen v. Christenberry, 327 F.3d 1290, 1293-95 (11th Cir. 2003) (malpractice proceeding that led to the APA action in Christenberry v. Thompson) (holding that removal under § 233(l)(2) was only permitted in two circumstances: if the Attorney General appears in state court and informs the court that the defendants are covered by the FTCA, or if the Attorney General fails to appear altogether).
266. 42 U.S.C. § 233(l)(2) (2000).
267. To obtain coverage under the FTCA generally, an employee must get the Attorney General's certification that he was "acting within the scope of his office or employment at the time of the incident." 28 U.S.C. 2679(d)(1) (2000). If the Attorney General refuses to make this certification the defendant may petition the court to obtain such a determination "at any time before trial." Id. § 2679(d)(3). If the petition is filed in a civil action in state court, the case is removed to federal court to allow a district court to make the determination. Id.
268. The APA would still be available to review coverage determinations made prior to the beginning of litigation, but § 233(l)(2) removal would be the exclusive remedy after litigation had begun.
269. This is a result that the D.C. Circuit acknowledges has a "facial attractiveness." El Rio, 396 F.3d at 1269.
270. Chamber of Commerce of the U.S. v. SEC, 412 F.3d 133 (D.C. Cir. 2005).
271. A mutual fund is "a pool of assets . . . belonging to the individual investors holding shares in the fund." Burks v. Lasker, 441 U.S. 471, 480 (1979). An "investment company" operates the mutual fund through a board of directors, which is elected by the company's shareholders. Chamber of Commerce, 412 F.3d at 136. Typically, the board of directors delegates the role of operating the fund to an "adviser," which is a separate company that could have interests other than maximizing the shareholders' returns in the fund. Id.
272. Investment Company Act of 1940, 15 U.S.C. §§ 80a-1 to -64 (2000); Chamber of Commerce, 412 F.3d at 136.
273. Administrative Procedure Act, Pub. L. No. 79-404, 60 Stat. 237 (1946) (codified as amended in scattered sections of 5 U.S.C.).
274. Chamber of Commerce, 412 F.3d at 136.
275. Id. at 137.
276. As elaborated upon infra Part C.2, mutual funds are generally prohibited from conducting transactions that might benefit advisers at the shareholders' expense. The SEC's Exemptive Rules, however, allow funds that meet certain standards to engage in otherwise prohibited transactions.
277. Investment Company Governance, 69 Fed. Reg. 46,378, 46,381, 46,388 (Aug. 2, 2004) (to be codified at 17 C.F.R. pt. 270).
278. Chamber of Commerce, 412 F.3d at 138-40.
279. Id. at 143-44.
280. Id. at 143.
281. Id. at 144-45.
282. Id. at 144.
283. Id. at 142-43.
284. Id. at 142.
285. Role of Independent Directors of Investment Companies, 66 Fed. Reg. 3734, 3736 (Jan. 16, 2001) (to be codified at 17 C.F.R. pt. 270). An independent director is a director who is not an "interested person," as defined by 15 U.S.C. § 80a-2(a)(19). See 15 U.S.C. § 80a-10(a) (2000).
286. Investment Company Governance, 69 Fed. Reg. 46,378, 46,379 (Aug. 2, 2004).
287. Investment Company Governance, 69 Fed. Reg. 3472, 3472 (Jan. 23, 2004).
288. Id. at 3474.
289. Chamber of Commerce, 412 F.3d at 136.
290. Id. at 139.
291. Id.
292. The court's opinion does not discuss this aspect of its jurisdictional basis for hearing the case and only addresses issues of standing. Id. The Chamber argued in its opening brief that the D.C. Circuit had jurisdiction based on the ICA, see Opening Brief of Petitioner Chamber of Commerce of the United States of America at 2-4, Chamber of Commerce of the U.S. v. SEC, 412 F.3d 133, 136 (D.C. Cir. 2005) (No. 04-1300), which states that "[a]ny person or party aggrieved by an order issued by the [SEC] . . . may obtain a review of such order in the . . . United States Court of Appeals for the District of Columbia," 15 U.S.C. § 80a-42(a) (2000). As the court did not address this argument, it is appropriate to assume that it found jurisdiction to be proper. It is not entirely clear, however, if the court accepted the Chamber's asserted basis for jurisdiction.
