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Case number 20-7063, Joseph V. Fisher, a balance for Suspension Benefit Guarantee Corporation.

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Ms.

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Gaffney for the balance, Mr. Cooper for the appellee.

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Good morning, council.

[00:00:16] Speaker 02:
Good morning.

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Council may proceed.

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Thank you, your honors.

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May it please the court.

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Alison Gaffney on behalf of the appellant, Joseph Fisher.

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There are several issues raised in this appeal, but I'd like to spend my time this morning focusing on one of them.

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And that is the question of whether the appeals board's 2016 decision was new agency action or a more complete explanation of its 2011 decision.

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This court's answer to that question could resolve this entire appeal.

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If this court determines that the 2016 decision was not new agency action,

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then it need not reach what otherwise is a predicate question of whether the matter should have been remanded in the first place.

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And it need not reach the arguments regarding the regulation that the appeals board relied upon for the first time in 2016, PBGC regulation 4044.4B.

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As the Supreme Court explained last year in regents, an agency on remand may do one of two things.

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It may provide a fuller explanation of the reasons given as part of its initial action

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or it may start afresh and take new agency action.

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If it does the former, it may elaborate on the reasons that it gave as part of those initial actions, or as this circuit's precedent has described it, it may provide an amplified articulation of those reasons, but it may not provide new ones.

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On the other hand, if it takes new agency action, it is not limited to its prior reasons, but it must comply with the procedural requirements for new agency action.

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And here there's no dispute.

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The second decision on its face says that this, i.e.

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the second decision is final agency action.

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That's correct.

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It is final agency action, but it is not new agency action.

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It also says on its face.

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It has to be new agency action because the district court set aside the first decision.

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The district court did reason that the word set aside would make it new agency action, but that is incredibly overbroad.

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The word set aside come from the APA itself, of course.

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And is the standard APA remedy, right?

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The only way the district court could not have set aside that decision is if it had done the very unusual course of remanding without vacating,

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we have a very specific test for when courts are allowed to do that and there's not a word of any of that in the district courts intervene a first opinion.

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But if the words set aside as you said that's the standard remedy under the APA and so if those were the marker of new agency action that would mean that for nearly every instance of remand governed by the APA there would be

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no need for the prohibition on post hoc rationalization.

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So it would completely do away with that foundational principle of administrative law.

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Which is not hugely concerning if you think that another foundational principle of administrative law is the Channery doctrine.

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And this is exactly what happened in Channery where the agency gave one rationale, the court set it aside.

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The agency gave a different rationale on remand and that second decision was fine.

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The second decision was fine because it was new agency action and that was the holding of Channery too.

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is that the agency is not limited to one procedural, the agency has different procedural options on remand.

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It may take new agency action, but if it does, so it must follow the procedural requirements for new agency action.

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And that's what the Supreme Court said in regents.

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Is there anything in APA procedural law that will prevent the agency if everything was fully briefed and argued the first time around?

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when the case comes back on remand from just deciding it?

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The Supreme Court addressed this question in regents.

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It said that the procedural requirements here are not just idle formalities.

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And that's clearly right if the court sets aside a rule or a policy or something of that nature.

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But this just seems completely unexceptional.

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I mean, it happens in court.

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happens in courts all the time.

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You brief multiple grounds and it's not a legal requirement to re-brief when things come back on a remand.

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No, it is not a legal requirement to re-brief, but it is also a legal requirement that the agency may not provide new rationalizations for the first time on remand.

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The procedural requirements are what are the marker of new agency action.

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And those procedural requirements will vary depending on the agency action at issue.

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It may be that the procedural requirements are more extensive in formal rulemaking or formal adjudication.

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Here we have informal adjudication and the procedural requirements are not as extensive.

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But in regents, they were even less so.

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The agency action at issue was

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And the DHS announcing a policy change.

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But nonetheless, the Supreme Court said the procedural requirements matter here.

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They serve important values of administrative law.

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And it cannot be that simply considering a new rationale for the first time on remand would make it a new decision in and of itself.

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The agency must follow those procedural requirements.

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Well, our cases seem to focus on, A, either what the district court said or, and, B, what the agency said on remand.

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So we don't have a case here where the agency said we're sticking with our original point of view, but we want to make this additional observation.

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Nor do we have a situation here where your client wasn't fully advised of what issues were to be raised.

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on remand from the district court's point of view.

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So I'm wondering as to procedural requirements, what you have in mind.

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My question is he had full notice because the district court elaborated in its first decision why it was remanding.

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One point first is that the agency on remand

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did say precisely that, that the 2016 decision was a revised and more complete explanation of its 2011 decision.

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And if you stick with that, then the agency would not have been conforming its action to the district court's remand order.

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The agency had the choice on remand.

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It described its action as a more complete explanation

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But then it went into an impermissible post hoc rationalizations.

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What I'm trying to draw the distinction between is the district court said not only is the policy ground a problematic, but there were other issues that the agency simply never addressed and that could be dispositive.

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The district court said that the agency had not addressed whether the policy that it relied upon could apply to Mr. Fisher's factual situation.

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But it was clear on its face that the policy did not apply to the factual situation where the request was denied and not only submitted, but also denied before the notice of intent to terminate was submitted.

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I see that I'm running into my time.

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So what about the regulation?

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What about the regulation?

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It also wanted the agency to address the regulation.

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And in the first decision, the agency had not done so.

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Correct.

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And that is exactly what makes its decision to address it on remand an impermissible post-op rationalization.

