United States Court of Appeals, District of Columbia Circuit
BEFORE: Pillard [*] , Circuit Judge; Edwards and
Silberman, Senior Circuit Judges
ORDERED, on the court's own motion, that the opinion
issued June 13, 2017, be amended by appending to the opinion
the "Clarification and Amendment of the Majority
Opinion, " attached to this order.
Clerk is directed to issue the amended opinion.
and Amendment of the Majority Opinion
the opinions in this case were issued, the Wright Petitioners
filed a petition for rehearing en banc, challenging the panel
majority's decision on three points relating to the
FCC's Order on interstate and intrastate prison
phone rates. On the three points in issue, the majority
opinion reaches the following judgments:
• We hold that the Order's proposed caps on
intrastate rates exceed the FCC's statutory
authority under the 1996 Act. We therefore vacate this
• We further hold that the use of industry-averaged cost
data as proposed in the Order is arbitrary and
capricious because it lacks justification in the record and
is not supported by reasoned decisionmaking. We therefore
vacate this provision.
• We find that the Order's proposed
wholesale exclusion of site commission payments from the
FCC's cost calculus is devoid of reasoned decisionmaking
and thus arbitrary and capricious. This provision cannot
stand as presently proposed in the Order under
review; we therefore vacate this provision and remand for
further proceedings on the matter.
Global Tel*Link v. FCC, 859 F.3d 39, 45 (D.C. Cir.
petition for rehearing en banc, the Wright Petitioners
complain that, "[a]lthough this case involves an
ambiguous statute administered by the FCC, the panel did
precisely what Chevron disclaimed: it 'impose[d]
its own construction on the statute' rather than defer to
the FCC's detailed analysis of an ambiguous statute. . .
. The panel opinion creates a dangerous loophole to evade
judicial review when agencies are unable or unwilling to
justify changed positions." Br. for Wright Petitioners
at 6, 8 (quoting Chevron, U.S.A., Inc. v. Natural
Resources Defense Council, Inc., 467 U.S. 837, 843
(1984)). These claims are meritless.
there be any confusion over the majority's opinion going
forward, there are two points that warrant clarification.
First, the majority opinion carefully analyzes the terms of
the FCC's Order and the agency's
justifications in support of the Order. The majority
does not second-guess the agency. Rather, the majority found
the FCC's justifications for the proposed caps on
intrastate rates "manifestly contrary to the statute,
" Chevron, 467 U.S. at 844, and clearly
unworthy of deference.
as noted above, after reviewing the entire record in this
case, the majority opinion concludes that "the
Order's proposed caps on intrastate
rates exceed the FCC's statutory authority under the 1996
Act." It goes without saying that if an agency action
exceeds its statutory authority, the agency is entitled to no
deference under Chevron. See, e.g., Sullivan v.
Zebley, 493 U.S. 521, 541 (1990); Goldstein v.
SEC, 451 F.3d 873, 880-81 (D.C. Cir. 2006). As the
concurring opinion notes, "the statute's structure
and context demonstrates that the agency's interpretation
would fail at Chevron's second step; it is an
unreasonable (impermissible) interpretation of section
276." If this point was lost in the original opinion
issued by the majority, we make it clear now. We need not and
do not decide whether we were required to follow
Chevron Step Two even though the agency declined to
defend its position before the court. The important point
here is that we have carefully analyzed the contested
provisions of the FCC's Order and found that
they cannot survive review under either the "best
reading" of the statute standard, Miller v.
Clinton, 687 F.3d 1332, 1342 (D.C. Cir. 2012) (quoting
Landmark Legal Found, v. LRS, 267 F.3d 1132, 1136
(D.C. Cir. 2001)), or pursuant to Chevron Step Two.
is no Chevron question with respect to the
majority's decision on the use of industry-averaged cost
data as proposed in the Order. The majority found
that provision arbitrary and capricious because it lacks
justification in the record and is not supported by reasoned
decisionmaking. The same is true with respect to the majority
decision on the Order's proposed wholesale
exclusion of site commission payments from the FCC's cost
calculus. We found that provision devoid of reasoned
decisionmaking and ...