293. Chamber of Commerce of the U.S. v. SEC, No. 04-1300 (D.C. Cir. Oct. 18, 2004) (order denying emergency motion for stay).
294. See Investment Company Governance, 69 Fed. Reg. 46,378, 46,390 (Aug. 2, 2004) (dissent of Commissioners Glassman and Atkins).
295. Id. at 46,379; see also Investment Company Governance, 69 Fed. Reg. 3472, 3472 (Jan. 23, 2004) (indicating that management abuses included "late trading, inappropriate market timing activities and misuse of nonpublic information about fund portfolios").
296. Investment Company Governance, 69 Fed. Reg. at 46,379.
297. Id. at 46,382.
298. Id.
299. Id. at 46,390.
300. Id. at 46,390-91.
301. Id. at 46,391-92.
302. Id. at 46,392-93.
303. Id. at 46,390.
304. Investment Company Act of 1940, 15 U.S.C. §§ 80a-1 to -64 (2000).
305. See 15 U.S.C. §§ 80a-12(a)-(g).
306. Chamber of Commerce of the U.S. v. SEC, 412 F.3d 133, 136 (D.C. Cir. 2005) (alteration in original) (quotation omitted).
307. See, e.g., 17 C.F.R. § 270.10f-3 (2005) (stating that when conditions are satisfied, fund may purchase securities in a primary offering although the advisor-affiliated broker-dealer is a member of underwriting syndicate); see also Investment Company Governance, 69 Fed. Reg. 46,378, 46,379 n.9 (Aug. 2, 2004) (listing the SEC's Exemptive Rules).
308. 15 U.S.C. § 80a-2(c). This language was added to the ICA by the National Securities Market Improvement Act of 1996, Pub. L. No. 104-290 § 106(c), 110 Stat. 3416, 3424.
309. Administrative Procedure Act § 10(e)(2)(A), 5 U.S.C. § 706(2)(A) (2000).
310. Pub. Citizen v. Fed. Motor Carrier Safety Admin., 374 F.3d 1209, 1216 (D.C. Cir. 2004).
311. 15 U.S.C. § 80a-2(c). See generally Peter J. Wallison, Buried Treasure: A Court Rediscovers a Congressional Mandate the SEC Has Ignored, FIN. SERVICES OUTLOOK, Oct. 2005, at 1, http://www.aei.org/publications/pubID.23310/ pub_detail.asp. The Chamber of Commerce court implicitly held that consideration of the costs of conditions imposed is part of the consideration of efficiency, competition, and capital formation. See Chamber of Commerce, 412 F.3d at 142-44; see also infra Part D.3.b.
312. Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983).
313. Id. at 43 (quotation omitted).
314. RICHARD J. PIERCE, JR. ET AL., ADMINISTRATIVE LAW AND PROCESS 365 (4th ed. 2004).
315. Id.
316. See id. ("A reviewing court always can delay a particular agency action, sometimes indefinitely, but a court can never take a specific action within an agency's jurisdiction or force the agency to take a specific action preferred by the court.").
317. Chamber of Commerce of the U.S. v. SEC, 412 F.3d 133, 136 (D.C. Cir. 2005).
318. Id. at 138. As discussed supra note 292, the court limited its discussion of jurisdiction to the Chamber's standing to bring suit.
