Questions to Answer:
1. Explain the Court of Appeals holding "that rejection of energy conservation on the basis of the `threshold test' [435 U.S. 519, 550] was "capricious and arbitrary"
2. The USSC agreed with the Court of Appeals on the above holding? true or false. If false, explain why.
Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, 435 U.S. 519 (1978), is a case in which the United States Supreme Court held that a court cannot impose rulemaking procedures on a federal government agency. The federal Administrative Procedure Act of 1946 and an agency's statutory mandate from Congress establish the minimum requirements for an agency's rulemaking (and adjudicative) process. An agency may grant additional procedural rights in the regulatory process (within constitutional and statutory limits), but a reviewing court cannot "impose upon the agency its own notion of which procedures are 'best' or most likely to further some vague, undefined public good." (435 U.S. at 549.) To do so would exceed the limits of judicial review of agency action.
The APA applies to both the federal executive departments and the independent agencies. U.S. Senator Pat McCarran called the APA "a bill of rights for the hundreds of thousands of Americans whose affairs are controlled or regulated" by federal government agencies. The text of the APA can be found under Title 5 of the United States Code, beginning at Section 500.
Look at Rulemaking and the Courts from wikipedia:
Rulemaking and the courts
In the U.S., interested parties can sue to have a judge review the rulemaking process once the rule is finalized. Interested parties frequently sue the rulemaking agency, asking the court to order the agency to reconsider. For example, environmental groups may sue, claiming that the rule is too lax on industry; or industry groups may sue, claiming that the rule is too onerous.
Traditionally, courts are reluctant to step into the shoes of the technical experts and re-open the decisions made in the agency’s detailed analysis. However, courts do review whether a rulemaking meets the standards for the rulemaking process. The basis of this review by the courts may be limited to certain questions of fairness or the procedures that ensure that both sides of a dispute are treated equally before any decision making occurs or that the decision is not patently unreasonable (under Canadian law) orWednesbury unreasonableness (under British law) or similar doctrines described below.
These powers of review of administrative decision, while often governed by statute, were originally developed out of the royalprerogative writs of English law such as the writ of mandamus and the writ of certiorari.
Thus, it is not enough to simply claim that the rulemaking agency could have done a better job. Instead, under U.S. administrative law, to ask the court to order changes in a rule, a party must argue that the rule is:
Arbitrary and capricious and/or unsupported by the record. Most frequently, objectors will argue that, even if the judge is not an expert, she can tell that there is an obvious gap in the agency’s data or analysis. A court may intervene if it finds that there is no reasonable way that the agency could have drafted the rule, given the evidence in the rulemaking record. A court may send a rule back to the agency for further analysis, generally leaving the agency to decide whether to change the rule to match the existing record or to amend the record to show how they arrived at the original rule. If a court does remand a rule back to the agency, it almost always involves an additional notice and public comment period.
Exceeds statutory authority. Frequently, opponents of a rule argue that it fails to follow the instructions of the authorizing legislation. Rules can be found to exceed statutory authority if they are too strict or too lax. If a law instructs an agency to issue regulations to ban a chemical, but the agency issues a rule that instead sets levels for safe use—or vice versa—a court may order the agency to issue a new rule.
Bolt out of the blue. Occasionally, interested parties argue that the final rule contains provisions that were never vetted during the public comment period. A court may intervene if it finds that there was no way that the commenting public could have anticipated the new provisions and provided comment. If so, the new provisions are said to be, in a colorful legal phrase, a 'bolt out of the blue' rather than a reasonable course correction during the rulemaking process. Frequently, agencies will vet several options during the proposed rule phase to allow for comment on the full spectrum of rules under consideration.
NEPA's most significant effect was to set up procedural requirements for all federal government agencies to prepare Environmental Assessments (EAs) and Environmental Impact Statements (EISs). EAs and EISs contain statements of the environmental effects of proposed federal agency actions.[1] NEPA’s procedural requirements apply to all federal agencies in the executive branch. NEPA does not apply to the President, to Congress, or to the federal courts.[2]
Vertmont Yankee case excerpts:
Under the Atomic Energy Act of 1954, 68 Stat. 919, as amended, 42 U. S. C. § 2011 et seq., the Atomic Energy Commission[2]526 was given broad regulatory authority over the development of nuclear energy.
In order to obtain the construction permit or to operate the plant, the utility must file a preliminary safety analysis report, an environmental report, and certain information regarding the antitrust implications of the proposed project.
This application then undergoes exhaustive review by the Commission's staff and by the Advisory Committee on Reactor Safeguards (ACRS), a group of distinguished experts in the field of atomic energy. Both groups submit to the Commission their own evaluations, which then become part of the record of the utility's application. The final agency decision may be appealed to the court of appeals.
In December 1967, after the mandatory adjudicatory hearing and necessary review, the Commission granted petitioner Vermont Yankee a permit to build a nuclear power plant in Vernon, Vt. See 4 A. E. C. 36 (1967). Thereafter, Vermont Yankee applied for an operating license.
Excluded from consideration at the hearings, over NRDC's (An Environmental Protection Group) objection, was the issue of the environmental effects of operations to reprocess fuel or dispose of wastes resulting from the reprocessing operations
Much of the controversy in this case revolves around the 529 procedures used in the rulemaking hearing which commenced in February 1973.
