Action Alliance of Senior Citizens of Greater Philadelphia v. Louis W. Sullivan

930 F.2d 77, 289 U.S. App. D.C. 192, 59 U.S.L.W. 2646, 1991 U.S. App. LEXIS 6033, 56 Empl. Prac. Dec. (CCH) 40,775

• Court: Court of Appeals for the D.C. Circuit
• Decided: April 16, 1991
• Docket: 87-5251
• Status: Published

Opinions

Opinion for the Court filed by Circuit Judge WILLIAMS.

Dissenting Opinion filed by Circuit Judge WALD.

STEPHEN F. WILLIAMS, Circuit Judge.

In the Paperwork Reduction Act, 44 U.S.C. § 3501 et seq. (1988), Congress sought “to minimize the Federal paperwork burden for individuals, small businesses, State and local governments, and other persons.” Id. § 3501(1). The act requires federal agencies to forward to the Office of Management and Budget “a copy of any proposed rule which contains a collection of information requirement.” Id. § 3504(h)(1). If OMB “determines that the collection of information by an agency is unnecessary, for any reason, the agency may not engage in the collection of the information.” Id. § 3508. We here consider whether a regulation vetoed by OMB qualifies as an information collection request, in light of Dole v. United Steelworkers of America, 494 U.S. 26, 110 S.Ct. 929, 108 L.Ed.2d 23 (1990).

The Age Discrimination Act of 1975, 42 U.S.C. § 6101 et seq. (1988), made the Secretary of Health and Human Services (actually Health, Education and Welfare, of which a part later became HHS, the term we will use throughout) responsible for promulgating regulations relating to age discrimination. The regulations were to serve as a model for ones to be issued later by each of the various federal agencies that extend federal financial assistance. Id. § 6103. HHS published its final model regulations on June 12, 1979. 44 Fed.Reg. 33,776 (1979). Included was a provision under which each adopting agency would require each of its funding recipients “to complete a written self-evaluation of its compliance under the Act ... [and to] make the self-evaluation available on request to the agency and to the public for a period of 3 years following its completion.” 45 CFR § 90.43(b)(1) & (4) (1990). As HHS is itself an agency that extends federal financial assistance, it then proposed HHS-specific regulations that followed its own model, including the self-evaluation provision. 44 Fed.Reg. 55,108 (1979).

After HHS proposed its agency-specific regulations, but before final adoption, OMB exercised its authority under the Federal Reports Act of 1942, 44 U.S.C. §§ 3501 et seq., predecessor of the Paperwork Act, formally disapproving the self-evaluation provision of the model regulations. See letter from OMB to HHS, dated February 14, 1980, Joint Appendix (“J.A.”) 89. HHS then modified the corresponding agency-specific self-evaluation requirement.¹ Under the final HHS-specific regulations a self-evaluation is required only when requested by HHS in conjunction with a compliance review or a complaint investigation. 45 C.F.R. § 91.33(b) (1990).

Action Alliance of Senior Citizens of Greater Philadelphia sued HHS and OMB, claiming among other things that provisions of this sort were not subject to OMB’s authority under the Paperwork Act. This court upheld HHS’s decision to submit to OMB, and thus indirectly upheld the action of OMB itself. Action Alliance of Senior Citizens of Phil. v. Bowen, 846 F.2d 1449 (D.C.Cir.1988). The Supreme Court granted certiorari and remanded to us for further consideration in light of Steelworkers, which held the Paperwork Act inapplicable to a hazard labelling and disclosure requirement. Action Alliance of Senior Citizens of Phil. v. Sullivan, - U.S. -, 110 S.Ct. 1329, 1330, 108 L.Ed.2d 469 (1990). Because we find no inconsistency between Steelworkers and our prior decision, we again uphold HHS’s revision of its agency-specific regulations to conform with OMB’s disapproval of the self-evaluation provision of the model regulations.

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The parties start with a dispute over whether the case is governed by the Paperwork Act or its predecessor, the Federal Reports Act of 1942, the Alliance arguing for the Paperwork Act, the government for the Reports Act. OMB disapproved of the self-evaluation provision of the model regulations in February 1980, before enactment of the Paperwork Act (December 11, 1980), and well before its effective date (April 1, 1981). But the Alliance challenges the final HHS-specific regulations, which were not promulgated until December 28, 1982, long after the Paperwork Act became effective. On the other hand, the Age Discrimination Act required agencies to follow the model regulation, 42 U.S.C. § 6103 (1988), so a case could be made that the controlling date should be that of OMB’s ruling (February 14, 1980) or of HHS’s adoption of the model regulations (June 12, 1979).

