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 The Supreme's decision on indecency avoided the first amendment issues, which are profound. The case had been dismissed on grounds the FCC hadn't followed reasonable procedure. The Supremes decided the procedure was fine if not perfect. The ruling on procedure makes it much harder to challenge FCC rulings in court, where current cases often resemble Jarndyce and Jarndyce.
Any company rich enough to afford a federal case worth of lawyers threatens to go to court on any FCC ruling they don't like. Many do, tying things up for years. The FCC has often compromised the public interest in order to avoid a court case. The "moral hazard" of that was predictable. The U.S. now has a brutal load of cases, and "The American Disease" is spreading to other nations whose carriers copy U.S. tactics.
Traditionally, the courts show deference to the administration, only interfering on egregious malpractice. The D.C. Circuit, led by conservative activist Judge Harry Edwards, strongly believed in protecting business from government and moved the courts to a very anti-regulation stance. They repeatedly threw out reasonable rules and put their beliefs above the commission. The Supreme Court has now ruled that's not the law reads,
and has given the Obama team far more leeway to set rules.
This opens a wonderful opportunity for Comcast to admit defeat on net neutrality, as AT&T and Verizon did more than a year ago on wireline. New FCC Chair Jules personally put net neutrality in the Obama platform. It's simply stupid to confront the rulemakers head-on, especially when the facts are not on your side.
Cable has no decent reason to fight: Comcast itself has demonstrated it can reduce network management drastically without a serious problem. No one at the FCC challenged Comcast for charging users of more than 250 gigabytes a month; I took a great deal of flack for calling that level reasonable. Bandwidth is cheap but isn't free. Anything truly reasonable will get through; Comcast got a slap on the wrist because world-class engineers, including two MIT professors, told Kevin Martin the throttling was clearly unreasonable. The Comcast witnesses - David Cohen and Joe Waz - made obviously uninformed claims and will need years to rebuild their reputation. I'm not sure who is the pig-headed fool that is pushing the case forward, but Comcast has much more important battles. "Retransmission consent" will cost several $billions a year and is a giveaway to the station owners. Brutal and illegal levels of inter-carrier compensation add substantially to the cost of all cable phone service. Rules on Tru2way, firewire and Ethernet ports on TV sets, open program guides and a dozen others are more strategic.
Here's the key parts of the actual decision for those who speak lawyerese.
(a) Under the APA standard, an agency must “examine the relevant data and articulate a satisfactory explanation for its action.” Motor Vehicle Mfrs. Assn. of United States, Inc. v. State Farm Mut. Automobile Ins. Co., 463 U. S. 29, 43. In overturning the FCC’s judgment, the Second Circuit relied in part on its precedent interpreting the APA and State Farm to require a more substantial explanation for agency action that changes prior policy. There is, however, no basis in the Act or this Court’s opinions for a requirement that all agency change be subjected to more searching review. Although an agency must ordinarily display awareness that it is changing posi-tion, see United States v. Nixon, 418 U. S. 683, 696, and may some-times need to account for prior factfinding or certain reliance interests created by a prior policy, it need not demonstrate to a court’s satisfaction that the reasons for the new policy are better than the reasons for the old one. It suffices that the new policy is the statute, that there are good reasons for it, and that the agency believes it to be better, which the conscious change adequately indicates. Pp. 9–12.
(b)
Under these standards, the FCC’s new policy and its order finding the broadcasts at issue actionably indecent were neither arbi-trary nor capricious. First, the FCC forthrightly acknowledged that its recent actions have broken new ground, taking account of incon-sistent prior FCC and staff actions, and explicitly disavowing them as no longer good law. The agency’s reasons for expanding its enforce-ment activity, moreover, were entirely rational. Even when used as an expletive, the F-Word’s power to insult and offend derives from its sexual meaning. And the decision to look at the patent offensiveness of even isolated uses of sexual and excretory words fits with Pacifica’s context-based approach. Because the FCC’s prior safe-harbor-for-single-words approach would likely lead to more widespread use, and in light of technological advances reducing the costs of bleeping of-fending words, it was rational for the agency to step away from its old regime. The FCC’s decision not to impose sanctions precludes any argument that it is arbitrarily punishing parties without notice of their actions’ potential consequences. Pp. 13–15.
(c)
None of the Second Circuit’s grounds for finding the FCC’s ac-tion arbitrary and capricious is valid. First, the FCC did not need empirical evidence proving that fleeting expletives constitute harmful “first blows” to children; it suffices to know that children mimic behavior they observe. Second, the court of appeals’ finding that fidelity to the FCC’s “first blow” theory would require a categorical ban on all broadcasts of expletives is not responsive to the actual policy under review since the FCC has always evaluated the patent offensiveness of words and statements in relation to the context in which they were broadcast. The FCC’s decision to retain some discretion in less egregious cases does not invalidate its regulation of the broadcastsunder review. Third, the FCC’s prediction that a per se exemption for fleeting expletives would lead to their increased use merits deference and makes entire sense. Pp. 15–18.
