Thus, says the Secretary, § 1315(a), like the statute in Webster, grants unreviewable discretion to her to approve waivers for demonstration projects she deems likely to assist in promoting the AFDC goals; moreover, the breadth of an approved project is to be ascertained by the Secretary based upon what she believes to be necessary to carry out the project. "The statute does not include standards directing how the Secretary is to exercise her discretion apart from requiring her to exercise her considered judgment as to whether the proposed demonstration project will likely further the purposes of the AFDC program." Fed. Def. Br. at 13 (footnote omitted).
However, the Secretary's reliance on Webster is misplaced. Her "linguistic" argument appears predicated largely on the words "deem" and "determine" in the text and legislative history of § 1315(a). However, "the mere fact that a statute contains discretionary language does not make agency action unreviewable." Beno v. Shalala, 30 F.3d 1057, 1066 (9th Cir. 1994) (citing Esmeralda v. Dep't of Energy, 925 F.2d 1216, 1218-19 (9th Cir. 1991)). In addition, the Court finds that Webster's finding of agency unreviewability must be limited to the narrow category of agency decisions that implicate concerns of national security, an area of executive action 'in which courts have long been hesitant to intrude.'" Lincoln, U.S. at , 113 S. Ct. at 2031, (quoting Franklin v. Massachusetts, 505 U.S. , , 112 S. Ct. 2767, 2785, 120 L. Ed. 2d 636 (1992) (Stevens, J., concurring)). Indeed, as Justice Stevens explained in Franklin, "the operations of a secret intelligence agency may provide an exception to the norm of reviewability" and that "the Court has limited the exception to judicial review . . . to cases involving national security, such as Webster.. . ." Franklin, 505 U.S. at , 112 S. Ct. at 2784-85 (Stevens, J., concurring). See also Ward v. Skinner, 943 F.2d 157, 160-61 (1st Cir.), cert. denied, 503 U.S. 959, 112 S. Ct. 1558, 118 L. Ed. 2d 207 (1992). Consequently, the insulation from review accorded the CIA director who took action "in the interest of the United States" simply cannot be grafted onto the Secretary of HHS with respect to her approval of a welfare demonstration project.
Furthermore, as plaintiffs point out, § 1315(a) furnishes a judicially manageable standard by which the Secretary's waiver can be evaluated. That statute does not afford the Secretary unfettered discretion. Rather, "it allows waivers only for the period and extent necessary to implement experimental projects which are 'likely to assist in promoting the objectives' of the AFDC program," which, as noted supra, are set forth in some detail at 42 U.S.C. § 601. Beno, 30 F.3d at 1067. Thus, as the Ninth Circuit has found, the limitations of §§ 1315(a) and 601 provide meaningful standards which a court may employ to evaluate the decision of the Secretary. Id.
Finally, I note that § 1315(a) does not trigger the type of concerns normally present when courts decline to review agency action. This is not a case where an agency's employee termination implicates national security concerns ( Webster v. Doe, supra), nor is it a case where an agency has determined how budget funds from a lump-sum appropriation with little Congressional guidance (Lincoln v. Vigil, supra), nor is it a situation where the Food and Drug Administration has decided not to commence enforcement proceedings against a state for using particular drugs in executions ( Heckler v. Chaney, supra). Rather, in this case the Court is confronted with an AFDC program circumscribed by comprehensive regulations with no intimation from Congress that the Secretary's discretion is immune from judicial scrutiny. "The granting of an exemption from statutory requirements is not an area of agency discretion traditionally unreviewable . . . [and] it would be somewhat surprising were Congress to grant unreviewable discretion to the Secretary to exempt States from such an all-encompassing series of statutory requirements." Beno v. Shalala, 853 F. Supp. 1195, 1205 (E.D.Cal. 1993), rev'd on other grounds, 30 F.3d 1057. Indeed, while the Secretary contends that § 1315(a) waivers are one of the rare instances where agency action has been committed to agency discretion by law, this flies in the face of each court which has previously addressed the issue. See, e.g., Beno v. Shalala, 30 F.3d 1057 (9th Cir. 1994); Aguayo v. Richardson, 473 F.2d 1090 (2d Cir.), cert. denied, 414 U.S. 1146, 94 S. Ct. 900, 39 L. Ed. 2d 101 (1974); Crane v. Mathews, 417 F. Supp. 532, 539 (N.D.Ga. 1976); California Welfare Rights Org. v. Richardson, 348 F. Supp. 491, 497 (N.D.Cal. 1972). This Court, too, must reject her premise.
2. Arbitrary and Capricious
Having found that the Secretary's actions in granting the § 1315(a) waivers are amenable to judicial review, this Court must next focus on plaintiffs' substantive claim that those waivers violated the APA. Section 706(2)(a) of the APA states that a court, when reviewing agency action, may overturn that action if it is found to be "arbitrary or capricious." It has been determined that this standard requires the reviewing court to "consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment." Overton Park, 401 U.S. at 416. An agency's decision may be arbitrary and capricious only where:
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.