In the end we think it appropriate to sidestep all this. The primary purpose of the Paperwork Act was to make the government-mandated paperwork law clearer and to eliminate the exemptions from the OMB clearance process enjoyed by certain agencies under the Reports Act scheme. See 126 Cong.Rec. 6212 (1980) (remarks of Rep. Horton); 125 Cong.Rec. 16564 (1979) (remarks of Sen. Danforth). The Paperwork Act introduced little (if any) difference in the type of agency action subject to OMB review, and such change as it makes, on the issue on which the Supreme Court remanded, only tends to improve the government’s position. See discussion of relevant provisions of the two acts at page 79, below. (The reason why the parties split as they do is a claim based on 44 U.S.C. § 3518(e), adopted as part of the Paperwork Act, which we resolved against plaintiffs in our prior treatment of the case, see 846 F.2d at 1454-55, and which we do not revisit today. See pages 83-84 below.) Thus we will address the issue under the currently effective Paperwork Act, but also note the congruence of the superseded Records Act.

Under the Paperwork Act, OMB’s review authority encompasses all “information collection requests.” See 44 U.S.C. § 3507 (1988). The act defines such a request as

a written report form, application form, schedule, questionnaire, reporting or recordkeeping requirement, collection of information requirement, or other similar method calling for the collection of information.

Id. § 3502(11) (1988) (emphasis added). Thus an agency request is subject to OMB disapproval if it embodies either a “record-keeping requirement” or a “collection of information requirement”. A “collection of information” is in turn

the obtaining or soliciting of facts or opinions by an agency through the use of written report forms, application forms, schedules, questionnaires, reporting or recordkeeping requirements, or other similar methods calling for ... answers to identical questions posed to, or identical reporting or recordkeeping requirements imposed on, ten or more persons....

Id. § 3502(4) (emphasis added). And a “recordkeeping requirement” is a “requirement ... to maintain specified records.” Id. § 3502(17) (emphasis added).²

As OMB is the agency entrusted with the administration of the Paperwork Act, Steelworkers, 110 S.Ct. at 933, we are required under Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781, 81 L.Ed.2d 694 (1984), to uphold its interpretation unless it is barred by Congress’s clear expression or is unreasonable. See also Steelworkers, 110 S.Ct. at 938.

On its face the phrase “recordkeeping requirement” appears to encompass the draft self-evaluation rule. The rule requires a funds recipient to “complete” the “self-evaluation of its [Age Discrimination Act] compliance” and to “make [it] available on request to the agency and to the public” for a period of three years. 45 CFR § 90.43(b)(4) (1990). Thus it seems to require the recipient “to maintain specified records”.

The self-evaluation regulation also appears to fit the “collection of information” definition. The regulation directs funds recipients “to complete a written self-evaluation of [their] compliance under the [Age Discrimination] Act”, and to make that report “available on request to the agency and to the public”. 45 CFR § 90.43(b)(4) (1990). This appears to be the “soliciting of facts or opinions by an agency through the use of ... identical reporting or record-keeping requirements”.

The Alliance argues that because “no federal agency has apparently sought to collect information contained in a recipient self-evaluation”, Alliance Brief at 15, the self-evaluations are not maintained for agency use, and therefore cannot be “recordkeeping requirements”. Even if we assumed that availability to the agency were essential for Paperwork Act review, the self-evaluation regulation meets that test, explicitly requiring the federal funds recipient to “make the self-evaluation available to the agency” as well as to the public. See S.Rep. 1411, 96th Cong., 2d Sess. at 40, U.S.Code Cong. & Admin.News 1980, pp. 6241, 6280 (“The term ‘recordkeeping requirement’ ... includes information maintained by persons which may be but is not necessarily provided to a Federal agency ”) (emphasis added). Obviously the burden of collecting and maintaining information is not diminished merely because the agency disdains the information that it forced the private party to create. See 126 Cong.Rec. 6212 (1980) (“this bill provides for the implementation of a very important concept: That the Federal Government should treat information as a resource, not a free good_”) (remarks of Rep. Horton). It would be a startling irony if OMB’s power were lacking in precisely the case where the need for its exercise was greatest — where an agency compels the costly generation of data that it never bothers to study.

