that led to being placed in restraints or seclusion), and requiring such
orders to be specific as to date, time, reason, and method of restraint
or seclusion. Id. It is clear that the Secretary's goals were to ensure
that restraints and seclusion not be overused or improperly used, that
patients be frequently monitored while in restraints or seclusion, and
that patients be removed from them as soon as possible.
The one-hour requirement imposed in the final rule is a logical
outgrowth of the proposed rule, as it specifically addressed those
goals; an early face-to-face evaluation of a patient placed in restraints
or seclusion would ensure that such restraints or seclusion were being
properly used, that the patient's health and safety were not being
endangered, and that the restraints or seclusion continued to be
necessary. The commenters had fair notice that the Secretary wished to
address these concerns in her final rule, and their failure to anticipate
the exact contours of the Secretary's final rule does not compel the
conclusion that the final rule is not a logical outgrowth of the proposed
rule. "They cannot now complain because they misread the regulatory
waters, incorrectly anticipated how [the agency] would react to their
criticisms, and, consequently, submitted comments that left some things
unsaid." BASF Wyandotte Corp., 598 F.2d at 643.
C. Is the Interim Final Rule Arbitrary and Capricious?
In reviewing an agency's decision under the APA, the Court cannot set
aside that decision unless it is arbitrary, capricious, an abuse of
discretion, or otherwise contrary to law. 5 U.S.C. § 706 (2)(A). In
making this finding, the Court "must consider whether the decision was
based on a consideration of the relevant factors and whether there has
been a clear error of judgment." Citizens to Preserve Overton Park, 401
U.S. at 416, 91 S.Ct. 814. The Court may not substitute its judgment for
that of the agency, but must uphold a decision that is reasonable and
conforms to minimal standards of rationality. Additionally, a high degree
of deference is owed to agency actions based on an evaluation of complex
scientific data within the agency's technical expertise. Baltimore Gas &
Elec. Co., 462 U.S. at 103, 103 S.Ct. 2246.
Plaintiffs make two arguments for why the final rule adopted by the
Secretary is arbitrary and capricious. First, Plaintiffs argue that the
Secretary failed to justify the adoption of the rule, and that there is
no adequate basis in the record to support the decision. Plaintiffs
maintain that the Secretary's mere three-sentence justification of the
rule is insufficient, especially in light of the fact that none of the
studies, articles, or comments directly discussed or addressed the need
for a face-to-face assessment of a restrained or secluded patient within
a short period of time after that patient is placed in restraints or
Plaintiffs' perspective for evaluating the rule is too narrow. Both the
need and justification for it are to be found in the extensive commentary
regarding the need for rapid assessment and constant monitoring of the
patient's condition. The Secretary was concerned that improper use of
restraints and seclusion were jeopardizing patients' health and safety,
psychologically as well as physically, and wanted to provide clear
guidelines within which physicians must operate when ordering the use of
restraints or seclusion. The Secretary considered the various studies,
articles, and comments that discussed the harms that can befall patients
when restraints or seclusion are improperly initiated or continued in
coming to her decision to promulgate the final rule. Thus, it appears
that the Secretary considered all relevant factors in reaching her
decision, and her decision requiring maximum patient protection is a
Plaintiffs' second argument is that the evidence in the record does not
support the final rule, but instead leads to the
opposite conclusion. Plaintiffs argue that the one-hour rule interferes
with a physician's diagnosis or treatment of a patient, by requiring a
face-to-face assessment that may be unnecessary or, in some instances,
may even be counterproductive. For example, Plaintiffs argue that if the
patient is removed from restraints or seclusion in less than an hour, or
if the patient is asleep or extremely agitated, a face-to-face assessment
may not be in the patient's best interest, and only the patient's
physician should make that assessment. Plaintiffs also argue that
requiring a physician to make a face-to-face evaluation in every case
within one hour of the restraint order is unnecessary, and that a highly
trained psychiatric nurse could brief the physician who would then make
any necessary decisions regarding the patient's safety and health and
need for an in-person evaluation.
Plaintiffs may be correct that a somewhat more narrowly crafted rule
could have been formulated from the available evidence, but that is not
the standard by which this Court reviews agency decisions under the APA.
