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TEXAS TECH LAW REVIEW 

VOLUME XVI SYMPOSIUM 1985 NUMBER 1 

ADMINISTRATIVE LAW AND PROCEDURE 

by Joe A. Tucker * 

I. INTRODUCTION 

The Fifth Circuit considered more than one hundred administrative 

law cases during the current survey period. Most merely reaffirmed 

established precedent. Noteworthy cases, however, were 

decided in the areas of deregulation, rulemaking, scope of judicial review, 

and the appealability of "final" agency orders. These cases reveal 

the circuit's response to recent challenges to deregulatory 

programs and reflect its current thinking about more traditional administrative 

law concerns. This article contrasts these decisions to 

precedent, within and without the Fifth Circuit, to impart an understanding 

of the circuit's contribution to the development of this area 

of the law. 

II. DEREGULATION, RULEMAKING, AND SCOPE OF 

JUDICIAL REVIEW 

A. Transportation Deregulation 

The Motor Carrier Act of 1980 (MCA)l represented a major 

shift of direction in transportation policy by authorizing the Interstate 

Commerce Commission (ICC) to institute a broad deregulation of the 

trucking industry. Congress found that the original Motor Carrier 

Act of 1935 2 was in need of substantial modification since it was based 

* Assistant Professor of Law, Texas Tech University School of Law. B.A., University 

of Houston, 1977; J.D., University of Texas, 1981. 

I. The Motor Carrier Act of 1980, Pub. L. No. 96-296, 94 Stat. 793 (1980) (codified as 

amended in scattered sections of 49 U.S.c.). 

2. The Motor Carrier Act of 1935, Pub. L. No. 74-255, 49 Stat. 543 (1935) (codified as 

amended in scattered sections of 49 U.S.c.). One major purpose of the 1935 Act was to protect 

the economically weak trucking industry by eliminating excessive competition through the 

1 

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on "outmoded and archaic regulatory mechanisms" which had ceased 

to serve the public interest. 3 Congress concluded that the motor carrier 

industry was extremely healthy, generating $108 billion in annual 

revenues, and no longer in need of unnecessary federal regulations to 

provide protection against competition. 4 A primary purpose of the 

Act was to alleviate the regulatory difficulties experienced by new carriers 

seeking entry to the trucking transportation business. 5 The MCA 

of 1980 also attempted to provide trucking concerns "greater freedom 

to set rates in response to market demands."6 This increased latitude 

in rate setting was in response to Congress' perception that trucking 

rates were inflated in price and would properly be decreased by market 

competition. 7 Reduction of inflationary rate setting, increased 

market competition, and avoidance of unnecessary red tape were the 

foremost congressional deregulatory goals. Congress also intended to 

preserve existing safety regulations for motor carriers, encourage energy 

efficiency measures, and improve transportation services for 

small communities. s Deregulation, therefore, was not unqualified but 

intended to eliminate the deficiencies of the antiquated Act, while retaining 

the provisions of the prior law that were still of utility under 

changed market conditions. Congress purported to provide the ICC 

with "explicit direction" in maintaining a balance between perceived 

beneficial deregulation and retention of necessary regulation and 

noted that "the Commission is admonished to stay within the powers 

specifically vested in it by the revised law."9 

Like most statutory directives, however "explicit," the 1980 

MCA did not anticipate all possible questions, and left a considerable 

number of interstitial gaps to be "filled in" by the discretionary judgment 

of the ICC. The ICC was well disposed to the 1980 deregulation 

medium of limiting entry into the carrier field. See United States v. Drum, 368 U.S. 370, 373- 

74 (1962); Note, Teamsters, Truckers, and the ICC: A Political and Economic Analysis of Motor 

Carrier Deregulation, 17 HARv. J. ON LEGIS. 123,128-31 (1980) (noting that profits of trucking 

concerns are now high due to the Motor Carrier Act regulation and therefore the act has 

served its purpose and deregulation should follow). 

3. H.R. REP. No. 1069, 96th Cong., 2d Sess. 2, reprinted in 1980 U.S. CODE CONGo & 

AD. NEWS 2283, 2284 [hereinafter cited as HOUSE REPORT]' 

4. HOUSE REPORT, supra, at 2-3. 

S. Id. at 3. 

6. Id. at 4. 

7. Id. at 6-7. 

8. Id. at 9-10. 

9. Id. at 10-11. Congress also provided for the appointmerit of congressional committees 

"to hold periodic oversight hearings to assure that the Act is being implemented according to 

congressional intent and purpose." Id. at II. 


1985] ADMINISTRATIVE LAW 3 

because the measure largely comported with the current views of the 

agency. Even before the adoption of the MCA of 1980, the ICC had 

moved in the direction of implementing a liberalization of entry and 

trucking route policies. lo The MCA amendments provided the ICC 

with the statutory authority to effectuate its preexisting incentive to 

accelerate trucking deregulation. II 

1. The Repeal of the Special Circumstances Doctrine 

On October 9, 1981, the ICC issued notice of a proposed policy 

statement that invited public comments concerning whether the "special 

circumstances" doctrine l2 should be repealed in light of the Stag- 

10. See, e.g., Note, supra note 2, at 145-47 (observing that the ICC's pre-1980 MCA 

"pro-competitive policies. . . generated numerous court challenges"). The legislative history 

indicates that Congress was aware of the ICC's ongoing deregulatory activities and, although 

generally approving of the Commission's new policy, determined that congressional guidance 

was necessary: 

The Committee believes that it is incumbent on the Congress to provide the Commission 

with guidance regarding motor carrier entry policy. A liberalized entry policy 

will have a significant impact on the motor carrier industry. For example, relaxed 

entry standards and increased competition for traffic will have a direct effect on employment 

in the industry and on the industry itself. Broad policy decisions of this 

type should be made by the Congress and should not be left to the discretion of the 

Commission. 

HOUSE REPORT, supra note 3, at 13. 

II. In response to broad deregulation at the federal level, there are indications that motor 

carriers have now directed their efforts towards acquiring regulatory protection at the state 

level. Beilock & Freeman, Motor Carrier Perceptions of Intrastate Motor Carrier Regulations 

and Regulators, 51 I.C.C. PRAC. J. 275 (1984). 

12. In Kansas City Southern Transport Co., Common Carrier Application, 10 M.C.C. 

221 (1938), the ICC held that it would not grant licenses to railroads to engage in carrier 

transportation unless this transportation was directly related or supplemental to railroad business. 

The Commission's primary motivation for adopting the "auxiliary-to-rail" restriction 

was the perceived competitive advantage that the then economically powerful railroad would 

possess in comparison to the weaker independent trucking companies. Id. at 237. 

The United States Supreme Court on two occasions upheld the Commission's authority to 

restrict the railroads to railroad-related trucker carrier activities. United States v. Rock Island 

Co., 340 U.S. 419 (1950); ICC v. Parker, 326 U.S. 60 (1945). The special circumstances rule 

represented an ICC created exception to the auxiliary-to-rail restriction rule: 

The doctrine allowed issuance of unrestricted authority where the rail-affiliated applicant 

could show a "compelling need" for its service by demonstrating (1) that a 

grant of unrestricted authority would not result in undue restraint of competition, 

and (2) that the public interest requires the proposed operation which was not being 

furnished by independent motor carriers. 

Applications for Motor Carrier Operating Authority by Railroads and Rail Affiliates, 132 

M.C.C. 978, 981 (1982). The United States Supreme Court upheld the validity of the special 

circumstances rule in American Trucking Ass'ns v. United States, 355 U.S. 141, 151-52 (1957) 

(stating that although the ICC must recognize and apply the Act as a whole, "we do not 

believe that the Commission acts beyond its statutory authority when in the public interest it 



gers Rail Act of 1980 13 and the MCA of 1980. After analyzing the 

comments received,14 the ICC decided to abandon the doctrine finding 

that it was unnecessary and inconsistent with the intent of the 

newly enacted legislation. IS The Fifth Circuit had previously considered 

the authority of the ICC to dismantle certain other regulatory 

programs under the new statutory provisions and had cautiously permitted 

the reforms subject to the caveat that the deregulation was 

shown to be within the bounds of congressional intent. 16 

The Fifth Circuit followed its cautious but approving approach 

to ICC deregulation in American Trucking Associations v. ICC. 17 Pacific 

Motor Trucking Company (PMT), a subsidiary of a railroad 

company, applied for an ICC certificate to transport general commodities 

without demonstrating special circumstances to justify an exemp- 

occasionally departs from the auxiliary and supplementary provisions"). In American Trucking 

Ass'ns v. United States, 364 U.S. I, 6 (1960), however, the Court overturned an ICC 

decision that granted an unrestricted carrier license to a railroad without a finding of "special 

circumstances ... 

13. The Staggers Rail Act of 1980, Pub. L. No. 96-448, 94 Stat. 1897 (codified at 49 

U.s.c. § JOlOla (1982». In relevant part, the Act provides that: 

In regulating the railroad industry, it is the policy of the United States Government--(I) 

to allow, to the maximum extent possible, competition and the demand 

for services to establish reasonable rates for transportation by rail; (2) to minimize 

the need for Federal regulatory control over the rail transportation system and to 

require fair and expeditious regulatory decisions when regulation is required; ... (4) 

to ensure the development and continuation of a sound rail transportation system 

with effective competition among rail carriers and with other modes, to meet the 

needs of the public and the national defense; ... (5) to foster sound economic conditions 

in transportation and to ensure effective competition and coordination between 

rail carriers and other modes. 

[d. 

14. 132 M.C.C. at 978, 978-79. Comments were received from numerous concerned parties. 

In summary, the United States Department of Transportation, railroads, and rail-affiliated 

carriers asserted that the special circumstance doctrine should be repealed in light of the enactment 

of the deregulation statutes and the "comparable economic positions of today's rail and 

truck industries." [d. at 979. Independent motor carriers, freight forwarders, and shippers 

contended that the doctrine should be retained. [d. 

IS. [d. at 979. 

16. The Fifth Circuit's recent consideration of the ICC's motor carrier restriction removal 

rules presents an example of the circuit's general approach to the agency's deregulation 

program. 

17. 722 F.2d 1243 (5th Cir. Jan. 1984), petition for cerr. filed, 53 U.S.L.W. 3001 (U.S. 

June 22, 1984) (No. 83-2117). The case was previously presented to a panel of the Fifth Circuit 

in 1982. American Trucking Ass'ns v. ICC, 682 F.2d 487 (5th Cir. 1982). The court, 

however, invoked the doctrine of primary jurisdiction and declined to hear the case at that 

time, preferring to allow the ICC to complete ongoing administrative proceedings and develop 

a final policy with respect to the final circumstances doctrine. [d. at 492. 



tion from the traditional auxiliary-to-rail restrictions. IS The ICC 

granted the certificate finding that a showing of special circumstances 

was unnecessary because the doctrine had been abolished. 19 The petitioners 

alleged that the ICC had exceeded its statutory authority in 

repealing the special circumstances doctrine. 20 

The court held that section 706(2)(A)21 of the Administrative 

Procedure Act (AP A)22 provided the applicable standard of judicial 

review. In applying this standard, the court found that the ICC's decision 

to eliminate the special circumstances doctrine could not be reversed 

unless it exceeded the agency's "statutory authority or [was] 

18. 722 F.2d at 1244. 

19. Id. 

20. The petitioners relied on several statutory arguments to support their position. They 

pointed out that Congress had retained statutory provisions that indicated that the national 

transportation policy would be served by the maintenance of the different intermodal forms of 

transportation. Id. at 1251. See also 49 U.S.C. § 10101(a)(1)(A) (1982) (consistent with the 

transportation needs of the country "to recognize and preserve the inherent advantage of each 

mode of transportation"). In addition, 49 U.S.C. § I 1344(c) (1982), purports to regulate consolidations, 

mergers, and acquisitions of control among two or more carriers. 

The petitioners contended that the two statutory provisions "buttressed" each other and 

indicated that "Congress intended to retain the old anti-railroad bias in licensing proceedings." 

722 F.2d at 1251. The Fifth Circuit disagreed, noting that the "broad 'inherent advantages' 

language could be argued to support a pro-railroad position as well as an anti-railroad position." 

Id. The court found this interpretation supported by Congress' recognition that the 

relative economic positions of the trucking and rail companies had been reversed because the 

"earnings by the railroad industry are the lowest of any transportation mode and are insufficient 

to generate funds for necessary capital improvements." Id. As a result, the court found 

that it was reasonable to believe that the "abolition of the special circumstances doctrine in 

licensing proceedings might strengthen the trucking industry by improving its competitive environment 

as well as strengthen the railroads financially-thus preserving 'the inherent advantages 

of each mode.' " Id. Moreover, the court noted the persuasiveness of the ICC's argument 

that the special circumstances doctrine had a "chilling effect" on intermodal transportation 

because it deterred companies from instituting rail-motor activities because of the time consuming 

process of demonstrating the existence of special circumstances. Id. 

The court also rejected petitioners § l1344(c) argument, finding that even "if § 11344(c) 

still demands proof of special circumstances in acquisitions proceedings, we are persuaded that 

under the revised I.C.A. the acquisitions and licensing sections are not required to be interpreted 

in tandem." Id. (footnote omitted). The court left open the question whether the special 

circumstances doctrine is still applicable when carrier companies seek ICC approval for consolidation 

or acquisition. But cf. supra note 10. In addition, the court was careful to point out 

that the ICC "has not proposed to exempt rail-affiliated trucking companies from the requirement 

of participating in individual licensing proceedings," but only from the requirement of 

demonstrating special circumstances. 722 F.2d at 1251. See also id. at 1249-52 (discussion of 

the court's rejection of petitioners' related statutory arguments). 

21. 5 U.S.c. § 706(2)(A) (1982). 

22. Ch. 324, §§ 1-12,60 Stat. 237 (1946) (codified as amended in scattered sections of 5 

U.S.c.). This article will cite to the current codified version of TitIe 5 of the U.S.C. in reference 

to any AP A sections discussed. 



'arbitrary, capricious, an abuse of discretion, or otherwise not in accordance 

with law.' "23 After determining the proper scope of judicial 

review to be applied, the court rejected the petitioners' argument that 

the ICC's repeal of the special circumstances doctrine was improper 

because it constituted a statutory "repeal by implication."24 Instead of 

requiring the ICC to satisfy the difficult burden of demonstrating a 

disfavored statutory repeal by implication, the court found that the 

agency need only proffer a reasonable justification for its change of a 

longstanding administrative interpretation or policy.25 

The court found that the 1980 MCA's "radically different, deregulatory 

approach" provided reasonable justification for the ICC's 

new interpretive posture with respect to rail carrier licensure restrictions. 

26 Abandonment of the special circumstances requirement was, 

in the court's opinion, consistent with congressional recognition of the 

"change in the relative economic positions of the rail and trucking 

industries.'>27 Although the court was careful to note that it was not 

interpreting the MCA to require that the ICC place rail-affiliated applicants 

"on the same footing as other applicants," it did hold that the 

ICC's decision to overrule the special circumstances doctrine was 

"permissible as measured by our standard of review."28 

American Trucking is significant as it represents the first circuit 

court opinion to expressly approve the ICC's repeal of the special circumstances 

doctrine. The court's well-reasoned decision has already 

been followed by the Eighth Circuit,29 and is likely to be found per- 

23. 722 F.2d at 1247-48. 

24. Id. at 1248. The petitioners argued that the United States Supreme Court decision in 

American Trucking Ass'ns v. United States (ATA II), 364 U.S. I (1960), holding that the ICC 

had improperly granted a carrier license to a railroad-owned subsidiary without a consideration 

of special circumstances, mandated the application of the doctrine. Because the MCA of 

1980 had not amended the applicable statutory language of the preexisting law, the petitioners 

asserted that the ICC was required to make the difficult showing that the statute had been 

repealed by "implication" before abolishing the special circumstances doctrine. 722 F.2d at 

1248. The court disagreed with petitioners' reading of ATA II, finding that the Supreme Court 

had only approved the ICC's interpretation of the statute, rather than having independently 

construed the prior law to require the application of the special circumstances doctrine without 

exception. In the court's view, ATA II had only prohibited the ICC from failing to apply 

the doctrine in an individual adjudication, but did not prevent the ICC from overruling the 

doctrine entirely upon a finding of changed general circumstances. Id. at 1248-49. 

25. 722 F.2d at 1249. 

26. Id. 

27. Id. at 1251. 

28. Id. at 1248. 

29. Tri-State Motor Transit Co. v. ICC, 739 F.2d 1373 (8th Cir. 1984). 


1985] ADMINISTRATIVE LAW 

suasive by other courts who may consider this issue in the future. 

2. The ICC's Abortive Attempt to Extend Restriction Removal 

Rules to Freight Forwarders 

The Fifth Circuit also demonstrated a willingness to prohibit 

ICC deregulatory efforts which exceeded the court's view of the 

agency's delegated statutory authority or resulted in a perceived noncompliance 

with the rulemaking provisions of the AP A. A major illfated 

deregulatory undertaking of the ICC was the Commission's attempt 

to apply its "restriction removal rules"30 to freight forwarders. 