319. Id.
320. Id. (quotation omitted).
321. Id. at 138-40.
322. Id.
323. Investment Company Act of 1940 § 6(c), 15 U.S.C. § 80a-6(c) (2000).
324. Chamber of Commerce, 412 F.3d at 138-39.
325. Id. at 139-40.
326. Bus. Roundtable v. SEC, 905 F.2d 406 (D.C. Cir. 1990).
327. Id. at 416-17.
328. Chamber of Commerce, 412 F.3d at 139 (quotation omitted).
329. Teicher v. SEC, 177 F.3d 1016 (D.C. Cir. 1999).
330. Id. at 1019-22.
331. Chamber of Commerce, 412 F.3d at 140.
332. Investment Company Act of 1940 § 10(a), 15 U.S.C. § 80a-10(a) (2000).
333. Chamber of Commerce, 412 F.3d at 140.
334. Id. (quoting 15 U.S.C. § 80a-10(a)).
335. Id.
336. Id. (citing 5 U.S.C. § 706(2)(A) (2000)).
337. Id.
338. Id. at 143-45.
339. Id. at 140.
340. Id. at 140-41.
341. Id. at 141 (quoting Investment Company Governance, 69 Fed. Reg. 46,378, 46,382 (Aug. 2, 2004)).
342. Id.
343. Id.
344. Id.
345. Id. at 140 (quotation omitted). See supra Part C.3 for further explanation of the basis for this requirement.
346. Chamber of Commerce, 412 F.3d at 142.
347. Id.
348. Id.
349. Letter from Eric D. Roiter, Senior Vice President and Gen. Counsel, Fidelity Mgmt. & Research Co., to Jonathan G. Katz, Sec'y, SEC (Mar. 10, 2004), http://www.sec.gov/rules/proposed/s70304/fidelity031804.htm
350. (attaching GEOFFREY H. BOBROFF & THOMAS H. MACK, ASSESSING THE SIGNIFICANCE OF MUTUAL FUND BOARD INDEPENDENT CHAIRS (2004)).
351. In fact, the study found that "[t]o the contrary, the evidence supports the conclusion that funds with independent chairs have underperformed, in a statistically significant way, funds chaired by interested directors." Id. "The study noted, however, that this correlation may be due to 'Other important differences [than independence of the chairmen] that may have impacted performance results,' such as the prevalence of independent chairmen among bank-sponsored fund groups." Investment Company Governance, 69 Fed. Reg. 46,378, 46,384 n.52 (Aug. 2, 2004) (quoting BOBROFF & MACK, supra).
352. Chamber of Commerce, 412 F.3d at 142.
353. Id. (quotation omitted).
354. Id. (quoting Investment Company Governance, 69 Fed. Reg. at 46,383-84).
355. Id. Chairman Donaldson expressed a belief that "'there are no empirical studies that are worth much. You can do anything you want with numbers and we've seen evidence of that in a number of our submissions.'" Id. at 142-43 (quoting SEC Open Meeting, 57-58 (June 23. 2004)).
356. Chamber of Commerce, 412 F.3d at 142.
357. Id.
358. Id.
359. Id. at 143 (alteration in original) (quoting Investment Company Governance, 69 Fed. Reg. at 46,387).
360. Id.
361. Id. The court explained that "in [the] face of uncertainty, [an] agency must exercise its expertise to make tough choices about which of the competing estimates is most plausible, and to hazard a guess as to which is correct, even if . . . the estimate will be imprecise." Id. (quotation omitted).
362. According to the Chamber, the costs imposed by the independent chairman condition were related to the hiring of staff to assist the chairman. Opening Brief of Petitioner Chamber of Commerce of the United States of America at 43-44, Chamber of Commerce of the U.S. v. SEC, 412 F.3d 133 (D.C. Cir. 2005) (No. 04-1300).
363. Chamber of Commerce, 412 F.3d at 143.
364. Id.
365. Id.
366. Id. at 144.
367. Id.
368. Id. at 140.
369. Id. at 144.
370. Id. (quotation omitted).
371. Id.
372. Id.
373. Id.
374. Id. In support of its conclusion, the court noted that the SEC had "augmented the disclosure requirements of the ICA even as it was considering the independent chairman condition." Id. at 145.
375. Id.
376. Id.
377. Id. On remand, nine days after the D.C. Circuit's decision - and on the final day of outgoing Chairman Donaldson's tenure with the agency - a divided SEC reaffirmed the rule as originally adopted. Investment Company Governance, 70 Fed. Reg. 39,390, 39,390 (July 7, 2005). After reconsidering the conditions, the SEC decided that the benefits of the rule outweighed its costs and that disclosure of investment company conflicts of interest were of limited utility. Id. at 39,398; Roberta S. Karmel, Key Outcomes of 'Chamber of Commerce v. SEC,' N.Y. L.J., Aug. 18, 2005, at 3. Upon further appellate review, the D.C. Circuit held that although the SEC was not constrained by this case in how to estimate the costs of the conditions, they failed to comply with the APA by relying on materials not in the rulemaking record without affording an opportunity for public comment. Chamber of Commerce of the U.S. v. SEC, No. 05-2140, 2006 WL 890669 (D.C. Cir. Apr. 7, 2006).
