Wiley Gill v. DOJ , 913 F.3d 1179 ( 2019 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
WILEY GILL; JAMES PRIGOFF; No. 17-16107
TARIQ RAZAK; KHALED IBRAHIM;
AARON CONKLIN, D.C. No.
Plaintiffs-Appellants, 3:14-cv-03120-RS
v.
OPINION
UNITED STATES DEPARTMENT OF
JUSTICE; MATTHEW WHITAKER,
Acting Attorney General;
PROGRAM MANAGER -
INFORMATION SHARING
ENVIRONMENT; THE OFFICE OF
THE PROGRAM MANAGER OF THE
INFORMATION SHARING
ENVIRONMENT,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of California
Richard Seeborg, District Judge, Presiding
Argued and Submitted October 18, 2018
San Francisco, California
Filed January 29, 2019
2 GILL V. USDOJ
Before: MILAN D. SMITH, JR. and ANDREW D.
HURWITZ, Circuit Judges, and RICHARD K. EATON, *
Judge.
Opinion by Judge Milan D. Smith, Jr.
SUMMARY **
Administrative Procedure Act
The panel affirmed the district court’s summary
judgment in favor of federal defendants in an action under
the Administrative Procedure Act (“APA”) challenging the
Functional Standard regarding the sharing of terrorism-
related information.
In the wake of 9/11, the federal government sought to
standardize the sharing of terrorism-related information
through the adoption of a Functional Standard. Plaintiffs are
United States citizens who are the subjects of a Suspicious
Activity Report (SAR) or Information Sharing Environment
(ISE)-SAR, none of whom have been charged with a crime.
The panel held that the Functional Standard constituted
final agency action because it had legal and practical effects.
*
Richard K. Eaton, Judge of the United States Court of International
Trade, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
GILL V. USDOJ 3
The panel held that the Functional Standard was exempt
from the APA’s notice and comment requirement because
the significant discretion retained by agencies and their
analysts in determining whether to disseminate information
demonstrated that the Functional Standard was not a
legislative rule. Legislative rules have the force of law, and
are subject to notice and comment under the APA before
becoming effective.
Plaintiffs argued that the Functional Standard was
arbitrary and capricious under the APA because it was
inconsistent with the “reasonable suspicion” standard for
disseminating criminal intelligence information in 28 C.F.R.
Part 23. The panel held that the Department of Justice’s
decision to exclude SARs from Part 23 was not contrary to
the record, and was consistent with the stated objectives of
the Nationwide Suspicious Activity Reporting Initiative.
The panel concluded that the Functional Standard was not
arbitrary and capricious under the APA.
COUNSEL
Linda Lye (argued) and Julia Harumi, American Civil
Liberties Union Foundation of Northern California Inc., San
Francisco, California; Michael James Ableson and Stephen
Scotch-Marmo, Morgan, Lewis & Bockius LLP, New York,
New York; Christina Sinha, Asian Americans Advancing
Justice—Asian Law Caucus, San Francisco, California;
Hugh Handeyside, American Civil Liberties Union
Foundation, New York, New York; Mitra Ebadolahi,
American Civil Liberties Union Foundation of San Diego
and Imperial Counties, San Diego, California; Jeffrey S.
Raskin, Morgan Lewis & Bockius LLP, San Francisco,
California; Peter Bibring, American Civil Liberties Union
4 GILL V. USDOJ
Foundation of Southern California, Los Angeles, California;
for Plaintiffs-Appellants.
Daniel Aguilar (argued) and H. Thomas Byron III, Appellate
Staff; Alex G. Tse, Acting United States Attorney; Civil
Division, United States Department of Justice, Washington,
D.C.; for Defendants-Appellees.
