Brenda HUSSION, on Behalf of herself and all others similarly situated, Plaintiffs-Appellees, v. Edward R. MADIGAN, Secretary, in his official capacity as the Secretary of the U.S. Department of Agriculture, et al., Defendants-Appellants.
No. 90-8873.
United States Court of Appeals, Eleventh Circuit.
Jan. 24, 1992.
950 F.2d 1546 | 60 USLW 2485
Susan Alice Reif and Kay Y. Young, Georgia Legal Services Program, Atlanta, Ga., for plaintiffs-appellees.
Appeal from the United States District Court for the Northern District of Georgia.
Before TJOFLAT, Chief Judge, BIRCH, Circuit Judge, and HILL, Senior Circuit Judge.
BIRCH, Circuit Judge:
In this appeal we consider whether the district court erred in holding that it was arbitrary and capricious for the Farmers Home Administration (“FmHA” or “Agency“) to eliminate administrative review of lease terminations and evictions in FmHA-financed housing. In 1983, the FmHA altered the appeal process applicable to lease termination and eviction cases by substituting state judicial process in place of the previously established administrative review procedure. The regulations, as modified, now provide that landlords in FmHA program housing may evict a tenant only for a “material violation of the lease terms or for other good cause” in a “judicial action pursuant to State or local law.”
I. BACKGROUND
A. The Relevant Facts
In 1986, appellees Brenda Hussion and Julie Wright were tenants in the Douglass Village Apartments, a housing project financed by the FmHA and subsidized by the
Hussion and Wright sought to invoke the FmHA‘s informal grievance procedure to resolve the issues surrounding their lease terminations. When the owners of the complex declined to participate in any informal dispute resolution process, they sued to enforce their rights to grievance hearings as provided by relevant regulations. Although their original complaint involved other adverse actions in addition to eviction, the appellees were prompted to challenge in the same law suit the FmHA‘s decision to abolish the right to have an administrative hearing prior to eviction. In this connection, they instituted the present action on behalf of themselves and others similarly situated against Richard E. Lyng in his official capacity as the Secretary of the Department of Agriculture,2 and Vance Clark as Administrator of the FmHA, seeking to enjoin enforcement of a 1983 amendment to the FmHA‘s tenant grievance and
B. The History of the Relevant Regulations
The FmHA first proposed the contested revision to the tenant grievance and appeals procedure regulations in 1982. Prior to this time, the grievance procedure had been governed by regulations originally adopted in 1979 which provided for informal meetings to settle disputes between landlords and tenants. See
Concerns about the burdens of this multi-layered process prompted the FmHA to propose revisions in 1982 intended to remove eviction actions governed by state law from the grievance process. The FmHA also proposed that a direct review of the outcome of the informal meeting by the district director be substituted for the existing review hearing conducted by a hearing officer or panel. See 47 Fed.Reg. 17,300, 17,301-02 (1982). In particular, the FmHA was concerned that unpaid hearing officers with suitable qualifications were difficult to secure in rural areas and that the costs of retaining such persons for pay would burden all tenants in the form of higher rents. Id. at 17,300. Hence, the FmHA sought to modify the rules to minimize potential economic burdens inuring to participants in program housing. The Agency published notice of the proposed rulemaking, collected comments, invited the commenting parties to extend and clarify their comments, and summarized the positions urged by opponents and proponents before issuing its final rule in December 1983. See 48 Fed.Reg. 56,175, 56,175-77 (1983).
In light of the public comments offered, the FmHA decided in the final rule to retain the hearing officer or panel as a component of the process, and, rather than completely removing evictions from the regulations, further decided that lease terminations would be permissible only through state or local judicial action. Thus, the agency‘s modified rule answered concerns attending the wholesale elimination of the hearing officer or panel, as well as the specter that “self-help” evictions
C. The Proceedings Below
In August of 1987, the district court held that the 1983 amendment to the FmHA tenant grievance and appeals procedure was consistent with constitutional due process requirements and the enabling statute,
[Assuming that] § 1480(g) mandates that eviction and termination of tenancy be considered in an administrative hearing ... the 1983 Amendment satisfies the literal terms of that mandate.
* * * * * *
[While t]he statute reflects Congress’ concern that [the pre-1978 FmHA provisions were] ‘seriously deficient in terms both or procedural and substantive due process’ ... the 1983 Amendment does not violate the underlying spirit of § 1480(g).
