## Facts

- The National Council for Adoption (NCFA) is a nonprofit whose member adoption agencies facilitate intercountry adoptions.
- In February 2018, the U.S. Department of State posted an online FAQ about international-adoption fee schedules stating that “soft referrals” were not acceptable under regulations and “may lead to adverse action.”
- In March 2018, the Department posted “Guidance on Soft Referrals,” defining “soft referrals” to include: (1) informing prospective adoptive parents about a specific child before the country of origin determined the child eligible for intercountry adoption; and (2) matching a child to a family before required home study and background checks were complete, effectively “holding” the child.
- The Department later posted an additional FAQ indicating that some informal matching before a home study might be permissible, but not if a child’s file was held in a way that prevented matching with other families.
- NCFA alleged member agencies stopped certain practices newly labeled “soft referrals” to avoid enforcement consequences, resulting in lost referrals and revenue.
- NCFA sued under the Administrative Procedure Act (APA), alleging the Guidance was an unlawful legislative rule issued without notice and comment and was arbitrary and capricious.
- The district court dismissed for lack of Article III standing; NCFA appealed.

## Issues

1. Whether NCFA had Article III associational standing to challenge the Department’s “soft referral” Guidance based on injuries to its member agencies.
2. Whether the Guidance functioned as a legislative rule requiring APA notice-and-comment procedures, rather than nonbinding interpretive guidance or a policy statement.
3. Whether the proper remedy, if the Guidance was procedurally invalid, was vacatur.

## Decision

- The D.C. Circuit reversed the standing dismissal and held NCFA had associational standing based on member declarations alleging concrete operational and economic harms.
- The court held the “soft referral” Guidance operated as a legislative rule because it categorically prohibited defined practices under threat of “adverse action,” rather than merely interpreting existing regulations.
- Because the Department did not use notice-and-comment rulemaking, the Guidance was procedurally invalid under APA § 553.
- The court vacated the Guidance and remanded.

## Legal Principles

- An association has standing when at least one member has a concrete injury fairly traceable to the challenged agency action, likely to be redressed by the requested relief, and the claim and relief do not require individual member participation beyond supporting evidence.
- Agency “guidance” is treated as a legislative rule when, in practice, it imposes new obligations or prohibitions on regulated parties or otherwise binds them, including through threatened enforcement consequences.
- Legislative rules generally require notice-and-comment procedures; failure to follow required procedures renders the rule invalid and subject to being set aside (vacated).
- A court may resolve a case on procedural APA grounds without reaching separate substantive challenges (such as arbitrary-and-capricious review) when procedural invalidity is dispositive.

## Conclusion

The D.C. Circuit held NCFA could sue on behalf of member agencies harmed by compliance changes prompted by the Department’s “soft referral” pronouncements, and it vacated the Guidance as an unlawful legislative rule issued without notice and comment.


Nat'l Council for Adoption v. Blinken, 4 F.4th 106 (D.C. Cir. 2021)