DOT Establishes Demonstration Assistance Program for Indigent Participants in Agency Proceedings

The Department of Transportation (DOT) has become the first federal agency to establish procedures, in the absence of specific statutory authority, for providing financial assistance to indigent participants in administrative proceedings.¹ On January 13, DOT announced the beginning of a one-year demonstration funding program² for participants in selected National Highway Traffic Safety Administration (NHTSA) rulemaking and adjudicatory proceedings under the National Traffic and Motor Vehicle Safety Act of 1966.³ The purpose of this demonstration program is to aid DOT in determining at a later date whether assistance should be provided to indigent participants in all DOT proceedings. To this end, the agency at the same time issued an advance notice of proposed rulemaking inviting public comment by April 20, 1977 on possible establishment of a permanent, department-wide assistance program.

In DOT's view, assisting certain indigent participants will provide added assurance that a full range of views and all relevant information are presented to the agency in its consideration of regulatory actions. The agency noted in its advance notice that consumer, environmental, and citizens groups have often had difficulty bearing the cost of participation in federal regulatory proceedings, while better financed groups representing the regulated industry are able to participate vigorously and effectively, thereby attaining a disproportionate influence in governmental decisionmaking. Removing the financial barriers to effective participation was thus put forth as a logical way both to reduce or eliminate this imbalance and to improve the quality of administrative decision-making by facilitating fuller presentation of all points of view.

DOT concluded that it has existing authority to fund intervenors on the basis of a series of recent Comptroller General opinions which address the issue of administrative assistance awards in the absence of explicit statutory authorization.⁴ Decision B-92288, issued February 19, 1976, in response to a query from the Nuclear Regulatory Commission (NRC), held that such awards would be proper where the agency "determines that it cannot make the required determination" without extending financial assistance to indigent parties "whose participation is essential to dispose of the matter before it." The decision then reformulated this standard in somewhat looser terms, stating that assistance would be appropriate if the agency believes the indigent party's participation is "necessary to represent adequately opposing points of view on a matter."

The ambiguity created by these seemingly divergent formulations of the applicable standard caused considerable confusion. NRC, looking to the more restrictive version as the guiding principle, concluded that its authority to fund indigent intervenors was so narrow that establishment of an assistance program was unwarranted.⁵ NRC characterized the possibility of assistance awards under the requirements prescribed by the February 19 decision as illusory.

In response to a request from the Food and Drug Administration for clarification on this point, the Comptroller General issued Decision B-139703 on December 3, 1976.⁶ According to this more recent opinion, the requirement that an agency find participation by the indigent party to be "essential" does not mean the agency must determine that the issue or matter cannot be decided at all without such participation. It would be sufficient, the decision held, for the agency to determine that a particular expenditure for participation "can reasonably be expected to contribute substantially to a full and fair determination of the issues before it."

The December 3 decision went on to discuss the additional issue of the criteria for determining indigency. The opinion expressly disapproved financial assistance to a party

which has the financial resources to participate but does not, for whatever reason, wish to use its resources for this pourpose.

The Comptroller General also rejected basing assistance on a party's having an economic interest in the proceeding that is small in comparison with the costs of effective participation, and declared impermissible the awarding of funds prior to commencement of the proceeding.

Putting these standards together, DOT set four criteria for determining whether a particular party is eligible for financial assistance.⁷ First, the applicant must represent [7 ELR 10044] an interest whose representation contributes or can reasonably be expected to contribute substantially to a full and fair determination of the issues involved in the proceeding. Second, the applicant's participation must be reasonably necessary to represent that interest adequately. Third, the applicant must competently represent the interest it espouses. And fourth, the applicant must not have available, or be able to obtain in other ways, sufficient resources to participate effectively in the proceeding.

Assistance when given may include attorneys' and expert witness fees, the costs of clerical services and evidence collection and presentation. Awards are to be calculated according to the prevailing market rate for the kind and quality of service provided.

The Environmental Protection Agency (EPA) also recently moved on the intervenor assistance issue by promulgating an advance notice of proposed rulemaking⁸ on the subject. EPA's action is especially significant, given the large number of administrative proceedings which the agency conducts across the wide subject matter range of its environmental responsibilities. Before examining its legal authority in this area, EPA articulated the general policy consideration that wider representation of interests without a direct financial stake in the outcome would contribute to better agency decisions.

EPA was apparently unaware of the Comptroller General's December 3 decision. Nevertheless, it pointed to the second, less restrictive formulation in the February 19 opinion and concluded that the relevant standard for assistance is not whether the agency will be unable to make any decision at all without the applicant's participation, but whether in its judgment funding is "necessary" or "essential" to make the best decision possible under the circumstances.

