author: WILKINS, Circuit Judge:

text:
    EMERA MAINE, formerly known as Bangor Hydro-Electric Company, et al., Petitioners v. FEDERAL ENERGY REGULATORY COMMISSION, Respondent LS Power Transmission, LLC, et al., Intervenors
    No. 15-1139 Consolidated with 15-1141
    United States Court of Appeals, District of Columbia Circuit.
    Argued January 13, 2017
    Decided April 18, 2017

      Sean A. Atkins, Washington, DC, argued the cause for petitioners Emera Maine, et al. With him on the briefs were Kenneth G. Jaffe, Michael E. Ward, Washington, DC, Jeffrey M. Jakubiak, New York, NY, Stephen M. Spina, David R. Poe, David B. Raskin, Washington, DC, Karen Krug O’Neill, and S. Mark Sciarrotta, Rutland, VT. Jason J. Fleischer, Charles G. Cole, Washington, DC, Mary E. Grover, Boston, MA, and Phyllis E. Lemell, Berlin, CT, entered appearances.
    Jason Marshall argued the cause for petitioners New England States Committee on Electricity, Inc., et al. With him on the joint briefs were John Michael Adrag-na, Phyllis G. Kimmel, Jeffrey K. Janicke, F. Anne Ross, Edward McNamara, Clare E. Kindall and Robert D. Snook, Assistant Attorneys General, Office of the Attorney General for the State of Connecticut, Maura Healy, Attorney General, Office of the Attorney General for the Commonwealth of Massachusetts, Jeffrey M. Leupold, Senior Counsel, and Leo J. Wold, Assistant Attorney General, Office of the Attorney General for the State of Rhode Island.
    Carol J. Banta, Senior Attorney, Federal Energy Regulatory Commission, argued the cause for respondent. With her on the brief was Robert H. Solomon, Solicitor.
    Paul Alessio Mezzina, Washington, DC, argued the cause for intervenors supporting respondent in Case No. 15-1139. With him on the brief were Ashley C. Parrish, David G. Tewksbury, Gunnar Birgisson, and Michael R. Engleman, Washington, DC.
    Before: BROWN and WILKINS, Circuit Judges, and EDWARDS, Senior Circuit Judge.
   WILKINS, Circuit Judge:

We consider two petitions for review challenging determinations by the Federal Energy Regulatory Commission (“FERC” or “the Commission”) following compliance Slings by the regional transmission organization for New England’s electric grid. See ISO New England Inc., Order on Compliance Filings, 143 F.E.R.C. ¶ 61,150 (May 17, 2013) (Initial Order), on reh’g, 150 F.E.R.C. ¶ 61,209 (Oct. 16, 2014) (Rehearing Order).

For the reasons given below, both petitions for review are denied.

I.

In 2011, the Commission issued Order No. 1000, ordering utilities to remove certain “right of first refusal” provisions from their existing tariffs and agreements. See Transmission Planning and Cost Allocation by Transmission Owning and Operating Public Utilities, F.E.R.C. Stats. & Regs. ¶ 31,323, 76 Fed. Reg. 49,842 (2011) [hereinafter Order No. 1000]. These provisions granted incumbent utilities “the option to construct any new transmission facilities in their particular service areas, even if the proposal for new construction came from a third party.” S.C. Pub. Serv. Auth. v. FERC (South Carolina), 762 F.3d 41, 72 (D.C. Cir. 2014) (per curiam). Order No. 1000’s prohibition of such provisions was premised on the rationale that rights of first réfusal deterred new entrants “from proposing much-needed infrastructure reforms, discouraging competition within the industry, and potentially driving up the cost of rates charged for wholesale electricity service.” Okla. Gas & Elec. Co. v. FERC (Oklahoma Gas), 827 F.3d 75, 76 (D.C. Cir. 2016).

Order No. 1000 was upheld by this Court in South Carolina, 762 F.3d at 71-81. The petitioners in that case raised a litany of challenges to the Order, including that FERC was prevented from eliminating rights of first refusal because those provisions were entitled to the Mobile-Sierra presumption. Id. at 81. The Mobile-Sierra presumption requires the Commission to “presume a contract rate for wholesale energy is just and reasonable” and prohibits the Commission from setting aside that rate unless . the Commission finds that the rate “seriously harm[s] the public interest.” Id.; see generally United Gas Pipe Line Co. v. Mobile Gas Serv. Corp. (Mobile), 350 U.S. 332, 76 S.Ct. 373, 100 L.Ed. 373 (1956); Fed. Power Comm’n v. Sierra Pac. Power Co. (Sierra), 350 U.S. 348, 76 S.Ct. 368, 100 L.Ed. 388 (1956). It is premised on the idea that arms-length bargaining generally results in contract rates that are just and reasonable. See NRG Power Mktg., LLC v. Me. Pub. Utils. Comm’n, 558 U.S. 165, 175 n.4, 130 S.Ct. 693, 175 L.Ed.2d 642 (2010).

In Order No. 1000, “[t]he Commission had reserved judgment on whether to apply this presumption to the rights of first refusal until evaluating the individual utilities’ compliance filings, and therefore so did we.” Oklahoma Gas, 827 F.3d at 76 (citing South Carolina, 762 F.3d at 81).

Oklahoma Gas presented the situation South Carolina anticipated and we considered a petition for review of a FERC compliance filing determination in which FERC refused to apply the Mobile-Sierra presumption to a right of first refusal provision. We held that the Mobile-Sierra presumption was inapplicable because the presumption does not extend to “terms arrived at by horizontal competitors with a common interest to exclude any future competition.” Id. at 80.

The case before us now presents a slight wrinkle on the question we answered in Oklahoma Gas, along with a separate challenge to an application of another provision of Order No. 1000.

In response to Order No. 1000, a compliance filing was made by ISO New England Inc. (“ISO-NE”) — the FERC-approved regional transmission organization whose tariff governs transmission service and wholesale electric markets in New England — and its participating transmission owners (the “Transmission Owners”). After FERC issued the Initial Order and Rehearing Order containing FERC’s compliance determinations, two petitions for review were filed with this Court. •

The first petition for review was filed by the Transmission Owners, who object to FERC’s determination that the right of first refusal must be removed from the Transmission Operating Agreement among ISO-NE and the Transmission Owners. What makes this case different from Oklahoma Gas is that, here, FERC purported to apply the Mobile-Sierra presumption as a matter of discretion, even though FERC continued to maintain that it was not required to apply the presumption as a matter of law (a position we vindicated in Oklahoma Gas). As a result, we must consider the new question of whether FERC has overcome the Mobile-Sierra presumption, which presents a higher hurdle than the more deferential default standard for evaluating FERC actions.

The second petition for review was filed by the New England States Committee on Energy, Inc. (“NESCOE”) and governmental entities from five of the six states it represents in regional electricity matters: Connecticut, Massachusetts, New Hampshire, Rhode Island, and Vermont (collectively, with NESCOE, the “State Petitioners”). The State Petitioners argue that, in the ISO-NE compliance order, the Commission went beyond Order No. 1000 and impermissibly altered the balance of responsibility and power as between state governments and ISO-NE.

II.

We consider first the petition for review filed by the Transmission Owners.

In its orders, the Commission determined that the Mobile-Sierra presumption did not apply as a matter of law. See Initial Order ¶¶ 160-72. Nevertheless, as a matter of discretion, the Commission applied the presumption to the right of first refusal provision in Section 3.09 of the Transmission Operating Agreement, noting that it had earlier accorded Mobile-Sierra protection to the provision in 2004 when the Transmission Operating Agreement was first approved. See id. ¶ 172. However, the Commission ultimately found that the right of first refusal “severely harm[s] the public interest,” meaning that the Mobile-Sierra presumption was overcome. Id. As a result of this analysis, the Commission ordered the right of first refusal provision stricken from the Transmission Operating Agreement. Id. ¶ 11.

The Transmission Owners first assert that the Commission erred in finding the Mobile-Sierra presumption inapplicable as a matter of law. In addition, the Transmission Owners contend that FERC did not properly establish that the right of first refusal harmed the public interest, as is required in order to overcome the presumption.

A.

The Commission argues that the Transmission Owners lack standing to contest the determination that the Mobile-Sierra presumption does not apply as a matter of law, because the Commission nonetheless applied the presumption as a matter of discretion.

In support of its contention that standing is absent, the Commission cites New England Power Generators Association v. FERC, 707 F.3d 364 (D.C. Cir. 2013). In Neiv England Power, the Commission was attacked from two sides after it concluded that rates resulting from an auction process were not contract rates, but nevertheless were subject to the Mobile-Sierra presumption. As we explained, one petitioner “like[d] the result but not the reasoning: it argue[d] the auction results, as contract rates, must receive the Mobile-Sierra presumption,” while an opposing group of petitioners “supported] much of FERC’s reasoning but not the result: they contend that because the auction results are not contract rates, FERC cannot presume them just and reasonable.” New England Power, 707 F.3d at 366 (emphasis omitted). We held that the first petitioner lacked standing because “its desired outcome— application of Mobile-Sierra’s public interest standard — has already been achieved.” Id. at 369.