Order of August 31, 1987, R3-68-6-8 (citations omitted). Despite determining that the 1983 amendment satisfied the mandates of relevant law and expressing the view that there was apparently “little merit in plaintiffs’ argument under the arbitrary-and-capricious standard,” the district court nevertheless denied dismissal of that aspect of the complaint in order to allow full discovery. Id. at 12-13.
After a review of the revised administrative record that emerged from the ensuing discovery, the district court held in July 1990 that the 1983 amendment was arbitrary and capricious in violation of the APA. See Hussion v. Yeutter, 741 F.Supp. 1563, 1568 (N.D.Ga.1990). In particular, the district court determined that the agency had accorded only cursory treatment to comments attacking its proposed revisions in which opponents pointed out several ways in which state laws were inadequate to protect tenants rights. Id. at 1567. The district court found that FmHA “either did not consider or ignored these important aspects of the [1983] Amendment” and that its explanation for the changes embodied by the new rule was not adequately supported by the record. Id. at 1568. It therefore granted summary judgment in favor of the appellees on their APA-based claim.
The FmHA now challenges the district court‘s grant of summary judgment, arguing that the Agency‘s action satisfied the rigors of the arbitrary-and-capricious standard applicable to administrative actions. See
II. DISCUSSION
A. Standard of Review
As outlined by the APA, judicial review of informal rulemaking assesses whether an agency‘s action is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”
If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines that Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency‘s answer is based on a permissible construction of the statute.
Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984) (footnotes omitted).
The district court‘s application of these principles is a legal question subject to plenary review by this court. See Cabriolet Porsche Audi, Inc. v. American Honda Motor Co., 773 F.2d 1193, 1201 (11th Cir.1985), cert. denied, 475 U.S. 1122, 106 S.Ct. 1641, 90 L.Ed.2d 186 (1986). Our task, therefore, is to render an independent decision in light of the facts in the record and the same principles which govern the district court. We proceed accordingly on the basis of the same revised administrative record that was relied upon below.5
B. Whether the Regulation Is Contrary to Law
Since the district court found that the 1983 amendment was not contrary to law, appellant does not urge us to directly consider that question on appeal. However, we are authorized to affirm the district court‘s rejection of the 1983 amendment on any ground which the law and record permit. See Furness Withy (Chartering), Inc., Panama v. World Energy Sys. Assocs., Inc., 772 F.2d 802, 808 (11th Cir.1985). Therefore, we pause to consider this question in passing. Specifically, we address whether the FmHA‘s promulgation of the 1983 amendment adequately satisfies the mandates of the enabling act that it administers, the Housing and Community Development Amendments of 1978,
As a plain interpretation of the language of Section 1480(g) discloses, the 1983 amendment to the tenant grievance and appeals procedure is in all respects consonant with relevant statutory requirements. Section 1480(g) provides that the Secretary of Agriculture has the power to issue regulations ensuring that, upon eviction, tenants
are given written notice of the reasons for ... [lease] termination and are provided at least an opportunity to appeal an adverse decision and to present additional information relevant to that decision to a person, other than the person making the original determination, who has authority to reverse the decision....
The imaginative interpretation of the enabling statute‘s requirements urged by the appellees--which finds in the statute the requirements of a guarantee of discovery rights and a separate administrative appeal process, for example--arguably projects a picture of how a more wisely crafted statute might well have looked. Nevertheless, this expanded interpretation does not provide this court, as we assume the deferential posture mandated by Chevron, with the authority to reject an administrative action clearly supported by a permissible reading of the statute. Moreover, the legislative history that is explored extensively in appellees’ brief is equally unavailing on this question. “Absent a clear indication of legislative intent to the contrary, the statutory language controls its construction.” Ford Motor Credit Co. v. Cenance, 452 U.S. 155, 158 n. 3, 101 S.Ct. 2239, 2241 n. 3, 68 L.Ed.2d 744 (1981) (per curiam). Here, none of the traditional tools of statutory construction indicate that the statute means anything other than what it simply says.7 See Pension Benefit Guar. Corp. v. LTV Corp., 110 S.Ct. 2668, 2677, 110 L.Ed.2d 579 (1990). Especially because “the regulations promulgated by the governmental body responsible for interpreting or administering a statute are entitled to considerable respect,” we see no reason to venture into legislative sources extrinsic to a clearly worded statute as a basis for judicial reversal of this administrative action. Ford Motor, 452 U.S. at 158 n. 3, 101 S.Ct. at 2241 n. 3.