Section 6 of the Motor Carrier Act of 1980 mandated that the 

ICC expeditiously remove unnecessary restrictions on existing motor 

carrier certificates to provide for more efficient carrier service. 3 J In 

publishing a notice of proposed rulemaking in 1982, the Commission 

stated its position that although the statutory provision was "not detailed," 

it "clearly gave the Commission a significant amount of discretion 

in the procedures to be established and the substantive 

decisions to be made under them."32 The ICC initiated the rulemaking 

proceeding to extend existing restriction removal rules 33 to freight 

forwarders only after an abortive 1981 attempt to apply those provisions 

to freight forwarders was rejected by the ICC Commissioners.34 

The Commissioners, concerned about the lack of public notice, disallowed 

the 1981 extension since the express language of the prior rules 

failed to mention freight carriers. 35 The agency's 1982 notice of proposed 

rulemaking was intended to cure the deficiencies of the unsuccessful 

1981 extension. 

Even though section 6 of the MCA of 1982, like the ICC's 1980 

motor carrier restriction removal rules, failed to expressly mention 

freight forwarders, referring instead only to motor carriers, the 

agency was not deterred from concluding that the provision could be 

applied to freight forwarders. The ICC found that "there is no indication 

in the Act or its legislative history that Congress intended to preclude 

the Commission from allowing forwarders to use procedures to 

30. See 49 U.S.c. § \0922(i)(I) (1982). 

31. See HOUSE REPORT, supra note 3, at 17-18. 

32. ICC Notice of Proposed Rulemaking, Freight Forwarder Restrictions, 47 Fed. Reg. 

8801 (1982) (proposed March 2, 1982) [hereinafter cited as Proposed Rules of 1982]. 

33. First enacted at 45 Fed. Reg. 86,747 (1980) (codified at 49 C.F.R. § 1165). 

34. Proposed Rules of 1982, supra note 32, at 8801. 

35. [d. at 8801-02. 

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broaden their authorities."36 That the statute's language made specific 

reference only to motor carriers was not interpreted by the agency to 

be exclusive in nature, but only indicative of the fact that "Congress 

simply addressed the primary area where reform seemed most 

needed."37 The ICC applied a functional approach and determined 

that because of the "close operational relationship" between freight 

forwarders and motor carriers, the extension of the motor carrier restriction 

rules to freight forwarders would promote the deregulatory 

goals Congress sought to achieve by adoption of the MCA of 1980. 38 

Moreover, the ICC found that the National Transportation Policy39 

supported its interpretation because the agency reasoned that permitting 

freight forwarders to broaden their certificates would "preserve 

the inherent advantages of each mode of transportation." Simply put, 

the agency applied the maxim "what's good for the goose is good for 

the gander." The Commission was unpersuaded by negative comments 

received during the notice and comment rulemaking period and 

adopted the proposed rule in Freight Forwarder Restrictions. 4D 

The Fifth Circuit disproved the maxim "what's good for the 

goose is good for the gander" in Global Van Lines, Inc. v. ICC. 41 The 

court reversed Freight Forwarder Restrictions; and held that on the 

basis of the statutory provisions asserted by the ICC, the agency 

lacked the authority to apply its restriction removal rules to broaden 

the carrier certificates of freight forwarders. 42 

The court relied on prior Fifth Circuit precedent developed in 

Central Forwarding, Inc. v. ICC 43 as support for the principle that the 

general rulemaking authority of the ICC is limited to the "specific 

36. ld. at 8802. 

37. ld. 

38. Jd. 

39. 49 U.S.C. § 10101 (1982). 

40. 132 M.C.C. 832 (1982). The amended rule was codified at 49 C.F.R. § 1165 (1983). 

41. 714 F.2d 1290 (5th Cir. Sept. 1983). 

42. ld. at 1293-94. In addition to the MCA and the National Transportation Policy, the 

ICC also cited to general rulemaking powers under 49 U.S.C. § 10321(a) (1982) and its authority 

to condition the licenses of freight forwarders pursuant to 49 U.S.C. § 10923(d)(I) 

(1982) to support its position. ld. at 1293. After a thorough examination of the applicable 

legislative history, the court found that the MCA and National Transportation Policy permitted 

the ICC to apply the restriction removal rules "only to motor carriers, not freight forwarders." 

ld. at 1293-94. The court also refused to consider the ICC's claims relating to 49 U.S.c. 

§ I 0923( d)(l). 

43. 698 F.2d 1266 (5th Cir. 1983). 



substantive mandates enacted by Congress."44 Although recognizing 

that the United States Supreme Court's decision in Mourning v. Family 

Publications Service, Inc. ,45 had apparently approved the "modern 

view" of statutory delegations of rulemaking power to agencies,46 the 

court held that this legal doctrine did not provide support for the 

Commission's position. The court indicated its agreement with the 

Seventh Circuit's opinion that the modern view doctrine "is still subject 

to the well-recognized rule that an administrative agency cannot 

exceed the specific statutory authority granted it by Congress."47 

Since the court "[had] no trouble in concluding" that the statutory 

provisions relied on by the ICC applied "only to motor carriers, [and] 

not freight forwarders,"48 it found that the ICC extension was invalid. 

The ICC also asserted that the rule was within its power to adopt 

by reason of its statutory authority49 to prescribe the conditions under 

which a permit may be granted to a freight forwarder. 50 The court, 

however, refused to consider the merits of the agency's "conditioning 

power" argument. The court noted that the ICC had undertaken informal 

rulemaking proceedings under section 553 of the APA. APA 

section 553(b)(2) requires that an agency providing notice of proposed 

rulemaking include a "reference to the legal authority under which 

the rule is proposed."51 The ICC, however, had not mentioned its 

statutory conditioning power in its proposed rulemaking notice, cited 

44. 714 F.2d at 1295 (quoting Central Forwarding, Inc. v. ICC, 698 F.2d 1266, 1278 (5th 

Cir. 1983». 

45. 411 V.S. 356 (1973). 

46. In Mourning, the Supreme Court held when a statute empowers an agency to "make 

. such rules and regulations as may be necessary to carry out the provisions of this Act," 

then regulations adopted thereunder are valid if they are "reasonably related to the purposes of 

the enabling legislation." Id. at 369 (footnote omitted) (quoting Thorpe v. Housing Authority, 

393 V.S. 268, 280-81 (1969». 

47. 714 F.2d at 1296 (citing Atchison, T. & S.F. Ry. v. ICC, 607 F.2d 1199, 1203 (7th 

Cir. 1979». 

48. 714 F.2d at 1293-94. 

49. See 49 V.S.C. § 10923(d)(I) (1982) which sets forth the ICC's authority to condition 

the permits of freight forwarders: 

The Commission may prescribe necessary conditions under which a contract carrier 

or freight forwarder provides transportation or service, except that in the case of a 

motor contract carrier of property, the Commission may not require such carrier to 

limit its operations to carriage for a particular industry or within a particular geographic 

area. The Commission may prescribe the conditions when the permit is issued 

and at any time thereafter. 

Id. 

50. 714 F.2d at 1299. 

51. 5 V.S.c. § 553(b)(2) (1982). 



the authority in its final decision, or offered any other opportunity for 

interested parties to comment on the issue. 52 Under these circumstances, 

the court found that the agency had failed to provide either 

notice or a "concise general statement of the of [the rule's] basis and 

purpose."53 In the court's view, to permit the agency to rely on a 

newly cited statutory provision after the notice and comment period 

had expired would violate the intent of the AP A and "encourage inadequate 

substantive and procedural consideration of significant issues 

at the agency level. "54 The court left open the question of 

whether the ICC could effectuate the rule under its permit-conditioning 

authority and expressly declined to indicate how it would rule on 

this issue in the future. 55 

The likely result of Global Van Lines is to ensure that, at least 

until after an additional notice and comment rulemaking proceeding 

is concluded, freight forwarders must petition under a new licensing 

proceeding to obtain the removal of restrictions from their existing 

certificates. The case should properly be understood to relate to two 

issues: the proper observance of the informal rulemaking procedural 

requirements of the AP A; and the authority of a court to refuse to 

defer to agency discretion concerning a matter of statutory 

in terpretation. 

The proper resolution of the first issue is clear--courts should 

justifiably require agencies to strictly adhere to the AP A's informal 

notice and comment procedural requirements. The right of interested 

parties to effectively comment on the legal basis of a rule would be 

circumvented if agencies could rely on after-the-fact rationalizations 

not raised during the notice and comment period. In a 1947 contemporaneous 

construction of section 553(b)(2) of the APA, commenting 

on the statute's requirement that an agency must provide a "reference 

to the [legal] authority under which the rule is proposed," the Department 

of Justice stated that the "reference must be sufficiently precise 

to apprise interested persons of the agency's legal authority to issue 

52. 714 F.2d at 1297·98. 

53. Id. at 1298 (the court also noted that the omission was more than "merely technical"). 

Furthermore, the court was careful to point out the fact that petitioners were provided 

an opportunity to discuss the ICC's conditioning power claim in a reply brief, and during oral 

argument, was insufficient to cure the defective notice. 

54. Id. at 1299. 

55. Id. at 1297. 



the proposed rule."56 When citation to the particular statutory authority 

relied upon is entirely omitted, parties are insufficiently informed 

of the proposed rule's legal basis and are prevented from 

meaningful participation. Courts have tended to apply a strict standard 

of judicial review to mandate that agency rulemaking decisions 

comport with the procedural requirements of the APA. 57 

Global Van Lines joins this trend of cases, and utilizes the AP A 

procedural requirements to assure that agencies engage in fair and 

reasoned decision-making. Since in Vermont Yankee Nuclear Power 

Corp. v. Natural Resources Defense Council, Inc. ,58 the Supreme 

56. U.s. DEP'T OF JUSTICE, ATTORNEY GENERAL'S MANUAL ON THE ADMINISTRA 

TIVE PROCEDURE ACT 29 (1947) [hereinafter cited as ATT'Y GEN. MANUAL OF 1947]. 

57. See, e.g., Comment, The Need for an Additional Notice and Comment Period when 

Final Rules Differ Substantially From Interim Rules, 1981 DUKE L.J. 377 (1981). 

58. 435 U.S. 519 (1978). The Court stated that: 

Agencies are free to grant additional procedural rights in the exercise of their discretion, 

but reviewing courts are generally not free to impose them if the agencies have 

not chosen to grant them. This is not to say necessarily that there are no circumstances 

which would ever justify a court in overturning agency action because of a 

failure to employ procedures beyond those required by the statute. But such circumstances, 

if they exist, are extremely rare. 

Id. at 524. 

The proper construction of Vermont Yankee is highly controversial and has invoked a 

prodigious amount of scholarly attention and debate. See, e.g., DAVIS, ADMINISTRATIVE LAW 

TREATISE, § 6:37-3 (Supp. 1982) (contending that Vermont Yankee misconstrued the intent of 

the APA drafters and neglected the importance of the recognized formulation of "administrative 

common law" by the courts and further suggesting that the courts regularly violate the 

broad Vermont Yankee dicta); Scalia, Vermont Yankee: The APA, the D.C. Circuit, and the 

Supreme Court, 1978 SUP. CT. REV. 345, 375-88 (asserting that the Vermont Yankee decision 

improperly limited judicial review of administrative rulemaking to the out-moded statutory 

framework of the 1946 AP A without any clear indication that this result was mandated by 

congressional intent); Stewart, Vermont Yankee and the Evolution of Administrative Procedure, 

91 HARV. L. REV. 1805, 1814 (1981) (Supreme Court erred in Vermont Yankee by holding 

that judicial innovation is prohibited "in matters of administrative law governed by the AP A." 

The Court's position is "contradicted by administrative law decisions in which the Court has 

boldly altered the established law regarding standing, ripeness, and judicial review of informal 

administrative action, notwithstanding the fact that these matters are regulated by the AP A. "). 

But see Breyer, Vermont Yankee and the Courts' Role in the Nuclear Energy Controversy, 91 

HARV. L. REV. 1833 (1981) (asserting the correctness of the Vermont Yankee decision); Byse, 

Vermont Yankee and the Evolution of Administrative Procedure: A Somewhat Different View, 

91 HARV. L. REV. 1823 (1981) (Vermont Yankee welcomed "as a needed corrective to an 

unwholesome trend in the lower federal courts" proposing that the imposition of additional 

procedures should derive from the agencies rather than the courts); Howarth, Informal Agency 

Rulemaking and the Courts: A Theory for Procedural Review, 61 WASH. U.L.Q. 891, 913-26 

( 1984). 

The reaction of the courts to Vermont Yankee has been no more harmonious than that of 

the scholars. For a survey of court cases construing Vermont Yankee, see id. at 926-42 (observing 

that "few, if any, courts have adhered strictly to the letter of Vermont Yankee's admoni- 



Court forbade the application of additional judicially created procedural 

requirements for agency informal rulemaking, the strict observance 

of the AP A's minimum requirements is both necessary and 

appropriate. 59 The current trend among administrative agencies is to 

move away from ad hoc adjudication as a means of fulfilling their 

tion. and flatly refused even to entertain requests for rulemaking procedures which go beyond 

those specifically outlined in the APA·'). Irrespective of the debate concerning Vermont Yankee, 

there is no doubt that the decision "has slowed, if not stopped, the development of judgemade 

'common law' of rulemaking procedure." ADMINISTRATIVE CONFERENCE OF THE 

UNITED STATES, A GUIDE To FEDERAL AGENCY RULEMAKING, 4 (1983). There is evidence, 

however, that the Supreme Court has begun to devote greater attention to the informal 

rulemaking requirements of the APA. See Motor Vehicles Mfrs. Ass'n. v. State Farm Mut. 

Auto. Ins. Co., 103 S. Ct. 2856 (1983) (overruling and remanding a decision of the Nation 

Highway Safety Administration to rescind rules mandating that passive restraint systems or 

air bags be installed in automobiles, finding that the rescission was made without a reasoned 

analysis and therefore "arbitrary and capricious"). Several recent lower court decisions have 

also vacated agency rule rescissions. See, e.g., International Ladies' Garment Workers' Union 

v. Donovan, 722 F.2d 795 (D.C. Cir. 1983); Action on Smoking and Health v. CAB, 699 F.2d 

1209 (D.C. Cir. 1983); Center for Science in the Pub. Interest v. Department of the Treasury, 

573 F. Supp. 1168 (D.D.C. 1983). 

A federal circuit court judge has recently written that "State Farm may signal a renewed 

endorsement of Overton Park's probing review, and a rejection of the expansive reading of 

Vermont Yankee's bar to judicially imposed procedural requirements." Edwards, Judicial Review 

of Deregulation, II N. Ky. L. REV. 229, 254 (1984). Judge Edwards, however, recognizes 

that State Farm "is certain to create some confusion over judicial review of deregulation." Id. 

at 241. A major open question perceived by the judge is whether courts should apply different 

standards of review when determining the legitimacy of an agency's modification of existing 

rules as opposed to the administrative rescission of rules. Id. at 249 (Posing the question: does 

an agency have more discretion to change a rule within the existing regulatory framework than 

to rescind one altogether?). 

A comparison of American Trucking and Global Van Lines points out the relevance of 

Judge Edwards' inquiry. The former case involved the complete rescission of an agency rule, 

while the latter related to the extension of a pre-existing agency rule. An additional factor, 

separate and distinct from the question of scope of judicial review, however, was present in 

these cases. The ICC's special circumstances rule had been adopted in an adjudication, while 

the agency's restriction removal rules had been promulgated under the rulemaking procedures 

of the APA. Irrespective of the substantive merits of the ICC's decision, if the extension of the 

restriction removal rules constituted a substantive amendment to those rules within the mean· 

ing of the APA, then the agency had the additional burden of satisfying the requirements of 

APA § 553(b)(2). 

59. A more critical concern is that even when the APA's informal rulemaking requirements 

are strictly observed, these procedures are largely inadequate to address the complex 

needs of the modern day regulatory system. See, Howarth supra note 58, at 978. See also, 

ADMINISTRATIVE LAW CONFERENCE OF THE UNITED STATES, A GUIDE TO FEDERAL 

AGENCY RULEMAKING 5 (1983). During the past eight years numerous congressional attempts 

to amend the APA have been initiated, but have been unsuccessful. Howarth, supra 

note 58, at 917. In the 94th Congress, for example, a total of fourteen attempts were made to 

amend the APA. See Comment, The Need for an Additional Notice and Comment Period 

When Final Rules Differ Substantially From Interim Rules, 1981 DUKE L.J. 377, 392 n.9S. 

The only successful statutory improvements to rulemaking that Congress has been able to 



statutory responsibilities in favor of a heavier reliance on informal 

rulemaking. 60 Courts have accordingly paid greater attention to the 

informal rulemaking procedural mandates of the APA. 6 1 In its euphoric 

zeal to deregulate, the ICC failed to observe these procedural 

niceties. Global Van Lines is also significant because it properly interprets 

a provision of the AP A that has rarely received judicial attention. 

62 

Whether the court should have deferred to the ICC's interpretation 

of its enabling act, as opposed to engaging in an independent 

review of the statute's meaning, is a more difficult question to resolve. 

Section 706 of the AP A states that "[ t]o the extent necessary to decision 

and when presented, the reviewing court shall decide all relevant 

enact. have been in the form of amendments to various individual enabling acts. See, e.g., id. 

at 386. 

In Howarth's view, "[g]iven the current scope of regulatory authority and the national 

significance of the social and economic problems to be resolved by agencies, literal compliance 

with the notice and comment procedures of the APA no longer provides a politically acceptable 

method for the development of regulatory policy." Howarth, supra note 58, at 894. Howarth 

suggests that the recent congressional deregulation programs represent another legislative 

response to the problem. Id. If Howarth's suggested rationale is accurate, deregulation would 

appear to be an extremely harsh method to control agency rulemaking-in effect throwing the 

baby out with the bath water. 