In a closely related argument, the Alliance suggests a distinction between information directly collected by an agency and information merely required to be made available to it on request, claiming that the latter is not encompassed by “collection of information”. But by insisting on the information’s availability to the relevant agency, the self-evaluation requirement “solicits] ... facts or opinions ... through the use of ... identical reporting or record-keeping requirements”. 44 U.S.C. § 3502(4) (emphasis added).

Moreover, in adopting the Paperwork Act Congress had before it the policy statements and regulations of OMB by which it (and its predecessor) had consistently exercised their Reports Act authority simply on the basis of officially mandated availability to an agency, and the legislative history reflects an intent to maintain (or expand) this prior authority. Thus the Senate Report endorsed prior practice in these terms:

The ‘collection of information’ definition does not change the scope of current authority and practice by the Director of OMB and the Comptroller General to promulgate rules and regulations needed to interpret the relationship of certain kinds of information to the definition of collection of information. This practice is presently evident in OMB Circular A-40 and GAO regulations (4 CFR Part 10). Previous editions of Circular A-40 and GAO regulations demonstrate how this authority has been used during the 37-year history of the original Federal Reports Act.

S.Rep. 96-930, 96th Cong., 2d Sess. at 39, U.S.Code Cong. & Admin.News 1980, p. 6279; see also id. at 13 (reflecting intent in some particulars to expand authority over collection of records by precluding certain formerly arguable limitations). OMB Circular A-40, one of the prior agency interpretations listed, said: “When a person or organization is requested by a Federal agency to collect specific information to be made available to the agency, the plan or report form ... used to collect this information must be regarded as spon-sored_” OMB Circular A-40 (revised November 5, 1976), reprinted at J.A. 128, 132 (emphasis added). See also Regulation A, Federal Reporting Services, Clearance of Plans and Reports Forms, Title I(l)(e) (February 13,1943), reprinted in HHS Brief (“[a]ny general or specific requirement for the establishment or maintenance of records ... which are to be used or be available for use in the collection of information”) (emphasis added).

Further, the Steelworkers majority itself observed that a requirement of availability to an agency was enough to bring a data-collection regulation under the Paperwork Act. It instanced tax and business records and compliance reports as being among “[tjypical information collection requests”, 110 S.Ct. at 933, and also said that they

are examples of information provided only indirectly to an agency. In these cases, the governing regulations do not require records to be sent to the agency; they require only that records be kept on hand for possible examination as part of a compliance review.

Id. at 933 n. 4. Forced availability is enough.

The Alliance’s final argument rests on a distinction drawn by the Steelworkers opinion between collection of data for such purposes as determining whether “to initiate enforcement measures”, id. at 933, and requirements that “represent[] a substantive regulatory choice,” id. The Alliance believes that the self-evaluation requirement must be substantive because HHS had justified the requirement as “impos[ing] upon recipients a primary responsibility for ensuring compliance with the [Age Discrimination] Act”, 43 Fed.Reg. at 56,437, and had stated that its primary purpose was “internal review by the recipient,” 44 Fed.Reg. at 33,785. See Alliance Brief at 14-15.

The regulation under review in Steelworkers was a “Hazard Communications Standard” issued by the Department of Labor requiring employers to supply all employees in multi-employer sites “with data sheets describing the hazardous substances to which they were likely to be exposed”. 110 S.Ct. at 932.³ As the Court said, the rules “mandated] disclosure by one party directly to a third party ”. See id. at 938 (emphasis added). The Court outlined the choices open to the regulating agency as (1) a simple ban on the chemicals in question, (2) a mandate of specific safety solutions such as gloves or goggles, and (3) a system of required warnings and labels. The agency selected disclosure, the Court observed, because it believed “that such a requirement is the least intrusive measure that will sufficiently protect the public.” Id. at 933.

We do not believe the regulation here is “substantive” as the term is used in Steelworkers. It appears both in form (“a written self-evaluation of [the recipient’s] compliance”) and in function considerably more like the tax records and compliance reports that the Court recognized as covered by the Paperwork Act (see 110 S.Ct. at 933 & n. 4) than like the OSHA disclosure rules that it found exempt.