OPINION
M. SMITH, Circuit Judge:
In the wake of 9/11, law enforcement agencies at the
federal, state, and local levels found that they were unable to
communicate effectively about potential threats to our
national security. In response, the federal government
sought to standardize the sharing of terrorism-related
information through the adoption of a “Functional
Standard.” Aaron Conklin, Wiley Gill, Khaled Ibrahim,
James Prigoff, and Tariq Razak (collectively, Plaintiffs)
challenged the Functional Standard under the
Administrative Procedure Act (APA). 1 The district court
granted summary judgment in favor of the federal
defendants.
We affirm. Although the Functional Standard
constitutes final agency action, it was not required to
undergo the APA notice and comment procedure, nor was it
arbitrary and capricious.
1
Plaintiffs raised only an APA challenge and do not contend that
the Functional Standard is unconstitutional or has been applied to them
in an unconstitutional manner.
GILL V. USDOJ 5
FACTUAL AND PROCEDURAL BACKGROUND
I. Factual Background
In October 2007, President George W. Bush issued a
National Strategy for Information Sharing concerning
terrorism-related information. The Strategy created fusion
centers that would ensure Suspicious Activity Reports
(SARs) were “disseminated to and evaluated by appropriate
government authorities,” and identify requirements to
support a “unified process for reporting, tracking, and
accessing” SARs. The nationwide effort to standardize this
information sharing was called the Nationwide Suspicious
Activity Reporting Initiative (NSI).
To “govern[] how terrorism information is acquired,
accessed, shared, and used,” the Program Manager for the
Information Sharing Environment (ISE) has issued three
Functional Standards since the inception of the NSI, each
superseding the previous one: Functional Standard 1.0
(issued January 2008), Functional Standard 1.5 (issued May
2009), and Functional Standard 1.5.5 (issued February
2015). 2 The current Functional Standard 1.5.5 focuses
“exclusively on terrorism-related information.”
2
The Program Manager sought input from various civil liberties
groups throughout the process of refining the Functional Standards.
After promulgating Standard 1.0, the Program Manager hosted a
conference with advocates from the American Civil Liberties Union
(ACLU) and other privacy and civil liberties groups. The ACLU noted
its concerns with the overbroad behavioral categories and the Standard’s
definition of a suspicious activity, suggesting a “reasonably indicative”
standard. The ACLU also recommended that certain information should
not be reported absent reasonable suspicion of criminality.
6 GILL V. USDOJ
The Functional Standard defines suspicious activity as
“[o]bserved behavior reasonably indicative of pre-
operational planning associated with terrorism or other
criminal activity.” After receiving a report of suspicious
activity, an officer creates a SAR. The SAR then undergoes
a two-part evaluation process. An analyst determines
whether the SAR meets certain behavioral criteria and has a
potential nexus to terrorism. 3 If the analyst concludes that it
does, the SAR becomes an ISE-SAR, and is uploaded to the
eGuardian repository, where it is available to all NSI
participants. The ISE-SAR is also input into the Federal
Bureau of Investigation (FBI) classified system and sent to
the Department of Homeland Security Office of Intelligence
Analysis.
Plaintiffs are United States citizens who are the subjects
of a SAR or ISE-SAR, none of whom has been charged with
a crime. The ISE-SAR on Gill notes his potential access to
a “flight simulator type of game,” his conversion to Islam,
and his “pious demeanor.” The FBI visited Gill’s sister and
questioned her about Gill’s religious beliefs. Another SAR
describes Razak as a male of believed Middle Eastern
descent who “meticulously stud[ied] the entry/exit points”
After the ISE issued Functional Standard 1.5, the Program Manager
re-engaged with the ACLU to obtain their feedback on a draft privacy
and civil liberties report. The ACLU again recommended that
information meet the reasonably indicative standard before
dissemination. In May 2013, the ISE held another conference with civil
liberties groups, including the ACLU, to discuss Functional Standard
1.5.5.
3
The behavioral categories include both defined criminal activity,
such as “Breach/Attempted Intrusion,” “Misrepresentation,” and
“Cyberattack,” along with other activity, such as “Photography,”
“Acquisition of Expertise,” and “Weapons Collection/Discovery.”