60. Note, Judicial Review of Informal Administrative Rulemaking, 1984 DUKE L.J. 347, 

347. 

61. Id. at 347-48. 

62. The scarce judicial attention directed to § 553(b)(2) has been questionable in some 

instances. For example, compare Trans-Pacific Freight Conference of Japan/Korea v. Federal 

Maritime Comm'n, 650 F.2d 1235 (D.C. Cir. 1980), cerr. denied, 451 U.S. 984 (1981). The 

Federal Maritime Commission had failed to include a reference to the legal authority upon 

which the rule was based in issuing a notice of proposed rulemaking. The Commission, however, 

did state the statutory basis for the rule when it published the final rule after the notice 

and comment period had terminated. Id. at 1259. Although the court found that the agency 

was "technically ... not in compliance" with APA § 553(b)(2), it held that the "defect in the 

notice of proposed rulemaking was not fatal." Id. Apparently the court found that the petitioners 

had been provided sufficient notice to comment on the substance of the rule and "[were 

not] prejudiced by the Commissions' failure to include specific reference to the enforcement 

sections of the Act until the actual promulgation." Id. 

The Fifth Circuit's decision in Global Van Lines appears to be more consistent with the 

congressional intent in enacting § 553(b)(2). The relevant legislative history provides that: 

Notice must fairly apprise interested persons of the issues involved, so that they may 

present relevant data or argument. The required specification of legal authority must 

be done with particularity. Statements of issues in the general statutory language of 

legislative delegations of authority to the agency would not be a compliance with the 

section (emphasis added). 

H.R. REP. No. 1980, 79th Congo 2d Sess., 24 (1946), reprinted in LEGISLATIVE HISTORY OF 

THE ADMINISTRATIVE PROCEDURE ACT, S. Doc. No. 248, 79th Cong., 2d Sess. 258 (1946) 

[hereinafter cited as APA LEG. HIST.]. 



questions of law . . . and determine the meaning or applicability of 

the terms of an agency action."63 Despite this provision, the "custom 

has been to give deference or great weight to the agency's view" of 

statutory questions. 64 The cases, unfortunately, provide little guidance 

as to when a court will substitute its view of the interpretation of statutory 

provisions or defer to an agency construction. The judicial literature 

is not particularly illuminative, and the issue has been aptly 

described as "one of great uncertainty in which equally impressive 

cases may be found to cite in favor of deferring to the determination 

of the administrator or giving it no weight whatever."65 

What is reasonably certain, however, is that different types of 

administrative action should not be subject to the same scope of judicial 

review. The nature of the agency activity reviewed is an essential 

factor in determining the proper degree of judicial deference to be 

accorded. 66 When highly technical issues are involved that require 

the application of sophisticated scientific expertise, courts have generally 

chosen to defer to the agency's presumptively greater specialized 

knowledge. 67 When resolution of the statutory question primarily necessitates 

the ascertainment of congressional intent, through an examination 

of legislative history or other traditional legal sources, the 

courts have generally substituted their judgment for that of the 

agency.68 Moreover, the judicial tendency to refuse deference is even 

greater when the court is called upon to determine whether the 

agency has remained within its delegated statutory authority. Section 

706 of the APA clearly permits courts to exercise independent judg- 

63. 5 U.S.c. § 706 (1982). 

64. DA VIS, supra note 58, § 29.006, at 558. 

65. Coffman, Judicial Review of Administrative Interpretations of Statutes, 6 W. NEW 

ENG. L. REV. I (1983). 

66. See W. GELLHORN, C. BYSE & P. STRAUSS, ADMINISTRATIVE LAW: CASES AND 

COMMENTS 249-51 (7th ed. 1979). 

67. See, e.g., E.I. DuPont de Nemours & Co. v. Train, 430 U.S. 112, 135 n.25 (1977) 

(affording deference to the EPA because of the agency's "unique experience and expertise" and 

"the complexity and technical nature of the statutes and subjects they regulate"). But cf Stever, 

Deference to Administrative Agencies in Federal Environmental, Health and Safety litigation-Thoughts 

on Varying Judicial Application of the Rule, 6 W. NEW ENG. L. REV. 35, 51- 

59 (1983) (discussing the current scholarly and judicial debate concerning the application of a 

"hard look" approach to closely scrutinize agency decision-making). 

68. See, e.g., Red Ball Motor Freight, Inc. v. Shannon, 377 U.S. 311 (1964) (Supreme 

Court substituted its judgment for that of the ICC in determining that a statute did not provide 

the agency with jurisdiction to regulate livestock and commodities dealers transporting sugar); 

see, Edwards, supra note 58, at 256 (noting that judicial review of deregulation may also be 

subject to independent statutory construction). 



ment in the latter instance, since deciding issues of this nature represent 

the quintessential function of the judiciary.69 

Considered within the above analytical framework, the legal 

character of the agency determination in Global Van Lines strongly 

suggests that the decision was properly decided. The court was required 

to determine whether the ICC's attempt to apply the restriction 

removal rules to freight forwarders was within the agency's 

statutorily delegated authority. The resolution of this issue did not 

require the application of any particular technical expertise of the 

agency, but instead demanded the ascertainment of legislative intent-a 

determination within the competence of the jUdiciary.7o 

3. Perspective 

A cursory review of the Fifth Circuit's docket over the past two 

years reveals the tremendous volume of transportation deregulation 

litigation brought before the court. 71 The trucking industry has 

demonstrated its resolve to challenge the breadth of the 1980 MCA's 

deregulatory scope. Judge Brown, speaking in Steere Tank Lines, Inc. 

v. ICC,72 one of a long line of trucking deregulations cases heard by 

the court during the current survey period, eloquently described the 

above circumstance: 

With hope, this case will signal the demise of a virulent strain of 

ICC cases which has recently plagued the motor carrier industry. 

Frequent outbreaks have occurred over the last two years leaving 

69. See, e.g., Coffman, supra note 65, at 8-10. 

70. Even though the court found it important that section 6 of the MCA did not explicitly 

refer to freight forwarders, it is important to note that the court did not consider this 

circumstance as per se determinative of the case. Such a literalistic approach is foreclosed by 

the Supreme Court's decision in American Trucking Ass'ns v. United States, 344 U.S. 298, 312 

(1953) (holding that the ICC's "promulgation of ... rules for authorized carriers falls within 

the Commission's power, despite the absence of specific reference to leasing practices in the 

Act"). The significant factor was the court's finding that the statutory framework of the MCA 

clearly provided for different treatment of motor carriers and freight forwarders. See 714 F.2d 

at 1290. Moreover, the legislative history failed to indicate that Congress had intended to 

change the historical practice of distinguishing between the two types of carriers. Id. at 1294 

n.4. This combination of factors, added to the lack of explicit expression of a legislative intent 

to alter prior practice in this respect, influenced the court to find that the statutory provisions 

cited by the agency did not authorize its actions. 

71. See Steere Tank Lines, Inc., v. ICC, 714 F.2d 1300, 1302 n.1 (5th Cir. 1983) (citing 

numerous trucking deregulation cases decided by the Fifth Circuit over the past two years). 

The court upheld the ICC's application of the 1980 MCA's new entry standard that reduced 

the applicant's burden of proof by requiring only a prima facie showing that the proposed 

service would serve a "useful public purpose." Id. at 1304. 

72. Id. at 1302. 



trucking firms languishing with ailing certifications. Once again, 

this Court faces a possible epidemic of infirm certificates and swollen 

transportation authority.73 

Trucking regulation has been described as belonging to the category 

of regulations that "reflects the economic interest of the government 

and the regulated parties in preserving a certain economic 

allocation scheme."74 Congress decided to alter the pre-existing economic 

allocation scheme of the transportation industry by enacting 

the MCA of 1980 and the Staggers Rail Act of 1980. These two acts 

represent "the most significant changes in transportation regulation 

since motor carriers" were first regulated by the federal government 

in 1938. 75 The scholarly writing is unclear about the economic effects 

of transportation deregulation. 76 Furthermore, the legislative history 

of the MCA demonstrates that Congress was also uncertain about the 

consequences of the deregulation. In expressing its concern "over the 

effect this Act may have on existing motor carriers and on the employees 

of these motor carriers" as well as the fear that the "legislation 

might result in a severe reduction in the value of motor carrier 

operating rights," Congress provided for the appointment of oversight 

committees to hold annual hearings for five years after enactment of 

the MCA.77 This congressional action is evidence that Congress was 

cognizant of the "experimental" nature of the deregulatory program, 

and took preparatory measures to enact further legislation in the 

eventuality that ensuing conditions warranted such action. 

When legislatures implement policy decisions that are experi- 

73. Id. (footnote omitted). It is apparent that Judge Brown thought it unlikely that his 

hope would be fulfilled stating that: "[als for future panels with this plague on their courthouses, 

we have no remedy. To them, we offer only the medical profession's universal palliative: 

take two aspirins and call us in the morning." Id. at 1315. 

74. See O'Reilly, Judicial Review of Agency Deregulations: Alternatives and Problems for 

the Courts, 37 VAND. L. REV. 509, 510 (1984). 

75. Edles, The Strategy of Regulatory Change, 49 l.e.e. PRAC. J. 626, 626 (1982). 

76. There is little doubt that the effects of deregulation are unclear. See, e.g., Hynes, A 

Study of How Deregulation of the Motor Common Carriers May Affect Movement of Freight In 

and Out of the Center City Areas: Baltimore a Case Study, 48 l.e.e. PRAC. J. 312 (1980); Lieb, 

Regulatory Reform In Transportation: Some Interim Observations, 49 l.e.e. PRAC. J. 273, 278 

(1982) (noting that "it is still too early to render definitive judgments"); Wagner & Dean, A 

Prospective View Toward Deregulation of Motor Common Carrier Entry, 48 l.e.e. PRAC. J. 406 

(1981). For an analysis of the economic implications of motor carrier deregulation, see Damus, 

An Agenda For Research In Transportation Pricing In an Era of Deregulation, 49 l.C.e. PRAC. 

J. 23 (1981); Waring, Motor Carrier Regulation-By State Or By Market?, 51 l.e.C. PRAC. J. 

240 (1984). 

77. HOUSE REPORT, supra note 3 at 11. 



mental in nature, and perhaps questionable in wisdom, they nonetheless 

perform their intended function. The transportation deregulation 

legislation is representative of the current spate of deregulatory programs 

begun under the Carter and continued by the Reagan Administration. 

78 It is not the function of the judiciary to second-guess the 

substantive merits of legislative policy decisions unless constitutional 

problems are implicated. Yet expansive changes in existing regulatory 

programs can be expected to evoke determined resistance from 

quarters that will not hesitate to seek relief in a judicial forum. 

In response to the current deregulatory trend, some courts have 

demonstrated a tendency to apply "a more exacting scrutiny even to 

the most policy-based instances of deregulation."79 The true import of 

American Trucking and Global Van Lines lies, not only in the fact 

that they are cases of first impression, but also in the observation that 

they reveal the Fifth Circuit's intention to resist the temptation to 

intrude into the policy-making domain of the legislature. The Fifth 

Circuit, however, has not abdicated its judicial responsibilities. The 

court permitted the agency deregulation validly effectuated and consistent 

with congressional intent. The court intervened when the 

agency failed to demonstrate that its proposed deregulation was properly 

executed and within its statutory authority. This judicious approach 

to an admittedly experimental legislative program is essential 

to ensure the necessary flexibility required to implement a complex 

economic allocation scheme, and should present a persuasive model 

for other courts confronted with deregulatory issues. 8o 

78. O'Reilly, supra note 74, at 513-16. 

79. [d. at 517. 

80. During the survey period, the Fifth Circuit also decided several additional transportation 

cases worthy of mention. In Wales Transp., Inc. v. ICC, 728 F.2d 774, 782 (5th Cir. 

Apr. 1984), the court distinguished Global Van Lines and found that the general rulemaking 

power of the ICC permitted the agency to adopt regulations reducing the amount of 

paperwork carriers could require from owner-operators, even though the rules substantially 

affected "the division of responsibilities" between the parties and reduced their "ability to 

contract." See also Petrou Fisheries, Inc. v. ICC, 727 F.2d 542 (5th Cir. Mar. 1984) (holding 

that the ICC could not retroactively apply the market dominance requirement of the Railroad 

Revitalization and Regulatory Reform Act of 1976). 

In a series of related cases, the court rejected challenges brought by the State of Texas 

against ICC action under the Staggers Rail Act of 1980. See Texas v. United States 730 F.2d 

409 (5th Cir. Apr. 1984) (holding that when the contract rate rules of the Texas Railroad 

Commission required more disclosure than comparable rules of the ICC, the state rules were 

pre-empted by the Act, and sustaining the ICC's action against constitutional challenge); 

Texas v. United States, 730 F.2d 420 (5th Cir. Apr. 1984) (same result, citing 730 F.2d at 409 

with approval). See also Texas v. United States, 730 F.2d 339 (5th Cir. Apr. 1984). 



B. Environmental Protection of Wetlands Under Section 404 of the 

Clean Water Act of 1977 

Significant rulemaking and scope of judicial review issues continue 

to be presented in the application of the Federal Water Pollution 

Control Act (FWPCA)81 and the Clean Water Act of 1977 (CWA).82 

Congress' intent in enacting the FWPCA was to "restore and maintain 

the chemical, physical, and biological integrity of the Nation's 

waters,"83 and to set a "national goal that the discharge of pollutants 

into navigable waters be eliminated by 1985."84 The 1972 Federal 

Water Pollution Control Act Amendments created the section 404 

permit program and authorized the Army Corps of Engineers (Corps) 

and the Environmental Protection Agency (EPA) to act to protect 

biologically sensitive wetlands from pollution. 85 

81. Federal Water Pollution Control Act of 1972, Pub. L. No. 92·500, 86 Stat. 816 (codified 

as amended at 33 u.s.c. §§ 1251-1376 (1982». See generally W. ROGERS, HANDBOOK ON 

ENVIRONMENTAL LAW 360-68 (1977) for an analysis of the history and purposes of the 

FWPCA. A complete collection of the legislative history of the 1972 amendments has been 

compiled by the Congressional Research Service of the Library of Congress. See ENVIRON 

MENTAL POLICY DIVISION OF THE CONGRESSIONAL RESEARCH SERVICE OF THE LIBRARY 

OF CONGRESS, A LEGISLATIVE HISTORY OF THE WATER POLLUTION CONTROL ACT 

AMENDMENTS OF 1972 (1973) [hereinafter cited as LEGISLATIVE HISTORY]' 

82. Clean Water Act of 1977, Pub. L. No. 95-217, 91 Stat. 1566 (codified as amended in 

scattered sections of 33 U.S.c.). The entire act, inclusive of the FWPCA and the 1977 CWA 

amendments, may be properly referred to as the CWA. Blumm, The Clean Water Act's Section 

404 Permit Program Enters Its Adolescence: An Institutional and Programmatic Perspective, 8 

ECOLOGY L.Q. 4\0, 410 n.1 (1980). The courts often use the nomenclature of the acts interchangeably, 

and this article will likewise follow this approach. This article will also cite to the 

current edition of the regulations, unless the prior applicable regulations have been amended 

or the citation is made in reference to a historical context. 

83. 33 U.S.c. § 1251 (1982). 

84. Id. § 1251(a)(1). 

85. Congress has never provided a statutory definition of the term "wetlands." United 

States v. Riverside Bayview Homes, Inc., 729 F.2d 391, 394 (6th Cir. 1984) (noting the fact, 

however, that the Corps and the EPA jointly enacted regulations defining wetlands and delineating 

the factors indicative of their presence). 33 C.F.R. § 323.2(c) (1983) provides that: 

The term "wetlands" means those areas that are inundated or saturated by surface or 

ground water at a frequency and duration sufficient to support, and that under normal 

circumstances do support, a prevalence of vegetation typically adapted for life in 

saturated soil conditions. Wetlands generally include swamps, marshes, bogs and 

similar areas. 

Id. The legislative history of the 1977 CWA amendments, however, clearly indicates that Congress 

intended to provide protection to wetlands by means of the section 404 program: 

The committee bill includes a provision which utilizes existing legislative mechanisms, 

and maintains the primary thrust of § 404 with respect to protection of wetlands 

from spoil and fill discharges where wetlands protection is an important public 

need. At the same time, the bill tries to free from the threat of regulation those kinds 



From the date of enactment of the 1972 FWPCA, the Corps 

demonstrated a reluctance to exercise its wetland authority and narrowly 

construed the scope of its jurisdiction under the ACt. 86 In 1975, 

however, the court in Natural Resources Defense Council, Inc. v. Callaway,87 

declared that the Corps had acted unlawfully in failing to 

exercise its wetland jurisdiction under the FWPCA and ordered the 

Corps to undertake rulemaking procedures to recognize the "full regulatory 

mandate of the Water Act. "88 Pursuant to the court order, the 

Corps published in the Federal Register what it termed "tentative" 

rules to implement its section 404 jurisdiction and, after a two year 

period, enacted "final interim" section 404 rules. 89 

of manmade activities which are sufficiently de minimis as to merit general attention 

at [the] State and local level and little or no attention at the national level. 

S. REP. No. 370, 95th Cong., 1st Sess. 10-11, reprinted in 1977 U.S. CODE CONGo & AD. 

NEWS 4326, 4336-37 [hereinafter cited as SENATE REPORT]. 