First, we question whether a regulation’s “substantive” characterization is relevant at all where, as here, it requires data to be collected and made available to the agency, and both agencies (as well as plaintiffs) have throughout the proceedings treated the regulation as a unit. The Court in Steelworkers observed that mandatory agency availability is a feature of what it dubbed “[t]ypical information collection requests”. Id. at 933. Such requests, it said, “share at least one characteristic: The information requested is provided to a federal agency, either directly or indirectly.” Id. (emphasis added).⁴

Second, we believe that a standard of conduct is substantive in the sense used by the Court if it fulfills the agency’s ultimate statutory goal, independently of its tendency to enhance compliance with other norms. By this reading, measures that simply increase the likelihood that regula-tees or recipients will comply with standards defined elsewhere are not substantive.⁵

In Steelworkers, disclosure directly served the agency’s safety purposes. It did so not because it enhanced compliance with some other standard, but because the disclosure would enable possible victims of the chemicals’ side effects to protect themselves. While the self-evaluation requirement would also have advanced the substantive goals of the Age Discrimination Act, it would have done so in essentially the manner of tax records and compliance reports — by enhancing compliance with norms defined elsewhere, both by adjusting the regulatees’ mindset and by facilitating agency enforcement.

The Court’s reading suggests a view that while Congress feared wasteful paper-shuffling in data collections that serve only as a method of inducing compliance, it had less concern (or none) as to data transmissions that directly accomplish the agency’s ultimate goal. Indeed, Congress may well have believed that agencies suffered an especially severe temptation to wasteful data collections for compliance enhancement, as these would enable the agencies to shift enforcement costs from themselves to regulated parties.

It is true that Steelworkers observed that if “ ‘reporting and recordkeeping requirement’ is understood to be analogous to the examples surrounding it, the phrase would comprise only rules requiring information to be sent or made available to a federal agency, not disclosure rules.” 110 S.Ct. at 935. In context, we do not think the Court’s contrast can be taken as making agency availability a necessary condition of Paperwork Act coverage. The Court is more sensibly seen as stressing the difference between data that informs the relation between regulatee or fund recipient and agency, and disclosures to a specific class of third parties otherwise likely to be injured by the product described. See id. at 934 (requirement that someone “communicate specified data to a third party” is not “soliciting facts”).

While this case is easy because of the agencies’ agreement that the regulation, including the agency availability requirement, is to be treated as an integral whole, see page 9 above, conditioning OMB’s Paperwork Act authority on such a requirement would invite a kind of sham. Agencies could omit any express provision for availability, relying on their general enforcement powers both to secure access to records whose maintenance they compel, and to penalize the regulatee’s failure to create them.

Plaintiffs lay great stress on evidence in the rulemaking record that HHS’s purpose in requiring self-evaluations was to advance substantive anti-discrimination goals. We do not doubt it. But, as we said above, the role of the self-evaluations is essentially the same as that of tax and other compliance records — to bring behavior into compliance with substantive standards outside the requirement. The test is a functional one. It does not require OMB (and then a court, in review) to study the context and agency “legislative” history of a regulation to make some elusive finding of its primary or main or important purpose. Not only would such a test be extremely hard to apply, involving a dubious weighing of joint purposes, but it would be readily manipulated by agencies, enabling them to escape OMB review by larding their regulatory preambles with gratuitous claims of acceptable “substantive” purposes.

Congress and HHS clearly hoped that the Age Discrimination Act would correct discriminatory stereotyping, see, e.g., dissent at 87 (citing items from legislative history of the Act), but these hopes do not change the analysis. The link between right conduct and right thinking was observed at least as early as Aristotle: “[W]e become just by doing just acts, temperate by doing temperate acts, brave by doing brave acts.” Nichomachean Ethics, Book II, Ch. 1. But neither of the political branches saw attitude change, divorced from conduct change, as an independent regulatory goal. The Act and regulations established norms of substantive conduct, designed to protect older Americans from behavior deemed unfair; the agency quite understandably believed that mandatory self-evaluations of compliance with the Act would, like tax and other compliance records, lead to conduct conforming to the prescribed norms.

HHS, we note, made it quite clear that among the purposes of the self-evaluation regulation was one specified by Steelworkers as a characteristic of covered information collections, namely, monitoring compliance for purposes of enforcement activity. See Steelworkers, 110 S.Ct. at 933. The self-evaluation regulation was promulgated as part of “Subpart D — Investigation, Conciliation and Enforcement Procedures”, 45 CFR § 90 Subpart D, and the immediately preceding regulation noted that a funds recipient would have the “responsibility to maintain records, provide information, and to afford access to its records to an agency to the extent required to determine whether it is in compliance with the Act”, 45 CFR § 90.42(a).