There is one crucial distinction between New England Power and this case, however: in New England Power, the petitioner had prevailed before the Commission and was objecting only to the Commission’s reasoning in reaching that favorable result. Here, by contrast, the Transmission Owners not only take issue with the Commission’s reasoning but are also aggrieved by the Commission’s conclusion that the right of first refusal must be removed from the Transmission Operating Agreement.

Of course, the fact that the Mobile-Sierra presumption was applied as a matter of discretion by the Commission renders irrelevant the Transmission Owners’ argument that the Commission was required to apply it as a matter of law. However, this does not diminish the Transmission Owners’ standing to challenge an adverse determination by the Commission.

B.

Since the Transmission Owners have standing to bring their challenge, we must evaluate whether the Commission erred in finding that the right of first refusal in the Transmission Operating Agreement “severely harm[s] the public interest.” See Initial Order ¶ 172. FERC’s determination will be set aside if it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A); see, e.g., Williams Gas Processing-Gulf Coast Co. v. FERC, 475 F.3d 319, 326 (D.C. Cir. 2006).

The Transmission Owners’ objections fall into three categories. First, they assert that FERC’s orders were inconsistent with its past decisions. Second, the Transmission Owners allege that FERC applied the wrong legal standard as the yardstick for measuring whether the Mobile-Sierra presumption had been overcome. Finally, the Transmission Owners argue that FERC’s determination was not in accord with the evidence before it. We consider these arguments in turn.

1.

“[I]t is ‘axiomatic that [agency action] must either be consistent with prior [action] or offer a reasoned basis for its departure from precedent....’” Williams Gas, 475 F.3d at 326 (alterations in original) (quoting Brusco Tug & Barge Co. v. NLRB, 247 F.3d 273, 278 (D.C. Cir. 2001)). The Transmission Owners allege that the Commission’s determinations in the challenged orders flunk this requirement because they are inconsistent with two prior actions by the Commission: Order No. 1000 and the 2004 order that first approved the Transmission Operating Agreement.

In Order No. 1000, the Commission declined to resolve the question of whether the Mobile-Sierra presumption applied to the threatened rights of first refusal in existing tariffs and agreements. The Commission noted that one commenter — National Grid — had argued that the presumption applied to the specific right of first refusal in the Transmission Operating Agreement at issue here. However, the Commission found “that the record is not sufficient to address the specific issues raised by National Grid in this generic proceeding.” Order No. 1000 ¶ 292. .The Commission further explained:

[W]e generally do not interpret an individual contract in a generic rulemaking, and we are not persuaded to do so here given the limited record developed so far on section 3.09. Thus, we conclude that these arguments, including National Grid’s argument as to the applicable standard of review, are better addressed as part of the proceeding on ISO New England’s compliance filing pursuant to this Final Rule, where interested parties may provide additional information.

Id.

In the Rehearing Order, the Commission elaborated, noting that the record at the time of Order No. 1000 was insufficient because the Commission issued Order No. 1000 “prior to having before it the universe' of contracts and arguments to determine which lend support to, or provide evidence against the specific issue.” Rehearing Order ¶ 193. Once the specific contract and relevant arguments were submitted as part of the compliance filing process, “the Commission was able to examine together all the arguments relating to this specific issue — Mobile-Sierra protection of the right of first refusal provisions — as well as the individual contract provisions and other related documents, such as Commission orders addressing these provisions.” Id. The Commission explained that its “findings on compliance were based on this more complete, and now sufficient, record.” Id.

The Transmission Owners take issue with the Commission’s characterization. They argue that the Commission’s decision in the orders now under review arbitrarily departed from the Commission’s finding in Order No. 1000 that the record was not sufficient to address the applicability of the Mobile-Sierra presumption. The thrust of the petitioners’ argument is that the only new empirical data introduced between the time FERC issued Order No. 1000 and the Initial Order was information introduced by the Transmission Owners to show that regional transmission needs were already being addressed while the right of first refusal was in place. Accordingly — per the Transmission Owners’ argument — if the record was insufficient to make a Mobile-Sierra finding when Order No. 1000 was issued, it remained insufficient at the time of the Initial Order.

This misunderstands the way in which the record was “not sufficient” at the time of Order No. 1000. The Transmission Owners view the Initial Order as reaching a different verdict from Order No. 1000 in spite of the fact that no new evidence was introduced in support of that new verdict. To the contrary, FERC did not come to any verdict on the Mobile-Sierra issue in Order No. 1000. Instead, the Commission deferred until later compliance proceedings the introduction of specific evidence about the Transmission Operating Agreement — including the text of the agreement itself — and the region. See Order No. 1000 ¶ 292. Because this evidence had not yet been introduced, the record in Order No. 1000 was “insufficient” to reach any verdict, not just insufficient to find that the right of first refusal was sufficiently harmful to overcome the Mobile-Sierra presumption. See id. (“[T]he record is not sufficient to address the specific issues raised....” (emphasis added)). It was not at all inconsistent for FERC to treat the record as sufficient to reach such a verdict after the introduction of the language of the provision at issue and other information from interested parties.

The Transmission Owners cite a second example of purportedly inconsistent decision-making. This time, the earlier decision was the 2004 order by the Commission approving the Transmission Operating Agreement in which the Commission found that the Transmission Operating Agreement’s right of first refusal provision “will have no adverse impact on third parties or the New England market.” ISO New England, Inc., 109 F.E.R.C. ¶ 61,147, ¶ 78 (2004). In its Initial Order, which is the subject of the petition for review in this case, the Commission addressed the argument that the 2004 finding precluded its new determination that the right of first refusal “severely harm[s] the public interest” and therefore must be removed. See Initial Order ¶ 172. The Commission asserted that the 2004 finding presents no barrier because the Commission “is permitted to adapt its rules and policies in light of changing circumstances” and “changes in the electric industry driving the demand for new transmission, coupled with the advent of nonincumbent transmission developers, led the Commission to reexamine the effect of federal rights of first refusal on customers and nonincum-bent transmission developers.” Id. ¶¶ 196-98.

In support of this proposition, the Commission cited a 1968 Supreme Court decision upholding the Commission’s restriction of escalation clauses in natural gas contracts notwithstanding an earlier decision of the Commission that had expressly declined to limit their use. Id. ¶ 197 (citing In re Permian Basin Area Rate Cases, 390 U.S. 747, 783-84, 88 S.Ct. 1344, 20 L.Ed.2d 312 (1968)). In the cited case, the Court held that the challenged decision may not “properly be set aside merely because the Commission has on an earlier occasion reached another result; administrative authorities must be permitted, consistently with the obligations of due process, to adapt their rules and policies to the demands of changing circumstances.” Permian Basin, 390 U.S. at 784, 88 S.Ct. 1344.

This case presents another example of changing circumstances and an appropriate adaptation of rules and policies by FERC. While FERC reached a different conclusion in its Initial Order than in its 2004 order approving the Transmission Operating Agreement, this different conclusion was not the result of arbitrary decision-making by the Commission. Rather, it was the natural consequence of the new policy adopted in Order No. 1000 to address the changing circumstances identified by the Commission.

2.

Turning to the meat of FERC’s analysis, the Transmission Owners argue that FERC did not apply the correct legal standard in analyzing whether the Mobile-Sierra presumption had been overcome.

We considered the application of the Mobile-Sierra standard in a similar context in Texaco Inc. v. FERC, 148 F.3d 1091 (D.C. Cir. 1998), where we upheld FERC’s application of a generic rule— Order No. 630 — to a particular contract. Order No. 636 required pipelines to use a new pricing method that was intended to promote a national gas-sales market by reducing the impact of fixed costs — which vary significantly between pipelines - on market prices. Id. at 1094.

In a rate filing shortly after FERC promulgated Order No. 636, one pipeline proposed maintaining its existing rate structure for existing customers and adopting the new rate structure for new customers only. Id. FERC rejected that proposal, finding that it would “distort the pricing information signals that Order 636 was designed to regularize.” Id. at 1095. Because the rate provisions in the service agreements between the pipeline and its existing customers were subject to the Mobile-Sierra presumption, FERC was required to show that “the public interest required it to intervene.” Id. at 1096.

After reviewing the record, we found FERC’s public interest showing in Texaco to be sufficient. We explained that “the ‘public interest’ that permits FERC to modify private contracts is different from and more exacting than the ‘public interest’ that FERC seeks to serve when it promulgates its rules,” meaning that “more is required to justify regulatory intervention in a private contract than a simple reference to the policies served by a particular rule.” Id. at 1097. While “FERC relie[d] in part on the public interest rationale articulated in Order 636 to justify its modification of the” service agreements, FERC “did not rest its reformation of the [service] agreements on the generalized public interest goals underlying Order 636.” Id. Instead, FERC determined that retaining the existing rate structure in the contracts at issue would adversely affect the public interest, specifically by “distorting] gas market pricing to the detriment of the integrated national gas sales market” and by inflicting “anti-competitive” harm on the pipeline’s main competitor. Id. (internal quotation marks omitted).

