The Administrative-Remand Rule & Non-Merits Decisions

In In re Clean Water Act Rulemaking, the Ninth Circuit held that it had jurisdiction to review an order vacating a regulation and remanding the dispute to an agency, as the district court had never deemed the regulation unlawful. This is an interesting twist on the administrative-remand rule. That rule normally bars appeals from orders remanding a dispute to an administrative agency. The Ninth Circuit said that this general rule applied only to remands after the district court resolved a dispute on the merits.

The Clean Water Act Rulemaking Litigation

Simplifying a bit, Clean Water Act Rulemaking stemmed from an Environmental Protection Agency regulation that implemented the Clean Water Act, the details of which are irrelevant to the jurisdictional issue. After the Agency promulgated the rule, a group of plaintiffs challenged it, arguing that it was inconsistent with the Act. A group of intervenors then joined the suit to defend the regulation.

The Agency eventually announced its intention to revise the rule. The Agency accordingly asked the district court to remand the dispute to the Agency for further consideration. (I don’t quite get how this would be a “remand,” as it appears that the litigation started in the district court.) Although the plaintiffs opposed this remand, they alternatively asked the district court to vacate the regulation alongside the remand. The intervenors took no position on the remand. But they opposed any vacatur of the regulation.

The district court sided with the plaintiffs’ alternative request, vacating the regulation and remanding the dispute to the Agency. The intervenors then appealed to the Ninth Circuit, arguing that the district court could not vacate the regulation without first deeming it unlawful.

The Administrative-Remand Rule

At first glance, appellate jurisdiction in Clean Water Act Rulemaking might seem straightforward. The district court was finished with the dispute, so its decision should be final under 28 U.S.C. § 1291. But jurisdiction was complicated by the administrative-remand rule.

As a general rule, district court decisions remanding disputes to an agency are not final or appealable. Remands normally mean more remains to be done in the agency. An immediate appeal from a remand would likely require staying these administrative proceedings. An immediate appeal could also lead to piecemeal review. The court of appeals might hear a case twice—once after the administrative remand and again after any further administrative proceedings. Delaying review would consolidate all issues (from both the earlier agency action and the later agency action) into one appeal. So parties generally have to wait until after the proceedings on remand before taking an appeal.

But that’s not always the case, and exceptions to the general rule exist. For example, a remand is appealable when delaying any review might prevent a party—often the government—from obtaining any appellate review.

Non-Merits Vacaturs

In Clean Water Act Rulemaking, the Ninth Circuit held that the administrative-remand rule did not apply. But that wasn’t due to a recognized exception to the rule. The court instead held that the administrative-remand rule did not apply at all in the context of non-merits vacaturs.

The Ninth Circuit said that its cases articulating and applying the administrative-remand rule and its exceptions “involved a particular kind of order: one in which a district court reaches a merits decision on the lawfulness of a challenged regulation and returns the matter to the agency to remedy the problems identified in the merits decision.” The court thought that the administrative-remand rule was developed for those kinds of orders. Indeed, the Ninth Circuit’s phrasing of the general rule “presuppose[d] a reasoned merits order” with its references to “conclusively resolv[ing] a separable legal issue” and “apply[ing] a potentially erroneous rule.”

So the rule did not apply “to a district court decision that entirely skips over any merits adjudication.” And in Clean Water Act Rulemaking, there was no merits decision on the lawfulness of the Environmental Protection Agency’s regulation.

An Interesting Twist

I’m not a big fan of the administrative-remand rule. It seems to me that once district court proceedings are over, the court’s decision should be appealable. So I’m fine with the outcome in Clean Water Act Rulemaking.

But Clean Water Act Rulemaking adds an interesting twist to the general rule. And I’m not sure it’s a good twist.

The rationale for the administrative-remand rule is that more remains to be done in the agency. So avoiding piecemeal review normally requires delaying review. That rationale seems to apply regardless of whether the district court’s decision goes to the merits of an agency action. Merits decision or not, there is still the risk of an appeal after the remand and another after any further agency proceedings.

The Ninth Circuit’s decision doesn’t wrestle with this. Instead, it picks out a fact in prior cases—decisions on the merits—that those cases didn’t rely on. Sure, it’s a distinction. But I don’t see why that distinction matters.

Also, the phrasing of the rule that the court relied on—referring to “conclusively resolv[ing] a separable legal issue” and “apply[ing] a potentially erroneous rule”—isn’t terribly persuasive. For one thing, there’s no indication that in choosing this phrasing, earlier cases focused on (or even thought of) merits and non-merits decisions. And even if the cases were so focused, the quoted language comes from an exception to the general bar on reviewing administrative remands. So any assumption of a merits decision comes from an exception to the general rule, not the general rule itself.

In re Clean Water Act Rulemaking, 2023 WL 2129631 (9th Cir. Feb. 21, 2023), available at the Ninth Circuit and Westlaw