GILL V. USDOJ 7
of a train station. After the SAR was uploaded to eGuardian,
the FBI questioned Razak. The SAR concerning Ibrahim
notes his attempt to purchase “a large amount of computers.”
Two reports concerning Ibrahim were uploaded to
eGuardian.
Private guards prevented Prigoff, a professional
photographer, from taking photographs of a work of public
art near Boston, an incident resulting in the creation of
multiple SARs. The FBI then visited Prigoff’s home and
questioned a neighbor about him. In northern California,
private security stopped Conklin, an amateur photographer,
from photographing oil refineries, and during the subsequent
questioning, the sheriff’s deputies told him he would be
placed on an “NSA watch list.”
II. Procedural Background
In 2014, Plaintiffs sued the Attorney General, the
Department of Justice, and the ISE Program Manager
(collectively, the Department). The complaint asserted two
APA challenges to the Functional Standard, contending that:
(1) the promulgation of the Functional Standard without
notice and comment was unlawful; and (2) the Standard was
arbitrary and capricious because it did not comply with the
“reasonable suspicion” standard in 28 C.F.R. Part 23 for the
dissemination of criminal intelligence information. 4
The Department moved to dismiss, arguing that
Plaintiffs lacked standing, and that the Functional Standard
4
At the onset of this lawsuit, only Functional Standard 1.5 was at
issue. Version 1.5.5 was not promulgated until February 2015. At the
summary judgment stage, Plaintiffs challenged both versions.
8 GILL V. USDOJ
did not constitute final agency action pursuant to the APA.
The district court denied the Department’s motion.
The parties later cross-moved for summary judgment.
The district court granted summary judgment for the
Department, finding that: (1) the Functional Standard is a
policy guidance statement exempt from the notice and
comment requirement; and (2) the Functional Standard is not
arbitrary and capricious because it addresses data issues
outside the scope of 28 C.F.R. Part 23. Plaintiffs timely
appealed.
JURISDICTION AND STANDARD OF REVIEW
We have jurisdiction pursuant to 28 U.S.C. § 1291. We
review de novo a district court’s grant of summary judgment,
and we may affirm on any ground supported by the record.
White v. City of Sparks, 500 F.3d 953, 955 (9th Cir. 2007).
ANALYSIS
I. Final Agency Action
The APA allows judicial review only of final agency
actions. 5 U.S.C. § 704; see Ukiah Valley Med. Ctr. v. FTC,
911 F.2d 261, 266 (9th Cir. 1990). Although it denied the
Department’s motion to dismiss for lack of finality, the
district court observed in its summary judgment order that
there was “good reason to treat the Functional Standard as
not constituting a final agency action.” We review de novo
whether agency action is final. Havasupai Tribe v.
Provencio, 906 F.3d 1155, 1161–62 (9th Cir. 2018).
For agency action to be final, it must “mark the
consummation of the agency’s decisionmaking process” and
“must be one by which rights or obligations have been
GILL V. USDOJ 9
determined, or from which legal consequences will flow.”
Bennett v. Spear, 520 U.S. 154, 177–78 (1997) (internal
quotation marks omitted). “We focus on the practical and
legal effects of the agency action” and interpret finality in a
“pragmatic and flexible manner.” Or. Nat. Desert Ass’n v.
U.S. Forest Serv., 465 F.3d 977, 982 (9th Cir. 2006); see also
Indus. Customers of Nw. Utils. v. Bonneville Power Admin.,
408 F.3d 638, 646 (9th Cir. 2005) (considering any “direct
and immediate effect on the day-to-day operations of the
party seeking review,” and if “immediate compliance with
the [action’s] terms is expected”). Regardless of an agency’s
characterization, we consider the actual effects of the action
to determine whether it is final. Columbia Riverkeeper v.
U.S. Coast Guard, 761 F.3d 1084, 1094–95 (9th Cir. 2014).