In this way, Texaco drew a distinction between mere recitation of policy goals and a “particularized” analysis of the deleterious effects of the contract provision at issue. While new policies — such as those adopted in Order No. 636 in Texaco or Order No. 1000 here — may be supported by “generalized public interest goals,” “particularized” analysis is required in order to overcome the Mobile-Sierra presumption where it applies.

The Commission’s challenged orders in this case contain the requisite “particularized” analysis. In Order No. 1000, the Commission found that rights of first refusal are generally anticompetitive. See Order No. 1000 ¶¶ 256-57. In the orders now being challenged, FERC went further and found that the specific right of first refusal in ISO-NE’s Transmission Operating Agreement “would adversely affect transmission development.” Rehearing Order ¶ 204; see also id. ¶ 196-97 (citing evidence of “transmission system expansion” in New England that “makes the need to foster competitive practices more acute”). Of course, the Transmission Owners may quibble with the evidentiary basis for that conclusion — and they do, as discussed below — but it cannot be said that the Commission failed to make the “particularized” finding required by our case law.

The Transmission Owners have one additional argument regarding the legal standard. They point to a statement from the Supreme Court’s decision in Morgan Stanley Capital Group Inc. v. Public Utility District No. 1, 554 U.S. 527, 128 S.Ct. 2733, 171 L.Ed.2d 607 (2008): “We have said that, under the Mobile-Sierra presumption, setting aside a contract rate requires a finding of ‘unequivocal public necessity’ or ‘extraordinary circumstances.’ ” Id. at 550-51, 128 S.Ct. 2733 (citations omitted) (quoting Permian Basin, 390 U.S. at 822, 88 S.Ct. 1344; Ark. La. Gas Co. v. Hall, 453 U.S. 571, 582, 101 S.Ct. 2925, 69 L.Ed.2d 856 (1981)). The Transmission Owners argue that this sentence requires FERC, in all cases in which the Mobile-Sierra presumption applies, to make an explicit finding of either “unequivocal public necessity” or “extraordinary circumstances.”

We reject the invitation to don blinders and read this sentence as establishing an exclusive list of phrases FERC must incant to rebut the Mobile-Sierra presumption. Reading just two paragraphs down in the same opinion reveals the Court’s conclusion that “the FPA intended to reserve the Commission’s contract-abrogation power for those extraordinary circumstances where the public will be severely harmed.” Id. at 551, 128 S.Ct. 2733 (emphasis added). In other words, severe harm to the public constitutes extraordinary circumstances. Where FERC has made a finding of such harm, it has made the requisite finding of extraordinary circumstances. FERC made such a finding here, see Initial Order ¶ 172, thereby clearing the Mobile-Sierra bar as articulated in Morgan Stanley.

3.

The Transmission Owners also contend that, in reaching the conclusion that the rights of first refusal harmed the public interest, the Commission identified no evidence to support that conclusion and ignored the contrary evidence submitted by defenders of the right of first refusal.

The Transmission Owners’ first contention- — -that FERC identified no evidence in support of its conclusion — is based on the faulty premise that economic theory cannot provide the basis for FERC’s decisions. As we held in rejecting a nearly identical challenge to Order No. 1000, “at least in circumstances where it would be difficult or even impossible to marshal empirical evidence, the Commission is free to act based upon reasonable predictions rooted in basic economic principles.” South Carolina, 762 F.3d at 76; see also id. at 64-65. This ease presents a nearly identical circumstance to that addressed in South Carolina, as we once again must decide whether the Commission was entitled to rely on economic and competition theory to justify its decision in the absence of empirical data. Again we reach the same result, mindful of the limitations of empirical data in evaluating a counterfactual and the proper role of other forms of evidence in some situations. Cf. id. at 65 (“Agencies do not need to conduct experiments in order to rely on the prediction that an unsupported stone will fall; nor need they do so for predictions that competition will normally lead to lower prices.” (quoting Associated Gas Distribs. v. FERC, 824 F.2d 981, 1008-09 (D.C. Cir. 1987))).

The Transmission Owners' second contention — that FERC ignored the evidence they introduced into the record — is also wrong. The Transmission Owners introduced evidence that ISO-NE “has placed $4.7 billion in new transmission facilities in service and has placed another $5.7 billion in projects (in different stages of development) in the ISO-NE Regional System Plan.” Rehearing Order ¶ 196. This evidence of transmission development, they contend, demonstrates that the right of first refusal does not harm the public interest.

Far from ignoring this evidence, FERC confronted it head-on. The Commission credited the evidence, but explicitly rejected the inference that “the incumbent transmission owners are sufficiently developing projects under the existing framework with their current rights of first refusal.” Id. ¶ 197. The Commission did note, however, that this evidence illustrated the “onset” of a “development trend” — noted earlier by the Commission in Order No. 1000 — that “demonstrates a changing circumstance in the marketplace, which continues to threaten the public interest by avoiding expected efficiencies and cost savings and makes the need to foster competitive practices more acute.” Id. (footnote omitted).

The rejection of the Transmission Owners’ preferred inference was well within the Commission’s discretion. Evidence of a certain level of past development does not compel a conclusion about the development that would have occurred in a coun-terfactual universe without the right of first refusal provision or, more importantly, the relative level of development that would occur in the future in alternate universes with and without the provision. The inference that there is a functioning market with the right of first refusal in place may be plausible, but the contrary conclusion drawn by FERC is plausible as well. “Where the evidence might support more than one rational interpretation, ‘the question we must answer ... is not whether record evidence supports [the petitioner’s] version of events, but whether it supports FERC’s.’ ” Cogeneration Ass’n of Cal. v. FERC, 525 F.3d 1279, 1283 (D.C. Cir. 2008) (alterations in original) (quoting Fla. Mun. Power Agency v. FERC, 315 F.3d 362, 368 (D.C. Cir. 2003)). Accordingly, we reject the Transmission Owners’ challenge to the Commission’s orders.

III.

We turn next to considering the petition for review filed by the State Petitioners, which takes issue with a different aspect of the Commission’s orders.

In addition to addressing rights of first refusal, Order No. 1000 also required the consideration of transmission needs driven by public policy when determining what projects to include in the Regional System Plan for cost allocation purposes. See Order No. 1000 ¶¶ 78-84. Public policy requirements that could give rise to transmission needs include “enacted statutes (i.e., passed by the legislature and signed by the executive) and regulations promulgated by a relevant jurisdiction, whether within a state or at the federal level.” Id. ¶ 2.

ISO-NE’s compliance filing included a proposed multi-step procedure for complying with this new requirement. See Initial Order ¶¶ 77-84. Under this proposal, NES-COE — the regional committee that represents the New England states in electricity matters — would first “identify state and federal public policies that may drive the need for transmission in New England.” Id. ¶ 77. After transmission needs are identified, “ISO-NE will undertake scenario studies to provide a sense of the costs and benefits of various high-level alternatives.” Id. Then, “[i]f some or all states determine that those transmission solutions may meet their identified public policies,” those states may direct ISO-NE to solicit initial proposals from transmission developers. Id. ISO-NE was tasked with conducting a preliminary review of those proposals, after which NESCOE “may submit to ISO-NE a list of projects that one or more of the states would like to have further developed.” Id. ¶¶ 82-83. However, if NESCOE does not identify any projects to be further developed, the planning process would end. Id. ¶ 83. Ultimately, ISO-NE would place projects into the Regional System Plan only if requested by either NESCOE or the participating states’ utility regulatory authorities. Id. ¶ 84.

FERC rejected this proposed procedure because it left to NESCOE or the states several roles that FERC contends Order No. 1000 had directed ISO-NE — the regional transmission organization — to fulfill. See id. ¶¶ 108,116. FERC asserted:

[T]o comply with Order No. 1000 the Filing Parties must propose a process for the public utility transmission providers in the region to select in the regional transmission plan for purposes of cost allocation the more efficient or cost-effective transmission solution that resolves an identified transmission need driven by public policy requirements.

Id. ¶ 108.

The State Petitioners object on two grounds. First, they argue that FERC’s determination impermissibly conflicts with and expands on Order No. 1000. This argument turns on the State Petitioners’ reading of the word “select” in the Initial Order as meaning that FERC requires not only a process to identify transmission needs driven by public policy requirements and evaluate potential transmission solutions that could meet those needs — two requirements that the State Petitioners do not dispute are contained in Order No. 1000 — but also selection of whichever project is the most efficient or cost-effective.

We need not determine whether any such selection requirement would be permissible, however, because the Commission adamantly disclaims such a reading. The Commission explains that the language at issue was not distinguishing between identifying transmission needs and selecting projects, but rather was clarifying which entity must control each step of the process. The Rehearing Order made clear that there is no requirement that ISO-NE “must select ... a transmission solution to address every identified transmission need driven by a public policy requirement.” Rehearing Order ¶ 126. The only selection requirement is that if a solution is selected it “must be selected by ISO-NE rather than by NESCOE.” Id. In light of these clarifications by the Commission, there is no inconsistency with Order No. 1000.