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Well, I guess I don't understand how you see the APA functioning then.

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in this type of situation where a district court expressly says, I need the agency to address two matters.

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One, it addressed in part, but not sufficiently.

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And the second, it didn't address it all.

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And so I'm setting aside the agency's first decision.

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This runs up again.

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Excuse me, go ahead.

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Oh, sorry.

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The court can only affirm the agency action on the grounds invoked by the agency at the time of its decision, and it cannot substitute its judgment for that of the agency.

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The agency did not consider this regulation relevant to its denial of Mr. Fisher's request.

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Whether or not the court did, the court cannot substitute its judgment for the agency.

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Any further questions?

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All right, thank you.

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Let us hear from council for Appellee.

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Good morning, your honors may please the court.

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Kenneth Cooper on behalf of the pension benefit guarantee corporation.

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I would like just to emphasize a few points that were just discussed.

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One is the point that the PBGC appeals board really had no choice but to make a new decision based on what the district court instructed to do.

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question though is should if they're going to make a new decision shouldn't they have followed or should they have followed the normal procedures with reference to a briefing hearing whatever you would normally do with a new proceeding well everything was already before the court in uh in the 2010 appeal uh there there was no need to uh

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start with a new proceeding.

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The district court had told the appeals board exactly what to address.

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Those issues had been addressed by Mr. Fisher in his original brief in 2010.

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So there was no need to start from

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from the beginning with a new procedure.

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Does that make it then a post-hoc rationalization on the first proceeding if you don't do anything else rather even though you called it a new proceeding?

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Is it just a post-hoc rationalization?

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It is not a

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post hoc rationalization because it was a new decision.

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The arguments, as I said, are already before the board.

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That would normally be the case when it post hoc rationalization, wouldn't it?

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Well, you wouldn't know

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It wouldn't normally do that if the issues were already in place.

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If I can compare it to regents, in regents there was a memo by the DHS that just said very briefly this is illegal.

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The district judge remanded it simply to give an opportunity to the DHS to offer some new explanation.

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And so the Supreme Court found that they did have to start over because they had to come up with new reasons.

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Here also, there was no

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predetermined conclusion.

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The board had to adjudicate this in Regents.

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The DHS could have decided not to go further and just leave the DACA in place, but here the appeals board had to make an adjudication.

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The result was not predetermined in the

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District courts remand the judge specifically said, if the board denies the appeal on remand, then Mr. Fisher can challenge that decision.

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So really all these issues were before the board.

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It was not something that came up simply in the second decision.

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So your position simply is not to contest appellant's argument about the proper procedures have to be followed, but rather that the record here shows that the issues had already been fully briefed and appellant showed

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or has shown nothing to indicate that he did not have a full opportunity to get his views before the agency on remand?

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That would be correct.

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I wouldn't say as a generalization that they had

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that they would have had to make a new decision, but saw it as an exception.

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I'm sorry, put in place new procedures.

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And then the board saw this as an exception.

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I think they just saw it as the decision.

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I'm sorry.

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The issues were briefed, as he said.

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The district court told it what to address.

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It couldn't just start pulling in issues that perhaps Mr. Fisher wouldn't have had a chance to brief before.

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Well, that's sort of the point of my question.

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In other words, hypothetically, had Mr. Fisher himself not raised the regulation and it had come up only before the district court, then do you agree that that would have been some procedure on remand to give him an opportunity to get his views before the agency?

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So the question is if he had not raised it at all in his appeal.

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Yeah, well, I think the district court would have likely said something different in that case.

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I'm not sure how it would have

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come up had it not been in the appeal.

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This is a hypothetical, just trying to understand how far the board's position is going on procedures.

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I'm just following up on Judge Santel's question.

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I think if a district court sends it back and says this decision is deficient,

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I want a new one.

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Then I think you would likely need to start a new procedure.

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Anything further?

[00:17:17] Speaker 04:
No, if you have no other questions, I don't have anything further.

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All right, Council.

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Collins, any further questions?

[00:17:27] Speaker 01:
No further questions.

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All right.

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Thank you, Council.

[00:17:30] Speaker 03:
Councilor Pellin?

[00:17:33] Speaker 02:
Thank you.

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Quickly, the district court in its remand order has asked that the appeals board address three things.

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Two of those were closely tied to the rationale explained by the appeals board in 2011.

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And one of those was the regulation.

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So the district court, in terms of providing an amplified articulation that would have not been an impermissible post hoc rationalization, the appeals board

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could have chosen to amplify those reasons that it gave previously, but it did not.

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That was a choice that the agency had, regardless of what the district court told it to do.

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The Supreme Court in Regents rejected the argument that simply because the agency was invited to do something by the district court, that would make it permissible.

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And in Regents, there were multiple reasons in the first memo

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And the court said that the reasons that were given in the first memo and then amplified in the second memo, it went ahead and evaluated those under the arbitrary and capricious standard as governed by the APA.

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So it was only the reasons that were not raised in the first memo that were impermissible post hoc rationalizations.

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And the same thing would apply here.

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It's just that in the 2016 decision, the appeals board focused entirely on this new rationale.

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And it really isn't an issue of whether Mr. Fisher raised the issue.

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It's not a question of notice, it's a question of what the agency rationale was for its decision.

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That's the only grounds on which the reviewing court may judge the agency's action.

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All right, anything further?

[00:19:22] Speaker 02:
No, thank you very much for listening to my argument this night.

[00:19:26] Speaker 03:
All right, thank you.

[00:19:27] Speaker 03:
We will take the case under advisement.