The Department does not dispute that the first finality
requirement—consummation of the decisionmaking
process—is met. Instead, it concentrates on the second
Bennett prong, contending the Functional Standard “merely
provides procedural guidelines for [agencies’] voluntary
participation” and does not impose binding obligations.
Plaintiffs counter that the Functional Standard has legal
force because the Department can revoke an agency’s
eGuardian membership for violating the terms of the
eGuardian User Agreement, which requires compliance with
the Standard. Plaintiffs also assert that compliance with the
Functional Standard is a practical requirement of the NSI,
and that this “condition on participation” renders the
Functional Standard final. We agree; the Functional
Standard constitutes final agency action because it has legal
and practical effects.
The Functional Standard imposes “direct and
appreciable legal consequences.” Bennett, 520 U.S. at 178.
In Oregon Natural Desert, we held the Forest Service’s
10 GILL V. USDOJ
issuance of annual operating instructions (AOIs) to
permittees grazing livestock on national forest land
constituted final agency action under the APA. 465 F.3d at
979. The AOIs outlined restrictions on the permit holder’s
right to graze. Id. at 980, 986. If a permittee did not comply
with the directives in the AOI, the Forest Service could issue
a notice of non-compliance and impose administrative
sanctions, such as suspension or cancellation of the permit,
against the permit holder. Id. at 987–88. We held that the
AOIs had legal consequences because the Forest Service
could take enforcement actions against a non-complying
permittee, imposing “substantial and intricate legal
obligations.” Id. at 988, 990.
The Functional Standard is not materially
distinguishable. To be sure, participation in the NSI remains
within the agencies’ discretion. And, absent that
participation, the Functional Standard does not obligate
analysts or agencies to send SAR information or penalize
them for sending non-compliant SARs. But, as the
Department conceded below, once an agency decides to
participate, the eGuardian User Agreement permits the
Department to revoke agency membership for violating
various policies, including the Functional Standard. Like the
suspension of permits in Oregon Natural Desert, 465 F.3d
at 988, eGuardian membership revocation is a legal
consequence.
The Functional Standard is also final agency action
because of its practical effects. In Havasupai, we held a
Forest Service Mineral Report was a “practical requirement
to the continued operation” of a mine—and therefore final
agency action—because the parties “understood that mine
operations would not resume until” the Mineral Report’s
determination of valid existing rights “was completed.”
GILL V. USDOJ 11
906 F.3d at 1163. An agency action can be final even if its
legal or practical effects are contingent on a future event.
See Bennett, 520 U.S. at 170 (noting an agency could
“technically” disregard the issued opinion, but to do so
would subject it or its employees to “substantial civil and
criminal penalties, including imprisonment”); City of
Fremont v. F.E.R.C., 336 F.3d 910, 914 (9th Cir. 2003)
(concluding agency orders that attach legal consequences to
future proceedings satisfy the finality analysis).
Similarly, because the eGuardian User Agreement
permits the Department to revoke participating agencies’
access for failure to comply with the Functional Standard,
once an agency joined the NSI there was the immediate
understanding that its analysts would conform to the
Functional Standard when submitting SARs. Thus, we hold
the Functional Standard constitutes final agency action.
II. Notice and Comment Procedure
The APA requires a notice and comment procedure for
agency “rule making.” 5 5 U.S.C. § 553. However,
“interpretive rules, general statements of policy, or rules of
agency organization, procedure, or practice” are exempt
from the notice and comment requirement. 5 U.S.C.
§ 553(b)(3)(A). The district court found the Functional
Standard was “fundamentally a policy guidance statement”
and therefore not subject to the notice and comment
requirement. We review de novo the district court’s
determination of the scope of the APA’s notice and comment
5
The APA defines “rule making” as “agency process for
formulating, amending, or repealing a rule.” 5 U.S.C. § 551(5).