Where the agency decision turns on issues requiring the exercise of
technical or scientific judgment, it is essential for judges to "look at
the decision not as the chemist, biologist, or statistician that we are
qualified neither by training nor experience to be, but as a reviewing
court exercising our narrowly defined duty of holding agencies to certain
minimal standards of rationality." Ethyl Corp., 541 F.2d at 36. The
Secretary's decision certainly conforms to far more than "minimal"
standards of rationality, and is supported by the record.
D. Did Defendants Violate the Regulatory Flexibility Act?
The Regulatory Flexibility Act ("RFA"), 5 U.S.C. § 601 et seq.,
requires agencies to assess the negative impact of their rules on small
businesses. An agency must perform an initial regulatory flexibility
analysis ("IRFA") in its notice of proposed rulemaking, 5 U.S.C. § 603
(a), unless the head of the agency certifies that the rule will not "have
a significant economic impact on a substantial number of small entities."
5 U.S.C. § 605 (b). The agency must also perform a final regulatory
flexibility analysis ("FRFA") in its final rule, 5 U.S.C. § 604 (a),
unless it again makes the requisite certification. 5 U.S.C. § 605
(b). The adequacy of the FRFA is subject to APA review, 5 U.S.C. § 611
(a)(1) and (2). The agency needn't present its FRFA in any "particular
mode of presentation," as long as the FRFA "compiles a meaningful, easily
understood analysis that covers each requisite component dictated by the
statute and makes the end product-whatever form it reasonably may
take-readily available to the public." Associated Fisheries of Maine,
Inc. v. Daley, 127 F.3d 104, 115 (1st Cir. 1997). The requisite
components of a FRFA, as set forth in 5 U.S.C. § 604 (a), are:
(1) a succinct statement of the need for, and
objectives of, the rule;
(2) a summary of the significant issues raised by the
public comments in response to the initial regulatory
flexibility analysis, a summary of the assessment of
the agency of such issues, and a statement of any
changes made in the proposed rule as a result of such
(3) a description of and an estimate of the number of
small entities to which the rule will apply or an
explanation of why no such estimate is available;
(4) a description of the projected reporting,
recordkeeping and other compliance requirements of the
rule, including an estimate of the classes of small
entities which will be subject to the requirement and
the type of professional skills necessary for
preparation of the report or record; and
(5) a description of the steps the agency has taken to
minimize the significant economic impact on small
entities consistent with the stated objectives of
applicable statutes, including a statement of the
factual, policy, and legal reasons for
selecting the alternative adopted in the final rule
and why each one of the other significant alternatives
to the rule considered by the agency which affect the
impact on small entities was rejected.
In the NPRM, the Secretary made a certification of no significant
economic impact, and thus did not perform an IRFA. 62 F.R. at 66,753.
Plaintiffs do not challenge this certification, but argue that because
the final rule was so dramatically different from the proposed rule, the
Secretary was required to perform an adequate FRFA or certify that the
rule would have no significant impact. Plaintiffs argue that the
Secretary did neither, but instead made the brief, conclusory, and
erroneous statement that she did not "anticipate . . . a substantial
economic impact on most Medicare-participating hospitals." 64 Fed.Reg. at
36,085. Plaintiffs specifically argue that the Secretary completely
failed to address the second, fourth, and fifth components of FRFAs, as
contained in 5 U.S.C. § 604 (a) (quoted above).
The second component of a FRFA requires the agency to summarize the
significant issues raised by the public comments in response to the
IRFA, and to summarize the agency's assessment of those issues.
5 U.S.C. § 604 (a)(2). Plaintiffs argue that Defendant could not have
complied with this component, since she never presented the one-hour rule
in the NPRM for public comment. Defendant correctly points out that since
an IRFA was not needed because she certified that there would be no
significant impact to small businesses (a certification which Plaintiffs
do not dispute), there were no IRFA-related issues that the Secretary
could have discussed in her FRFA.
The fourth component of a FRFA requires the agency to describe what
reporting, recordkeeping, or other compliance requirements the rule would
likely produce, and to estimate the classes of small entities which will
be subject to the requirement and the type of professional skills
necessary for preparation of those compliance requirements.
5 U.S.C. § 604 (a)(4). Plaintiffs argue that the Secretary made no
effort whatsoever to comply with this component, and argue that there is
nothing in the final rule discussing reporting or recordkeeping
requirements, to ensure the rule is complied with. Defendant is again
correct in noting that she has complied with this component: as stated in
the FRFA, the only new recordkeeping requirement imposed by the rule is a
telephone call to HCFA regional offices to report deaths from restraint
or seclusion. 64 Fed.Reg. at 36,086.*fn6
The fifth component of a FRFA requires the agency to describe the steps
the agency took to minimize the significant economic impact on small
businesses, and to include a "statement of the factual, policy, and legal
reasons for selecting the alternative adopted in the final rule and why
each one of the other significant alternatives to the rule considered by
the agency which affect the impact on small entities was rejected."
