Hundreds of thousands of individuals relied on the Deferred Action for Childhood Arrivals (DACA) policy in making major life decisions, such as where to live and whether to invest in higher education. The policy promised some without legal immigration status a chance to remain in the United States with work authorization. If certain criteria were met, the Department of Homeland Security would consider whether to grant a type of prosecutorial discretion called deferred action. DACA was created through a guidance memorandum. Then Secretary of Homeland Security Janet Napolitano issued a 2012 memo to her department explaining the details of the policy, and then the agency implemented it. In 2017, the Trump administration attempted to end DACA by issuing another memo. In 2020, the Supreme Court concluded that President Trump’s attempt to end DACA was unlawful. The Court reached that conclusion in part because the Trump administration failed to adequately consider the reliance interests of DACA beneficiaries in determining to end the policy.
In her article Administrative Reliance, Professor Damon-Feng dives into the reliance phenomenon in administrative law. One administration develops a policy, many rely on it, and then the next administration changes course. Should reliance interests matter when courts review the change of course? If so, how much, and why? Professor Damon-Feng concludes, based on her examination of the implicated values, that the Supreme Court should adopt a more purposeful and disciplined approach to considering reliance interests.
Administrative law gives regulated entities tools to challenge agency procedures. “APA,” after all, is short for “Administrative Procedure Act”. The APA is less generous, however, with opportunities for regulated parties to challenge policy choices. Courts are not well positioned to review whether a policy shift is a good idea. Instead, courts can review the procedures an agency used to decide to shift the policy. For example, the APA requires agency decisions not be arbitrary and capricious. In claiming arbitrary and capricious agency behavior, parties argue that an agency failed to think about something important or that the agency thought about something in an inappropriate way. If a court agrees, the court can send the policy change back to the agency to think about the issue differently. For example, if an agency is faced with two choices, Policy A and Policy B, and the agency calls a fortune teller to help the agency decide whether to pick Policy A or Policy B, that would be arbitrary and capricious agency action. If an agency fails to adequately consider reliance interests as a part of the deliberation to change policy, that also is arbitrary and capricious.
Professor Damon-Feng is concerned that the claim of inadequate consideration of reliance interests is susceptible to “weaponization and abuse” because the Supreme Court has not developed a robust analysis for courts to apply when parties make this argument. Professor Damon-Feng follows the Supreme Court’s reliance interest thread from State Farm onwards. She concludes that the Supreme Court activates the reliance interests/arbitrary and capricious rationale on a seemingly ad hoc basis, with no classification of which reliance interests should matter and when. According to Professor Damon-Feng, not all reliance interests are the same and not all should be the basis of proclaiming agency action to be arbitrary and capricious.
In the DACA case, the Supreme Court concluded that DACA did create legally recognizable reliance interests. The Court concluded that the Trump administration did not adequately consider these reliance interests when deciding to end the policy. As far as what would constitute adequate consideration, the Court appears to demand little. As Professor Damon-Feng explains, the “potentially sharp teeth of reliance interests may be substantially filed down” if the Court provides easily fulfillable direction to agencies on how to adequately consider reliance interests.
Because President Trump lost the 2020 election, we do not know if a second Trump administration would have succeeded in terminating DACA after complying with the Supreme Court’s direction to consider reliance interests. We have seen, however, how lower courts have used the Supreme Court’s treatment of reliance interests in the DACA case in other contexts. For example, states claimed their reliance interests were not adequately considered in challenging President Biden’s decision to end the Trump administration’s Remain in Mexico program. The Remain in Mexico program required some individuals to wait for their immigration hearings in Mexico. These states were never the subject of the policy (they did not have to wait in Mexico), but the states argued that their reliance interests should matter because the states would be affected by the change in regulation of others.
Professor Damon-Feng thinks that without a more principled framework to guide how courts review agency action that implicate reliance interests there is a risk that claims of administrative reliance will unduly stifle policy change. She identifies agency legitimacy and accountability, stability, and respecting settled expectations as the main values behind administrative reliance. If agencies acknowledge reliance interests but explain why a shift in policy is necessary, that makes the agency more democratically accountable. Consideration of reliance interests also may soften sudden swings in policy and make sure that the agency is considering the effects of upsetting settled expectations.
The central argument of Administrative Reliance is that the Court needs to develop an analysis that lower courts can use to determine if a particular reliance interest should support a finding of arbitrary and capricious agency action. Professor Damon-Feng argues that not all reliance interests are equal. She envisions a framework where claims of administrative reliance are “screened in a way that privileges claims originating in concrete expectations of rights, statuses, or expectations that had been promised by the policy at issue.” (P. 53.) Professor Damon-Feng argues that this filter keeps administrative reliance focused on the expectations of the regulated party, and not consequential effects or where reliance interests are more “attenuated and diffuse.” This approach would allow courts to consider administrative reliance in cases where the government now wants to shift away from a commitment it made to a regulated party (as in the DACA case) but would make it more difficult for interests merely tangential (as in the Remain in Mexico case), where third-parties argue that a change in treatment of regulated parties would affect them.
How hard courts should look at an agency rationale for a policy change, or even require any rationale at all, is a long-standing issue in administrative law. This type of arbitrary and capricious review took on even greater salience during the Trump administration as litigants relied on the argument to challenge extremely controversial shifts in policy. Claims of arbitrary and capricious action are now used against the Biden administration’s attempts to change course. Professor Damon-Feng’s suggestion that the Supreme Court provide better direction is well-taken. Arbitrary and capricious review relies on a tricky balance. Courts understandably demand that agencies explain themselves, but what courts require must not be so intricate and demanding that agency policy change becomes too difficult. Additionally, regulated parties should be able to better predict which agency action will be held to be arbitrary and capricious. Arbitrary and capricious review should not be a political stopgap that allows courts to prevent disfavored policy changes.
Professor Damon-Feng’s proposal that claims of reliance interests in arbitrary and capricious review need to be better screened is intriguing. In this article, she proposes a filter that would limit claims of administrative reliance to those who have directly been regulated. She promises to develop further her theories of administrative reliance in future articles, and it would be interesting to hear her thoughts on the intersection between her proposed filter and standing doctrine. Her research implicates big questions about the role of courts in reviewing agency policy choices, and I am sure administrative law will benefit from her contributions. These questions take on even greater importance given the challenges facing legislative reform and the resulting pressure on the executive branch to take action.
