Posted by Sasha Volokh:
FCC v. Fox Television Stations, Part V: A digression on what it takes to change
a policy.
http://volokh.com/archives/archive_2009_05_31-2009_06_06.shtml#1243897361
I haven't had time to post lately, but now let me return to my series
of posts discussing the background of the Supreme Court's "fleeting
expletives" case from last month, [1]FCC v. Fox Television Stations.
Click [2]here to see the whole string of posts, including this one, on
a single page, in chronological order. (As usual, click [3]here to
watch [4]George Carlin's monologue if you haven't done so already!)
In past posts, we've seen the evolution of the FCC's policy on
regulating expletives. Recall that the FCC's statute, the
[5]Communications Act of 1934, has two sections that are somewhat in
tension. First, we have the no-censorship provision, now codified at
47 U.S.C. § 326, which says:
Nothing in this chapter shall be understood or construed to give
the Commission the power of censorship over the radio
communications or signals transmitted by any radio station, and no
regulation or condition shall be promulgated or fixed by the
Commission which shall interfere with the right of free speech by
means of radio communication.
Then, we have the no-indecency provision, now codified at 18 U.S.C. §
1464:
Whoever utters any obscene, indecent, or profane language by means
of radio communication shall be fined under this title or
imprisoned not more than two years, or both.
Originally, the FCC announced a policy where, say, the George Carlin
monologue was considered "indecent" and therefore sanctionable; this
policy was upheld in [6]FCC v. Pacifica Foundation in 1978 -- that
story is told in [7]this post. But over the years, they took the
policy that "fleeting expletives" -- if an expletive occurred in an
isolated context, or by accident -- were either not indecent or, if
indecent, didn't merit any enforcement action.
The FCC reversed its policy over the last 5 years, first announcing
its change in a case involving [8]Bono and then [9]applying its new
policy to dozens of complaints it had in its backlog. All this was
challenged -- and that challenge resulted in the recent [10]FCC v. Fox
Television Stations case, which upheld the FCC's change of course
(though leaving the First Amendment arguments for another day).
We'll discuss that case in a later post. But first, a bit of
background. What does it take for an agency to legitimately change
course? The classic case on this is [11]Motor Vehicle Manufacturers
Ass'n v. State Farm Mutual Automobile Insurance (1983), called State
Farm for short. That's what the rest of this post is about.
([12]show the rest of this post)
I. Highway safety policy
Let's forget about communications policy for a while and let's instead
think about highway safety policy, as set by the [13]Department of
Transportation, through the [14]National Highway Traffic Safety
Administration (NHTSA).
The main statute here is the National Traffic and Motor Vehicle Safety
Act of 1966, which directs the Secretary of Transportation to issue
safety standards that "shall be practicable, shall meet the need for
motor vehicle safety, and shall be stated in objective terms." In
issuing the standards, the Secretary had to consider "relevant
available motor vehicle safety data," whether the standard "is
reasonable, practicable, and appropriate" for the type of car, and the
"extent to which such standards will contribute to carrying out the
purposes" of the Act. (This all was codified at 15 U.S.C. � 1392(a),
but repealed in 1994.)
If this sounds pretty vague and open-ended to you, well, you're right;
but those sorts of vague, open-ended statutes are the bread and butter
of the modern American regulatory state. If you want to challenge that
sort of thing, look up the [15]nondelegation doctrine; but you'll
probably lose.
In 1967, the DOT issued a safety standard, called Motor Vehicle Safety
Standard 208. At first, all Standard 208 did was require seatbelts in
all cars. But the problem with seatbelt mandates is to get people to
actually use the things! Because seatbelt use was low, the DOT started
to consider "passive occupant restraint systems," for instance
[16]automatic seat belts and [17]airbags. In 1977, NHTSA estimated
that passive restraints could save 12,000 lives and prevent over
100,000 serious injuries a year.
In 1969, the DOT proposed a standard requiring the installation of
passive restraints. In 1970, it actually revised Standard 208 to
include such requirements, and in 1972, it amended the Standard "to
require full passive protection for all front seat occupants" of cars
made after 1975. This was challenged and upheld in the Sixth Circuit
in 1972 (472 F.2d 659). Cars made between 1973 and 1975, if they
didn't have passive restraints, could satisfy the requirement by
having [18]ignition interlocks, but these turned out to be so
massively unpopular that Congress intervened in 1974, prohibiting any
motor vehicle standards that required or permitted compliance with
ignition interlocks, and providing that any standard that could be
satisfied by anything other than seat belts would have to be submitted
to Congress, which could veto it. (This was all before legislative
vetoes were invalidated in [19]INS v. Chadha.)
The date when passive restraints were going to become mandatory ended
up getting extended to 1976 -- the Secretary of Transportation was
afraid they would be as unpopular as ignition interlocks. Finally, the
Secretary scrapped the mandate entirely. But the mandate was revived
in the Carter Administration. In 1977, Modified Standard 208 came into
being, mandating that passive restraints -- either automatic seat
belts or airbags -- be phased in starting in 1982. The D.C. Circuit
upheld this in 1979, and Congress chose not to veto it.