The State Petitioners’ second objection is that the Commission exceeded the bounds of its authority under the Federal Power Act (“FPA”). Specifically, the State Petitioners point to section 201(a) of the FPA, which provides that FERC’s authority is “to extend only to those matters which are not subject to regulation by the States.” 16 U.S.C. § 824(a). The Supreme Court has explained:

The policy declaration that federal regulation is “to extend only to those matters which are not subject to regulation by the States” is one of great generality. It cannot nullify a clear and specific grant of jurisdiction, even if the particular grant seems inconsistent with the broadly expressed purpose. But such a declaration is relevant and entitled to respect as a guide in resolving any ambiguity or indefiniteness in the specific provisions which purport to carry out its intent. It cannot be wholly ignored.

Conn. Light & Power Co. v. Fed. Power Comm’n, 324 U.S. 515, 527, 65 S.Ct. 749, 89 L.Ed. 1150 (1945).

As the State Petitioners concede, the “clear and specific” grants of jurisdiction in the FPA include FERC’s authority to regulate the rates charged for transmission of electricity, see 16 U.S.C. § 824d, and to “facilitate the planning of a reliable grid,” see South Carolina, 762 F.3d at 90. Nevertheless, the State Petitioners contend that the FPA does not grant FERC authority over what they characterize as “the means by which states meet their own public policy mandates.” Pet’rs’ (15-1141) Joint Br. 35.

This argument fails because it is necessarily an objection to the entire regional planning and cost allocation scheme. The role of a regional transmission organization such as ISO-NE is to plan for the region’s transmission needs. Order No. 1000 established a regional planning process that is agnostic as to the provenance of the transmission needs, whether resulting from population growth or federal public policy or state public policy. In South Carolina, we approved this process and explicitly rejected the argument that the regional planning “mandate infringes on the States’ traditional regulation of transmission planning, siting, and construction, violating the federalism principle recognized in Section 201(a).” 762 F.3d at 62; see also id. at 58-59. Similarly, we held that providing for cost allocation falls within the Commission’s authority to regulate the rates charged for electricity. Id. at 84.

The division of roles between ISO-NE and the states poses no jurisdictional problem for FERC. ISO-NE has no role in setting public policy for the states. ISO-NE considers transmission needs that arise from a variety of sources, one of which is the public policy requirements chosen by federal and state officials. See Rehearing Order ¶ 132 (“Transmission needs driven by public policy requirements, and not the public policy requirements themselves, are what must be considered by public utility transmission providers under Order No. 1000.”). As we explained in South Carolina:

The [regional planning] mandate simply recognizes that state and federal policies might affect the transmission market and directs transmission providers to consider that impact in their planning decisions. In this regard, the requirement is no different from other facets of the planning process. The providers assess what transmission capacity is required to fulfill a variety of needs (such as reliability of the grid, geographic expansion, and now public policy requirements) and then plan how to develop that capacity. This fits comfortably within the Commission’s authority under Section 206.

762 F.3d at 89-90 (citations omitted).

Requiring that ISO-NE, rather than the states, evaluate transmission needs and potential solutions is a reasonable implementation of Order No. 1000’s regional planning process, which we upheld in South Carolina. That is true regardless of whether those transmission needs arise from state public policy requirements or any other source.

We note as well that the Commission’s conclusion that the proposed regional planning process did not satisfy Order No. 1000 was supported by substantial evidence, as set forth in its Orders. See Initial Order ¶¶ 71-121; Rehearing Order ¶¶ 29-32, 98-154.

For the foregoing reasons, both petitions for review are denied.

So ordered.

      . In Oklahoma Gas, we noted that "the Supreme Court has at least thus far applied the doctrine to rates, although we are presented here with a right of first refusal provision.” 827 F.3d at 79. In that case, as here, because "neither party advocates for restricting Mo

        bile-Sierra exclusively to rates, there is no need to decide that question.” Id.

        . In any event, our decision in Oklahoma Gas has since rejected the Transmission Owners’ argument that FERC is required to apply the Mobile-Sierra presumption to rights of first refusal such as the one at issue in this case. See Oklahoma Gas, 827 F.3d at 80.


source: Caselaw Access Project

license: Public Domain

text:
    CITIZENS FOR RESPONSIBILITY AND ETHICS IN WASHINGTON, Appellant v. UNITED STATES DEPARTMENT OF JUSTICE, Appellee
    No. 16-5138
    United States Court of Appeals, District of Columbia Circuit.
    Argued March 3, 2017
    Decided April 21, 2017

      David L. Sobel, Tulsa, OK, argued the cause for appellant. With him on the briefs was Adam J. Rappaport.
    William E. Havemann, Attorney, U.S. Department of Justice, argued the cause for appellee. With him on the brief were Benjamin C. Mizer, Principal Deputy Assistant Attorney at the time the brief was filed, and Matthew M. Collette, Attorney.
    Before: TATEL, SRINIVASAN and WILKINS, Circuit Judges.
   WILKINS, Circuit Judge:

Citizens for Responsibility and Ethics in Washington (CREW) appealed from an order of the District Court granting summary judgment in favor of the United States Department of Justice (DOJ) and denying CREW’s cross-motion for partial summary judgment. In granting summary judgment, the District Court agreed that Exemption 5 in the Freedom of Information Act (FOIA) shielded certain Federal Bureau of Investigation (FBI) correspondence and that Exemptions 6 and 7(C) could be invoked to protect names and other personal information contained in responsive records.

We reverse the District Court’s grant of summary judgment. We conclude that the Government’s assertion of Exemption 5 was untimely and, before ruling on Exemptions 6 and 7(C), a more particularized balancing of the interests at stake is required.

I.

“In 2004, the Federal Bureau of Investigation (FBI) opened a wide-ranging-public corruption investigation into the activities of former lobbyist Jack Abramoff. The investigation yielded 21 guilty pleas or convictions by jury.” CREW v. DOJ (CREW I), 746 F.3d 1082, 1087 (D.C. Cir. 2014). Two of those convicted had been senior aides to former House of Representatives Majority Leader Tom DeLay. Id. Although the FBI never acknowledged whether DeLay was a subject of their investigation, in August 2010, DeLay himself announced that DOJ had informed him that it would not bring charges against him. Id.

In October 2010, CREW filed a FOIA request with the FBI, a component of DOJ. The request sought information related to DOJ’s investigation of DeLay, including records related to DOJ’s investigation of relationships between DeLay and fourteen specified individuals and entities.

DOJ declined to provide any requested documents on the basis that, “because the requested records involved third parties, they were generally exempt from disclosure and could not be released absent express authorization from each third party, proof of the third party’s death or a clear demonstration -that the public interest in disclosure outweighs the personal privacy interest and that significant public benefit would result from the disclosure of the requested records.” Id. at 1089 (internal quotation marks omitted).

After exhausting its administrative remedies, CREW filed suit against DOJ. Id. The parties filed cross-motions for summary judgment. Id. In support of its motion, DOJ submitted a declaration asserting that “all responsive documents were categorically exempt under Exemption 7(A) and Exemptions 6 and 7(C).” Id. at 1090 (citations omitted). The Government also invoked Exemptions 2, 3, 7(D) and 7(E) to withhold some portions of the responsive material. Id. CREW specifically sought prosecution memoranda, but the declaration stated that no prosecution memoranda were found in the FBI’s case file. Id. at 1090 n.l. The District Court granted DOJ’s motion for summary judgment, agreeing with DOJ on the application of each cited exemption. Id.

On appeal, we reversed the grant of summary judgment and remanded to the District Court. Id. at 1102. We found that DOJ had “not met its burden to justify categorical withholding under Exemption 7(A) or 7(C)” and had not “provided sufficient detail at this stage for a court to determine whether a portion of the requested records may be withheld under Exemption 3, 7(D) or 7(E).” Id.

Of particular relevance here, we noted the “weighty public interest in shining a light on the FBI’s investigation of major political corruption and the DOJ’s ultimate decision not to prosecute a prominent member of the Congress for any involvement he may have had.” Id. at 1092-93. “[T]he relevant public interest,” we explained, “is not to find out what DeLay himself was ‘up to’ but rather how the FBI and the DOJ carried out their respective statutory duties to investigate and prosecute criminal conduct.” Id. at 1093 (emphasis omitted). Specifically, we noted the likelihood that the requested information would “reveal much about the diligence of the FBI’s investigation and the DOJ’s exercise of its prosecutorial discretion: whether the government had the evidence but nevertheless pulled its punches.” Id.

Foreshadowing the present controversy, we also noted that persons other than DeLay might be mentioned in investigative files and that those individuals “have a substantial privacy interest in preventing disclosure of their names in law enforcement files.” Id. at 1092 n.3. In recognition of this privacy interest, “the names and identifying information of third parties contained in investigative files are presumptively exempt.” Id. at 1096.

Since we had rejected the categorical withholding of responsive documents, the task for DOJ on remand was to “make a more particularized showing as to what documents or portions thereof are exempt.” Id. The District Court then had the responsibility to “weigh what information may be withheld under Exemption 7(C) and whether any information is reasonably segregable and may be disclosed.” Id.

