The opinion of the court was delivered by: William M. Skretny Chief Judge United States District Court
On March 31, 2009, Plaintiffs commenced this action challenging the legality of a gambling casino operated by the Seneca Nation of Indians ("SNI") in the City of Buffalo on land it acquired in 2005 (the "Buffalo Parcel").
Currently before the Court is Plaintiffs' Motion for an Order Compelling Production of Administrative Record Documents and Authorizing Discovery to Supplement the Administrative Record. (Docket No. 37.) The motion is fully briefed, and the Court has determined that oral argument is not necessary. For the reasons discussed below, Plaintiffs' Motion is granted in part and denied in part.
The facts and legal principles underlying this action have been thoroughly discussed in this and the prior cases, and only facts pertinent to this discovery dispute are set forth below.
This is the third lawsuit commenced by largely the same plaintiffs, who seek to bar the SNI from operating a gambling facility in Buffalo, New York. The Complaint sets forth three claims for relief. Only two give rise to this discovery dispute, and both allege violations of the Administrative Procedure Act ("APA").
In their second and third claims for relief, Plaintiffs allege that the Indian Gaming Regulatory Act's ("IGRA's") prohibition against gambling on "after-acquired" lands applies to the Buffalo Parcel, and renders the SNI's ongoing gambling operation there unlawful. Specifically, they contend that new regulations promulgated by the Secretary of the Interior in May 2008 regarding the scope of the "after-acquired" land prohibition and the "settlement of a land claim" exception to that prohibition are illegal, arbitrary, and capricious because the DOI did not adhere to the APA's publication requirements and because the regulations contradict the clear intent of Congress. In both claims, Plaintiffs go on to assert that the National Indian Gaming Commission's ("NIGC") approval of Class III gambling on the Buffalo Parcel, based on the new regulations, also is illegal. They seek an order declaring the challenged portions of the regulations and the NIGC's January 20, 2009 ordinance approval invalid.
On May 11, 2010, the NIGC filed its administrative record containing the documents then-Chairman Hogen relied on in approving the SNI's second amended gaming ordinance. (Docket Nos. 24, 25.) The DOI filed its administrative record on August 27, 2010, which includes documents underlying a DOI M-Opinion (M-37023) and a letter, both issued by Solicitor David L. Bernhardt on January 18, 2009. (Docket Nos. 31, 32.) The M-Opinion and letter were issued after the NIGC, on November 14, 2008, requested a description of the policy reasons for the DOI's changed interpretation of the IGRA's after-acquired land prohibition. (Docket No. 31-2 at 34.)
By letter dated October 7, 2010, Plaintiffs' counsel asked Defendants' counsel to provide documents they believe were improperly omitted from the administrative record or should otherwise be disclosed. (Docket No. 37-16.) These included: (1) the administrative record for the DOI's revised regulations, issued on May 20, 2008, insofar as it relates to the applicability of IGRA's prohibition against gambling on after-acquired land to trust land and not restricted fee land; (2) documents Plaintiffs contend are not within the deliberative process privilege; specifically, documents post-dating May 20, 2008 (the date the new regulations were published) that were redacted or withheld and communications between the agencies (DOI and NIGC) and SNI representatives; and (3) documents relating to Edith Blackwell's role in developing the policy statement the NIGC had requested. This latter request was based on documents in the DOI's administrative record showing that Blackwell, who serves as Associate Solicitor for the Division of Indian Affairs and who had been recused from matters involving SNI gaming (Docket No. 31-2 at 113), had participated in preparing the Solicitor's M-Opinion.
In response, Defendants filed documents responsive to Plaintiffs' first request, and stated that all communications from the agencies to the SNI had been disclosed. But, Defendants objected to the remaining requests on the grounds that all assertions of deliberative process privilege were proper, and that Edith Blackwell's participation in the development of Solicitor Opinion M-37023 was appropriate. (Docket No. 37-17.)
Eight months after Defendants responded to Plaintiffs' requests (id.), and more than six months after Defendants filed their supplemental administrative record (Docket No. 33), Plaintiffs brought the instant discovery motion. As this Court noted in its prior decision, Plaintiffs' challenge to the legality of government rule-making and decision-making is an administrative record case. (Docket No. 21 at 28.) But Plaintiffs contend that disclosure beyond what Defendants have provided is warranted here because: (1) the government has asserted unfounded claims of privilege and redacted highly relevant information, and (2) Edith Blackwell's serious conflict of interest infected the integrity of the administrative process. The motion is now fully briefed and ready for disposition.
A. The Relevant Legal Principles
1. APA Review of Agency Action
The APA provides that a reviewing court must "set aside agency action" that is "arbitrary, capricious, an abuse of discretion or otherwise not in accordance with the law." 5 U.S.C. § 706(2)(a). Here, Plaintiffs challenge the DOI's regulations on all fronts, claiming that the agency's actions were arbitrary and capricious and that the resulting regulations are contrary to Congress's intent.
Courts may deem an agency decision arbitrary and capricious if: the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.
Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S. Ct. 2856, 77 L. Ed. 2d 443 (1983). Proof of subjective bad faith by agency decision-makers, depriving a plaintiff of fair and honest consideration of the matter, also generally constitutes arbitrary and capricious action. Tummino v. Torti, 603 F. Supp. 2d 519, 542 (E.D.N.Y. 2009) (citations omitted).
Where the agency decision at issue involves the interpretation of a federal statute the agency administers, the court's review is guided by the principles announced in Chevron, U.S.A., Inc. v. Natural Res. Defense Council, Inc., 467 U.S. 837, 842-43, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984). Chevron confirmed that "[t]he judiciary is the final authority on issues of statutory construction and must reject administrative constructions which are contrary to clear congressional intent." Id. at 843 n.9.
"Generally, a court reviewing an agency decision is confined to the administrative record compiled by that agency when it made the decision." Nat'l Audubon Soc'y v. Hoffman, 132 F.3d 7, 14 (2d Cir. 1997) (citing Florida Power & Light Co. v. Lorion, 470 U.S. 729, 743-44, 105 S. Ct. 1598, 84 L. Ed. 2d 643 (1985)). The rationale for this "record rule" is that, when considering a determination or rule that an administrative agency is authorized by law to make, the reviewing court should review only the materials that were before the agency when it made its ...