Industry Pushes White House To Allow Judicial Review Under Data Act

Industry officials are urging the White House Office of Management and Budget (OMB) to tell Congress in an upcoming report on the costs and benefits of regulations that outside parties are allowed to sue the government if they dispute an agency decision under the controversial Information Quality Act (IQA).

The effort represents the latest move by industry groups to push the government to change its position that decisions made under the two-sentence law are not subject to judicial review, which has been the subject of an ongoing legal battle now under consideration by a federal appeals court.

The Center for Regulatory Effectiveness (CRE), an industry-funded watchdog group, is prodding OMB regulatory chief John Graham to assert that judicial review applies to the act, despite the Department of Justice’s (DOJ) legal arguments to the contrary. The group, which has the support of industry associations like the National Association of Manufacturers (NAM), also says Congress intended to give OMB the authority to implement and interpret the act, giving it the power to override DOJ’s position.

“OMB should advise Justice that its position is that such final agency actions are judicially reviewable pursuant to the Administrative Procedure Act [APA],” say comments that CRE submitted June 21 to OMB on its draft report to Congress on the costs and benefits of federal regulations. Industry officials want the final report to reflect that position and are also calling on OMB to enshrine this stance unilaterally by amending its government-wide information quality guidelines.

An OMB spokeswoman declined to comment on the office’s position on the matter, referring an inquiry to DOJ. A spokesman for the department says the government stands firmly behind its position that the IQA is not judicially reviewable, a stance that was reiterated this week by the government in the appeals court case over the issue.

The OMB report, whose comment period closed this week, strongly supports the IQA, which public interest groups have criticized as a tool industry can abuse to slow or disrupt the regulatory process. The White House and other proponents of the act say it is critical to ensure that influential data disseminated by federal agencies are sound, although critics note that very few IQA petitions have been granted.

The White House report fails to state what OMB’s position is on whether decisions under the law are subject to judicial review, instead providing background on court cases that have rejected industry efforts to ensure outside groups can sue the government under the statute.

The industry groups have failed to convince courts the act is judicially reviewable because congressional intent is unclear on the issue, since the act was tacked onto a Treasury Department’s spending bill that President Clinton signed into law in 2000. Two court cases have rejected pleas to review decisions under the act, and one is being appealed by the salt industry in the U.S. Court of Appeals for the 4th Circuit.

DOJ this week issued its brief in the case Salt Institute v. Michael Leavitt, saying the IQA only allows for appeals on administrative grounds, not through the courts. “It is well established that agency reports and other statements lacking the force of law are not ‘final agency action’ within the meaning of the APA,” the brief says. “As this court has stressed, such statements ‘are properly challenged through the political process and not the courts.’”

Under the law, outside parties can seek corrections to data an agency disseminates and appeal to agency officials in the event that their petitions are denied.

The CRE in its comments says DOJ’s position stems from the Clinton administration, which was hesitant to endorse the IQA. “However, the position being maintained by Justice is blatantly contrary to the plain language of the APA and established legal precedent and should be withdrawn,” the group says.

The industry argues that APA allows for judicial review if a person is harmed when agencies disseminate incorrect data and says the IQA provides for review unless the underlying statutes preclude judicial review.

A CRE official says OMB has yet to take a firm position on the matter. An NAM source says the groups’ comments will point out that a June 2002 memo from Graham to federal agencies asked them to avoid explicit language on judicial review when developing implementing guidelines. The source says NAM will ask OMB to reconsider its position on the matter.

Critics of the statute say OMB would be overstepping its authority if it said in the report or in its guidelines that judicial review applies to the act. The Center for Progressive Reform, a left-leaning think tank, says in its comments to OMB that the act should be repealed. “The act is (predictably) being abused by industry to delay and derail important environmental, health, and safety measures and should be repealed,” the group says. -- Manu Raju

Date: June 24, 2005

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