After our decision, “the FBI ran its search for responsive records anew, using the same parameters and garnering the same results as its initial search.” CREW v. DOJ (CREW II), 174 F.Supp.3d 415, 419 (D.D.C. 2016). The search yielded a total of 328 pages of responsive material, 124 pages of which were released to CREW, albeit with redactions. Id. at 420. The FBI withheld in full the remaining 204 pages. Id. To justify its redactions and withholding, the FBI invoked FOIA Exemptions 3, 5, 6, 7(C), 7(D) and 7(E). Id. The Government again moved for summary judgment, which CREW opposed with respect to the application of Exemptions 5, 6 and 7(C). Id. In a March 30, 2016 Memorandum Opinion and Order, the District Court again granted the Government’s motion for summary judgment and denied a cross-motion for partial summary judgment filed by CREW. Id. at 427.

II.

On appeal, CREW raises two issues. First, CREW asserts that the District Court erred in permitting the FBI to rely on Exemption 5, which it had not raised during the initial round of summary judgment. Second, CREW alleges error in the District Court’s allowing the FBI to redact names of all individuals other than DeLay and Abramoff that were contained in responsive records.

A.

In FOIA cases, the Government generally “must assert all exemptions at the same time, in the original district court proceedings.” Maydak v. DOJ, 218 F.3d 760, 764 (D.C. Cir. 2000). “[T]he delay caused by permitting the government to raise its FOIA exemption claims one at a time interferes both with the statutory goals of efficient, prompt, and full disclosure of information, and with interests of judicial finality and economy.” Id. (citations omitted) (internal quotation marks omitted).

We have recognized two exceptions to this general rule. The first is for “extraordinary circumstances where, from pure human error, the government failed to invoke the correct exemption and will have to release information compromising national security or sensitive, personal, private information unless the court allows it to make an untimely exemption claim.” Id. at 767. The second is “where a substantial change in the factual context of the ease or an interim development in the applicable law forces the government to invoke an exemption after the original district court proceedings have concluded.” Id.

The Government does not contend that either exception is applicable here. In fact, the District Court noted that the Government’s “briefing contains no claim of changed factual or legal circumstances, no mea culpa or acknowledgment [of] mistake, and indeed no explanation at all as to its failure to assert Exemption 5 in regards to the FBI’s records in the original proceedings.” CREW II, 174 F.Supp.3d at 423.

Nevertheless, the District Court allowed the Government to rely on Exemption 5. The District Court observed that CREW’s objection was solely on waiver grounds and CREW did not advance any substantive argument for why Exemption 5 would not cover the pages at issue. See id. at 421, 423-24. In the District Court’s view, precluding the Government from applying Exemption 5 “would not advance the policy goals supporting the Maydak rule,” id. at 424, because CREW’s failure to present objections to Exemption 5 on the merits meant it had effectively conceded the issue and there was “no occasion for delaying the process with presentation and consideration of fresh arguments about the applicability of the exemption,” id. at 423.

As we have previously explained, though, “[t]he timeliness rule is concerned not just with efficiency in a given case, but also with efficiency in the long run, and it disserves this broader goal to permit untimely defenses, even after they' have been argued, to prevail.” Wash. Post Co. v. Dep’t of Health & Human Servs., 795 F.2d 205, 209 (D.C. Cir. 1986). It may well be that, in this particular case, the District Court could just as quickly have considered and accepted the Exemption 5 defense as rejected it as untimely. But this alone does not answer the critical question of whether the ends of promptness and efficiency are better served by nevertheless preventing the Government from invoking a new exemption on remand following an appeal. If Exemption 5 had been invoked at the outset, we could have resolved the merits of its application in the prior appeal. A robust timeliness rule encourages the Government to present all its arguments the first time around. Weakening that rule lessens the incentive. In addition, requiring a FOIA requester to brief and argue the merits of newly asserted defenses — rather than simply adverting to the timeliness rule — imposes additional costs on that party. Cf. id. (“It would be grotesque to present the [FOIA requester] with the bill for an entertainment which it alone insisted should not have been staged.”). These considerations suggest that a robust timeliness rule well serves FOIA’s goal of a prompt and efficient process. Of course, there will be “unusual situations, largely beyond the government’s control,” Maydak, 218 F.3d at 767, in which other considerations override those motivating the timeliness rule — this Court’s previously articulated exceptions address such circumstances — but the Government has not made any claim that this is such a case.

Before the District Court, the Government asserted that it had in fact raised Exemption 5 in the initial round of summary judgment. See CREW II, 174 F.Supp.3d at 422. On appeal, the Government has abandoned that contention, in apparent recognition of the fact that Exemption 5 was asserted only by the DOJ’s Criminal Division to shield prosecution memoranda, not by the FBI to protect the six pages of an electronic communication that are now at issue. Id.

The Government continues to argue, though, that the fact that the Criminal Division cited Exemption 5 in the original proceedings precludes any inference of gamesmanship or sandbagging with respect to the FBI’s initial failure to make a similar assertion. That contention is belied by the fact that DOJ utilized a decentralized process, in which the Criminal Division and the FBI independently decided whether or not to release responsive records that originated in their respective components. Id. The decision of the Criminal Division to invoke Exemption 5 therefore tells us nothing about why the FBI chose not to cite it. In any event, the application of the Maydak timeliness rule does not require a finding of bad faith or intentional gamesmanship.

As the Government’s invocation of Exemption 5 was untimely and the Government has not provided a sufficient basis for declining to apply the Maydak timeliness rule, Exemption 5 cannot shield any of the information sought by CREW in this appeal.

B.

We turn next to the question of whether summary judgment was proper with respect to Exemptions 6 and 7(C).

FOIA’s Exemption 6 encompasses “personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy,” while Exemption 7(C) protects “records or information compiled for law enforcement purposes, but only to the extent that the production of such law enforcement records or information ... could reasonably be expected to constitute an unwarranted invasion of personal privacy.” 5 U.S.C. § 552(b)(6)-(7). When information is claimed to be exempt from disclosure under both provisions, courts “focus ... on Exemption 7(C) because it provides broader privacy protection than Exemption 6 and thus establishes a lower bar for withholding material.” CREW I, 746 F.3d at 1091 n.2 (internal quotation marks omitted).

When examining an assertion of Exemption 7(C), a court must “balance the [ ] privacy interest against the public interest in disclosure.” Id. at 1091 (alteration in original). “At all times, courts must bear in mind that FOIA mandates a strong presumption in favor of disclosure, and that the statutory exemptions, which are exclusive, are to be narrowly construed.” ACLU v. U.S. Dep’t of Justice, 655 F.3d 1, 5 (D.C. Cir. 2011) (alteration omitted) (citations omitted) (internal quotation marks omitted).

This dispute over the application of the personal privacy exemptions centers on whether the Government is permitted to redact the names (and other personally identifying information) of individuals other than DeLay and Abramoff from responsive records. These names fall into three general categories. First, records may contain names of FBI or other federal government personnel. CREW does not challenge the redaction of this category of names. Second, individuals may be named or otherwise identified who have not previously been publicly implicated in the corruption investigation. Where, as here, there is no “compelling evidence that the agency is engaged in illegal activity,” such names are “categorically ... exempt from disclosure.” SafeCard Servs., Inc. v. SEC, 926 F.2d 1197, 1206 (D.C. Cir. 1991).

Finally, there is the third category: individuals who have already been publicly identified — either through agency press releases or testimony in open court — as having been charged, convicted or otherwise implicated in connection with the public corruption investigation that encompassed Abramoff and DeLay. CREW attached eight press releases to its briefing before the District Court, containing the names of sixteen such individuals in addition to Abramoff. As explained below, these individuals have a diminished privacy interest in certain information that may be contained in the records at issue, and therefore the categorical rule of non-disclosure announced in SafeCard does not apply to them.

Determining whether the cited FOIA exemptions apply to this third category of individuals requires a weighing of the privacy interests and public interest at issue in this case. As we explained at length in our previous opinion, see CREW I, 746 F.3d at 1092-96, a “weighty public interest” is present here: the interest in finding out “how the FBI and the DOJ carried out their respective statutory duties to investigate and prosecute criminal conduct.” Id. at 1092-93. This interest is served by disclosures that “shin[e] a light on the FBI’s investigation of major political corruption and the DOJ’s ultimate decision not to prosecute a prominent member of the Congress for any involvement he may have had.” Id. at 1093.

Moving to the opposing side of the scale, we have observed that “individuals have an obvious privacy interest cognizable under Exemption 7(C) in keeping secret the fact that they were subjects of a law enforcement investigation.” Nation Magazine v. U.S. Customs Serv., 71 F.3d 885, 894 (D.C. Cir. 1995). “That privacy interest also extends to third parties who may be mentioned in investigatory files, as well as to witnesses and informants who provided information during the course of an investigation.” Id. Even after an individual has been convicted, we have recognized that the individual retains a privacy interest in the facts of his conviction. See ACLU, 655 F.3d at 7; cf. U.S. Dep’t of Justice v. Reporters Comm. For Freedom of the Press, 489 U.S. 749, 763-65, 109 S.Ct. 1468, 103 L.Ed.2d 774 (1989). However, privacy interests of individuals who have been convicted or pled guilty “are weaker than for individuals who have been acquitted or whose cases have been dismissed” and are “plainly substantially weaker than the privacy interests of individuals who have been investigated but never publicly charged at all.” ACLU, 655 F.3d at 7; cf. Reporters Comm., 489 U.S. at 763 n.15, 109 S.Ct. 1468 (“The common law recognized that one did not necessarily forfeit a privacy interest in matters made part of the public record, albeit the privacy interest was diminished.... ”).