5 U.S.C. § 604 (a)(5).
As to this requirement, the Secretary's analysis is severely lacking,
and the Court cannot find that she has made a "reasonable, good-faith
effort to canvass major options and weigh their probable effects."
Associated Fisheries of Maine, 127 F.3d at 116. The Secretary did not
obtain data or analyze available data on the impact of the final rule on
small entities, nor did she properly assess the impact the final rule
would have on small entities. Plaintiffs point out that in promulgating a
restraint and seclusion rule that would apply to nursing homes, the
Secretary estimated the economic impact of that rule would be $35
million,*fn7 but that she performed no
such estimate or analysis with respect to this rule. The Secretary also
failed to consider other significant alternatives to the rule before
settling on the one-hour rule.*fn8 There is no discussion of what, if
any, steps the agency took to minimize the significant economic impact on
small businesses. There is no "statement of the factual, policy, and
legal reasons for selecting the alternative adopted in the final rule."
There is no discussion of what other significant alternatives which
affect the impact on small entities were considered (if any in fact were
considered), and why those alternatives were rejected. Defendant protests
that her FRFA need not exhibit mathematical exactitude, and need take no
special form of presentation, as long as each component is covered
somewhere in the final rule. The Secretary is not being held to this high
a standard. The fact of the matter is that she has totally failed to
comply with section (5) of § 604(a) of the FRFA.
E. Should A Permanent Injunction Be Granted?
Plaintiffs ask the Court to permanently enjoin enforcement of the
one-hour rule because of Defendant's violation of the RFA. The
well-settled requirements for a permanent injunction are adopted from the
requirements for a preliminary injunction, as stated in Wisconsin Gas
Co. v. FERC, 758 F.2d 669, 673-74 (D.C.Cir. 1985) and a Washington
Metropolitan Area Transit Com'n v. Holiday Tours, Inc., 559 F.2d 841, 843
(D.C.Cir. 1977):(1) success on the merits; (2) irreparable harm absent
the injunction; (3) the balance of hardship tips in favor of the
plaintiff if an injunction is not granted; and (4) the public interest
lies in granting an injunction. See also National Mining Ass'n v. US.
Army Corps of Eng'rs, 145 F.3d 1399, 1409-10 (D.C.Cir. 1998) (applying
preliminary injunction standard to request for permanent injunction).
It should be noted that although the statute gives the Court the option
of deferring enforcement of the Rule against small entities until
completion of a compliant FRFA, the statute also permits continued
enforcement of the Rule if the Court finds that continued enforcement is
in the public interest. 5 U.S.C. § 611 (a)(4). Consequently, an
injunction should issue only if Plaintiffs can show irreparable harm, and
that the public interest would best be served by issuance of an
First, Plaintiffs have failed to show what, if any, irreparable harm
would befall them should the Court refuse to enter an injunction.
Plaintiffs argue that they will suffer irreparable harm from the
enforcement of the rule, because it will allegedly cost them $100 million
to come into compliance with this new requirement. Plaintiffs, however,
offer no concrete, reliable evidence to support their contentions of
Second, and more importantly, Defendant has clearly established that
the public interest would best be served by continued
enforcement of the Rule. The Rule was promulgated to protect patients
against the unnecessary and excessive use of restraints or seclusion.
Delaying enforcement would create the likelihood that injuries or death
could result if the restraints or seclusion continued to be used
inappropriately, because restraints and seclusion are dangerous
interventions. Given the severe psychological and physical injuries that
can and do result from inappropriate use of restraints and seclusion, and
the fact that many of these injuries go unreported, the public interest
lies in continued enforcement of the Rule.
Consequently, the case will be remanded to the agency for completion of
a compliant FRFA, without enjoining continued enforcement of the rule
while the agency completes a new FRFA.
For the reasons discussed above, Plaintiffs' Motion for Summary
Judgment is granted in part and denied in part, Plaintiffs' Application
for a Preliminary Injunction is denied, and Defendant's Motion for
Summary Judgment is granted in part and denied in part. An Order will
issue with this Opinion.