acceptance of the amount of downward adjustment did not necessarily imply their acceptance of the accuracy of the audit methodology and the substantive permissibility of all claims considered by the audit. As such, defendants' action in denying audit exception treatment to the subject upward adjustment was not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.
The court also concludes that the decision of the DAB was not "in excess of statutory jurisdiction, authority, or limitations, or short of statutory right." 5 U.S.C. § 706(2)(C). Reviewing agency interpretations of statutes and regulations to insure that they are not in excess of statutory jurisdiction involves deference to the administrative determinations, unless they are plainly erroneous or inconsistent with the relevant statutes. Rydeen v. Quigg, 748 F. Supp. 900, 904 (D.D.C. 1990) (citing Udall v. Tallman, 380 U.S. 1, 16 (1965)), aff'd, 937 F.2d 623 (Fed. Cir. 1991), cert. denied, 112 S. Ct. 974 (1992). As discussed above, the court does not find the DAB's decision to be either plainly erroneous or inconsistent with the relevant regulation.
Finally, the court concludes that the DAB did not fail to observe any procedure required by law. 5 U.S.C. § 706(2)(D). Plaintiffs have not identified any specific procedures required by law that defendants have failed to observe, and the court finds no procedural irregularities in the DAB's determination which would warrant setting aside the agency's action pursuant to 5 U.S.C. § 706(2)(D). Therefore, plaintiffs' motion for summary judgment based on defendants' violation of 5 U.S.C. § 706(2)(A), (C), or (D) is denied.
Alternatively, plaintiffs seek an order compelling defendants to provide affidavits explaining why the HCFA denied audit exception treatment for the subject upward adjustment. See Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 420 (1971) (court may require some explanation in order to determine if agency acted within scope of its authority if bare record before the court does not disclose the factors considered by the agency or the agency's construction of the evidence); 1902 Atlantic Ltd. v. Hudson, 574 F. Supp. 1381, 1397 (E.D. Va. 1983) ("where an agency's failure to explain its rationale frustrates judicial review, a court's scrutiny of explanatory affidavits is permissible"). Specifically, plaintiffs complain that the HCFA letter of disallowance gave no specific rationale for the rejection of the proposed upward adjustment. It was not until the case reached the DAB that a rationale for the decision was set forth, and plaintiffs argue that the HCFA should be required to explain its own decision.
The court finds no basis for granting plaintiffs' request. The principles of law recited by plaintiffs are inapplicable to the case at bar because the specific decision on appeal to this court is that of the DAB, not the HCFA. A careful reading of the DAB's decision leads this court to conclude that the grounds upon which the agency acted are clearly disclosed and sustained by the record. Therefore, plaintiffs' request is denied.
In summary, the DAB's decision to deny audit exception treatment to the proposed upward adjustment does not create a material issue of fact, in that no evidence has been presented to suggest that the decision was arbitrary and capricious, in excess of statutory jurisdiction, or that the DAB failed to observe procedure required by law. Giving due deference to the DAB's decision, defendants are thus entitled to summary judgment as a matter of law and their motion is hereby granted. Consequently, plaintiffs' motion for summary judgment and alternative request for explanatory affidavits from the HCFA are hereby denied. The clerk of the court is directed to enter judgment in favor of defendants and dismiss plaintiffs' complaint in its entirety.
It is So Ordered.
Dated October 6, 1992
Syracuse, New York
HOWARD G. MUNSON
SENIOR UNITED STATES DISTRICT JUDGE