Numerous authorities have discussed the environmental significance and importance of 

wetlands. See Blum, supra note 82, at 413 n.ll and sources cited therein. 

86. On April 4, 1974, the Corps published final revisions to its regulations incorporating 

the newly adopted section 404 permit program. 39 Fed. Reg. 12,115 (1974). The 1974 regulations, 

however, provided that navigable waters were "those waters of the United States which 

are subject to the ebb and flow of the tide, and/or are presently, or have been in the past, or 

may be in the future susceptible for use for purposes of interstate or foreign commerce." Id. at 

12, 119. This interpretation followed the Corps' traditional position that its regulation of navigable 

waters under the §§ 10, 13 of the Rivers and Harbor Act, 33 U.S.c. §§ 403, 407 (1982), 

could not extend beyond the high water mark. See ROGERS, supra note 81, at 40 1. The courts 

have generally held, however, that in adopting the 1972 FWPCA amendments Congress "intended 

a departure from the traditional tests used to delimit Corps jurisdiction under the Rivers 

and Harbors Act." Deltona Corp. V. United States, 657 F.2d 1184, 1186 (Ct. Cl. 1981) (see 

also cases cited therein). During rulemaking proceedings in 1975, after several unfavorable 

court decisions, the Corps reconsidered its position. See 40 Fed. Reg. 31,320, 31,320-321 

(1975) (where in relation to inland areas the Corps indicated that its jurisdiction "would extend 

landward to their ordinary high water mark and up to their headwaters, as well as to all 

contiguous or adjacent wetlands"). Three years after adoption of the 1974 regulations, the 

Corps finally retreated from its strict construction when it noted that federal regulation must 

focus on all waters that form the entire aquatic system which includes adjacent wetlands. 42 

Fed. Reg. 37,122, 37,128 (1977); see also, Blum, supra note 82, at 411, 441 (noting that the 

EPA largely "ignored" the section 404 program until 1975, and has never "assumed an active 

role in 404 enforcement"). 

Several circuits have construed the 1972 amendments as evidencing Congress' clear intention 

to extend the meaning of the term navigable waters to it broadest constitutionally permissible 

extent. See United States v. Byrd, 609 F.2d 1204, 1209 (7th Cir. 1979); Minnesota V. 

Hoffman, 543 F.2d 1198, 1200 (8th Cir. 1976); Leslie Salt CO. V. Froehlke, 578 F.2d 742, 755 

(9th Cir. 1975); United States V. Ashland Oil and Transp. Co., 504 F.2d 1317 (6th Cir. 1974). 

87. 392 F. Supp. 685 (D.D.C. 1975). 

88. Id. at 686. 

89. Department of Defense Corps of Engineers Proposed Rules, Permits For Activities in 

Navigable Waters or Ocean Waters, 40 Fed. Reg. 19,766 (1975) was the Corps initial response 

in compliance with the court ordered rulemaking. The experimental nature of these proposals 



Subsequent to the Corps promulgation of section 404 final rules, 

Congress enacted the CWA Amendments of 1977. In the words of 

one commentator, the" 1977 Amendments brought an end to section 

404's stormy youth, and began an adolescence in which the focus of 

attention shifted to the implementation of a comprehensive and effective 

program."90 The CWA sets forth a complex statutory scheme 

granting four federal agencies joint responsibilities in effectuating the 

section 404 program. 91 The concurrent jurisdiction and interrelation- 

was evidenced by the fact that the Corps actually proposed four different versions of the rules 

for comment. On the same date, the EPA also proposed guidelines relating to the section 404 

permit process. EPA Proposed Guidelines, Discharge of Dredged or Fill Material, 40 Fed. 

Reg. 19,794 (1975). The EPA likewise intimated that its proposals were interim in nature: 

"EP A is aware that many questions remain to be answered regarding means of evaluating the 

effects of dredged or fill material discharged in navigable waters. Thus, we will continue to 

work with the Corps . . . to improve the analytical methodologies that underlie these guidelines." 

[d. 

After the receipt of more than 4,500 comments, the Corps promulgated a redefinition of 

the term "navigable waters" to be applied in the context of the section 404 permit program. 

Department of Defense Corps of Engineers Final Interim Regulations, Permits for Activities 

in Navigable Waters or Ocean Waters, 40 Fed. Reg. 31,320 (1975). 

Two years later the Corp enacted final rules amending the 1975 regulations indicating 

that after "almost two years of experience in administering the Section 404 program as revised 

by the July 25, 1975 regulation ... [t]his experience has revealed some problem areas that 

require correction." Department of Defense Corps of Engineers Final Rules, 42 Fed. Reg. 

37,122, 37,125 (1977). One "problem area" in particular was the 1975 limited definition of 

wetlands. [d. at 37,144 (codified at 33 C.F.R. § 323.2(c». The Corps provided a full explana 

tion of its rationale for amending the 1977 regulatory amendments: 

[d. 

This definition is intended to eliminate several problems ... [t]he reference to "periodic 

inundation" has been eliminated. Many interpreted that term as requiring inundation 

over a record period of years. Our intent under § 404 is to regulate discharges 

of dredged or fill material into the aquatic system as it exists, and not as it may have 

existed over a record period of time. The new definition is designed to achieve this 

intent. It pertains to an existing wetland and requires that the area be inundated or 

saturated by water at a frequency and duration sufficient to support aquatic vegetation. 

. . . Concerns were also expressed over the types and amount of vegetation 

that would be required to establish a "wetland" under this definition. We have again 

used the term "prevalence" to distinguish from those areas that have only occasional 

aquatic vegetation interspersed with upland or dry land vegetation. 

At the same time, we have changed our description of the vegetation involved by 

focusing on vegetation "typically adapted for life in saturated soil conditions." The 

old definition of "freshwater wetlands" provided a technical "loophole" by describing 

the vegetation as that which requires saturated soil conditions for growth and 

reproduction, thereby excluding many forms of truly aquatic vegetation that are 

prevalent in an inundated or saturated area, but that do not require saturated soil 

from a biological standpoint for their growth and reproduction. 

90. Blumm, supra note 82, at 411. 

91. The four federal agencies involved in the section 404 permitting process are the 

Corps, EPA, the United States Fish and Wildlife Service (FWS), and the National Marine 



ship of shared functions between these federal agencies is a primary 

factor in ensuring the effective implementation of section 404. 

In the administration of the section 404 permitting program, the 

Corps and the EPA are two of the most important federal agencies.92 

The CWA gives the Corps the authority to issue 404 permits 93 and the 

EP A the statutory duty to oversee the program and develop guidelines 

to be applied by the Corps.94 The Corps applies a "decentralized" 

approach to accomplish its section 404 responsibilities. 95 The 

Corps delegates the authority to issue permits to several district offices, 

which in turn allow thirty district engineers and eleven division 

engineers to actually administer the permit process. 96 Moreover, once 

a local district office has made a permit decision, the regulations provide 

for no further administrative appea1. 97 Although the system was 

criticized for its failure "to place strict controls on the discretionary 

power given to the District Engineers,"98 the EPA sanctioned the 

Corps' approach. EPA approval of the Corps decentralization policy 

was based on its finding that the application of general guidelines to 

diverse aquatic systems "requires that the permitting agency retain 

the discretion to adapt the approaches and considerations in the 

guidelines to local conditions."99 Nevertheless, the joint Corps-EPA 

administration of the 404 program continued to be subjected to substantial 

criticism. 100 

Fisheries Service. The powers and duties of the four federal agencies responsible for the implementation 

of the § 404 program have been analyzed in detail. See Blumm, supra note 82 at 

437-45. 

92. See Blumm, supra note 82, at 437. 

93. 33 U.S.c. § 1344(b)(I) (1982). 

94. /d. 

95. 33 C.F.R. § 320.1 (a)(2) (1983) states that: 

The Corps is a highly decentralized organization. Most of the authority for administering 

the regulatory program has been given to the thirty six district engineers and 

eleven division engineers. If a district or division engineer makes a final decision on a 

permit application in accordance with the procedures and authorities contained in 

these regulations (33 CFR Parts 320-330), there is no administrative appeal of that 

decision. 

[d. 

96. /d. 

97. [d. 

98. EPA Interim Final Guidelines, Discharge of Dredged or Fill Material, 40 Fed. Reg. 

41,292 (1975). 

99. [d. The EPA, however, added the caveat that "many of the approaches and considerations 

have been rewritten to clarify that discharges will not be allowed if it is determined that 

the proposed discharge will result in unacceptable harm to the aquatic system." [d. 

lDO. See, e.g., Blumm, supra note 82, at 437-42 (noting that the Corps decentralization 



1. The A voyelles Decisions 

The Fifth Circuit Court of Appeals considered several issues of 

significance to the section 404 program in A voyelles Sportsmen's 

League, Inc., v. Marsh (Avoyelles II). \01 To understand the legal issues 

presented in Avoyelles II, it is necessary to review the procedural 

history of the case which encompasses three federal court cases l02 and 

several years of section 404 rulemaking. 

A group of private landowners owning a tract of land (the Lake 

Long Tract), of about 20,000. acres in A voyelles Parish, Louisiana, 

began land-clearing operations to convert the acreage to soybean production. 

\03 The Lake Long Tract, however, was situated in an environmentally 

sensitive basin area. l04 The landowners began their landclearing 

activities in June of 1978, but were ordered to cease the work 

on August 25, 1978 by the Vicksburg District of the Army Corps of 

Engineers until that office could complete a wetlands determination. 

\05 A consultant hired by the Corps determined that thirty-five 

percent of the Lake Long Tract was comprised of wetland. \06 In October 

1978, however, the Fish and Wildlife Service (FWS) informed the 

Corps of its belief that the entire Lake Long Tract was wetland. \07 

The landowners, however, renewed their land-clearing operations on 

the sixty-five percent of the tract that the Corps held to be 

nonwetland acreage. \08 

The piaintiffs\09 brought a citizen suit in federal district court 

has resulted in the application of different standards to permit applications among the various 

districts, and criticizing the EPA for failing to take active measures in overseeing and enforcing 

section 404). See a/so, Comment, Water-Quality Standards, Maximum Loads, and the 

Clean Water Act: The Need for Judicial Enforcement, 34 HASTINGS L.J. 1245 (1983); Comment, 

Federal Water Pollution Laws: A Critical Lack of Enforcement by the Environmental 

Protection Agency, 20 SAN DIEGO L. REV. 945 (1983). 

101. 715 F.2d 897 (5th Cir. Sept. 1983). 

102. Avoyelles Sportsmen's League, Inc. v. Alexander, 511 F. Supp. 278 (W.O. La. 1981), 

rev'd in part and affd in part sub. nom. Avoyelles Sportsmen's League, Inc. v. Marsh, (Avoye1les 

II) 715 F.2d 897 (5th Cir. Sept. 1983); Avoyelles Sportsmen's League v. Alexander, 473 

F. Supp. 525 (W.O. La. 1979). 

103. 473 F. Supp. at 527-28. 

104. [d. at 528. The Lake Long Tract lies in the Bayou Natchitoches Basin. This basin is a 

backwater area which serves as a major overflow tract for waters from the Red River. [d. 

105. 715 F.2d at 901. 

106. [d. 

107. [d. 

108. [d. 

109. The plaintiffs were a group of environmental organizations and an interested individual. 

Specifically, these were: the Avoyelles Sportsmen's League, Inc.; the Environmental Defense 

Fund, Inc.; the National Wildlife Federation; the Avoyelles Natural Guard, Inc.; the 



private landowners, alleging violations of CWA sections 301(a), 402, 

notice of appeal prescribed by Rule 4(a), Fed. R. App. P." [d. In support of its construction of 

the United Airlines case, the Third Circuit indicated that the Supreme Court had approved the 

result in American Brake Shoe & Foundry Co. v. Interborough Rapid Transit Co., 3 F.R.D. 

162 (S.D.N.Y. 1942). 612 F.2d at 134. 

The Supreme Court did indeed cite to American Brake in a footnote and indicate its 

approval of the case's holding. 432 U.S. at 395 n.16. That the Court intended to extend the 

jurisdiction of trial courts to consider the merits of motions for intervention once appeal has 

been taken from a final judgment, however, is a misconstruction of the Court's opinion. First, 

the Court clearly indicated that its reference to American Brake, and to similar cases cited 

within the footnote, was in the context of "[p)ost-judgment intervention for the purpose of 

appeal." [d. Second, analysis of the American Brake decision strongly suggests that the Third 

Circuit's construction is questionable. American Brake involved a suit concerning the reorganization 

and consolidation of the Interborough Rapid Transit Co. with the Manhattan Railway 

Company. 3 F.R.D. at 163. Certain bondholders of Manhattan Railway objected to the reorganization. 

Only one of the bondholders filed suit, but did in fact also represent the interests of 

the other dissatisfied bondholders. The original bondholder litigant filed a notice of appeal 

after the trial court's final judgment, but later decided to settle the case and abandon the 

appeal. The district court permitted the other bondholders to intervene in order to prosecute 

the appeal since the motion was filed within the time in which an appeal might have been 

brought. [d. at 164. Under these circumstances, the result in American Brake did not abolish 

the rule, but fell under a recognized exception since the trial court's ruling on the motion for 

intervention was clearly "in aid of the appeal." 

In Avoyelles II, the Fifth Circuit indicated that it "was not persuaded by the Third Circuit's 

reading" of United Airlines. 715 F.2d at 928. The court refused to accept the rationale 

of Halderman and held that the rule prohibiting district courts from considering motions of 

intervention after entry of final judgment and notice of appeal had been filed was still the law: 

[W)e adhere to the earlier rule that the filing of a valid appeal deprives the district 

court of jurisdiction to hear a motion to intervene. The district court was thus without 

jurisdiction to entertain the motion of the Department of Agriculture; we therefore 

affirm, although on different grounds, the district court's refusal to grant the 

motion. 

[d. at 929. 

It is apparent that the states have a vital interest in the proper effectuation of § 404 programs 

within their respective jurisdictions. Congress intended for the states to assume important 

responsibilities under the § 404 plan. See SENATE REPORT, supra note 85, at 77-80; 

Blumm, supra note 82, at 458-60. Indeed, Corps regulations provide that no permit will be 

issued if a state agency has denied authorization of the activities under state law. 33 C.F.R. 

§ 320.4(j) (1983). Even though state law may not purport to regulate a particular activity 

related to the § 404 program, the Corps does give "due consideration" to the comments of any 

state "having jurisdiction or interest over the particular activity." [d. 

The Fifth Circuit's holding does not substantially impair the ability of the states to ensure 

that their interests are considered in a § 404 lawsuit, either by direct intervention in the case or 

by other appropriate devices. After entry of final judgment in district court and subsequent to 

the filing of a notice of appeal to the court of appeals, a party should file a motion for substitution 

under FED. R. ApP. P. 43 to the appellate court. See Air Lines Pilots Ass'n v. Texas Int'l 

Airlines, Inc., 567 F. Supp. 78, 81 (S.D. Tex. 1983). The problem in Avoyelles II arose because 

the Department of Natural Resources, the original agency representing the State of Louisiana 

before the trial court, failed to file an appeal to the Fifth Circuit. 715 F.2d at 928. The Department 

of Agriculture'S motion to intervene as a substitute was not properly submitted to the 

court of appeals, but to the district court after that court had already lost jurisdiction over the 



and 404(a).111 On November 7,1978, the district court issued a temporary 

restraining order prohibiting the defendant landowners from 

continuing land-clearing operations, and later, on January 17, 1979, 

ordered the federal agencies to submit a final wetlands determination 

to the court within sixty days. 112 

a. The EPA Redetermination of the Wetland Issue 

Upon reconsideration of the Corps' wetlands determination, the 

EP A concluded that eighty percent of the Lake Long Tract was comprised 

of wetlands. 113 The EPA's finding substantially differed from 

the Vicksburg District's thirty-five percent wetland determination and 

included portions of the land that had already been cleared by the 

landowners pursuant to the District's approval. Furthermore, the 

EP A also disagreed with the position of the plaintiffs and the FWS 

that the entire Lake Long tract was comprised of wetland. The EPA 

decision was based on its view of two major factors. These factors 

were the proper methodology to be applied in determining what really 

constituted wetlands within the meaning of section 404; and the identification 

of the types of land-clearing activities that required issuance 

of a section 404 permit. 

The EPA final wetland determination criticized the Vicksburg 

District's methodology because it "resulted in excluding areas containing 

species which meet the test established by the regulation 

.... [It] concentrated on unambiguous species (obligate hydro- 

case. Furthermore, the state appeal was not timely within the meaning of FED. R. App. P. 

4(a), and the trial court had no authority to rule on the motion since it was not made "in aid of 

the appeal." Nevertheless, the state could have filed an amicus curiae brief to the Fifth Circuit. 

FED. R. App. P. 29. 

Ill. Section 301(a) of the CWA provides in pertinent part that: "Except as in compliance 

with this section and sections 1312, 1316, 1317, 1328, 1342, and 1344 of this title, the discharge 

of any pollutant by any person shall be unlawful." 33 U.S.c. § 1311 (1982). The plaintiffs 

alleged that the defendants' land-clearing activities constituted a discharge of pollutants in the 

form of "dredged and fill material" within the meaning of sections 402 and 404 of the CWA. 