These initial observations do not resolve the question of whether the Government redactions of names were proper in this case. On the one hand, the substantial public interest present here may outweigh privacy interests that have been diminished by prior disclosures, including through guilty pleas and convictions. On the other hand, a responsive document could reveal new information about a person’s conduct, going beyond the facts in the public record related to that person’s conviction and sentencing. Under such circumstances, that individual would retain a privacy interest in the non-disclosure of the new information.

“Because the myriad of considerations involved in the Exemption 7(C) bal-anee defy rigid compartmentalization, per se rules of nondisclosure based upon the type of document requested, the type of individual involved, or the type of activity inquired into, are generally disfavored.” Stern v. FBI, 737 F.2d 84, 91 (D.C. Cir. 1984). The privacy interests of individuals who have not been convicted in connection with this investigation — and even more so those who have not been publicly linked with the investigation whatsoever — differ greatly from those of individuals who were convicted or pled guilty for their roles. Connecting the names of individuals to information contained in the documents at issue could add much, or not at all, to the public’s understanding of how the Government carried out its investigation and decision not to prosecute DeLay. There is little we can conclude in the abstract. This area is simply not well-suited to categorical determinations.

For this reason, we reverse the grant of summary judgment and remand to the District Court. With respect to those individuals with diminished privacy interests, the withholding of information pursuant to Exemptions 6 and 7(C) must be subjected to a particularized weighing of the public and privacy interests that would be implicated by the disclosure sought by CREW. When conducting this balancing, it is CREW’s burden to “show the information is likely to advance” the public interest in learning whether DOJ pulled its punches. Nat’l Archives & Records Admin. v. Favish, 541 U.S. 157, 172, 124 S.Ct. 1570, 158 L.Ed.2d 319 (2004). For its part, the Government must account for the privacy interests at stake, recognizing that previous disclosures or admissions may have diminished those interests.

* * *

For the foregoing reasons, the grant of summary judgment is reversed and we remand to the District Court for proceedings consistent with this opinion.

So ordered.

      . Exemption 2 applies to information "related solely to the internal personnel rules and practices of an agency”; Exemption 3 applies to certain information "specifically exempted from disclosure by statute”; Exemption 6 applies to "personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy”; and Exemption 7 applies to certain categories of "records or information compiled for law enforcement purposes.” 5 U.S.C. § 552(b).

      . CREW did not object to the District Court’s grant of summary judgment with respect to the application of Exemption 2, which applied only to internal FBI telephone and fax numbers. Id. at 1099 n.7.

      . Exemption 5 covers "inter-agency or intra-agency memorandums or letters that would not be available by law to a party other than an agency in litigation with the agency.” 5 U.S.C. § 552(b)(5).


author: SENTELLE, Senior Circuit Judge:

text:
    CONSUMER FINANCIAL PROTECTION BUREAU, Appellant v. ACCREDITING COUNCIL FOR INDEPENDENT COLLEGES AND SCHOOLS, Appellee
    No. 16-5174
    United States Court of Appeals, District of Columbia Circuit.
    Argued February 2, 2017
    Decided April 21, 2017

      Lawrence DeMille-Wagman, Senior Litigation Counsel, Consumer Financial Protection Bureau, argued the cause for appellant. With him on the briefs was John R. Coleman, Deputy General Counsel.
    Allyson B. Baker, Washington, DC, argued the cause for appellee Accrediting Council For Independent Colleges and Schools. With her on the brief were Andrew Hernacki, Benjamin E. Horowitz, Kimberly Culp Cloyd, and Kenneth J. Ingram, Washington, DC.
    Andrew J. Pincus, Ori Lev, Stephen C.N. Lilley, Matthew A. Waring, Kathryn Comerford Todd, and Steven P. Lehotsky, Washington, DC, were on the brief for amicus curiae The Chamber of Commerce of the United States of America in support of appellee.
    Michael C. Gartner, Falls Church, VA, was on the brief for amicus curiae Accrediting Council for Continuing Education & Training, Inc. (“ACCET”), et al. in support of appellee.
    Before: HENDERSON and WILKINS, Circuit Judges, and SENTELLE, Senior Circuit Judge.
   SENTELLE, Senior Circuit Judge:

The Consumer Financial Protection Bureau (“CFPB” or the “Bureau”) issued a civil investigative demand to the Accrediting Council for Independent Colleges and Schools (“ACICS”), a non-profit organization that accredits for-profit colleges. The civil investigative demand’s “Notification of Purpose” stated that the CFPB sought information relating to “unlawful acts and practices in connection with accrediting for-profit colleges.” When ACICS refused to comply, the CFPB filed a petition to enforce the civil investigative demand. The district court denied the petition. Because the civil investigative demand did not comply with the governing statute, see 12 U.S.C. § 5562(c)(2), we affirm.

I.

While the Department of Education does not accredit for-profit colleges, the Secretary of Education recognizes national accrediting agencies that set accreditation standards for those for-profit institutions. See Prof'l Massage Training Ctr., Inc. v. Accreditation All. of Career Schs. & Colls., 781 F.3d 161, 171 (4th Cir. 2015); Urquilla-Diaz v. Kaplan Univ., 780 F.3d 1039, 1044 (11th Cir. 2015); see also 20 U.S.C. § 1099b; 34 C.F.R. §§ 602.1-602.50. Indeed, the term “[accredited” is defined in the Department’s regulations as “[t]he status of public recognition that a nationally recognized accrediting agency grants to an institution or educational program that meets the agency’s established requirements.” 34 C.F.R. § 600.2; see also id. § 602.3. Recognized accrediting agencies are intended to be “reliable authorities regarding the quality of education or training offered by the institutions or programs they accredit.” Id. § 602.1(a); see also 20 U.S.C. §§ 1001(c), 1099b(a). Importantly, students at accredited for-profit colleges are eligible to receive federal student aid funding. See 20 U.S.C. § 1002(b)(1)(D); 34 C.F.R. § 600.5(a)(6); Career Educ., Inc. v. Dep’t of Educ., 6 F.3d 817, 817-18 (D.C. Cir. 1993); see also Urquilla-Diaz, 780 F.3d at 1043-44.

ACICS is a non-profit organization that accredits for-profit colleges in the United States. A council consisting of fifteen commissioners carries out the organization’s accreditation functions, while the organization’s president, who also serves as the Chief Executive Officer, oversees the day-to-day operations. The Secretary has recognized ACICS as a national accreditor since 1956, although the Secretary withdrew ACICS’s status as a recognized ac-creditor in 2016.

The most important aspect of ACICS’s accreditation process is the “peer review” component, which involves volunteer evaluators from ACICS member institutions and non-member institutions reviewing other institutions. The confidential accreditation process includes a self-evaluation by the institution, an on-site visit, a review of the institution’s operations, and a written report from the evaluators. After determining whether the institution complies with ACICS’s accrediting standards, the council makes a final accrediting decision. Relevant to this litigation, ACICS asserts that, as an accrediting agency, it plays no role in the student loan process.

The CFPB has investigated for-profit colleges for deceptive practices in connection with their student-lending activities. See, e.g., CFPB v. Corinthian Colls., Inc., No. 1:14-cv-7194, 2015 WL 10854380 (N.D. Ill. Oct. 27, 2015); CFPB v. ITT Educ. Servs., Inc., No. 1:14-cv-292, 219 F.Supp.3d 878, 2015 WL 1013508 (S.D. Ind. Mar. 6, 2015). On August 25, 2015, the CFPB issued a civil investigative demand (“CID”) to ACICS. The CID’s “Notification of Purpose” stated:

The purpose of this investigation is to determine whether any entity or person has engaged or is engaging in unlawful acts and practices in connection with accrediting for-profit colleges, in violation of sections 1031 and 1036 of the Consumer Financial Protection Act of 2010, 12 U.S.C. §§ 5531, 5536, or any other Federal consumer financial protection law. The purpose of this investigation is also to determine whether Bureau action to obtain legal or equitable relief would be in the public interest.

The CID included two interrogatories seeking to identify: (1) “all post-secondary educational institutions that [ACICS] has accredited since January 1, 2010,” and (2) “all individuals affiliated with [ACICS] who conducted any accreditation reviews since January 1, 2010” for twenty-one enumerated institutions. The CID also informed ACICS that a company representative must be made available to provide oral testimony on ACICS’s “policies, procedures, and practices relating to the accreditation of’ seven enumerated institutions.

After receiving the CID, ACICS’s counsel conferred with the CFPB to discuss compliance. These discussions proved fruitless, however, and ACICS subsequently petitioned the CFPB to set aside or modify the CID. See 12 U.S.C. § 5562(f); 12 C.F.R. 1080.6(e). The CFPB’s Director, Richard Cordray, denied ACICS’s petition on October 8, 2015, and ordered ACICS to meet and confer with the CFPB. The CFPB denied ACICS’s motion for reconsideration of that denial on October 27, 2015, and on October 29, 2015, filed the petition for enforcement that is the subject of this appeal. See 12 U.S.C. § 5562(e).