While EPA's reasoning was essentially correct on this point, the agency reached the wrong result in construing the indigency requirement. The agency stated that simply having some resources which might conceivably be devoted to the proceeding should not make a potential participant ineligible for funding. In EPA's view, applicants should be allowed to make a showing of what activity they would undertake without financial assistance, and funding should be potentially available for any further participation above that level. Unfortunately, this position is at odds with the Comptroller General's December 3 opinion, and thus apparently reflects an excessively expansive view of the agency's implicit authority in this area.

Although the DOT and EPA pronouncements are the most recent administrative events concerning the assistance issue, several other agencies such as the Food and Drug Administration⁹ and the Consumer Product Safety Commission are actively considering the prospect of establishing assistance programs. NRC may feel compelled to reconsider its decision not to fund intervenors now that the strict standard upon which it was based has been modified. The Second Circuit's recent remand in Greene County Planning Board v. Federal Power Commission¹⁰ has also put the question of funding indigent intervenors squarely before the Federal Power Commission.¹¹

While a number of federal agencies are now wrestling with the administrative assistance issue, the differences in interpretation of the relevant legal standards which have already arisen give substantial support to the Comptroller General's recommendation that Congress enact legislation delineating the boundaries of agency authority in this area and cataloging the circumstances under which it may be exercised. The two principal bills speaking to these points are H.R. 66¹² and S. 270.¹³ The latter measure, introduced by Sen. Kennedy (D.-Mass.) and based on last session's S. 2715,¹⁴ was acknowledged by DOT in establishing its demonstration assistance program.

The two measures (H.R. 66 and S. 270) differ in a number of minor respects, but on balance both articulate the same broad standards for assistance awards. They both also make possible judicial awards of attorneys' fees in civil litigation seeking review of federal agency action, however, a provision that may make passage more problematic.¹⁵ Senator Kennedy's subcommittee on Administrative Practices of the Senate Judiciary Committee began hearings on S. 270 during the first week in February, and the Senate Commerce Committee released at about the same time a compilation¹⁶ of agency comments on granting assistance without additional statutory authority.

The year to come thus promises to bring further major administrative, and perhaps legislative, developments in the area of providing financial assistance to indigent participants in agency proceedings. Funding public interest intervenors appears to be an idea whose time is a hand.

1. See Comment, Agency Funding of Indigent Public Interest Intervenors in Administrative Proceedings, 6 ELR 10052 (Mar. 1976).

2. 42 Fed. Reg. 2864 (Jan. 13, 1977). On January 24, the agency took the first step in implementing its new program by inviting applications for financial assistance for participation in a rulemaking which will set fuel economy standards for 1981-84 model passenger cars. 42 Fed. Reg. 5178 (Jan. 27, 1977).

3. 15 U.S.C. § 1381 et seq.

4. Decision B-92288 (Feb. 19, 1976); Decision B-139703 (Sept. 22, 1976); Decision B-139703 (Dec. 3, 1976). Although these opinions were specifically addressed to other agencies, the Comptroller General's office has stated that they are equally applicable to NHTSA. Letter from R. F. Keller, Deputy Comptroller General to Hon. John E. Moss, Chairman, Oversight and Investigations Subcommittee, House Commerce Committee (B-180224, May 10, 1976). The letter appears at 41 Fed. Reg. 35860 (Aug. 25, 1976).

5. Nuclear Regulatory Commission, Financial Assistance to Participants in Commission Proceedings — Statement of Considerations Terminating Rulemaking, Nov. 12, 1976. See also Comment, NRC Declines to Fund Indigent Participants in Agency Proceedings, 7 ELR 10010 (Jan. 1977).

6. Copies of this document are available frod ELR (8 pp. $1.00, ELR Order No. A-1008).

7. 42 Fed. Reg. 2867 (Jan. 13, 1977).

8. 42 Fed. Reg. 1492 (Jan. 7, 1977).

9. 41 Fed. Reg. 35855 (Aug. 25, 1976).

10. __ F.2d __, 7 ELR 20101 (2d Cir. Dec. 8, 1976).

11. A dissent from the remand order in Greene County raised some noteworthy objections to the threshold assumption that the Comptroller General's opinions on the assistance question carry the same weight as Supreme Court rulings.

12. 95th Cong., 1st Sess. (1977).

13. 95th Cong., 1st Sess. (1977).

14. 94th Cong., 2d Sess. (1976).

15. The Justice Department has indicated support for the provision allowing financial assistance to indigent participants in agency proceedings on the theory that it will lessen the number of after the fact suits challenging administrative actions. However, the Department opposes permitting discretionary judicial attorneys' fees awards, believing that it would encourage additional litigation questioning the legality of agency decisions. See Comment, supra note 1, at 10055.

16. Senate Commerce Committee, Agency Comments on the Payment of Reasonable Fees for Public Participation in Agency Proceedings, 95th Cong., 1st Sess. (Jan. 24, 1977).