33 U.S.c. §§ 1342, 1344 (1982). Consequently, the plaintiffs' position was that the land-clearing 

was unlawful without the acquisition of a permit from the Corps or EPA. 715 F.2d at 902. 

Since the discharge was not deposited in navigable waters, in the "direct" physical sense, it was 

essential to the plaintiffs' case to establish that the tract constituted wetland acreage defined by 

regulation to be a part of the "waters of the United States." See 33 C.F.R. §§ 323.2(a), 

323.2(a)(7) (1983). 

112. 511 F. Supp. at 281. The report filed by the agency was reprinted in the appendix of 

Avoyelles II. EPA Final Wetland Determination in Civil Action No. 78428-A (1979), reprinted 

in appendix Avoyelles Sportmen's League, Inc. v. Marsh (Avoyelles II), 715 F.2d 897, 930-34 

(5th Cir. Sept. 1983) [hereinafter cited as Appendix]. 

113. 715 F.2d at 903. 



phytes) and did not properly use soil and hydrology and other scientific 

data to verify the significance of the other species on the tract." 114 

The EPA also disagreed with the conclusion of the Vicksburg District 

that wetland vegetation was present on only one-third of the tract. 

The agency indicated that the District's faulty findings derived from 

its failure to consider all relevant species of vegetation. 115 The EPA 

stressed that the Vicksburg District had failed to properly apply the 

standard of vegetation mandated by the 1977 regulations. 116 In the 

EPA's view, the 1977 regulatory reference to "vegetation typically 

adapted for life in saturated soil conditions" had supplanted the more 

limited preexisting 1975 definition that described characteristic wetland 

vegetation "as that which requires saturated soil conditions for 

growth and reproduction, thereby excluding many forms of plants 

that are prevalent in an inundated or saturated area but that do not 

require saturated soil from a biological standpoint for their growth 

and reproduction."117 Accordingly, the EPA found the Vicksburg 

District's reliance on the antiquated 1975 regulations to be 

obsolete. 118 

In addition to finding that the Vicksburg District had failed to 

properly review the soil's hydrological condition, the EPA also denounced 

the Vicksburg Office's overreliance on topography and land 

elevation. Concluding that "it was inappropriate to assume that the 

demarcation between wetlands and uplands would necessarily occur 

at a given elevation throughout the tract,"119 the agency found that a 

wetland projection based solely on land elevation could result in 

either an overinclusive or underinclusive wetland determination. 120 In 

114. Appendix, supra note 112, at 931. The EPA defined "obligate hydrophytes" as a 

species of vegetation that require saturated soil to exist as differentiated from "facultative hydrophytes" 

which are plant species that may adapt to saturated soil, but are also found to exist 

elsewhere. ld. 

115. ld. 

116. ld. at 932. Furthermore, the EPA stated that the Vicksburg District's "selection of 

species to rely on is also inconsistent with the Preliminary Guide to Wetlands of the Gulf 

Coastal Plain, prepared by the U.S. Army Corps of Engineers Waterways Experimental station 

in consultation with EPA and with the practice of several other Corps of Engineers Districts." 

ld. Inconsistent application of standards and disparate § 404 decision-making are apparently 

routine occurrences among the district offices. See Blumm, supra note 82, at 438. 

117. See Appendix, supra note 112, at 931 (emphasis in the original). 

118. ld. at 931-32. The EPA emphasized that the Vicksburg District's "restricted list" of 

wetland indicator species resulted in an underinclusive wetland determination. ld. 

119. ld. at 933. The land's tract elevation is also of importance in determining the flood 

duration of the land, which in turn serves as an indicator of the aquatic nature of the soil. ld. 

120. ld. 



summary, the EPA rejected the District's wetland findings because 

the Vicksburg methodology excessively emphasized the presence of 

obligate hydrophytes while discounting the existence of facultative 

hydrophytes, failed to adequately analyze inundation and other relevant 

soil data, and focused on the overly simplistic factor of land elevation 

as a wetland indicator. 121 

The EPA, however, also disagreed with the position of the FWS 

and the plaintiffs that the entire Lake Long tract was wetland. 122 The 

final EPA determination that only eighty percent of the Lake Long 

tract constituted wetland relied upon an analysis of three factors: the 

type of vegetation prevalent in the area; the soil type; and the soil 

inundation. 123 In the view of the agency, areas of the tract that did 

"not meet either the inundation or soil elements of the regulatory definition 

should ... not be included as part of a section 404 wetland 

determination."124 The EPA therefore decided that "only the large 

majority, not the entirety, of the tract was section 404 wetlands."125 

The EPA's second major finding related to the ascertainment of 

the types of land-clearing activities that required a section 404 permit. 

Prior to the landowners' commencement of land-clearing activities on 

the Lake Long tract, loggers had harvested hardwoods from the tract 

leaving tree stumps and debris to be removed. 126 The landowners used 

bulldozers specially fitted with shearing blades designed to scrape the 

top surface of the soil to minimize soil displacement. 127 The plowing 

process, however, occasionally gouged the ground and disturbed humus 

and leaf litter overlaying the soil. 128 The landowners' also collected 

soil, leaf litter, felled trees, and debris in piles for burning and 

disposal. 129 The material that failed to burn was buried in pits fifty 

121. Id. 

122. Id. at 933-34. The Fifth Circuit noted, however, that after the EPA's redetermination 

of the wetland issue, and the substantial agreement between the redetermination and the plaintiffs' 

and FWS's positions, the defendant federal agencies were actually more closely aligned in 

legal position with the plaintiffs than the private landowner defendants. This circumstance 

prompted the court to observe that the parties had "changed positions as nimbly as if dancing 

a quadrille." 715 F. 2d at 903 (quoting Vermont Yankee Nuclear Power Corp. v. Natural 

Resources Defense Council, Inc., 435 U.S. 519, 540 (1978». 

123. Appendix, supra note 112, at 932-33. 

124. Id. at 933. 

125. Id. at 934. 

126. 473 F. Supp. at 528. 

127. Id. 

128. Id. 

129. Id. 



feet long and approximately six feet deep.13o Upon completion of the 

leveling process, the landowners used a discing procedure to convert 

the land to soybean production. \31 Finally, the landowners excavated a 

drainage ditch three-quarters of a mile long, and planned to construct 

four or five miles of additional ditches. 132 

The EPA concluded that section 404 permits were not required 

for land-clearing operations that caused only de minimis soil displacement. 

133 The agency found that the landowners' tree shearing activities 

resulted in de minimis soil dislodgement and that "[p]lowing, 

discing, and raking of the sort observed on the tract so far will not 

require a permit." 134 The EPA, however, held that the construction of 

the drainage ditches in wetland areas would require the issuance of a 

section 404 permit. 135 

b. The District Court Opinions 

The federal district court decided to bifurcate the case and hold 

two different trials-one proceeding addressing the question of what 

types of land-clearing activities would require section 404 permits and 

the second to consider what areas of the Lake Long tract constituted 

wetland acreage. 136 In the first trial, the district court reviewed the 

permit question. \37 The court found that the land-clearing equipment 

used by the landowners were "point sources" of pollution for the purposes 

of section 502(14) of the FWPCA, \38 and therefore within the 

coverage of the section 404 permit program. 139 The court rejected the 

landowners' contention that section 404(f)(I)(A) of the CWA exempted 

their activities from the permitting procedure as "normal 

farming, silviculture, and ranching activities." 140 The district court 

held that only agricultural operations conducted concomitant to ongoing 

farming or silvicultural activities were entitled to the section 

130. /d. 

131. Id. at 529. The court described "a disc" as involving the use of a "bowl-shaped blade 

that cuts into the ground and fluffs the soil up." /d. 

132. /d. 

133. Appendix, supra note 112, at 934. 

134. Id. 

135. /d. 

136. 473 F. Supp. at 529. 

137. /d. 

138. 33 U.S.c. § 1362(14) (1982) defines the term "point source" to include "any discernible, 

confined, and discrete conveyance from which pollutants are or may be discharged." 

139. 473 F. Supp. at 532. 

140. 33 U.S.c. § I 344(f)(I)(A) (1982). 



404(f)(I)(A) exemption. 141 Moreover, the court noted that section 

404(f)(2) of CWA 142 explicitly denied an exemption for any activities 

which resulted in a change in use of the land. The landowners' landclearing 

operations were found to constitute a change in use within 

the meaning of section 404(f)(2).143 

The district court held that since the Corps regulations defined 

"navigable waters" of the United States to include wetlands, and because 

vegetation growing on wetland tracts were part of the wetland 

area, the shearing of trees and the removal of vegetation from the 

tract resulted in "the discharge of dredged material" into navigable 

waters. 144 After reviewing the environmental functions of wetlands as 

described by the regulations, the court observed that these functions 

would be severely damaged, if not entirely destroyed, by the removal 

of the tract's vegetation. 145 The court viewed the vegetation itself-as 

opposed to the soil-of primary importance since it actually provided 

the favorable environmental benefits to the ecosystem. 146 

After establishing the importance of vegetation to wetland areas, 

the district court rejected the EPA's conclusion that de minimis soil 

displacement activities were not subject to the section 404 permit requirements. 

147 The court noted that the purpose of the statute would 

be thwarted if removal of wetland vegetation did not require acquisition 

of a section 404 permit. 148 In the view of the district court, the 

141. 473 F. Supp. at 535 (emphasis in original). 

142. 33 U.S.C § 1344(1)(2) 

Any discharge of dredged or fill material into the navigable waters incidental to any 

activity having as its purpose bringing an area of the navigable waters into a use to 

which it was not previously SUbject, where the flow or circulation of navigable waters 

may be impaired or the reach of such waters be reduced, shall be required to have a 

permit under this section. 

[d. 

143. 473 F. Supp. at 535. 

144. Id. at 531-32 (construing 33 CF.R. § 323.2(a)(c) (1983». Section 404(a) of the CWA 

authorizes the Corps to issue permits "for the discharge of dredged or fill material" into the 

navigable waters. 33 U.S.C § 1344(a) (J 982). The district court also found that the land-clearing 

activities resulted in a discharge of fill material within the meaning of the CWA: 

Our determination that the soil and detritus was scraped up and conveyed across the 

tract is buttressed by the fact that many of the small sloughs were filled and the 

larger ones were partially filled in the landclearing process. The process had a levelling 

effect which also qualified the material moved as fill material. 

473 F. Supp. at 532. 

145. Id. at 533. 

146. [d. at 533-34. 

147. [d. at 536. 

148. [d. at 534. 



government had focused on engineering theory and methodology 

rather than the policies sought to be implemented by the CWA.149 The 

de minimis degree to which soil may have been displaced was considered 

by the court to be immaterial, so long as the land-clearing activity 

resulted in the destruction of wetland vegetation. 150 The court held 

that the landowners, lacking section 404 permits, were prohibited 

from conducting the land-clearing activities. 151 

In the second trial,152 the district court considered what areas of 

the tract were wetland within the meaning of section 404. The court 

found that the term wetlands was not a term of "pure science" but "a 

jurisdictional term, the product of the legislative process, of political 

pressure groupS."153 In the court's view, the definition of the term 

could be "scientifically incorrect," but still valid in a jurisdictional 

sense if the practical needs of the section 404 program were sat isfied. 

154 Concluding in effect that the word "wetlands" was a term of 

art, the court looked to the section 404 regulations to determine the 

meaning of the terminology. 

The court did not defer to the agencies' interpretation, but applied 

an independent analysis to construe the wetland regulations. 155 

The court emphasized that the 1977 regulations broadened the scope 

of the 1975 regulatory definition of wetlands to encompass species of 

149. [d. at 536. 

150. [d. The court stated that: 

If the destruction and conversion of wetlands to another purpose is accomplished, 

does it really matter whether it is accomplished "where no earth (other than de 

minimis) is moved" or otherwise? 

More specifically, does it make sense, as the Government's statement implies, 

that the excavation of tal ditch 6 feet deep and 100 feet long requires a § 404 permit 

(is destructive of wetlands) but that the clearing of 20,000 acres of forest wetlands by 

methods involving only de minimis movement of earth does not (is not destructive of 

such wetlands). The factual situation in this very proceeding demonstrates the error 

implicit in the Government's statement. 

[d. 

lSI. [d. 

152. 511 F. Supp. 278. 

153. [d. at 288. 

154. [d. 

ISS. This conclusion follows because of the method the district court applied to determine 

the meaning of phrase "wetland." The court did not limit its review to the record compiled by 

the agencies, but constructed its own record: 

We have been favored by the testimony and evidence of imminent agronomists, soil 

scientists, hydrologists and biologists. This information has been used by us to classify 

the types of soil and vegetation and to determine the topography and hydrology 

affecting the. . . tract and to determine whether the wetlands characteristics . . . 

are present. 



vegetation typically adapted to saturated soil. 156 The critical wetland 

indicator, as the court perceived it, was whether there existed a prevalence 

of vegetation "tolerant" to saturated soil. 157 The court concluded 

that "all species except the intolerant species are wetland 

species" and found that, although the evidence conflicted on the degree 

of saturation tolerance of each vegetation species subsisting on 

the tract, there was no dispute that "they were all tolerant to a greater 

or lesser degree." 158 Because the court found a prevalence of wetland 

vegetation on the Lake Long tract, it held that the tract was a wetland 

within the meaning of section 404. 159 The test applied by the 

court was more extensive than the agencies' interpretation of the regulations, 

and resulted in the court's finding that ninety percent of the 

tract constituted a wetland. 160 

c. The Fifth Circuit Decision 

The Fifth Circuit was presented with a case in which numerous 

private parties, three federal agencies, and a federal district court had 

disagreed about the resolution of complex technical issues. The court 

examined four factors: (1) the proper scope of judicial review which 

the district court should have afforded the agency determination; 

(2) whether the EPA's wetland determination methodology constituted 

a substantive regulatory change requiring notice and comment 

proceedings before implementation; (3) the validity of the EPA's construction 

of the wetland regulations; and (4) the types of activities 

that required a section 404 permit. 

The court found that because the CWA failed to provide a stan- 

Id. 

The district court also failed to refer to the AP A, or make any explanation of the scope of 

review it applied to the agency findings. 

156. Id. at 289. 

157. [d. at 290-91. 

158. Id. at 291-93. In addition to adopting this broad interpretation of wetland vegetation 

species, the court concomitantly rejected the landowners' argument that wetlands "are restricted 

to deep swamp or cypress areas." Id. at 289-90. The court also found that even though 

the tract was only intermittently saturated throughout the year, a sufficient level of inundation 

existed to support wetland vegetation. Id. at 291. Accordingly, the court concluded that this 

sufficed to bring the land within the coverage of the § 404 regulations. See id. at 290-91. 

159. See id. at 291. 

160. See 715 F.2d at 903. The landowners also contended that enforcement of the section 

404 regulations under these circumstances violated the fifth amendment's prohibition against 

the "taking" of private property. The district court, applying the rationale that the defendants 

had no constitutional right to the "highest and best use" of their property, rejected this assertion. 

511 F. Supp. at 287. 



dard governing the scope of judicial review, the APA was the controlling 

authority. 161 The court concluded that the APA permitted 

reversal of agency determinations which are "arbitrary, capricious, an 

abuse of discretion, or otherwise not in accordance with law," or 

which contravene statutory, procedural or constitutional requirements. 

162 Finding that the agency decision was "entitled to a presumption 

of regularity," the court deemed the standard of review to 

be "highly deferential."163 In the court's opinion, the role of a reviewing 

court was limited to ascertaining whether the agency had made a 

"clear error of judgment" and considered the relevant decisional factors.l64 

Without an in-depth discussion of its rationale, the court decided 

that the relevant standard was provided by AP A section 

706(2)(A). The court held that under section 706(2)(A) the EPA's 

findings must be affirmed unless they were arbitrary, capricious, or an 

abuse or discretion. The plaintiffs contended that de novo review was 

appropriate since the EPA's determination was a jurisdictional question; 

however, the court made the distinction that the issue was more 

a question of the extent of the EPA's jurisdiction, and therefore, was 

"precisely the type of agency decision that is normally subject to limited 

judicial review."165 Placing great weight on the agency's utilization 

of scientific expertise, the court found that the arbitrary and 

capricious standard of review would properly provide due deference 

to the agency without "abdication of judicial responsibility."166 The 

Fifth Circuit held that the district court's scope of review was improper 

since the district court substituted its own judgment instead of 

reviewing the agency's decision on the record. 167 

The Fifth Circuit also considered the private defendants' contention 

that the EPA's wetland determination methodology constituted 

rulemaking violative of the AP A. The private defendants asserted that 

the divergent methodological procedures applied by the Vicksburg 

161. 715 F.2d at 904. 

162. Id. (quoting 5 U.S.c. § 706(2)(A).(B).(C).(D) (1982». 

163. Id. (citing Citizens To Preserve Overton Park. Inc. v. Volpe. 401 U.S. 402. 415 

(1971». 

164. Id. (citing Overton Park. 401 U.S. at 416). 

165. Id. at 906. 

166. Id. at 907. 

167. Id. Ordinarily. the Fifth Circuit would remand the case to the trial court to apply the 

correct standard of review. However. the court decided to proceed to the merits of the case. In 

the court's estimation. this extraordinary action was appropriate because the matter was legal 

in nature and "subject to our own independent review" and further warranted given that the 

"litigation ... [had] already gone on long enough." Id. 