In sum, because HHS’s self-evaluation rule requires a fund recipient to collect data describing its compliance with the norms of the Age Discrimination Act, we find it more akin to the tax and compliance records that are subject to the Paperwork Act than to the disclosure and warning system that Steelworkers found exempt.

The Alliance also raises two other challenges to the final HHS-specific self-evaluation provision. First, it argues that the self-evaluation provision is exempt from OMB review by virtue of 44 U.S.C. § 3518(e) (1988).⁶ Second, it claims that HHS’s change in the self-evaluation provision created such a gap between the proposed and final HHS-specific rules as to have obligated HHS to issue a new notice and initiate a new round of comment, in order to satisfy the informal rulemaking requirements of the Administrative Procedure Act, 5 U.S.C. § 553(b) (1988). We rejected both arguments in our prior opinion. Action Alliance, 846 F.2d at 1454-55 (rejecting the § 3518(e) claim as based on too broad a reading of the statute); id. at 1455-56 (finding no new notice necessary in light of the constraint provided by the OMB disapproval).

Although the Supreme Court vacated our prior opinion, see Action Alliance, 110 S.Ct. at 1330, it expressed no opinion on the merit of these holdings. They therefore continue to have precedential weight, and in the absence of contrary authority, we do not disturb them. See, e.g., Hopkins v. Price Waterhouse, 920 F.2d 967, 975 & n. 5 (D.C.Cir.1990); U.S. ex rel. Espinoza v. Fairman, 813 F.2d 117, 125 n. 7 (7th Cir.1987) (decision vacated by Supreme Court remains persuasive precedent so long as the Court did not reject the lower court decision’s underlying reasoning); Christianson v. Colt Industries Operating Corp., 870 F.2d 1292, 1298 (7th Cir.1989) (“although vacated, the decision stands as the most comprehensive source of guidance available on the ... questions at issue in this case.”); County of Los Angeles v. Davis, 440 U.S. 625, 646 n. 10, 99 S.Ct. 1379, 1391 n. 10, 59 L.Ed.2d 642 (1979) (Powell, J., dissenting) (“Although a decision vacating a judgment necessarily prevents the opinion of the lower court from being the law of the case, ... the expressions of the court below on the merits, if not reversed, will continue to have prece-dential weight and, until contrary authority is decided, are likely to be viewed as persuasive authority if not the governing law_”) (citations omitted).⁷

sK * * * * *

For the foregoing reasons, the petition for review is denied.

So Ordered.

1 . Interestingly, HHS never modified the model regulations, see Action Alliance of Senior Citizens of Phil. v. Bowen, 846 F.2d 1449, 1455 (D.C.Cir.1988), though OMB’s action drained the self-evaluation component of legal effect, id.

2 . The Reports Act simply defined "information” as

facts obtained or solicited by the use of written report forms, application forms, schedules, questionnaires, or other similar methods calling ... for answers to identical questions from ten or more persons ...

44 U.S.C. § 3502 (1976).

3 . "The data sheets were to list the physical characteristics and hazards of each chemical, the symptoms caused by overexposure, and any preexisting medical conditions aggravated by exposure. In addition, the data sheets were to recommend safety precautions and first aid and emergency procedures in case of overexposure, and provide a source for additional information.” Id. at 931.

4 . In Steelworkers, the Department of Labor had adopted a requirement of agency availability covering the information to be disclosed to workers, but as OMB did not strike it down, the Court did not address it. See 110 S.Ct. at 938 n. 11.

5 . While this distinction cannot handle a self-evaluation requirement imposed by an agency charged with enforcing the Greek maxim "Know thyself’, we leave that Orwellian hypothetical to another day.

6 . The section provides:

Nothing in this chapter shall be interpreted as increasing or decreasing the authority of [OMB] with respect to the substantive policies and programs of departments ..., including the substantive authority of any Federal agency to enforce the civil rights laws.

7 . Judge Ruth B. Ginsburg, who was drawn to replace original panel member Judge Starr, cast no vote on the merits of the § 3518(e) and notice-and-comment issues. She agrees, however, that the remand in Steelworkers does not bear on, and therefore should not unsettle, the original panel’s resolution of those issues.