The Bureau argued in its petition that it had “reason to believe” that ACICS, in its capacity as an accreditor, possessed “information relevant to the Bureau’s investigation” into “whether any entity or other person has engaged or is engaging in unlawful acts and practices in connection with accrediting for-profit colleges, in violation of the [Consumer Financial Protection Act], or any other Federal consumer financial law.” ACICS opposed the petition on a number of grounds, including that the Bureau’s investigation into the accreditation of for-profit colleges was outside the scope of its authority.

The district court denied the petition. CFPB v. Accrediting Council for Indep. Colls. & Schs., 188 F.Supp.3d 79, 80 (D.D.C. 2016). The court framed the issue before it as a single question: “Did the CFPB have the statutory authority to issue the CID in question?” Id. at 82. “Unfortunately for the CFPB,” the court held, “the answer is no.” Id. After reviewing the CFPB’s statutory authority, see id. at 82-83, the court noted that the laws enforced by the CFPB do not “address, regulate, or even tangentially implicate the accrediting process of for-profit colleges,” id. at 83. The court concluded that, “at first blush, the CID’s statement of purpose appears to concern a subject matter that is not within the statutory jurisdiction of the CFPB.” Id. Based on the Notification of Purpose and the requests, the court further determined that the CFPB’s investigation “clearly ... targets the accreditation process generally,” which “the CFPB was never empowered to do.” Id. at 83-84. Because the CFPB “plow[ed] head long into fields not clearly ceded to [it] by Congress,” the court denied the petition. Id. at 84. The CFPB appealed.

We have jurisdiction pursuant to 28 U.S.C. § 1291. See FTC v. Invention Submission Corp., 965 F.2d 1086, 1089 (D.C. Cir. 1992); FTC v. Texaco, Inc., 555 F.2d 862, 873 n.21 (D.C. Cir. 1977) (en banc).

II.

Congress enacted the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”) in the wake of the financial crisis of 2008 and 2009. State Nat’l Bank of Big Spring v. Lew, 795 F.3d 48, 51 (D.C. Cir. 2015) (citing Pub. L. No. 111-203, 124 Stat. 1376 (2010)). Title X of the Dodd-Frank Act — the Consumer Financial Protection Act (“CFPA”) — established the Consumer Financial Protection Bureau to “regulate the offering and provision of consumer financial products or services under the Federal consumer financial laws,” 12 U.S.C. § 5491(a), and “to implement and ... enforce Federal consumer financial law,” id. § 5511(a); see also id. §§ 5492(a), 5511(b)-(c). The “Federal consumer financial law” that the CFPB enforces includes the CFPA and eighteen pre-existing consumer protection statutes. Id. § 5481(12), (14); Morgan Drexen, Inc. v. CFPB, 785 F.3d 684, 686-87 (D.C. Cir. 2015). Relevant to our analysis, the CFPA prohibits “unfair, deceptive, or abusive aet[s] or practice[s] under Federal law in connection with any transaction with a consumer for a consumer financial product or service, or the offering of a consumer financial product or service.” 12 U.S.C. § 5531(a); see also id. § 5536(a)(1)(B). “Consumer financial product[s] or service[s]” include consumer loans and debt collection activities. See id. § 5481(5), (15).

The CFPA vests the Bureau "with broad “rulemaking, supervisory, investigatory, adjudicatory, and enforcement authority....” Morgan Drexen, 785 F.3d at 687 (citing 12 U.S.C. §§ 5512(b), 5514-5516, 5562-5564). One of the CFPB’s “primary functions” is to “supervis[e] covered persons for compliance with Federal consumer financial law, and tak[e] appropriate enforcement action to address violations of Federal consumer financial law[.]” 12 U.S.C. § 5511(c)(4). Pursuant to its investigative authority, the Bureau may issue CIDs requiring the production of documents and oral testimony from “any person” that it believes may be in possession of “any documentary material or tangible things, or may have any information, relevant to a violation” of the laws that the Bureau enforces. Id. § 5562(c)(1); see also 12 C.F.R. § 1080.6. CIDs allow the Bureau to investigate and collect information “before the institution of any proceedings.” 12 U.S.C. § 5562(c)(1). Each CID must “state the nature of the conduct constituting the alleged violation which is under investigation and the provision of law applicable to such violation.” Id. § 5562(c)(2); see also 12 C.F.R. § 1080.5. Because “CIDs are not self-enforcing,” John Doe Co. v. CFPB, 849 F.3d 1129, 1131 (D.C. Cir. 2017), the CFPB must file a petition in federal court to enforce a CID if a recipient refuses to comply, 12 U.S.C. § 5562(e)(1).

III.

A district court’s decision on a petition to enforce an administrative subpoena is reviewed for abuse of discretion, but the legal standard applied by the district court is reviewed de novo. See FTC v. Boehringer Ingelheim Pharm., Inc., 778 F.3d 142, 148 (D.C. Cir. 2015); see also McLane Co. v. EEOC, No. 15-1248, — U.S. -, 137 S.Ct. 1159, 1167, 1168 n.3, 197 L.Ed.2d 500, 2017 WL 1199454, at *6, *7 n.3 (U.S. 2017).

As noted, the Bureau may issue CIDs to obtain information relevant to potential violations of the laws it enforces before initiating any proceedings. 12 U.S.C. § 5562(c); 12 C.F.R. § 1080.6. We have treated CIDs as a form of administrative subpoena. See FTC v. Ken Roberts Co., 276 F.3d 583, 584-87 (D.C. Cir. 2001); Invention Submission, 965 F.2d at 1087; see also United States v. Markwood, 48 F.3d 969, 975-76 (6th Cir. 1995). “Administrative agencies wield broad power to gather information through the issuance of subpoenas.” Resolution Trust Corp. v. Thornton, 41 F.3d 1539, 1544 (D.C. Cir. 1994). Pursuant to their “power of inquisition,” agencies may use subpoenas to “investigate merely on suspicion that the law is being violated, or even just because [they] want[] assurance that it is not.” United States v. Morton Salt Co., 338 U.S. 632, 642-43, 70 S.Ct. 357, 94 L.Ed. 401 (1950); see also Okla. Press Publ’g Co. v. Walling, 327 U.S. 186, 216, 66 S.Ct. 494, 90 L.Ed. 614 (1946); SEC v. Arthur Young & Co., 584 F.2d 1018, 1023-24 (D.C. Cir. 1978); Texaco, 555 F.2d at 875.

Courts play a limited role in subpoena enforcement proceedings. U.S. Int’l Trade Comm’n v. ASAT, Inc., 411 F.3d 245, 253 (D.C. Cir. 2005); Texaco, 555 F.2d at 871-72. In determining whether to enforce a CID, courts consider only whether “[ (1) ] the inquiry is within the authority of the agency, [ (2) ] the demand is not too indefinite and [ (3) ] the information sought is reasonably relevant.” Ken Roberts, 276 F.3d at 586 (quoting Morton Salt, 338 U.S. at 652, 70 S.Ct. 357); see also United States v. Powell, 379 U.S. 48, 57-58, 85 S.Ct. 248, 13 L.Ed.2d 112 (1964); Arthur Young, 584 F.2d at 1023-24. Courts must also ensure that subpoenas are not “unduly burdensome or unreasonably broad.” Texaco, 555 F.2d at 881-82; see also Arthur Young, 584 F.2d at 1031-33. Courts generally defer to an agency’s interpretation of the scope of its own investigation. See FTC v. Church & Dwight Co., 665 F.3d 1312, 1315-16 (D.C. Cir. 2011); Dir., Office of Thrift Supervision v. Vinson & Elkins, LLP, 124 F.3d 1304, 1307 (D.C. Cir. 1997). Thus, “when the information sought falls within the purview of the regulatory agency’s authority,” judicial review of an administrative subpoena typically results in enforcement. FEC v. Machinists Non-Partisan Political League, 655 F.2d 380, 385-86 (D.C. Cir. 1981) (citations omitted).

But there are real limits on any agency’s subpoena power. Ken Roberts, 276 F.3d at 586; Arthur Young, 584 F.2d at 1023-24. As an initial matter, the deference courts afford agencies does not “eviscerate the independent role which the federal courts play in subpoena enforcement proceedings.” Machinists Non-Partisan Political League, 655 F.2d at 386; see also ASAT, 411 F.3d at 254. The statutory power to enforce CIDs in the district courts, see 12 U.S.C. § 5562(e), entrusts courts with the authority and duty not to rubber-stamp the Bureau’s CIDs, but to adjudge their legitimacy, see FTC v. Owens-Corning Fiberglas Corp., 626 F.2d 966, 973-74 (D.C. Cir. 1980). As we have stated, “federal courts stand guard ... against abuses of the[] subpoena-enforcement processes....” Arthur Young, 584 F.2d at 1024 & n.39. A court’s role in enforcement proceedings, while limited, “is neither minor nor ministerial.” Ken Roberts, 276 F.3d at 587. Otherwise put, “while the court’s role ... is narrow ... within its confines it is potent[.]” Arthur Young, 584 F.2d at 1024 n.39.