C. Whether the Regulation is Arbitrary and Capricious
The ground on which the district court ultimately invalidated the 1983 amendment was that the FmHA promulgated the amendment in a manner which violated the APA, relying on the familiar rule that requires courts to set aside agency rules which are, inter alia, promulgated through a procedure that is arbitrary and capricious.
As stated in Motor Vehicle Manufacturers Association, a number of factors guide our review.
Normally, an agency rule would be arbitrary and capricious if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered 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.
463 U.S. at 43, 103 S.Ct. at 2867; see also Organized Fishermen, 775 F.2d at 1550. With reference to these considerations, the appellees defend the judgment of the district court on several grounds. They assert that the Agency, in the course of the rulemaking process, failed to consider the adequacy of state law to guarantee the rights of aggrieved tenants, failed to accord appropriate weight to adverse data about the actual burdens associated with the functioning of the pre-1983 grievance and appeals procedure, and failed sufficiently to respond to comments it had received which highlighted objections to the proposed change. None of these arguments, either in the form argued before us or as adopted by the district court, supports the district court‘s reversal of the FmHA‘s action when tested against the “highly deferential” standards applicable to judicial review of agency action. Organized Fishermen, 775 F.2d at 1550.
The district court, agreeing with appellees, found that “the final rule does not even contemplate that some tenants may not be afforded the due process guarantees secured by § 1480(g).” Hussion, 741 F.Supp. at 1568 (footnote omitted). This determination is belied by ample evidence in the record. In fact, the Agency responded to public comments criticizing its original formulation--which would have provided merely that the eviction must be “according to state law“--by amending the proposal specifically to require “judicial action” (along with imposing “material [lease] violation” and “good cause” criteria on the eviction).
The agency has addressed this issue by stipulating termination of tenancy and evictions are to be handled by judicial action pursuant to State or local law. The Agency determined that in the case of evictions or termination of tenants that the right [sic] of tenants are fully protected under State or local law when a Judicial Process is required.... [T]he [landlord must] advise a tenant, in a termination notice, that the tenant is entitled to a court proceeding pursuant to State or local law at which he or she may present a defense to the eviction. The [landlord] is prohibited from resort to “self-help” evictions or any non-judicial process, even where authorized by State or local law.
48 Fed.Reg. 56,175, 56,176 (1983).8
To demonstrate the shortfall of the Agency‘s response, the district court cited additional objections to the Agency‘s proposed reliance on state judicial process, and found that “[a]t no place in the record does FmHA attempt to refute specific allegations concerning state laws made by opponents of the change.” Hussion, 741 F.Supp. at 1568. Those other challenges, however, were grounded in due process interests not mandated by the statute authorizing the review process in the first
There is similarly no basis for the district court‘s conclusion that the Agency‘s action ran “counter to the information provided.” Hussion, 741 F.Supp. at 1568. Although the appellees cite empirical data arguably undercutting the Agency‘s apparent determination that the grievance and appeals procedure was duplicative and burdensome, none of the arguments before us vitiates the fact that the Agency had collected numerous complaints from FmHA project personnel expressing concerns about the difficulties and costs of the procedure in its pre-1983 form. The empirical data accumulated before the time of the proposed rulemaking do not disprove the premise of the FmHA change: duplication was inherent in the process because even with an administrative grievance procedure in place, either party could appeal the outcome of the FmHA grievance procedure to the courts. See
We are unpersuaded by appellees’ further arguments as to the adequacy of the FmHA‘s responses to comments that were critical of the proposed regulation. The APA does not require the Agency to respond to comments which, in essence, reflect a policy-based preference for the most exacting guarantees of due process over the interest shared by owners and other tenants in minimizing the cost and delay of good-cause evictions. “Under the ‘arbitrary and capricious’ standard of review, an agency is ... required to respond to significant comments that cast doubt on the reasonableness of the rule the agency adopts.” Baltimore Gas and Elec. Co. v. United States, 817 F.2d 108, 116 (D.C.Cir.1987). Given that the significant objections raised by the amendment‘s opponents are, on the record, accounted for in the Agency‘s action and furthermore fall far short of indicating any clear error of judgment by the Agency, the arbitrary and capricious standard provides no basis to set aside the 1983 amendment.
III. CONCLUSION
For the foregoing reasons, we find that the FmHA has satisfied the requirements of both Section 1480(g) and the APA in promulgating the 1983 amendment to its grievance and appeals procedure. Finding no merit in appellees’ remaining arguments, we REVERSE the grant of appellees’ motion for summary judgment by the