Yesterday the Supreme Court decided FCC v. Fox Television Stations, Inc., No. 07-582, upholding, 5:4, the FCC's new rule that unrepeated indecent expletives may be penalized:
This case is entertaining I suppose for the facts if you care about what Cher and Bono say, but for appellate lawyers, the interesting aspect lies in the discussion among the majority (Scalia), concurrence (Kennedy) and dissent (Breyer) about when and how an agency can change its mind.
The SJC cites Chevron from time to time and I think adheres to some general fundamental principles about administrative decision-making articulated in Supreme Court decisions. One of the principles recognized by the Supreme Court for many years (Motor Vehicle Mfrs' Assn' of United States, Inc. v. State Farm Mut. Automobile Ins. Co., 463 U.S. 29, 43 (1983)) is that if an agency is going to change its mind it must recognize that it is doing so, and articulate why.
That principle remains after this decision; the question was how heavy the agency's burden is in articulating why it changed its mind.
The majority opinion says that the new reason doesn't have to be any better than the reason the agency articulated for the previous rule. Justice Kennedy in his concurrence says, yes, but that doesn't mean the agency can just dream up with a new set of factfindings without any basis — "an agency's decision to change course may be arbitrary and capricious if the agency ignores or countermands its earlier factual findings without reasoned explanation for doing so. An agency cannot simply disregard contrary or inconvenient factual determinations that it made in the past…."
In this instance, Justice Kennedy noted that the FCC's change of position didn't involve new factfinding, but a different interpretation of a previous Supreme Court decision. While the articulation of why the agency changed its reading was not a model of clarity, in his view, they were sufficient to sustain the new policy under the arbitrary or capricious standard.
Four Justices (Breyer, Ginsburg, Souter and Stevens) found that the FCC's explaination why it changed its policy was inadequate. Justice Breyer's point was that when an agency has already articulated a policy, there needs to be some explanation of why it was changing that policy, so an explanation that might hold water on a clean slate might not if the agency already has a policy.
Given Justice Kennedy's concurrence and the fact that only 4 Justices joined in that part of Justice Scalia's majority opinion responding to the dissents, to me, this means that this is a pretty fact-specific case. Basically in this specific instance, given the context, the majority found the agency's explanation sufficient. If any general proposition can be gleaned, it's that the basic principle of Motor Vehicle is still good law. Everyone on the Court agrees that when an agency decision is inconsistent with previous decisions, the agency must, at a minimum, recognize and acknowledge that fact, and give some rational explanation to support its new view.