12 GILL V. USDOJ
requirement. Mada-Luna v. Fitzpatrick, 813 F.2d 1006,
1011 (9th Cir. 1987).
Legislative rules have the “force of law,” and are subject
to notice and comment under the APA before becoming
effective Hemp Indus. Ass’n v. Drug Enf’t Admin., 333 F.3d
1082, 1087–88 (9th Cir. 2003). Policy guidance statements,
on the other hand, “do not have the force and effect of law
and are not accorded that weight in the adjudicatory
process,” see Shalala v. Guernsey Mem’l Hosp., 514 U.S.
87, 99 (1995), and need not undergo notice and comment.
“The critical factor to determine whether a directive
announcing a new policy constitutes a legislative rule or a
general statement of policy ‘is the extent to which the
challenged [directive] leaves the agency, or its implementing
official, free to exercise discretion to follow, or not to follow,
the [announced] policy in an individual case.’” Colwell v.
Dep’t of Health & Human Servs., 558 F.3d 1112, 1124 (9th
Cir. 2009) (second and third alterations in original) (quoting
Mada-Luna, 813 F.2d at 1013). That a policy “provid[es]
direction—where once there was none”—does not
automatically transform it into a legislative rule. Prof’ls &
Patients for Customized Care v. Shalala, 56 F.3d 592, 600–
01 (5th Cir. 1995).
Plaintiffs contend the Functional Standard is a legislative
rule because it creates a “binding norm” by establishing
sixteen exclusive categories the agencies must use in
defining suspicious activity. The Department responds that
the Functional Standard is not a legislative rule because it
provides only standardized guidance that does not have any
legal effect. Although we “need not accept the agency
characterization at face value,” Hemp Indus., 333 F.3d at
1087, we agree with the Department that the Functional
GILL V. USDOJ 13
Standard is not a legislative rule because it allows analysts
to exercise discretion.
SARs undergo a two-part evaluation before being
included in eGuardian. First, an FBI or fusion center analyst
“reviews” the SAR information against the sixteen pre-
operational behaviors identified in the Functional Standard,
“keeping in mind . . . the importance of context, facts, and
circumstances.” If the SAR information reflects one or more
of the pre-operational behaviors, then, based on the “context,
facts, and circumstances,” the analyst uses “professional
judgment” to determine whether the information has a
potential nexus to terrorism. Only if—in the analyst’s
judgment—a potential nexus to terrorism exists is the SAR
disseminated as an ISE-SAR.
While the Functional Standard employs a combination
of mandatory and discretionary language, it does not compel
analysts or agencies to disseminate SAR information, nor
does it require analysts to create an ISE-SAR when the
information reflects a certain number of behavioral
categories. Rather, if the SAR contains at least one of the
categorized activities, the analyst must still ascertain
whether it has a potential nexus to terrorism. No single
category of behavior or aggregation of categories is
determinative.
The Functional Standard is thus similar to the Food &
Drug Administration’s policy guide at issue in Professionals
and Patients for Customized Care. The FDA promulgated a
policy utilizing nine factors to help the agency determine
whether to initiate an enforcement action against a pharmacy
engaged in drug manufacturing. 56 F.3d at 593. In holding
that the policy did not constitute a legislative rule, the Fifth
Circuit noted that although the nine factors “assist[ed] the
FDA in identifying pharmacies engaged in the manufacture
14 GILL V. USDOJ
of drugs,” the “ultimate decision whether to bring an
enforcement action” remained with the agency. Id. at 601.
Likewise, the Functional Standard aids agencies in
determining whether an individual is engaged in suspicious
activity, but the final decision to disseminate an SAR rests
in the analyst’s discretion.
This significant discretion retained by agencies and their
analysts in determining whether to disseminate information
compels our decision that the Functional Standard is not a
legislative rule. Therefore, the Functional Standard was
exempt from the notice and comment requirement.
