So held a panel of the D.C. Circuit on Friday. Well, to be precise, the panel held that this intriguing determination of the U.S. Fish and Wildlife Service was entitled to deference, at least under the relaxed standards of informal adjudications, when “it is common for the record to be spare.” No. 20-5161, Phoenix Herpetological Soc’y, Inc. v. U.S. Fish & Wildlife Serv. (June 4, 2021)).
The appellant—still hoping to breed the iguana relatives—protested that the ruling was “unsupported by substantial evidence and thus violates the Administrative Procedure Act.”
Not so, said the D.C. Circuit:
[T]he text of the APA applies “substantial evidence” review only to formal proceedings, not informal adjudications. Compare Camp v. Pitts, 411 U.S. 138, 142 (1973) (“The appropriate standard of review” in informal proceedings is “arbitrary, capricious [or] an abuse of discretion . . . as specified in 5 U.S.C. § 706(2)(A).”) (internal quotations omitted), with Allentown Mack Sales & Serv., Inc. v. N.L.R.B., 522 U.S. 359, 377 (1998) (applying “‘substantial evidence’ factual review” in formal adjudications pursuant to § 706(2)(E)).
To be sure, the arbitrary and capricious standard does not substantively differ from the substantial evidence test when “performing [the] function of assuring factual support.” Ass’n of Data Processing Serv. Orgs., Inc. v. Bd. of Governors of Fed. Rsrv. Sys., 745 F.2d 677, 683 (D.C. Cir. 1984). But the standards do differ as to the allowable origins of factual support and, as a consequence, how those facts are assessed. See id. at 684-85. It is therefore permissible—as with the … determination here—for common sense and predictive judgements to be attributed to the expertise of an agency in an informal proceeding, even if not explicitly backed by information in the record. See FCC v. Fox Television Stations, Inc., 556 U.S. 502, 521 (2009). But formal adjudications (which more typically involve historical facts) require substantial evidence to be found based on the closed record before the agency. See Data Processing, 745 F.2d at 684. This subtle difference, as we have previously said, “should not be underestimated.” Id.
So, to sum up: If an agency proceeding is informal, that allows a court to count as factual support common-sense judgments not explicitly backed by the record. And one example of such a common-sense judgment is that you should not inbreed your iguanas.
Now you know.