When the Reagan Administration came around -- having promised, among
other things, to reduce the regulatory burden on American industry
and, in particular, the auto industry -- the DOT reopened the
rulemaking and ultimately rescinded Modifed Standard 208's passive
restraint requirement.
II. NHTSA's rationale
Now an agency can't just enact requirements and rescind requirements
just like that; they have to issue written statements, which they
publish in the [20]Federal Register. And courts then analyze those
statements to see whether they make sense, are consistent with the
statute, respond to the comments, etc.
So what did NHTSA say? It said it couldn't find -- as it had found in
1977 -- "that the automatic restraint requirement would produce
significant safety benefits." Why not? Not because of new beliefs
about the effectiveness of the technology, but because of the auto
industry's plans. Back in 1977, NHTSA had assumed that airbags would
be installed in 60% of new cars and automatic seatbelts in 40%. But by
1981 it was clear that automatic seatbelts would be installed in 99%
of new cars, which would, all by itself, satisfy the requirement.
Thus, "the lifesaving potential of airbags would not be realized."
But here's the tricky part: The automatic seat belts could just be
detached permanently, at which point they require "the same type of
affirmative action that is the stumbling block to obtaining high usage
levels of manual belts"! So there was no reliable basis for predicting
any significant increased usage of restraints.
See, Modified Standard 208 allowed manufacturers to comply with either
automatic safety belts or airbags. So a 99% rate of installing
automatic safety belts meant almost no airbags would be required...
even if the automatic safety belts were all disconnected and thus
useless! So because Modified Standard 208, in NHTSA's view, would have
miminal safety benefits, NHTSA determined that it wasn't worth the $1
billion it would cost to implement.
State Farm Insurance Co. sued, arguing that the rescission of the
standard was arbitrary and capricious, and the D.C. Circuit agreed.
The Supreme Court agreed.
III. Justice White's opinion
A. The scope of review
First, there was the question of the scope of judicial review. The
auto industry argued that deregulation should be judged by a looser
standard than regulation. Basically, if an agency decides not to
regulate at all, there's very little a court can do about it. The DOT
argued that if an agency rescinds an existing regulation, that's just
restoring the previous lack of regulation, so that should be judged by
the same standard as a failure to regulate in the first place. This
was rejected very quickly -- the Administrative Procedure Act makes it
clear that rescinding a regulation and enacting a regulation are both
examples of "rule making," and both should be judged by the same
standard.
So the agency has to produce as convincing an argument for rescinding
a regulation as it would have to produce for enacting it. This means
they can't "rel[y] on factors which Congress has not intended it to
consider, entirely fail[] to consider an important aspect of the
problem, offer[] an explanation for its decision that runs counter to
the evidence before the agency, or is so implausible that it could not
be ascribed to a difference in view or the product of agency
expertise."
(Relatedly, the Court disapproved the D.C. Circuit's suggestion that
Congress's (implicit) ratification of the agency's previous attempts
to require passive restraints put NHTSA under a heavier burden to
justify its rescission. Legislative action, the Court said, doesn't
change the standard of review.)
B. The rescission of the standard as to airbags
As to airbags, the Court found that the rescission was arbitrary and
capricious because NHTSA apparently didn't consider mandating airbags
at all. Recall the two-step above: the standard gave two options for
compliance, automatic seat belts and airbags. First, manufacturers
would (almost entirely) satisfy the standard by installing the cheaper
automatic seat belts. Second, people would then disconnect the seat
belts, making them no better than regular seat belts. Under the
standard as it was, there was no way to prevent people from
disconnecting the seat belts or requiring the installation of airbags.
So why not just modify the standard to require airbags? The agency
didn't have to actually require them, but at least, the Court said,
they should have considered the option. In fact, they didn't even
mention the alternative.
In fact, the original proposed standard only contemplated airbags. The
automatic seat belts were added later as an option, because it was
thought they would be as good as airbags. At the time, those automatic
seat belts were going to be non-detachable. Later, the agency approved
of the detachability feature. Now that the detachable seat belts were
determined to be worthless, the whole series of modifications to the
original standard turned out to be an evisceration! Given the Act's
mandate to achieve traffic safety, it seems that mandating airbags
would be a logical alternative to consider. But wait a minute, does
this mean that a court can "broadly require an agency to consider all
policy alternatives in reaching decision"? No, said the Court: "the
airbag is more than a policy alternative to the passive restraint
Standard; it is a technological alternative within the ambit of the
existing Standard. We hold only that given the judgment made in 1977
that airbags are an effective and cost-beneficial life-saving
technology, the mandatory passive restraint rule may not be abandoned
without any consideration whatsoever of an airbags-only requirement."