III. Arbitrary and Capricious
Agency action violates the APA if it is arbitrary or
capricious. 5 U.S.C. § 706(2)(A). Plaintiffs argue that the
Functional Standard is arbitrary and capricious because it is
inconsistent with the “reasonable suspicion” standard for
disseminating criminal intelligence information in 28 C.F.R.
Part 23 (Part 23). On summary judgment, the district court
rejected that argument. We review the district court’s
decision de novo. Nat’l Ass’n of Home Builders v. Norton,
340 F.3d 835, 840–41 (9th Cir. 2003).
Pursuant to Part 23, criminal intelligence systems can
retain criminal intelligence information “only if there is
reasonable suspicion that the individual is involved in
criminal conduct or activity.” 28 C.F.R. § 23.20(a)
(emphasis added). Part 23 defines criminal intelligence
information, in pertinent part, as “data which has been
evaluated to determine that it: (i) is relevant to the
identification of and the criminal activity engaged in by an
individual who or organization which is reasonably
suspected of involvement in criminal activity.” Id.
§ 23.3(b)(3). The Functional Standard, in contrast, defines
GILL V. USDOJ 15
suspicious activity as “[o]bserved behavior reasonably
indicative of pre-operational planning associated with
terrorism or other criminal activity.” (emphasis added).
Consequently, some SARs—including those related to
Plaintiffs—do not reach the reasonable suspicion standard
that Part 23 requires for criminal intelligence.
Plaintiffs’ arbitrary and capricious challenge is twofold.
They contend that: (1) the Department initially failed to
consider the applicability of Part 23; and (2) the rationale
eventually offered for why Part 23 does not apply contradicts
the record.
Several principles guide our analysis. An agency must
“examine the relevant data and articulate a satisfactory
explanation for its action including a ‘rational connection
between the facts found and the choice made.’” Motor
Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto.
Ins. Co., 463 U.S. 29, 43 (1983) (quoting Burlington Truck
Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)). A
rule is arbitrary and capricious if the agency has “entirely
failed to consider an important aspect of the problem, [or]
offered an explanation for its decision that runs counter to
the evidence before the agency.” Id. Our review of an
agency decision “is based on the administrative record and
the basis for the agency’s decision must come from the
record.” Norton, 340 F.3d at 841. That review is “narrow;”
we may not “substitute [our] judgment for that of the
agency.” FCC v. Fox Television Stations, Inc., 556 U.S. 502,
513 (2009). And, we will “uphold a decision of less than
ideal clarity if the agency’s path may reasonably be
discerned.” Motor Vehicle, 463 U.S. at 43.
First, Plaintiffs challenge the ISE’s July 2010
explanation concerning Functional Standard 1.5’s use of the
“reasonably indicative” standard as a post-hoc
16 GILL V. USDOJ
rationalization. But, Functional Standard 1.5.5, promulgated
in February 2015, superseded version 1.5. The Executive
Summary for version 1.5.5 provided a detailed explanation
for why SAR information need not comply with Part 23 and
the reasonable suspicion standard. Thus, Plaintiffs’
argument concerning the Department’s 2010 explanation for
Functional Standard 1.5 is moot.
Second, Plaintiffs argue that the ISE’s 2015 explanation
is inconsistent with Functional Standard 1.5.5. The 2015
explanation states that SAR information “represents
information about suspicious behavior” and “has a potential
criminal nexus.” In contrast, it asserts that criminal
intelligence “focuses on the investigative stage once a tip or
lead has been received and on identifying the specific
criminal subject(s), the criminal activity in which they are
engaged, and the evaluation of facts to determine that the
reasonable suspicion standard has been met.” Succinctly,
according to the 2015 explanation, criminal intelligence is “a
product of investigation.”
