Must agencies be sincere?

I think that the answer must be “yes.” It is reversible error for an agency to justify a decision with a reason that the agency does not really believe. This rule against pretextual agency reasons is implied by 1) the rule against upholding agencies’ decisions based on post hoc rationalizations, 2) the analogy between agencies and juries in Chenery I, and 3) the role of political accountability and expertise in justifying agency authority.

But Justice Thomas’ dissent in Dep’t of Commerce v. New York gives me a chance to ask (both of) my readers whether or not I am correct. Is Justice Thomas really rejecting my intuition about agencies and pretext? Or is he simply making a much less controversial point about administrative procedure and evidence that the majority does not really question? Your thoughts are especially appreciated, as I am trying to throw together a memo on Dep’t of Commerce for my Leg-Reg students for next spring.

In Dep’t of Commerce, Justice Thomas decried the majority for “an unprecedented departure from our deferential review of discretionary agency decisions” that would, “if taken seriously as a rule of decision, … transform administrative law.” The alleged novelty? “For the first time ever, the Court invalidates an agency action solely because it questions the sincerity of the agency’s otherwise adequate rationale.” On Justice Thomas’ view, so long as agencies give “a reasoned explanation for his decision” in the administrative process that has sufficient support in the administrative record, the courts ought to uphold the agency, regardless of the agency’s sincerity. Nothing in Arbitrary and Capricious review under section 706(2)(A), according to Justice Thomas, “instructs the court to inquire into pretext.”

I cannot see how these statements, taken literally, could possibly be correct. My intuition is that agency officials’ findings must be sincere in order to sustain their decisions, meaning that those officials must really, actually believe the statutorily appropriate reasons that they cite for their decisions.

Here are three reasons — maybe just my own post hoc rationalizations — for this intuition.

First, consider Chenery I’s rule against courts’ upholding agency decisions on the basis of reasons that were not articulated in the administrative record. Justice Thomas quotes the relevant language from Chenery I: “[t]he grounds upon which an administrative order must be judged are those upon which the record discloses that its action was based.” Requiring agencies to articulate reasons in the administrative process, however, makes sense only if the agency really, actually believes those reasons. Otherwise, post hoc rationalization in a brief written up by DOJ lawyers ought to serve as well as the agency’s own “pre hoc rationalizations” in internal agency documents. The problem, in either case, after all, is rationalization — i.e., insincere reasons that are not truly motivations causing a decision.

Second, consider Chenery I’s analogy between agencies and juries. “Where the correctness of the lower court's decision depends upon a determination of fact which only a jury could make but which has not been made,” Frankfurter observed, “the appellate court cannot take the place of the jury.” Likewise, “[i]f an order is valid only as a determination of policy or judgment which the agency alone is authorized to make and which it has not made, a judicial judgment cannot be made to do service for an administrative judgment.” This analogy suggests the insufficiency of pretextual reasons as justifications for agencies’ decisions, because juries cannot support verdicts with pretextual reasons, even if those verdicts are supported by substantial evidence in the trial record. Imagine, for instance, that a jury were to deliver a verdict against a defendant because they learned (say, by way of cell phone Google searches) that the defendant was an unpleasant, disagreeable person. Assuming that unpleasantness and disagreeability were legally irrelevant to the question being tried, the jury’s basing their verdict on such improper considerations would be reversible error, even if there were ample grounds in the trial record allowing the jury to rule against the defendant for other, legally relevant reasons.

Third, consider the justification for agency power in either or both expertise or political accountability. Neither expertise nor political accountability can be advanced by insincere reasons. An expert that offers an opinion that the expert does not really believe cannot confer any authority on that opinion by virtue of his or her endorsement of it. Consider a homely analogy: Suppose that some doctor tells you that you do not need to lose weight in order to avoid a heart attack, citing some study suggesting that people with your body-mass index are not at higher risk of coronary problems. If that doctor then later informed you that she did not really believe the study, then the value of the doctor’s endorsement would evaporate. Of course, the doctor’s insincerity would not undermine the value of the study itself, but you could read the study yourself without paying the doctor’s fee. To the extent that the doctor’s opinion was supposed to confer additional weight on the study, that opinion becomes weightless the moment that doctor herself states that she does not actually believe it. The same goes for political accountability. If the point of reason-giving is to give voters the opportunity to evaluate the real reasons for an agency’s decision, then pretextual reasons undermine such political accountability, because voters cannot see the real reasons hidden behind the pretexts.

The case against upholding agency actions based on pretextual reasons, in short, seems to me overwhelming. I am inclined, therefore, to give a charitable reading to Justice Thomas’ dissent. He cannot really be arguing that pretextual reasons suffice to justify an agency action. He is instead arguing that courts must adopt a super-strong presumption against inferring that agencies’ stated reasons are pretextual.

It is hard to disagree with this basic evidentiary assertion — so difficult, in fact, that I do not think that the majority disputes it at all. Chief Justice Roberts simply states that there must be some limit to even the strongest presumption of sincerity. The analogy to juries, again, is helpful. Ordinarily, lawyers cannot challenge a jury’s verdict by demanding discovery on the jury’s internal deliberative processes, because there is a super-strong presumption that the jury bases its verdict on the judge’s instructions on the law and the trial record. If, however, jurors’ misconduct (say, decision-making based on legally irrelevant facts discovered through Google searches) comes to light through, say, post-trial interviews of individual jurors, then that misconduct can be the basis for further inquiry. If further inquiry reveals that, yes indeed, the jurors all relied on a Google search of irrelevant matter to reach their verdict, then the court can order a new trial based on such misconduct.

Likewise, courts do not ordinarily allow extra-record discovery into an agency official’s thought processes when reviewing agency action. But if the record itself indicates that the stated reasons were not the agency’s real reasons, then the court cannot shut its eyes to record evidence of pretextual reasoning that is staring the court in the face.

The majority opinion, so far as I can tell, accepts the super-strong presumption that Justice Thomas’ (charitably reconstructed) dissent demands. So I am at a loss as to how the majority opinion “transforms administrative law” as Justice Thomas alleges. But I am counting on you, gentle reader, to set me straight by explaining to me (and my students) what I am missing.