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®: CRE Regulatory Action of the Week

D.C. Circuit Beats 9th Circuit to the Punch: The Data (Information) Quality Act is Subject to Judicial Review
In an opinion issued March 26, 2010, in Prime Time Int'l Co. v. Vilsack, the D.C. Circuit stated that the OMB guidelines issued under the IQA are "binding." The court stated: "[B]ecause Congress delegated to OMB authority to develop binding guidelines implementing the IQA, we defer to OMB's construction of the statute. See United States v. Mead, 533 U.S,. 218, 226-27 (2001)." At 14. The opinion is not yet published, and a pdf copy is attached below.

The citation of Mead at those particular pages is significant. The only statement by the Supreme Court in Mead that overlaps those two pages is the following: "We hold that administrative implementation of a particular statutory provision qualifies for Chevron deference when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority." (Emphasis added)

Therefore if you connect the dots, the fact that the Court opined that OMB;s regulations are legally binding with the Court's link of this finding to Mead, you readily conclude that the DQA (IQA) is judicially reviewable.

Prime Time had filed an IQA petition with USDA, but USDA failed to respond, and Prime Time filed an APA claim for judicial review. The District Court dismissed the claim on the basis that the IQA did not create any legal right to a correction, relying on the 2006 opinion by the 4th Circuit in the Salt Institute case and the District Court opinion in Americans for Safe Access v. HHS ("ASA"). The ASA case is currently on appeal in the 9th Circuit, with oral argument having taken place a year ago.

In Prime Time, the D.C. Circuit ignored the District Court opinion's reasoning and embraced a new Government argument that the substantive USDA action at issue was an "adjudication," and therefore specifically exempt from the IQA under the OMB guidelines.

The issue of whether the IQA guidelines and the IQA itself create legal rights that make agency actions subject to judicial review is at issue in the ASA case.

The D.C. Circuit's opinion is definitive and puts to rest the 4th Circuit's unexplained IQA decision in the Salt Institute case and will presumably have to be taken into account by the 9th Circuit.

It should be noted that the DC Circuit Court decision will not result in an avalanche of litigation for a number of reasons. The plaintiff must demonstrate standing which includes a demonstration of injury and redressability..

With respect to standing, claiming the contents of one report, when there might be many others in existence which address the same topics, is a cause of injury will constitute a challenge. With respect to redressability the plaintiff will have to identify an action the court can take to address its injury resulting from a report subsequent to its publication-both of these tasks presents a significant challenge.

However, given that Tozzi v HHS expands the potential plaintiff base to include harm caused indirectly by third-parties, the potential for a wide range of injury claims will be considered by the courts. Nonetheless the standing arguments presented above will place a damper on legal actions unless the underlying DQA petitions comply with the letter of the law.

CRE believes that the Federal agencies have done an exemplary job in publishing their DQA guidelines and responding to the resultant requests for corrections. The Prime Time decision is definitive-in those few instances when federal agencies do not give an objective consideration to a well reasoned request for correction, the courts will.

  • Click here to read court opinion