Agencies are also not afforded “unfettered authority to cast about for potential wrongdoing....” In re Sealed Case (Admin. Subpoena), 42 F.3d 1412, 1418 (D.C. Cir. 1994). Accordingly, courts will not enforce a CID when the investigation’s subject matter is outside the agency’s jurisdiction. See Morton Salt, 338 U.S. at 652, 70 S.Ct. 357; Ken Roberts, 276 F.3d at 586-87; Machinists Non-Partisan Political League, 655 F.2d at 386. Nor will they enforce a demand “where there is ‘too much indefiniteness or breadth’ in the items requested.” Machinists Non-Partisan Political League, 655 F.2d at 385 (quoting Okla. Press, 327 U.S. at 208-09, 66 S.Ct. 494). In extraordinary circumstances, a court also may inquire into allegations that an agency is using an administrative subpoena for an improper purpose. See Powell, 379 U.S. at 58, 85 S.Ct. 248; Resolution Trust Corp. v. Frates, 61 F.3d 962, 965 (D.C. Cir. 1995).

IV.

The district court’s memorandum opinion supporting its denial of the CFPB’s petition for enforcement discusses broadly the authority of the Bureau to conduct the investigation in which the CID was issued. The' court addressed ACICS’s argument that “the CFPB is attempting to conduct an investigation outside its statutory authority....” 183 F.Supp.3d at 82. Ultimately, the court concluded that “the CFPB lacks authority to investigate the process for accrediting for-profit schools....” Id. at 84. Before us, the parties largely argue the case in equally broad terms. However, as the district court rightly observed, the issue before that court, and now this one, is a single question: “Did the CFPB have the statutory authority to issue the CID in question?” Id. at 82. Because we can easily answer the issue on a narrower basis, and because the invalidity of the CID makes it unnecessary to reach the broad determination of the Bureau’s authority to investigate the area of accreditation at all, we will not reach the broad question answered by the district court. Rather, we will confine our analysis to the invalidity of this particular CID.

An administrative agency’s authority to issue subpoenas “is created solely by statute.” Peters v. United States, 853 F.2d 692, 696 (9th Cir. 1988). Thus, before analyzing whether the Bureau’s investigation is “sanctioned” by the CFPA, Resolution Trust Corp. v. Walde, 18 F.3d 943, 947 (D.C. Cir. 1994), we will determine whether the Bureau complied with the CFPA’s statutory requirements in the issuance of this CID, Markwood, 48 F.3d at 976-77, 980; see also Powell, 379 U.S. at 57-58, 85 S.Ct. 248. Although the CFPB may define the boundary of its investigation “quite generally,” Invention Submission, 965 F.2d at 1090, it must comply with the terms of 12 U.S.C. § 5562(c)(2) before we can fully consider the Morton Salt factors.

The CFPA mandates that “[e]ach [CID] shall state the nature of the conduct constituting the alleged violation which is under investigation and the provision of law applicable to such violation.” 12 U.S.C. § 5562(e)(2); see also 12 C.F.R. § 1080.5. Section 5562(c)(2) ensures that the recipient of a CID is provided with fair notice as to the nature of the Bureau’s investigation. Because the validity of a CID is measured by the purposes stated in the notification of purpose, see Church & Dwight, 665 F.3d at 1315, the adequacy of the notification of purpose is an important statutory requirement.

In this case, the CID’s Notification of Purpose states:

The purpose of this investigation is to determine whether any entity or person has engaged or is engaging in unlawful acts and practices in connection with accrediting for-profit colleges, in violations of sections 1031 and 1036 of the Consumer Financial Protection Act of 2010, 12 U.S.C. §§ 5531, 5536, or any other Federal consumer financial protection law. The purpose of this investigation is also to determine whether Bureau action to obtain legal or equitable relief would be in the public interest.

In this proceeding, other than noting that an agency may define the scope of its investigation in general terms, the Bureau wholly fails to address the perfunctory nature of its Notification of Purpose. As noted, the Bureau’s ability to define the boundary of its investigation does not absolve it from complying with the CFPA. We conclude that, as written, the Notification of Purpose fails to state adequately the unlawful conduct under investigation or the applicable law.

To begin with, the CID describes “the nature of the conduct constituting the alleged violation which is under investigation,” 12 U.S.C. § 5562(c)(2), as simply “unlawful acts and practices in connection with accrediting for-profit colleges.” Granted, a notification of purpose may use broad terms to articulate an investigation’s purpose, see Texaco, 555 F.2d at 874 n.26, 877, but § 5562(c)(2) mandates that the Bureau provide the recipient of the CID with sufficient notice as to the nature of the conduct and the alleged violation under investigation. Unlike the cases relied on by the Bureau, see, e.g., Church & Dwight, 665 F.3d at 1314; Invention Submission, 965 F.2d at 1087-88, the CID in this case does not inform ACICS of the investigation’s purpose. The Notification of Purpose defines the relevant conduct as “unlawful acts and practices in connection with accrediting for-profit colleges.” It never explains what the broad and non-specific term “unlawful acts and practices” means in this investigation. Tellingly, in attempting to explain the scope of its investigation, the Bureau merely repeats the broad language used in the Notification of Purpose. As we observed above, our review of the validity of a CID is governed by the Morton Salt analysis. While that review is narrow, it is not without content. As we noted in a subpoena enforcement proceeding involving a different federal agency, “broad language used to describe th[e] purpose makes it impossible to apply the other prongs of the Morton Salt test.” Sealed Case, 42 F.3d at 1418; cf. FTC v. Carter, 636 F.2d 781, 788 (D.C. Cir. 1980) (“The Commission ... allowed our examination of the relevance of their subpoena requests[ ] by identifying the specific conduct under investigation.... ”). We cannot determine, for example, whether the information sought in the CID is reasonably relevant to the CFPB’s investigation without knowing what “unlawful acts and practices” are under investigation. That is to say, where, as in this case, the Notification of Purpose gives no description whatsoever of the conduct the CFPB is interested in investigating, we need not and probably cannot accurately determine whether the inquiry is within the authority of the agency and whether the information sought is reasonably relevant. In short, we reach the same conclusion as the district court — albeit on narrower grounds — that is, the CID does not comply with the requirements of the statute.

The CFPB’s recognition that it lacks statutory authority over the accreditation process of for-profit colleges further illustrates the CID’s inadequacy. The CFPB’s ability to define the scope of its investigation broadly “does not afford it unfettered authority to cast about for potential wrongdoing....” Sealed Case, 42 F.3d at 1418; see also Church & Dwight, 665 F.3d at 1316. The Bureau argues that it has an interest in the “possible connection” and “intersection” between the lending practices of ACICS-aecredited institutions and the accreditation process. Even if the CFPB is correct, that interest does not appear on the face of the Notification of Purpose. While the Bureau may be correct in noting that it need not speculate as to “the precise character of [the] possible violations” its investigation might uncover, see Texaco, 555 F.2d at 877, it is required by statute to adequately inform ACICS of the link between the relevant conduct and the alleged violation. As the district court correctly noted, the Notification of Purpose “says nothing” about this potential link. See 183 F.Supp.3d at 83.

The CID’s description of “the provision of law applicable to such violation,” 12 U.S.C. § 5562(c)(2), is similarly inadequate. The Notification of Purpose identifies 12 U.S.C. §§ 5531 and 5536, as well as “any other Federal consumer financial protection law,” as the applicable laws. Sections 5531 and 5536 set forth the CFPA’s general prohibition of unfair, deceptive, or abusive acts and practices in connection with transactions involving consumer financial products and services. See id. §§ 5531(a), 5536(a)(1)(B). These provisions “stand[] broadly alone” in the Bureau’s Notification of Purpose, especially considering the Bureau’s failure to adequately state “the specific conduct under investigation,” and thus tell ACICS nothing about the statutory basis for the Bureau’s investigation. See Carter, 636 F.2d at 788. The CFPA provides detailed definitions of “Federal consumer financial law,” 12 U.S.C. § 5481(12), (14), and “[cjonsumer financial product or service,” id. § 5481(5), (15), yet the CID contains no mention of these definitions or how they relate to its investigation. The inclusion of the uninformative catch-all phrase “any other Federal consumer financial protection law” does nothing to cure the CID’s defects. Congress limited the Bureau’s CID authority with § 5562(c)(2)’s notice requirements, and framing the applicable law in such a broad manner does not satisfy Congress’s clear directive. Indeed, were we to hold that the unspecific language of this CID is sufficient to comply with the statute, we would effectively write out of the statute all of the notice requirements that Congress put in.

Conclusion

For the reasons stated, we conclude that the CID failed to advise ACICS of “the nature of the conduct constituting the alleged violation which is under investigation and the provision of law applicable to such violation.” 12 U.S.C. § 5562(c)(2). Accordingly, we affirm the district court’s denial of the Bureau’s petition to enforce the CID.

So ordered.

      . We express no opinion as to whether a revised CID that complies with § 5562(c)(2) should be enforced. Cf. United States v. Aero Mayflower Transit Co., 831 F.2d 1142, 1146 n.6 (D.C. Cir. 1987).