1985] ADMINISTRA TIVE LAW 33 

District and the EPA indicated that the latter agency had effectuated 

an amendment to a substantive rule. Because notice and comment 

procedures had not been afforded under AP A section 553, the defendants 

argued that the alleged amendment was invalid. 168 The EPA responded 

that the change in methodology reflected an interpretation of 

the Corps' existing wetlands definition and no notice and comment 

proceedings were required since section 553(b)(A) of the APA exempted 

interpretative rules from notice and comment proceedings. 169 

The resolution of this issue turned on an analysis of the AP A's 

distinction between legislative and interpretative rules. In discerning 

the differences between the two types of rules, the court recognized 

that it was required to look "beyond the label to the substance of the 

administrative action." 170 The court noted that legislative rules 

"grant rights, impose obligations, or produce other significant effects 

on private interests ... [and] narrowly constrict the discretion of 

agency officials by largely determining the issue addressed."171 Conversely, 

the court observed that interpretative rules merely "express 

the agency's intended course of action, its tentative view of the meaning 

of a particular ... statutory term ... [but] do not ... foreclose 

alternate courses of action or conclusively affect rights."172 Recognizing 

the practical difficulties inherent in applying these distinctions, the 

court held that the crucial considerations were the fairness of the 

agency's procedures and their accord with the APA's underlying policies.173 

The court found that the EPA's wetland methodology was 

fair, and comprised "an interpretative application, not an amendment 

of, the 1977 definition." 174 In effect, the court discerned that the 

Corps' 1977 regulations, rather than the EPA's methodology, had expanded 

the number of wetland indicators. As a consequence, the 

court viewed the landowners' "underlying contention ... [as] nothing 

more than a challenge to the EPA's interpretation of the 

regulation." 175 

168. [d. at 907-08. 

169. [d. at 908. 

170. [d. 

171. [d. (quoting Batterton v. Marshall, 648 F.2d 694,701-02 (D.C. Cir. 1980». 

172. 715 F.2d at 908 (quoting Batterton, 648 F.2d at 702). The court also observed that 

legislative rules are subject to less extensive judicial review than interpretative rules. [d. In 

addition, the court was careful to point out that an agency retains the discretion to implement 

its statutory responsibilities through case-by-case adjudication or by rulemaking. [d. 

173. [d. at 909-10. 

174. [d. at 910. 

175. [d. 



Having determined that the EPA's methodology was based on a 

regulatory interpretation exempt from the AP A's publication requirements, 

the court found that the agency's interpretation did not alter 

the regulation and was therefore consistent with the purposes of the 

CWA. The Avoye/les II court applied two principles to its analysis: 

first, that an agency interpretation of a statute which it administers is 

entitled to "substantial deference"; and second, that the "agency's 

construction of its own regulations is entitled to even greater deference."176 

Even though the Corps, not the EPA, had adopted the 1977 

regulations- and thus they were technically not the EPA's "own" 

regulations- the court saw "no reason to lessen our deference in this 

case."177 Moreover, the court viewed the technical nature of the decision 

as a further reason to exercise deference. 178 These factors, and the 

broad authority delegated by Congress to the agency, influenced the 

court to defer to the EPA's interpretation. 179 Although the court indicated 

that the interpretative comments of the 1977 regulations could 

be read to support a different construction, it was persuaded that the 

EP A's view was more reasonable than the landowners'. 180 The court 

also found that the EPA's interpretation comported with congressional 

intent since Congress was aware of the agencies' proposed regulations 

to expand the wetland definition, and not only refused to reject 

the proposals, but extended the Corps' section 404 jurisdiction beyond 

the "traditional definition of 'navigable waters,' " by enactment of the 

CWA of 1977. 181 Accordingly, the court held that the EPA's eighty 

percent wetland finding was neither arbitrary nor capricious, and reversed 

the district court's decision to the extent that it differed from 

176. Id. 

177. Id. at 911 n.27. The court found it significant that the EPA had consulted with the 

Corps during the development of the regulations. Furthermore, the court noted that the EPA 

had added the same wetland definition to its own 1982 regulations. Id. 

178. Id.at91O-11. 

179. Id. at 911. 

180. Id. at 9\3. The court noted that: 

A reading of the entire [regulatory] definition indicates that the agencies' interpretation 

is the more reasonable, since wetlands are not limited to areas that are permanently 

inundated . . . . We fail to understand how the agency may determine 

whether a tract is such an area without examining its hydrology. Similarly, the definition 

provides that a wetland is an area that "under normal circumstances [does] support" 

vegetation typically adapted for life in "saturated soil conditions." It would 

seem that the logical method for determining whether this requirement is met is to 

examine whether the soil is or is likely to be frequently saturated. 

Id. 

181. [d. at 915. 



the agency's determination. 182 

The court, although intimating that the matter should have been 

referred to the Corps for further administrative proceeding,183 upheld 

the district court and disagreed with the EPA about the types of activ- 

182. Id. at 918. 

183. The Avoyelles II court indicated its dissatisfaction with the procedural context in 

which the district court ruled on this issue. The court felt that before judicial consideration of 

the matter, the Corps should have been permitted to exercise its "primary jurisdiction." Id. at 

918-20. In the court's view, the landowners should have been required to actually request the 

issuance of permits from the Corps after the EPA's redetermination of the wetlands determination. 

The acquisition of an additional permit ruling by the Corps, in the court's opinion, 

"might have obviated the need for addressing some of the issues discussed in the district 

court's opinion and presently urged on appeal." /d. at 919 (footnote omitted). In any event, the 

court decided to rule on the merits of the activities issue since the federal agencies dropped 

their primary jurisdiction argument on appeal. /d. at 920. 

Professor William Rogers, a noted environmental law scholar, has noted that: 

The courts should surrender their jurisdiction on environmental cases only upon. 

firm indications that the agency is capable of, and interested in, disposing of the 

dispute and clear assurances that the plaintiff is being sent to a competent forum that 

will resolve his claims, not on a wild good chase. 

ROGERS, supra note 81, at 45-46. 

It is important to note that after the Corps' initial 35% wetland finding, the district court 

in Avoyelles I ordered the Corps and the EPA to reconsider the determination. 511 F. Supp. at 

281. The Avoyelles II court noted that "[i]n deciding to give the federal defendants an opportunity 

to make a final wetlands determination, the district recognized that the federal defendants 

bore the 'primary responsibility' for the determination of which lands were wetlands." 715 

F.2d at 903. The remand technique used in Avoyelles I has already been cited with favor by 

several courts. See Buttrey v. United States, 690 F.2d 1170 (5th Cir. 1982), cerro denied, 103 S. 

Ct. 2087 (1983); Buttrey v. United States, 573 F. Supp. 283 (E.D. La. 1983); Deltona Corp. V. 

Alexander, 682 F.2d 888, 894 n.7 (11th Cir. 1982) (cited but distinguished because the Corps 

had never been given the opportunity to decide the extent of its jurisdiction over the plaintiff's 

property). 

The Fifth Circuit's dicta with respect to primary jurisdiction is disturbing for several 

reasons. The agencies had already had "two bites at the apple," the last opportunity mandated 

by means of court order. Given the elapsed length of time and the delay which the parties had 

already been subjected to awaiting a wetland determination, the court's reasons for granting 

the agencies a "third bite" are unconvincing. Both agencies jointly participated in the second 

determination, and there is no indication that the Corps objected to the EPA's criticisms of the 

Vicksburg district's methodology, or to the agency's finding as to the types of activities requiring 

a permit. In fact, had the two agencies differed as to the proper interpretation of the wetland 

regulations, then the court's deference to the EPA's construction of "its own rules" would 

have been questionable. It is unlikely that the Corps would have failed to apply the determination 

it had jointly made with the EPA, and submitted to the district court as its final decision, 

in any subsequent permit process. Even before the agencies reconsidered the issue a second 

time, thousands of acres later determined to be wetland had already been lost because the 

Corps had permitted the landowners to proceed with operations on 10,000 acres of land already 

cleared under the Vicksburg district's improper initial wetland determination. See 473 F. 

Supp. at 537. Under Roger's analysis, and the balancing of the benefits to be engendered by 

further administrative proceedings against the costs of further delay, the application of the 

doctrine of primary jurisdiction was unwarranted. 



ltIes that required a section 404 permit. In accepting the district 

court's findings of fact, 184 the court held that the land-clearing activities 

constituted a discharge of pollutants prohibited by section 

301(a)185 of the CWA.186 The court also agreed with the district court 

that the bulldozers were point sources of pollution. 187 However, the 

court found it unnecessary to answer the question of whether the 

mere removal of wetland vegetation comprised a violation of the 

CWA. 188 In the court's view more than "mere removal" was involved 

since the land-clearing resulted in a redeposit of materials on the 

land. 189 Because the court held that a redeposit of materials was a 

discharge constituting "fill" material under section 404, it affirmed 

the district court's decision that the land-clearing activities required 

section 404 permits. 190 

In summary, the Fifth Circuit held that the district court had 

improperly applied a de novo scope of review, instead of the arbitrary 

and capricious or abuse of discretion standard. In addition, the court 

found that the EPA's methodology was a proper interpretation of the 

1977 wetlands regulation exempt from the APA's notice and comment 

procedures. In reference to questions of statutory interpretation 

under the CWA, however, the court affirmed the majority of the district 

court's legal conclusions. The district court was reversed only to 

the extent that its ninety percent wetland determination differed from 

the EPA's wetland determination. 

2. Perspective 

Environmental law cases have made significant contributions to 

the law relating to the scope of judicial review of agency decisionmaking. 

191 The Avoyelles decisions are also noteworthy because of 

their implications for agency rulemaking and interpretation of statutes 

and quasi-legislative rules. 

184. 715 F.2d at 920-22. 

185. 33 U.S.C. § 1311(a) (1982). 

186. 715 F.2d at 922. 

187. Id. 

188. Id. at 923. 

189. Id. 

190. Id. at 924. The Fifth Circuit also affirmed the district court's holding that the private 

defendant's land-clearing activities were not normal farming operations exempt from § 404. 

Id. at 925-27. The court, however, declined to consider whether the landowner's activities 

represented a discharge of "dredged material." Id. at 925. 

191. ROGERS, supra note 81, at 15. 



Professor Kenneth Culp Davis has noted that the "action of 

courts with respect to scope of review is far superior to their verbiage 

about scope of review."192 This description aptly fits Avoyelles II. 

Although the Fifth Circuit criticized the district court for failing to 

explain the standard of review it applied to the administrative record, 

the Avoyelles II court was likewise vague in describing why it found 

the arbitrary and capricious standard appropriate. Yet there is little 

doubt that the court's decision was correct. Section 404 of the CWA 

does not require an adjudication "determined on the record after opportunity 

for an agency hearing" necessary to trigger the formal procedural 

requirements of section 554(a) of the AP A. 193 The judicial 

opinions have uniformly found that the section 404 permit process is 

an informal adjudicatory proceeding; consequently, permit applicants 

do not have the right to a trial-type hearing. 194 Under the APA 

scheme, "the substantial evidence test is used only on questions of fact 

. . . the subject of a hearing with a determination on the record. . . 

[a]U questions not subject to the substantial evidence test are subject 

to the test of § 706(2)(A)" the arbitrary and capricious standard. 195 

The court, despite its contrary intimations, applied more than 

one standard of judicial review to examine the agency decision. In 

affirming the district court's holding that the land-clearing activities 

required section 404 permits, the court relied on the trial court's findings-not 

those of the EPA. The Avoyelles II court permitted the trial 

court to independently determine what acts were within the scope of 

section 404's coverage. 

Different types of administrative actions, however, are not subject 

to the same scope of judicial review. l96 The Avoyelles I court 

failed to recognize this distinction and indiscriminately applied a de 

novo standard of review to the agencies' determinations. Questions of 

statutory interpretation are within the competence of the judiciary 

and amenable to independent review should the court find the agency 

construction inconsistent with congressional intent. The determination 

of land-clearing activities within the coverage of section 404 

presented a question of a different nature than what areas of the tract 

192. DAVIS, supra note 58 § 29.00, at 518. 

193. 5 U.S.c. § 554(a) (1982). 

194. See e.g., Buttrey v. United States, 690 F.2d 1170 (5th Cir. 1982), cerro denied, 103 S. 

Ct. 2087 (1983); National Wildlife Fed'n v. Marsh, 568 F. Supp. 985 (D.D.C. 1983); Nofe1co 

Realty Corp. V. United States, 521 F. Supp. 458 (S.D.N.Y. 1981). 

195. DAVIS, supra note 58 § 29.00-1, at 520. 

196. See supra notes 66-69 and accompanying text. 



were wetland. As to the first issue, Congress provided guidance in the 

form of legislative history and detailed statutory provisions to confine 

agency discretion. In contrast, however, Congress has never attempted 

to define the term wetland. 197 Congress committed the formulation 

of the term's definition to agency discretion. Moreover, the 

technical nature of wetlands determination requires the application of 

specialized scientific knowledge. The agencies, by reason of their superior 

expertise, are ordinarily more qualified to address issues of this 

kind. The A voyelles II decision permitted the exercise of agency expertise 

and properly reviewed the wetland determination under the arbitrary 

and capricious standard. 

Avoyelles II's holding with respect to the EPA's regulatory interpretation 

was also of significance. The principle that agencies are afforded 

deference in the construction of their own regulations is well 

established; the concept that this same deference may be afforded to 

one agency's interpretation of another's regulations is not. Avoyelles II 

creatively applied the rule by deferring to the EPA's interpretation of 

the Corps' regulations. This adaptation was not only appropriate, but 

necessary in the specialized environmental setting in which four agencies 

share responsibilities. Furthermore, the court's decision gave due 

recognition to the development of the rules through joint consultation 

between the EPA and the Corps. In the absence of similar special 

factors, it is unlikely that the A voyelles II result will be applied to 

other contexts. 

The court's analysis of the distinction between legislative and interpretative 

rules was less satisfying. There are two conflicting lines of 

cases proffering different tests to distinguish the alternate types of 

rules: the "legal effect" test cases; and the "substantial impact" decisions. 

The legal effect test looks to whether the "legal rights or obligations" 

of the regulated individuals have been affected, and if the rule 

has established "binding norms" that serve to confine the decisionmaker's 

discretion. 198 The substantial impact test is more functional 

in nature and provides that rules having a significant effect on regulated 

individuals are legislative in character and must be adopted 

under notice and comment proceedings. 199 Not only did the Avoyelles 

II court fail to indicate which test it thought appropriate, but it also 

197. See supra note 85. 

198. See Asimow, Public Participation in the Adoption of Interpretive Rules and Policy 

Statements, 75 MICH. L. REV. 520, 531-45 (1977). 

199. Id. at 545-53. 



. indiscriminately cited to both legal effect and substantial impact cases 

to support its holding?OO Prior Fifth Circuit cases, however, have applied 

the more traditional legal effect test,201 and Avoyelles II does not 

suggest that the circuit is prepared to change its viewpoint. 202 

The "verbiage" of A voyelles II with respect to rulemaking is less 

important than the court's action. Whether the EPA's methodology 

constituted legislative or interpretive rulemaking was not the real issue-the 

Vicksburg District improperly applied the regulations. The 

EP A's interpretation was not a "change" but a correction of one District 

Office's mistaken regulatory construction. There was no real 

methodological dispute between the Corps and the EPA. The court, 

irrespective of its phraseology, refused to permit the landowners to 

use the AP A to prohibit the EPA's application of the correct regulatory 

standards. 

The section 404 program has always been highly controversial, 

and the debate has not ended. Critics assert that "[l]ike the amphibian, 

the program has gradually crawled from the navigable waters and 

now operates in areas where ships' keels have never ventured .... 

The current program now creates uncertainties and liabilities for all 

those who would dredge, fill, fell or level in all but the most arid locales. 

"203 Supporters of the program find the "amphibian metaphor 

200. See, e.g., 715 F.2d at 908-10. For example, the court cited to Pacific Gas & Electric 

Co. v. FPC, 506 F.2d 33 (D.C. Cir. 1974) and Batterton v. Marshall, 648 F.2d 694 (D.C. Cir. 

1980), both "legal effect" cases. The court also cited Texaco, Inc. v. FPC, 412 F.2d 740 (3d 

Cir. 1969) and Lewis-Mota v. Secretary of Labor, 469 F.2d 478 (2d Cir. 1972), both interpreted 

to be "substantial impact" cases. See Asimow, supra note 198, at 531-53 (classifying 

and discussing many of the cited cases). 

201. See, e.g., American Trucking Ass'ns v. ICC, 659 F.2d 452, 462 (5th Cir. 1982), cert. 

denied, 103 S. Ct. 1272 (1983) (holding that purported guidelines were actually rules within 

the meaning of the AP A since they established binding norms and did not leave the "decisionmakers 

free to exercise discretion"). 

202. In dictum, the A voyelles II court noted that the EPA had the discretion to proceed by 

"case-by-case adjudications and interpretative orders, rather than through the rulemaking process." 

715 F.2d at 909. During the survey period, the Tenth Circuit indicated that it was less 

willing to allow agencies to create rules of general applicability in adjudications. See First 

Bancorporation v. Board of Governors of the Fed. Reserve Sys., 728 F.2d 434, 438 (10th Cir. 

1984) (finding that the Board had abused its discretion "by improperly attempting to propose 

legislative policy by an adjudicative order"). The Ninth Circuit has also "in a series of cases 

... [striven] to develop law that an agency with power to make law through rules may not 

make law 'of widespread application' in an adjudication." DAVIS, supra note 58 § 7:25, at 179. 

