Agency Settlement Reviewability

November 30, 2013

Administrative agency settlements have recently come under increased judicial scrutiny. Agency actions are presumptively reviewable under the Administrative Procedure Act (APA), which means they are generally subject to, among other requirements, “arbitrary and capricious” review under 5 U.S.C. § 706(2) and Motor Vehicles Manufacturing Ass’n of the United States v. State Farm Mutual Automobile Insurance Co. In contrast, the U.S. Supreme Court held in Heckler v. Chaney that agency no–action decisions are presumptively unreviewable because they are “committed to agency discretion by law” under 5 U.S.C. § 701(a)(2). Are agency settlements also presumptively unreviewable? In other words, are they more like actions or no–action decisions?

The Supreme Court has twice analyzed agency settlement decisions but has never reached the “committed to agency discretion by law” question. While the D.C. Circuit has ruled that such settlements are presumptively unreviewable, no other circuit has established binding precedent on the issue, and the Ninth Circuit has reviewed agency settlements in several discrete cases. This Note argues that, based on the criteria put forward in Heckler v. Chaney, agency settlements are not presumptively unreviewable. They are, in short, more like actions than no–action decisions.

December 2013

No. 3