The proposed rulemaking offered two alternatives, both predicated on a report prepared by the Commission's staff entitled Environmental Survey of the Nuclear Fuel Cycle. The first would have required no quantitative evaluation of the environmental hazards of fuel reprocessing or disposal because the Environmental Survey had found them to be slight. The second would have specified numerical values for the environmental impact of this part of the fuel cycle, which values would then be incorporated into a table, along with the other relevant factors, to determine the overall cost-benefit balance for each operating license
The Commission found that "the environmental effects of the uranium fuel cycle have been shown to be relatively insignificant" . The Licensing Board also failed to consider the environmental effects of fuel reprocessing or disposal of radioactive wastes.
With respect to the challenge of Vermont Yankee's license, the court first ruled that in the absence of effective rulemaking proceedings,[13] the Commission must deal with the environmental impact of fuel reprocessing and disposal in individual licensing proceedings. 178 U. S. App. D. C., at 344, 547 F. 2d, at 641. The court then examined the rulemaking proceedings and, despite the fact that it appeared that the agency employed all the procedures required by 5 U. S. C. § 553 (1976 ed.) and more, the court determined the proceedings to be inadequate and overturned the rule. Accordingly, the Commission's determination with respect to Vermont Yankee's license was also remanded for further proceedings.[14]
the Court of Appeals struck down the rule because of the perceived inadequacies of the procedures employed in the rulemaking proceedings. The court first determined the intervenors' primary argument to be "that the decision to preclude `discovery or cross-examination' denied them a meaningful opportunity to participate in the proceedings as guaranteed by due process." 178 U. S. App. D. C., at 346, 547 F. 2d, at 643. The court then went on to frame the issue for decision thus: "Thus, we are called upon to decide whether the procedures provided by the agency were sufficient to ventilate the issues." Ibid., 547 F. 2d, at 643. The Court of Appeal's decision is that the procedures afforded during the hearings were inadequate.
The Supreme Court held: "Absent constitutional constraints or extremely compelling circumstances the "administrative agencies `should be free to fashion their own rules of procedure and to pursue methods of inquiry capable of permitting them to discharge their multitudinous duties.'"
There is little doubt that under the Atomic Energy Act of 1954, state public utility commissions or similar bodies are empowered to make the initial decision regarding the need for power. 42 U. S. C. § 2021 (k). The Commission's prime area of concern in the licensing context, on the other hand, is national security, public health, and safety. §§ 2132, 2133, 2201. And it is clear that the need, as that term is conventionally used, for the power was thoroughly explored in the hearings
Time and resources are simply too limited to hold that an impact statement fails because the agency failed to ferret out every possible alternative, regardless of how uncommon or unknown that alternative may have been at the time the project was approved.
Questions to Answer:
1. Explain the Court of Appeals holding "that rejection of energy conservation on the basis of the `threshold test' [435 U.S. 519, 550] was "capricious and arbitrary"
The court of appeals held that the agency erred by not demanding a new environmental impact statement that explores alternative energy possibilities before granting license.
In view of this development and a subsequent AEC ruling indicating that all evidence of energy conservation should not necessarily be barred at the threshold of AEC proceedings, one of the intervenors moved to reopen the permit proceedings so that energy conservation could be considered, but the AEC declined to reopen the proceedings. Respondents appealed from the granting of the construction permit.
We also think the court's criticism of the Commission's "threshold test" displays a lack of understanding of the historical setting within which the agency action took place and of the nature of the test itself. In the first place, while it is true that NEPA places upon an agency the obligation to consider every significant aspect of the environmental impact of a proposed action, it is still incumbent upon intervenors who wish to participate to structure their participation so that it is meaningful, so that it alerts the agency to the intervenors' position and contentions. This is especially true when the intervenors are requesting the agency to embark upon an exploration of uncharted territory, as was the question of energy conservation in the late 1960's and early 1970's.
"[C]omments must be significant enough to step over a threshold requirement of materiality before any lack of agency response or consideration becomes of concern. The comment cannot merely state that a particular mistake was made . . . ; it must show why the mistake was of possible significance in the results . .
Arbitrary and Capricious
In sum, to characterize the actions of the Commission as "arbitrary or capricious" in light of the facts then available to it as described at length above, is to deprive those words of any meaning. As we have said in the past:
"Administrative consideration of evidence . . . always creates a gap between the time the record is closed and the time the administrative decision is promulgated [and, we might add, the time the decision is judicially reviewed]. . . . If upon the coming down of the order 555 litigants might demand rehearings as a matter of law because some new circumstance has arisen, some new trend has been observed, or some new fact discovered, there would be little hope that the administrative process could ever be consummated in an order that would not be subject to reopening.
2. The USSC agreed with the Court of Appeals on the above holding? true or false. If false, explain why.
The USSC did not agree with the Court of Appeals on this holding. They held that the COA had overstepped its authority by requiring the agency to change its procedures, and expecting them to require an addition to the environmental impact, report which had been prepared and approved 2 years before the new rule requiring alternative power sources be investigated, prior to granting license to a nuclear power plant. They held that administrative procedures and rules should be left to the agency which was granted this power by Congress.
We have also made it clear that the role of a court in reviewing the sufficiency of an agency's consideration of environmental factors is a limited one, limited both by the time at which the decision was made and by the statute mandating review.
"Neither the statute nor its legislative history contemplates that a court should substitute its judgment for that of the agency as to the environmental consequences of its actions." Kleppe v. Sierra Club, 427 U. S., at 410 n. 21.
We think the Court of Appeals has forgotten that injunction here and accordingly its judgment in this respect must also be reversed