The Fifth Circuit's reluctance to confine administrative discretion in this area, however, is 

consistent with the position of the majority of circuits. See id. at 183-86. 

203. Parish & Morgan, History, Practice and Emerging Problems of Wetlands Regulation: 

Reconsidering Section 404 of the Clean Water Act, 17 LAND & WATER L. REV. 43, 45 (1982). 



amusing, but inaccurate," and maintain that its jurisdictional 

breadth is necessary to protect sensitive wetlands. 204 

The Fifth Circuit's Avoyelles II opinion permits the agencies to 

broadly interpret their regulations to protect environmentally sensitive 

wetlands. The Avoyelles II rationale conflicts with a decision of 

the Sixth Circuit issued during the survey period in United States v. 

Riverside Bayview Homes, Inc. 205 In holding that undeveloped suburban 

land was not subject to Corps section 404 jurisdiction, the Riverside 

court narrowly interpreted the scope of the wetland regulations: 

Congress may, indeed, have meant to extend the protections of the 

Act beyond the straightforward definition it provided of "navigable 

waters." The question, however, is how far away from "navigable 

waters" Congress contemplated that the regulations under the Act 

could drift. It is certainly not clear from the statute that the Corps' 

jurisdiction goes beyond navigable waters and perhaps the bays, 

swamps and marshes into which those navigable waters flow. 

Neither is it clear that Congress intended to subject to the permit 

requirement inland property which is rarely if ever flooded. 

Accordingly we interpret the words 'inundated at a frequency 

and duration sufficient to support, and that under normal circumstances 

[does] support [wetlands vegetation], as set forth in the 

amended regulation to require frequent flooding by waters flowing 

from 'navigable waters' as defined in the Act. The definition thus 

covers marshes, swamps, and bogs directly created by such waters, 

but not inland low lying areas such as the one in question here that 

sometimes become saturated with water. 206 

The significance A voyelles II holds for the section 404 program is 

demonstrated by the interest federal agencies and numerous private 

parties showed in the litigation. 207 The Fifth Circuit correctly applied 

administrative law principles and permitted the agencies to protect 

wetland areas. As demonstrated by another Fifth Circuit case issued 

during the survey period however, Save Our Wetlands Inc. v. 

Sands,208 the court was prepared to restrict the parameters of the program. 

In Save Our Wetlands Inc. v. Sands, the court held that section 

404 jurisdiction did not exist where a power company's land-clearing 

204. Blumm, Wetlands Preservation, Fish and Wildlife Protection and 404 Regulation: A 

Response, 18 LAND & WATER L. REV. 469, 477-80 (1983). 

205. 729 F.2d 391 (6th Cir. 1984). 

206. [d. at 397-99. 

207. See supra notes 103-112 and accompanying text. The State of Florida filed an amicus 

curiae brief in favor of the plaintiffs' position. 715 F.2d at 907 n.20. 

208. 711 F.2d 634 (5th Cir. Aug. 1983). 



activities had merely removed trees from the surface of the soil. 209 

The court distinguished Avoyelles II, finding that there was no agricuI 

tural con version of the soil in to non wetland. 210 The two cases, considered 

together, show that the circuit will only allow the agencies to 

exercise their broad jurisdiction over land-clearing activities that 

cause the deposit of fill or dredged material or a conversion of 

wetland. 

A voyelles II calls into question the effectiveness of the Corps' 

"decentralized" policy211 and the ability of the EPA to oversee the 

section 404 program. The Corps' adoption of the program has been 

less than enthusiastic and, because the Corps itself conducts major 

dredging activities, it has been described as playing "the role of the 

kettle assailing the teapot. "212 Leaving the administration of section 

404 to the various district offices with little supervision, and no administrative 

appeal of permit decisions, has resulted in a wide divergence 

in the application of the wetland regulations. 213 The EPA has 

failed to provide adequate review of district office decisions. 214 The 

citizen's suit provision 215 has been overburdened because of agency 

misadministration. In the final analysis, reliance upon private citizens, 

and even proper judicial application of the forty year old AP A, cannot 

substitute for effective agency implementation of the section 404 

program. Due to the Vicksburg District's misapplication of the regulations, 

several thousand acres of wetland were lost in Avoyelles II.216 

Avoyelles II provides some indication why, even after the adoption of 

the FWPCA and the CWA, 300,000 acres of wetlands continue to be 

lost each year. 217 

III. THE FINAL ORDER RULE 

A. The Meaning of the Term "Final Order" 

Section 704 of the AP A states that agency "action made reviewable 

by statute and final agency action for which there is no other 

209. The court noted that the power company only windrowed the "cleared vegetation 

... and allowed [it) to naturally deteriorate." Id. at 647. 

210. Id. 


212. ROGERS, supra note 81, at 407. 


214. /d. 

215. 33 U.S.c. § 1365(a) (1982). 

216. See 473 F. Supp. at 536-37. 

217. Blumm, supra note 204, at 471 n.11. 



adequate remedy in a court are subject to judicial review" but that a 

"preliminary, procedural, or intermediate agency action or ruling not 

directly reviewable is subject to review on the review of the final 

agency action."218 Although the APA provides that a nonfinal agency 

action is not subject to judicial review, the statute does not define the 

meaning of the term "final."219 Moreover, the United States 

Supreme Court has also failed to proffer a firm definition of final 

agency action. In the seminal case addressing this question, Abbott 

Laboratories v. Gardner,220 the Court held that section 704 only requires 

the application of a "flexible view of finality," in the sense that 

the term should be interpreted "in a pragmatic way."221 The law 

under section 704 has therefore lacked consistency, either because 

courts "variously interpreted" the meaning of finality or entirely ignored 

the statute. 222 

The AP A is not the sole source of the finality requirement. The 

ability of a court to review agency action may derive from either statutory 

or nonstatutory authority.223 Common law judicial review, 

however, has been gradually supplanted by statute, and at pre

1985] ADMINIS'TRATIVE LAW 43 

termination unique to any statutes and circumstances involved in a 

case."226 

Instead of formulating a separate body of jurisprudence for the 

consideration of diverse "final order" agency statutes, the federal 

courts have sometimes looked to section 1291 of Title 28 of the 

United States Code to determine questions of agency finality.227 Section 

1291 promotes finality by limiting the jurisdiction of the courts of 

appeal to "final decisions of the district courts of the United 

States,"228 and offers the additional benefit of the availability of a 

large body of interpretive case law. The rationale of this practice is 

that agency finality provisions further the "same policies as the finality 

rule embodied in ... [section] 1291."229 

Gillespie v. United States Steel Corp. 230 is one of the most significant 

Supreme Court decisions addressing the meaning of finality for 

the purposes of section 1291. In a wrongful death action brought by 

the petitioner, the mother of a seaman who drowned while working 

on the respondent shipowner's vessel, the district court held that federallaw 

provided the exclusive remedy and dismissed the petitioner's 

state law claims.23J The petitioner did not wait for a final judgment on 

the merits of the federal law cause of action, but immediately filed an 

appeal. Although the circuit court considered the claim, it held 

against petitioner and affirmed the district court. 232 The Supreme 

Court affirmed the circuit court's exercise of jurisdiction over the petitioner's 

appeal by holding that final "within the meaning of section 

1291 does not necessarily mean the last order possible to made in a 

case. "233 Furthermore, the Court stated that: 

[W]hether a ruling is "final" . . . is frequently so close a question 

that decision of that issue either way can be supported with equally 

forceful arguments, and that it is impossible to devise a formula to 

resolve all marginal cases coming within what might well be called 

the "twilight zone" of finality. Because of this difficulty this Court 

has held that the requirement of finality is to be given a "practical 

226. Note, supra note 223, at 1256. 

227. 28 U.S.c. § 1291 (1982). 

228. Id. 

229. Ingalls Shipbuilding Div., Litton Sys. v. White, 681 F.2d 275, 278 (5th Cir. 1982). 

230. 379 U.S. 148 (1964). 

231. Id. at 150. 

232. Id. at 151-52. 

233. Id. at 152. 



rather than a technical construction.,,234 

Finding the most important consideration to be the balancing of the 

competing interests of "inconvenience and costs of piecemeal review" 

against "the danger of denying justice by delay," the Court decided 

that it could not "say that the Court of Appeals chose wrongly under 

the circumstances. "235 

Recent Supreme Court cases, however, indicate that, although 

Gillespie has never been overruled, its liberal view of finality has rarely 

been applied. 236 In Ingalls Shipbuilding Division, Litton Systems, Inc. 

v. White, 237 a panel of the Fifth Circuit demonstrated that it was prepared 

to identify the exceptional circumstances under which strict application 

of the final order rule would be inappropriate. A shipfitter, 

injured in the course of his employment, filed a compensation claim 

against his employer238 pursuant to the Longshoremen's and Harbor 

Workers' Compensation Act (LHWCA),239 Before a formal administrative 

hearing was held, however, the parties negotiated a settlement 

which was approved by an administrative law judge (ALJ).24O The 

Director of the Office of Workers' Compensation Programs challenged 

the settlement and brought an appeal before the Benefits Re- 

234. Id. (citations omitted) (quoting Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 

545 (1949». 

235. 379 U.S. at 152-153. 

236. See, e.g., Firestone Tire & Rubber Co. v. Risjord, 449 U.S. 368 (1981) (citing the 

principle that a final order "ends the litigation on the merits and leaves nothing for the court to 

do but execute the judgment," in holding that a district court's prejudgment decision to refuse 

to disqualify counsel does not constitute a final order). But cf American Export Lines, Inc. v. 

Alvez, 446 U.S. 274 (1980) (plurality decision) (Court granted writ of certiorari from a decision 

by the highest court of a state that nonstatutory maritime law permitted a spousal claim 

for loss of society to be brought in a wrongful death action, even though all issues of liability 

were yet undecided by the state courts). The case could possibly be distinguished on the 

ground that considerations of federalism, rarely presented in the review of agency orders, influenced 

the Court to decide the merits of the action since the only federal issue had been finally 

decided by the state court and would eventually be presented to the Court irrespective of the 

resolution of other state claims. Id. at 279; see also 15 C. WRIGHT, A. MILLER & E. COOPER, 

FEDERAL PRACTICE AND PROCEDURE § 3908, at 435-36 (1976) (28 U.S.c. § 1257 and § 1291 

"should not be read indiscriminately together" as special considerations of "comity and federalism" 

are presented by the former statute); Coopers & Lybrand v. Livesay, 437 U.S. 463 

(1978) (dismissing for lack of jurisdiction an appeal from a district court's prejudgment denial 

of class action certification because the denial was not "final" since the order was subject to 

revision). 

237. 681 F.2d 275 (5th Cir. 1982). 

238. Id. at 277. 

239. 33 U.S.c. §§ 901-950 (1982). 

240. 681 F.2d at 277. 



view Board. 241 The Board, finding that the ALI's factual findings 

were inadequate, reversed and remanded the case for further proceedings.242 

The employer declined to participate in further administrative 

proceeding and filed an immediate appeal to the Fifth Circuit. 243 

Since section 921(c) of the LHWCA244 provided that only a "final 

order of the Board" was subject to review by a court of appeals, 

the court was required to determine whether the case presented sufficient 

"finality" to confer subject-matter jurisdiction. 245 The court applied 

the Gillespie test and weighed the "inconvenience and costs of 

piecemeal review on the one hand and the danger of denying justice 

by delay on the other. "246 First, the court concluded that its consideration 

of the merits of the case would "not raise the specter of piecemeal 

review."247 In the court's view, the validity of the settlement 

represented a question of law already decided by the Benefits Review 

Board and was therefore "final. "248 Second, the court indicated that 

since the agency's legal position was "final," a dismissal at the current 

stage of the proceeding would result in needless inconvenience to the 

claimant. The court stressed the fact that the ALl was bound by the 

Board's interpretation of the law. Pursuant to the court's reasoning, if 

the Board's legal view was incorrect and subject to reversal on a subsequent 

appeal, the claimant would suffer substantial harm "since the 

delay caused by dismissal could put him that much further off from 

the recovery to which he unquestionably is entitled."249 Under these 

circumstances, the court found that the case presented a "unique situation" 

that should be treated as an exception irrespective of technical 

finality.250 The court, therefore, held that the Board's order was final 

for the purposes of section 10 of the LHWCA.251 

241. Id. 

242. Id. 

243. Id. at 278. 

244. 33 U.S.c. § 921(c) (1982). 

245. 681 F.2d at 278. 

246. Id. at 279 (quoting Gillespie v. United States Steel Corp., 379 U.S. 148, 152-53 

(1964». 

247. 681 F.2d at 279. 

248. Id. 

249. Id. 

250. Id. 

251. Id. at 280. 


46 TEXAS TECH LAW REVIEW 

B. The Newpark Decisions 

1. Newpark I 

HeinOnline -- 16 Tex. Tech L. Rev. 46 1985 

[Vol. 16:1 

Less than a year after the Ingalls decision, another panel of the 

Fifth Circuit was called upon to construe the same statute in Newpark 

Shipbuilding & Repair, Inc. v. Roundtree (Newpark /).252 The claimant, 

a welder-employee of the petitioner shipping firm, filed a compensation 

claim for a job-related injury suffered during his first day of 

work on a shipping barge. Prior to joining the employ of the petitioner, 

the claimant had worked for twenty years as an independent 

contractor and been paid as much as $12.50 per hour. Petitioner, 

however, had compensated the employee at the rate of only $5.50 per 

hour. During a formal administrative hearing, the ALl found that the 

claimant was entitled to compensation. 253 Section 10 of the LHWCA 

used "the average weekly wage of the injured employee"254 to determine 

the amount of the compensation award, but provided three different 

formulas for computing the average weekly wage. 255 The ALl 

decided to apply the formula that considered the future earning capacity 

of the claimant based on his previous year's gross income. 256 

The Board affirmed the ALl's choice of formula, but reversed and 

remanded for further proceedings-apparently finding that the ALl 

should have computed the award on the basis of the claimant's net 

income. 257 

The Newpark I panel, finding the rationale of Ingalls persuasive, 

held that the Board's order was immediately appealable. 258 The court 

stressed that the "issue presented challenges the proper legal standard, 

rather than constitutes a factual dispute."259 Moreover, the 

court distinguished cases in which the agency determination was in a 

less "final posture," in the sense that the administrative record was 

incomplete, or presented undecided factual issues. 260 The Board's re- 

252. 698 F.2d 743 (5th Cir. 1983), rev'd on reh'g, 723 F.2d 399 (5th Cir. Jan. 1984). 

253. 698 F.2d at 745. 

254. 33 U.S.C. § 910 (1982). 

255. 698 F.2d at 748. 

256. Id. at 745. 

257. Id. 

258. Id. at 746. 

259. Id. 

260. Id. at 747. The court indicated that the record was complete because it contained 

"clear and ample evidence of ... earnings history, the earnings records of ... co-workers, 

and all other necessary information ... [t]he task of applying § lO(b) to the existing record 

will be ministerial in nature." Id. at 747-48 n.2. In the court's opinion, the remaining un-


mand to the ALJ was considered to be merely ministerial in nature, 

since it required only that the ALJ calculate the award under the legal 

standard set forth by the Board. In applying the Gillespie factors, the 

court noted that its decision on the merits would not raise the possibility 

of piecemeal appeals since it would "settle this question and 

minimize the risk of a wasted agency hearing and a later appeal."261 

2. Newpark II 

Sitting en bane, the Fifth Circuit Court of Appeals reversed the 

Newpark I panel decision in Newpark Shipbuilding & Repair, Inc. v. 

Roundtree (Newpark II).262 The court indicated that it was applying 

"the well-settled general rule that a judgment or order is not final 

unless it ends the litigation on the merits and leaves nothing for the 

trier to do but execute the judgment. "263 Although the court found 

that the Board order had determined "a central issue of liability," it 

gave greater weight to the Board's remand of "the administrative pro- 

resolved question of the amount of attorney fees due was a collateral matter that did not 

prevent the Board's decision from being appealable on the merits. Id. at 748 n.3. 

261. Id. at 748. The dissent, written by Judge Tate, strongly disagreed with the majority's 

analysis. Id. at 752-58 (Tate, J., dissenting). In Judge Tate's opinion, precedent provided that 

when "a central issue of liability has been determined to administrative finality ... but [a] 

remand is ordered to calculate and make a specific monetary award" that no final order exists 

for the purpose of judicial review. Id. at 753. 

Judge Tate also disagreed with the majority's view that the record was complete, indicating 

the possibility that further evidence might be necessary to ascertain the proper amount of 

weekly wages and to compute attorney fees. Id. at 755. The dissent also raised the hazard that 

the majority's lax view of finality could result in the filing of protective appeals by counsel to 

avoid suffering foreclosure of the right to judicial review in the fear that an agency's interlocutory 

order may be subsequently determined to be "pragmatically final." Id. at 756. Moreover, 

pointing to the present case as an example, the dissent argued that permitting a premature 

appeal could further prolong final resolution of the case, rather than prevent additional delay. 

Id. at 755-56. 

In addition, Judge Tate noted that in "a commendable effort to expedite judicial review 

. . . the majority has adopted a principle of case-by-case determination of 'finality' that will, 

however, unsettle the relative certainty that was previously attached to that concept." Id. at 

752. The dissent believed that the burden and resulting uncertainty of applying an ad hoc 

approach to questions of finality, outweighed any possible benefits that might accrue. Id. at 

756. 