378. For purposes of this case note, empirical data is defined as data "[o]f, relating to, or based on experience, experiment, or observation." BLACK's LAW DICTIONARY 569 (8th ed. 2004).
379. Empiricism "relies on the gathering of observations and data from which patterns can be discerned that can then be synthesized into a theory." Paul B. Mohler, Experiments at the FERC - In Search of a Hypothesis, 19 ENERGY L.J. 281, 283 (1998).
380. Chamber of Commerce, 412 F.3d at 142 (emphasis added) (quotation omitted).
381. Certainly all rules are not required to be based on empirical data. If this were the case, fears of ossification would likely manifest themselves. See Cary Coglianese, Empirical Analysis and Administrative Law, 2002 U. ILL. L. REV. 1111, 1125-26; see also infra Part E.2.b.
382. See Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983) ("The scope of review under the 'arbitrary and capricious' standard is narrow and a court is not to substitute its judgment for that of the agency.").
383. "In reviewing the rationality of agency decisionmaking, courts must be particularly careful not to go beyond their limited role in the administrative process." PIERCE, JR. ET AL., supra note 314, at 367.
384. "Outside of the constitutional law context, the judiciary is the least appropriate branch of government to make policy decisions, since it is the least accountable to the electorate." Id.
385. Chamber of Commerce, 412 F.3d at 142 (citing Investment Company Act of 1940 § 2(c), 15 U.S.C. § 80a-2(c) (2000)).
386. FCC v. Nat'l Citizens Comm. for Broad., 436 U.S. 775, 814 (1978).
387. Of course, agencies should not conduct empirical studies in the numerous situations where it is irrational to do so. For example, sometimes the cost of conducting a study is excessive, there is no established scientific method for conducting a study, or the nature of the problem at hand is not conducive to empirical study.
388. Agencies should act prophylactically, just as the SEC can engage in preventative rulemaking relating to corporate governance concerns. See Chamber of Commerce, 412 F.3d at 141.
389. Karmel, supra note 375.
390. Ruling Backing 'Informed Conjecture' Raises Fear over EPA Powers, INSIDE EPA's CLEAN AIR REP., July 14, 2005, at 15, 15.
391. Wallison, supra note 311, at 1.
392. Today, it is "widely accepted that the rulemaking process has become 'ossified,' as agencies are thought to take years to issue new regulations and in some cases have allegedly retreated altogether from issuing new rules." Coglianese, supra note 378, at 1125-26; see also Thomas O. McGarity, The Courts and the Ossification of Rulemaking: A Response to Professor Seidenfeld, 75 TEX. L. REV. 525, 528 (1997) (observing that "it has become so difficult for agencies to promulgate major rules that some regulatory programs have ground to a halt").
393. Coglianese, supra note 378, at 1126. Of course, Chamber of Commerce itself does not illustrate this issue of administrative delay because the SEC reissued the regulations at issue only nine days after the D.C. Circuit remanded them. See supra note 375.
394. Thomas O. McGarity, Some Thoughts on "Deossifying" the Rulemaking Process, 41 DUKE L.J. 1385, 1412 (1992).
395. For example, understanding costs is necessary for the SEC to understand the impact of rules on "efficiency, competition, and capital formation," as required by section 2(c) of the ICA. Investment Company Act of 1940 § 2(c), 15 U.S.C. § 80a-2(c) (2000); see supra Part D.3.b.
396. Agencies are required, by both statute and executive order, to perform an economic analysis of the costs and benefits of any proposed regulation that would impose annual costs of more than $100 million on the economy. See Unfunded Mandates Reform Act of 1995 § 202(a)(2), 2 U.S.C. § 1532(a)(2) (2000); Exec. Order No. 12,866, 58 Fed. Reg. 51,735 (Oct. 4, 1993). For the history and basis of this requirement, see Coglianese, supra note 378, at 1119.
397. Chamber of Commerce of the U.S. v. SEC, 412 F.3d 133, 136 (D.C. Cir. 2005).
398. Id.
399. Id.
400. See id. at 142.
401. See id. at 143-45.