C. The rescission of the standard as to automatic seat belts
As to the seat belts, the Court found that "the issue is closer." But
still, the Court found that the agency had acted wrongly: it "was too
quick to dismiss the safety benefits of automatic seatbelts." The
agency found that, because the industry was going to install
detachable seat belts, "it could not reliably predict 'even a 5
percentage point increase as the minimum level of expected usage
increase.'" (There were a number of studies on automatic seat belt
usage, but the agency chose to discount them, arguing that, for
various reasons, they were unrepresentative of what would actually
happen in real life.)
The Court (unlike the D.C. Circuit) agreed that uncertainty could be
sufficient grounds for rescinding a policy. But in this case, it's
implausible to think that automatic seat belts wouldn't substantially
increase seat belt usage: Regular seat belts require an affirmative
act to fasten them, while automatic seat belts require an affirmative
act to unfasten them. Inertia -- drivers' unwillingness to move their
muscles -- cuts against seat belt usage for conventional seat belts,
but in favor of seat belt usage for automatic seat belts. "Whether
this is in fact the case is a matter for the agency to decide, but it
must bring its expertise to bear on the question."
Also, the agency "failed to articulate a basis for not requiring
nondetachable belts." This argument was similar to the one in the
airbags section: If the problem with the automatic belts was that they
would become useless by being detached, then why not adopt a standard
that (1) mandates airbags or (2) makes automatic seat belts
nondetachable (i.e., continuous)? "By failing to analyze the
continuous seatbelts option in its own right, the agency has failed to
offer the rational connection between facts and judgment required to
pass muster under the arbitrary-and-capricious standard."
For these reasons, the Court remanded the matter to the agency for
reconsideration.
IV. Justice Rehnquist's partial dissent
Justice Rehnquist, plus three others (Chief Justice Burger, Justice
Powell, and Justice O'Connor), agreed with the majority on the airbags
but disagreed on the seat belts.
Given that the agency didn't like the existing studies of automatic
seat belt use, it discounted those studies and said there was too much
uncertainty about what the increase in seat belt use would be. The
majority rejected that because of the argument described above -- that
drivers' inertia would make them not disconnect their automatic belts.
Rehnquist thought this was insufficiently deferential to the agency:
"It seems to me that the agency's explanation, while by no means a
model, is adequate. The agency acknowledged that there would probably
be some increase in belt usage, but concluded that the increase would
be small and not worth the cost of mandatory detachable automatic
belts. The agency's obligation is to articulate a '"rational
connection between the facts found and the choice made."' I believe it
has met that standard."
Rehnquist closed by connecting the standard with the election of a new
President with different regulatory priorities: "The agency's changed
view of the standard seems to be related to the election of a new
President of a different political party. It is readily apparent that
the responsible members of one administration may consider public
resistance and uncertainties to be more important than do their
counterparts in a previous administration. A change in administration
brought about by the people casting their votes is a perfectly
reasonable basis for an executive agency's reappraisal of the costs
and benefits of its programs and regulations. As long as the agency
remains with the bounds established by Congress, it is entitled to
assess administrative records and evaluate priorities in light of the
philosophy of the administration."
Well, that's the standard for changing a previously adopted regulatory
standard. Next time, we'll see how the Supreme Court evaluated the
FCC's attempt to do this with its indecency standard.
([21]hide most of this post)
References
1. http://supremecourtus.gov/opinions/08pdf/07-582.pdf
2. http://volokh.com/posts/chain_1240936129.shtml
3. http://www.youtube.com/watch?v=3_Nrp7cj_tM
4. http://en.wikipedia.org/wiki/Seven_dirty_words
5. http://en.wikipedia.org/wiki/Communications_Act_of_1934
6.
http://en.wikipedia.org/wiki/Federal_Communications_Commission_v._Pacifica_Foundation
7. http://volokh.com/archives/archive_2009_05_03-2009_05_09.shtml#1241584136
8. http://volokh.com/archives/archive_2009_05_17-2009_05_23.shtml#1242700245
9. http://volokh.com/archives/archive_2009_05_17-2009_05_23.shtml#1242783653
10. http://supremecourtus.gov/opinions/08pdf/07-582.pdf
11. http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&invol=29&vol=463
12. file://localhost/var/www/powerblogs/volokh/posts/1243897361.html
13. http://en.wikipedia.org/wiki/United_States_Department_of_Transportation
14.
http://en.wikipedia.org/wiki/National_Highway_Traffic_Safety_Administration
15. http://en.wikipedia.org/wiki/Nondelegation_doctrine
16. http://en.wikipedia.org/wiki/Automatic_seat_belts
17. http://en.wikipedia.org/wiki/Airbag
18. http://en.wikipedia.org/wiki/Ignition_interlock_device
19. http://en.wikipedia.org/wiki/Legislative_veto
20. http://www.gpoaccess.gov/fr/
21. file://localhost/var/www/powerblogs/volokh/posts/1243897361.html
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