The Department asserts that its interpretation of Part 23
is entitled to Auer deference, which requires an agency’s
interpretation of its own ambiguous regulation to control
unless “plainly erroneous or inconsistent with the
regulation.” Turtle Island Restoration Network v. U.S. Dep’t
of Commerce, 878 F.3d 725, 733 (9th Cir. 2017) (quoting
Auer v. Robbins, 519 U.S. 452, 461 (1997)). “But Auer
deference is warranted only when the language of the
regulation is ambiguous.” Christensen v. Harris Cty.,
529 U.S. 576, 588 (2000). If the language of a “regulation
is unambiguous, we apply the terms as written.”
Christopher v. SmithKline Beecham Corp., 635 F.3d 383,
392 (9th Cir. 2011). The Department identifies no ambiguity
in Part 23, and we find none. Thus, we independently
GILL V. USDOJ 17
determine whether the ISE’s decision to exclude the
Functional Standard from Part 23’s scope is consistent with
the regulation.
Plaintiffs focus on the one sentence in the Department’s
explanation of Functional Standard 1.5.5, which states that
Part 23 “[c]riminal intelligence information is a product of
investigation.” They argue that SARs are also criminal
intelligence subject to the reasonable suspicion standard of
Part 23 because an official conducts “initial investigation or
fact gathering” before creating a SAR. That narrow focus
distorts the ISE’s explanation.
As originally conceived in October 2007, SARs involved
“tips and leads” information, that is, an “uncorroborated
report or information that alleges or indicates some form of
possible criminal activity.” Tips and leads required only
“mere suspicion,” a lower standard than the reasonable
suspicion required for criminal intelligence data. In
response to concerns regarding Functional Standard 1.0,
version 1.5 implemented a somewhat stricter standard—
“reasonably indicative”—albeit one still less demanding
than the reasonable suspicion standard. Given the lower
reasonably indicative standard utilized by the Functional
Standard, some SARs do not rise to the level of criminal
intelligence. This lower threshold underscores the purpose
of ISE-SARs disseminated in accordance with Functional
Standard 1.5.5: to determine whether to engage in “follow-
up information gathering” about potential terrorist activity,
not necessarily to determine whether a crime has occurred.
The distinction between criminal intelligence and SAR
information is admittedly not always precise. The ISE
Program Manager early on recognized the potential for
SARs to contain criminal intelligence subject to Part 23.
Thus, the ISE’s Initial Privacy and Civil Liberties Analysis
18 GILL V. USDOJ
of September 2008 stated, “agencies should clearly articulate
when 28 C.F.R. Part 23 should be applied . . . . ISE-SAR
information . . . may be subject to the requirements of 28
C.F.R. Part 23.” Further, an investigating officer “gathers
additional facts through personal observations, interviews,
and other investigative activities before creating a SAR,
suggesting that the “product of investigation” phrase is not
dispositive of whether SAR information comes within the
ambit of Part 23.
“We will . . . uphold a decision of less than ideal clarity
if the agency’s path may reasonably be discerned.” Motor
Vehicle, 463 U.S. at 43. From the outset, the ISE has
consistently pronounced that an ISE-SAR need not meet the
reasonable suspicion standard in order to expand the base of
information gathered. The 2015 explanation, published with
Functional Standard 1.5.5, also makes clear that the
government intentionally seeks more than reports showing a
reasonable suspicion that terrorism-related crimes have
occurred. Considering the entirety of the 2015 rationale and
the historical explanations before us, we find the
Department’s decision to exclude SARs from Part 23 is not
contrary to the record, and is consistent with the stated
objectives of the NSI. Accordingly, we hold that the
Functional Standard was not arbitrary and capricious.
CONCLUSION
The Functional Standard endeavors to standardize
terrorism-related information sharing nationwide. Although
the Functional Standard constituted final agency action, it
was not a legislative rule because it requires significant
analyst discretion. It therefore was exempt from the notice
and comment requirement. And, the Standard was not
arbitrary and capricious because the ISE’s 2015 explanation
distinguishing Part 23 information and SARs is consistent
GILL V. USDOJ 19
with the ISE’s objectives. We affirm the judgment of the
district court.
AFFIRMED.