Analysis
A. Governing Principles The Administrative Procedure Act, 5 U. S. C. §551 et seq., which sets forth the full extent of judicial authority to review executive agency action for procedural correctness, see Vermont Yankee Nuclear Power Corp. v. Natural Re-sources Defense Council, Inc., 435 U. S. 519, 545–549
(1978), permits (insofar as relevant here) the setting aside of agency action that is “arbitrary” or “capricious,” 5
U. S. C. §706(2)(A). Under what we have called this “narrow” standard of review, we insist that an agency “examine the relevant data and articulate a satisfactory explanation for its action.” Motor Vehicle Mfrs. Assn. of United States, Inc. v. State Farm Mut. Automobile Ins. Co., 463 U. S. 29, 43 (1983). We have made clear, however, that “a court is not to substitute its judgment for that of the agency,” ibid., and should “uphold a decision of less than ideal clarity if the agency’s path may reasonably be discerned,”
Bowman Transp., Inc. v. Arkansas-Best Freight System, Inc., 419 U. S. 281, 286 (1974).
In overturning the Commission’s judgment, the Court of Appeals here relied in part on Circuit precedent requiring a more substantial explanation for agency action that changes prior policy. The Second Circuit has interpreted the Administrative Procedure Act and our opinion in State Farm as requiring agencies to make clear “‘why the original reasons for adopting the [displaced] rule or policy areno longer dispositive’” as well as “‘why the new rule effectuates the statute as well as or better than the old rule.’” 489 F. 3d, at 456–457 (quoting New York Council, Assn. of Civilian Technicians v. FLRA, 757 F. 2d 502, 508 (CA2 1985); emphasis deleted). The Court of Appeals for the District of Columbia Circuit has similarly indicated that acourt’s standard of review is “heightened somewhat” when an agency reverses course. NAACP v. FCC, 682 F. 2d 993, 998 (1982).
We find no basis in the Administrative Procedure Act or in our opinions for a requirement that all agency change be subjected to more searching review. The Act mentions no such heightened standard. And our opinion in State Farm neither held nor implied that every agency action representing a policy change must be justified by reasons more substantial than those required to adopt a policy in the first instance. That case, which involved the rescission of a prior regulation, said only that such action requires “a reasoned analysis for the change beyond that which may be required when an agency does not act in the first instance.” 463 U. S., at 42 (emphasis added).2 Treating failures to act and rescissions of prior action differently
for purposes of the standard of review makes good sense, and has basis in the text of the statute, which likewise treats the two separately. It instructs a reviewing court to “compel agency action unlawfully withheld orunreasonably delayed,” 5 U. S. C. §706(1), and to “hold unlawful and set aside agency action, findings, and conclusions found to be [among other things] . . . arbitrary [or]capricious,” §706(2)(A). The statute makes no distinction, however, between initial agency action and subsequent agency action undoing or revising that action.
To be sure, the requirement that an agency providereasoned explanation for its action would ordinarily demand
that it display awareness that it is changing position.
An agency may not, for example, depart from a prior policy sub silentio or simply disregard rules that are still on the books. See United States v. Nixon, 418 U. S. 683, 696 (1974). And of course the agency must show that there are good reasons for the new policy. But it need not demonstrate to a court’s satisfaction that the reasons for the new policy are better than the reasons for the old one; it suffices that the new policy is permissible under the statute, that there are good reasons for it, and that the agency believes it to be better, which the conscious change of course adequately indicates. This means that the agency need not always provide a more detailed justification
than what would suffice for a new policy created on ablank slate. Sometimes it must—when, for example, its new policy rests upon factual findings that contradict those which underlay its prior policy; or when its prior policy has engendered serious reliance interests that mustbe taken into account. Smiley v. Citibank (South Dakota),
N. A., 517 U. S. 735, 742 (1996). It would be arbitrary orcapricious to ignore such matters. In such cases it is not that further justification is demanded by the mere fact of policy change; but that a reasoned explanation is needed for disregarding facts and circumstances that underlay orwere engendered by the prior policy.
JUSTICE KENNEDY, concurring in part and concurring in the judgment.
I join Parts I, II, III–A through III–D, and IV of the opinion of the Court and agree that the judgment must be reversed. This separate writing is to underscore certain background principles for the conclusion that an agency’ to change course may be arbitrary and capricious if the agency sets a new course that reverses an earlier determination but does not provide a reasoned explanation for doing so. In those circumstances I agree with the dissenting opinion of JUSTICE BREYER that the agency must explain why “it now reject[s] the considerations that led it to adopt that initial policy.” The question whether a change in policy requires an agency to provide a more-reasoned explanation than when the original policy was first announced is not susceptible,in my view, to an answer that applies in all cases. There may be instances when it becomes apparent to an agency that the reasons for a longstanding policy have been altered by discoveries in science, advances in technology, or by any of the other forces at work in a dynamic society. If an agency seeks to respond to new circumstances by modifying
its earlier policy, the agency may have a substantialbody of data and experience that can shape and inform the JUSTICE KENNEDY, concurring in part and concurring in the judgment.