Judge Tate's views concerning this matter are of particular interest since he later wrote 

the majority's en banc opinion in Newpark II that reversed the Newpark I panel decision. See 

infra note 262. Judge Williams, who wrote the majority opinion in Newpark I, later authored 

the dissent in Newpark II. 

262. 723 F.2d 399 (5th Cir. Jan. 1984) (en banc), cerro denied, 53 U.S.L.W. 3236 (U.S. Oct. 

I, 1984) (No. 83-1716). 

263. Id. at 400. 



ceedings to the administrative law judge for further findings."264 The 

court adopted the rationale of the Newpark I dissent,265 and found no 

reason to depart from the requirement of strict finality. 

The en banc decision, however, exceeded the scope of the 

Newpark I dissent in several important respects. First, the opinion 

critically analyzed Gillespie, and subsequent Supreme Court cases,266 

and articulated the court's view that the Gillespie should be limited to 

its unique facts. The court declined to "detail the facts ... [or] analyze 

the several strands of reasoning by which Gillespie, because of 

... [its] competing considerations," proffered an unusual factual situation 

justifying an exception from the strict technical application of 

finality, "save to observe that none of Gillespie's exceptional reasons 

are apparent here."267 Secondly, the decision did more than reverse 

Newpark I. The court, although noting that it could possibly leave 

Ingalls "undisturbed, distinguishable and limited to its facts," chose 

to expressly overrule Ingalls deciding that "its value in occasionally 

permitting reviewable pragmatic finality to Board remand orders is 

outweighed by its erosion of the values of the finality rule. "268 The 

Fifth Circuit, therefore, gave notice of its intention to strictly construe 

the finality requirement and reject the application of a "case-by-case 

methodology of determining pragmatic finality," because an ad hoc 

approach would be in "fundamental conflict with values and purposes 

of the finality rule."269 The court found it preferable to avoid the possible 

danger of delay, mUltiple appeals, and the filing of precautionary 

appeals by providing "a relatively clear test of appealability."27o 

C. Perspective 

Administrative finality cases can rarely be resolved by a purely 

jurisdictional analysis. The validity of this observation is sustained by 

several factors, not the least of which relates to the important distinction 

between finality requirements derived from statutory as compared 

to nonstatutory sources. 271 In the latter circumstance, the 

264. [d. 


266. 723 F.2d at 401-03. The court interpreted subsequent Supreme Court cases as indicating 

that the Court had afforded Gillespie a "limited construction." [d. at 402. 

267. [d. at 401. 

268. [d. at 407. 

269. [d. at 405. 

270. [d. 




application of the doctrine is subject to substantial judicial discretion, 

and is generally subsumed under the similarly related principles of 

exhaustion of administrative remedies, ripeness of review, and primary 

jurisdiction. Newpark II, in either its language or its intent, cannot 

be considered applicable to the finality requirement in the 

nonstatutory context. It would likewise be inaccurate to intimate that 

the holding of Newpark II could be applied to all statutes which purport 

to regulate the availability of judicial review from administrative 

decisions. The wide dissimilarities among these statutes suffices to 

demonstrate the point in issue. Some statutes provide for judicial review 

but designate no time limitation for the filing of such review, 

others provide for a time limitation but fail to specify the requirement 

of a "final order," while yet additional types of statutes explicitly permit 

pre-enforcement review or review of "interlocutory matters. "272 

The Newpark II rule should relate only to those types of review statutes 

that expressly, or pursuant to judicial construction, limit judicial 

review to "final" agency orders. 273 

A significant number of agency review statutes do, however, require 

that administrative finality exist before a court may afford judicial 

review,274 and Newpark II is likely to have a substantial impact 

272. See, e.g., Davis, Judicial Review for Rulemaking: New Patterns and New Problems, 

1981 DUKE L.J. 279, 280-81, 297-308 (providing a short description of 30 statutes mandating 

different procedures for judicial review of administrative decision-making). 

273. One Fifth Circuit panel has apparently already distinguished Newpark II on this basis. 

In RSR Corp. v. Donovan, 733 F.2d 1142 (5th Cir. June 1984), the Occupational Safety 

and Health Administration cited a corporation for failing to pay medical benefits to employees 

temporarily removed or terminated from work due to job related occupational illnesses. Section 

II(a) of the Occupational Safety and Health Act of 1970, 29 U.S.c. § 660(a) (1982) 

(OSHA) had been judicially interpreted to mandate finality of the agency decision as a prerequisite 

for judicial review. 733 F.2d 1144. 

In finding that the agency's order was reviewable, the court stated that "[o]nly a crabbed 

reading ... [of OSHA] would forbid review of an order that affirmed in part and modified in 

part both citations and penalties simply because the issue of what other (and additional) relief 

is appropriate has been remanded for determination." Id. The court distinguished Newpark II 

and similar cases under 28 U.S.c. § 1291 on the rationale that the divergent language of the 

OSHA provision indicated that Congress intended to "impose requirements different from 

those we have imposed under the LHWCA and those exacted by use of the term 'final decision' 

in the Judicial Code." Id. at 1146 (footnote omitted). 

274. See, e.g., Immigration and Nationality Act of 1952, 8 U.S.C. § 1105a (1982) (limiting 

the jurisdiction of the courts of appeals to direct review of "final orders of deportation"). 

During the survey period, the Fifth Circuit held that this provision prohibits direct appellate 

review of the administrative denial of a stay of deportation pending the Board of Immigration 

Appeals ruling on a motion to reopen a deportation proceeding. Bonilla v. INS, 711 F.2d 43, 

44 (5th Cir. July 1983). See also Civil Service Reform Act of 1978, 5 U.S.c. § 7703(a)(I) 

(1982) ("Any employee or applicant for employment adversely affected or aggrieved by a final 



upon parties subject to these provisions. There is little doubt that the 

mandates of these statutes are jurisdictional in nature, and may not be 

cavalierly treated with disdain by the federal courts. Nevertheless, the 

jurisdictional nature of these statutes do not, in and of themselves, 

provide the answer to the finality riddle. Although a lack of subjectmatter 

jurisdiction is a complete bar to the court's ability to hear a 

case, the statutes fail to define finality with specificity. The judiciary 

has the responsibility to define the parameters and extent of its jurisdiction 

in problematic cases. 

In Newpark II, the Fifth Circuit sought to divest itself of this 

burdensome task. The case is clearly intended to do more than correct 

a single panel's perhaps overly liberal interpretation of the LHWCA. 

Newpark II sets forth a narrow and restrictive bright-line test 

designed to obviate the need to give individualized consideration to 

future statutory final order cases. The natural inclination of the judiciary 

to desire a panacea to rid itself of a thorny legal dilemma described 

by one weary judge as a "threshold question . . . unduly 

wasteful of judicial time"275 is understandable. Nonetheless, the 

Supreme Court has never expressly overruled Gillespie, even though 

one noted commentator has remarked that "for the most part Gillespie 

has either been ignored by the courts of appeals or invoked to 

justify appeals that could have been explained on more traditional notions 

of finality."276 Requiring strict technical finality in all cases "is 

not feasible ... [since] [i]n some cases important rights of a party 

will be irremediably destroyed if he is unable to secure prompt review, 

and in others an issue is so readily separable from the balance of the 

case that there is no advantage in postponing review of that issue."277 

Gillespie, though appropriately rarely applied, preserves the ability 

of the courts to retain needed flexibility to deal with the unusual 

case in which finality exists in all but a technical sense. What is unclear 

from Newpark II, and the question that the Fifth Circuit point- 

order or decision of the Merit Systems Protection Board may obtain judicial review of the 

order or decision."); Atomic Energy Act, 42 U.S.c. § 2239(b) (1982) ("Any final order entered 

in any proceeding of the kind specified in subsection (a) of this section shall be subject to 

judicial review .... "); Hobbs Act, 28 U.S.c. § 2342(1) (1982) (providing the courts of appeals 

with exclusive jurisdiction to review "final orders" of the FCC); Social Security Amendments 

of 1950, 42 U.S.c. § 1316(a)(3) (1982) (requiring that the Secretary must make a "final 

determination" before states have the right to seek review in the courts of appeals). 

275. Yorkville Bank v. Bassak (In re Bassak), 705 F.2d 234, 235 (7th CiT. 1983) (Pell, J.). 

276. C. WRIGHT, THE LAW OF FEDERAL COURTS § \01, at 706 (4th ed. 1983). 

277. Id. at 698. 



edly declined to address, is to what degree and under what 

circumstances, if any, needed flexibility will be permitted in prospective 

extraordinary situations. Irrespective of how apparently free from 

uncertainty the finality issue may have been with respect to the 

LHWCA, the breadth of the Newpark II decision extends beyond the 

limited confines of that particular statute and portends the application 

of a restrictive formula to a wide range of divergent circumstances. 

The court's willingness to accept this eventuality is manifested by its 

overruling of Ingalls, a case that has received favorable treatment by 

other courts 278 -and by the court's own admittance, capable of 

distinction. 279 

If Gillespie has any remaining life in the Fifth Circuit, it may be 

difficult to identify cases offering more appropriate justifications for 

exceptional treatment than those provided by Ingalls and Newpark I. 

These cases ostensibly provided situations in which exceptional need 

for immediate judicial resolution was demonstrably present and the 

central legal issue had been finally resolved. Moreover, the legal questions 

were of the type particularly subject to final resolution with little 

risk of recurrence and the resultant harm of piecemeal appeals. If critical 

factual determinations yet remained to be decided, or if the 

agency remands involved more than the fulfillment of ministerial duties, 

the court's decision is unconvincing in making these conditions 

plain. Although Newpark II has been followed by a panel of the Eleventh 

Circuit in reference to another LHWCA case,280 it still is unclear 

to what degree other circuits will adopt or reject its apparently strict 

test, or limit its ambit to the LHWCA. What is likely, however, is that 

even within the Fifth Circuit, judges will be presented with the temptation 

to further torture the already strained concept of finality to provide 

relief in particularly meritorious cases-with little necessary 

guidance from Newpark II as to what appropriate factors or circumstances 

would warrant flexibility. 

278. See, e.g., Coastal Steel Corp. v. Tilghman Wheelabrator, Ltd., 709 F.2d 190, 213 (3d 

Cir. 1983) (citing Ingalls with favor). Moreover, the rationale of Newpark I, before its reversal 

by the Fifth Circuit sitting en banc, had been expressly followed by the Ninth Circuit. Stone v. 

Heckler, 722 F.2d 464, 467 (9th Cir. 1983). 

279. 723 F.2d at 407. For further evidence that Ingalls did not portend a deluge of cases 

undermining the foundations of the finality rule, but was well within the capacity of the courts 

to distinguish when necessary, see Freeman United Coal Mining Co. v. Director, Office of 

Worker's Compensation Programs, 721 F.2d 629, 632 (7th Cir. 1983) (finding "[n]o special 

reason for bending the rule, as in" Ingalls). 

280. Jacksonville Shipyards, Inc. v. Estate of Verderane, 729 F.2d 726, 727 (11th Cir. 

1984). 



The same policy considerations that support the avoidance of unnecessary 

multiple judicial appeals also promote the repudiation of 

the waste of administrative resources. In many overworked agencies 

the backlog of decisions may lag behind that of the courts. Delay of 

justice, inconvenience to the parties, and disservice to the public interest 

similarly transpire regardless of the stage at which the disfunction 

occurs. The Newpark cases provide an excellent example of this principle. 

What is remarkable is that the workman's compensation claimant 

suffered his injury on April 22, 1975,281 and no party disputed his 

entitlement to recovery. The agency finally ruled as to the method of 

his recovery, but more than nine years later the award is still in doubt. 

If the agency misread the law and applied an improper formula to 

determine the award, an additional round of appellate litigation will 

most likely occur. 

Congress' primary purpose in enacting statutory provisions 

which bypass the district courts to vest jurisdiction in the courts of 

appeals to review agency decisions was to eliminate unnecessary delay 

by relying upon administrative fact finding. 282 This fundamental intent 

should not be neglected when the additional interests of judicial 

economy are considered. One device which the courts of appeals have 

resorted to, even when dismissing cases for lack of jurisdiction upon a 

finding of non-finality, is that of "advisory" affirmance or reversal. 283 

The court's "view on the merits may provide useful guidance in recurring 

situations,"284 even though its statements may constitute dicta. 

The use of this device to lessen the effects of potential delay in usual 

situations is not novel to the Fifth Circuit. 285 Irrespective of the mer- 

281. 698 F.2d at 745. 

282. See Foti v. INS, 375 U.S. 217 (1963) (discussing the congressional intent in reference 

to § \06 of the Immigration and Nationality Act). 

283. 15 C. WRIGHT, A. MILLER & E. COOPER, FEDERAL PRACTICE AND PROCEDURE 

§ 3905, at 189-90 (Supp. 1983). Federal courts are prohibited from issuing "advisory opinions" 

by U.S. CONST. art. III, § 2. See WRIGHT, supra note 276. § 12. If a court, however, 

decides the "case in controversy" by dismissing a case for lack of jurisdiction, additional gratuitous 

statements of the court in reference to the merits should not be considered any more 

improper than other discretionary judicial dicta unnecessary to resolve the matter before the 

court. 

284. Massachusetts v. Hale, 618 F.2d 143, 145 n.3 (1st Cir. 1980). 

285. See Arango v. Guzman Travel Advisors Corp., 621 F.2d 1371, 1378 (5th Cir. 1980) 

(although dismissing the action because of a lack of "an appealable final judgment," the court 

nonetheless, "in the interest of expediency," offered the district court "some guidance in its 

further handling of these issues"). Other circuits have adopted this approach when unusual 

circumstances indicated its propriety. See, e.g., In re I.M. Wells, Inc., 575 F.2d 329 (1st Cir. 

1978); Sykes v. Krieger, 551 F.2d 689 (6th Cir. 1976). 



its of the court's finality decision in Newpark II, the case presented an 

appropriate opportunity to apply the extraordinary device of "advisory 

dismissal." Instead, the court's decision provided the agency 

with no guidance as to a crucial legal issue and preserved the inherent 

seeds of future delay. 

Resort to section 1291 to resolve issues of finality has engendered 

no more certainty than the vague formulation of this concept under 

the AP A and the diverse "final order" agency statutes. "[T]he opinions 

of the Supreme Court on the subject of the final judgment rule do 

not contain clear guidance ... [a]1though there are some cases supporting 

a generous attitude to appealability, they have had limited 

influence and coexist uneasily with precedents urging a stricter interpretation 

of finality."286 The danger of the broad language of Newpark 

II, is that it purports to proffer a decisive rule to settle a question to 

which "[n]o verbal formula yet devised can ... provide an utterly 

reliable guide for the future."287 Furthermore, a bright-line rule is of 

questionable necessity. Familiar devices such as summary dismissal or 

denial of oral argument, provide the appellate courts with sufficient 

means to readily dispense with nonmeritorious claims, while preserving 

needed justiciable flexibility for unusual cases. 

Newpark II should not be given an overly broad construction. 

The opinion by its own terms relates only to questions of statutory 

finality, and applies only when the statute is deemed to limit judicial 

review to final agency decisions. This distinction has already been 

noted by one Fifth Circuit panel,288 and is likely to be strictly applied 

in future cases. Moreover, even though the decision failed to describe 

the appropriate circumstances, Newpark II did not expressly foreclose 

the possibility of granting an exception from the requirement of strict 

technical finality when warranted by extraordinary conditions. This 

would also suggest that the Fifth Circuit will still recognize the need 

to permit appeal when the affect of the administrative order is not 

practically remediable on final appeal and the decision is "too independent 

of the cause itself to require that appellate consideration be 

deferred until the whole case is adjudicated. "289 

286. Bachowski v. Usery, 545 F.2d 363, 370 (3d Cir. 1976). 

287. Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 170 (1974). 


289. Cohen v. Beneficial Indus. Loan Corp., 337 U.S. 541, 546 (1949). See, e.g., Exennium, 

Inc. v. Karbach Enters., 715 F.2d 1401 (9th Cir. 1983). 



IV. CONCLUSION 

The cases on deregulation, rulemaking, scope of review, and appealability 

of final agency orders are noteworthy although the Fifth 

Circuit largely applied established administrative law principles. The 

court indicated that deregulatory programs would be permitted to 

proceed without judicial interference. The court, however, demonstrated 

its willingness to independently review relevant statutes and 

legislative history to ensure that proposed deregulation was within the 

agency's statutory authority. Moreover, the Fifth Circuit required 

agencies to show due deference to proper administrative procedure by 

strictly construing the APA's notice and comment procedures. The 

circuit's deregulation decisions present a flexible approach that should 

serve as a model to other courts reviewing statutory economic allocation 

programs. 

In the environmental area, the court permitted the EPA to exercise 

broad discretion over activities that reduce ecologically sensitive 

wetland areas. The court also made an interesting adaptation of 

traditional administrative principles by deferring to the EPA's interpretation 

of another agency's rules. The Fifth Circuit's refusal to 

limit the authority of the EPA to implement its regulatory definition 

of wetlands conflicts with a decision of the Sixth Circuit issued during 

the survey period. Finally, the court overruled precedent and gave 

notice of its intention to strictly construe the final order rule. The 

Fifth Circuit, however, declined to develop meaningful guidelines in 

identifying "final" agency orders and offered a bright-line rule which 

may prove troublesome in the future.

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