I join Parts I, II, III–A through III–D, and IV of the opinion of the Court and agree that the judgment must be reversed. This separate writing is to underscore certain background principles for the conclusion that an agency’sdecision to change course may be arbitrary and capricious if the agency sets a new course that reverses an earlier determination but does not provide a reasoned explanation
for doing so. In those circumstances I agree with the dissenting opinion of JUSTICE BREYER that the agency must explain why “it now reject[s] the considerations that led it to adopt that initial policy.” Post, at 5.
The question whether a change in policy requires an agency to provide a more-reasoned explanation than when the original policy was first announced is not susceptible,in my view, to an answer that applies in all cases. There may be instances when it becomes apparent to an agency that the reasons for a longstanding policy have been altered
by discoveries in science, advances in technology, or by any of the other forces at work in a dynamic society. If an agency seeks to respond to new circumstances by modifying
its earlier policy, the agency may have a substantial body of data and experience that can shape and inform the new rule. In other cases the altered circumstances may new that the agency must make predictive judgments that are as difficult now as when the agency’s earlier policy was first announced. Reliance interests in the prior policy may also have weight in the analysis.
The question in each case is whether the agency’s reasons
for the change, when viewed in light of the data available to it, and when informed by the experience and expertise of the agency, suffice to demonstrate that the new policy rests upon principles that are rational, neutral,and in accord with the agency’s proper understanding of its authority. That showing may be required if the agency is to demonstrate that its action is not “arbitrary, capricious,
an abuse of discretion, or otherwise not in accordance
with law.” 5 U. S. C. §706(2)(A). And, of course, the agency action must not be “in excess of statutory jurisdiction,
authority, or limitations, or short of statutory right.” §706(2)(C).
These requirements stem from the administrative agency’s unique constitutional position. The dynamics of the three branches of Government are well understood as a general matter. But the role and position of the agency, and the exact locus of its powers, present questions that are delicate, subtle, and complex. The Federal Government
could not perform its duties in a responsible andeffective way without administrative agencies. Yet the amorphous character of the administrative agency in the constitutional system escapes simple explanation.
If agencies were permitted unbridled discretion, their actions might violate important constitutional principles of separation of powers and checks and balances. To that end the Constitution requires that Congress’ delegation of lawmaking power to an agency must be “specific and detailed.” Mistretta v. United States, 488 U. S. 361, 374 (1989). Congress must “clearly delineat[e] the general policy” an agency is to achieve and must specify the Congress must “‘lay down by legislative act an intelligibleprinciple,’” and the agency must follow it. Id., at 372 (quoting J. W. Hampton, Jr., & Co. v. United States, 276
U. S. 394, 409 (1928)).
Congress passed the Administrative Procedure Act (APA) to ensure that agencies follow constraints even asthey exercise their powers. One of these constraints is the duty of agencies to find and formulate policies that can be justified by neutral principles and a reasoned explanation.To achieve that end, Congress confined agencies’ discretion
and subjected their decisions to judicial review. See
R. Stewart & C. Sunstein, Public Programs and Private Rights, 95 Harv. L. Rev. 1193, 1248 (1982) (the APA was a“working compromise, in which broad delegations of discretion
were tolerated as long as they were checked byextensive procedural safeguards”). If an agency takesaction not based on neutral and rational principles, theAPA grants federal courts power to set aside the agency’saction as “arbitrary” or “capricious.” 5 U. S. C. §706(2)(A); Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U. S. 402, 416 (1971). For these reasons, agencies under theAPA are subject to a “searching and careful” review by the courts. Ibid.
Where there is a policy change the record may be much more developed because the agency based its prior policy on factual findings. In that instance, an agency’s decision to change course may be arbitrary and capricious if theagency ignores or countermands its earlier factual findings
without reasoned explanation for doing so. An agency cannot simply disregard contrary or inconvenient factual determinations that it made in the past, any more than itcan ignore inconvenient facts when it writes on a blank slate.
This is the principle followed in the Court’s opinion in Motor Vehicle Mfrs. Assn. of United States, Inc.
2 JUSTICE BREYER’s contention that State Farm did anything more, post, at 4–6 (dissenting opinion), rests upon his failure to observe the italicized phrase and upon a passage quoted in State Farm from a plurality opinion in Atchison, T. & S. F. R. Co. v. Wichita Bd. of Trade, 412 U. S. 800 (1973). That passage referred to “a presumption that [congressional] policies will be carried out best if the settled rule isadhered to.” Id., at 807–808 (opinion of Marshall, J.). But the Atchison plurality made this statement in the context of requiring the agency toprovide some explanation for a change, “so that the reviewing court may understand the basis of the agency’s action and so may judge the consistency of that action with the agency’s mandate,” id., at 808. The opinion did not assert the authority of a court to demand explanation sufficient to enable it to weigh (by its own lights) the merits of the agency’s change. Nor did our opinion in State Farm. |
