
USCA1 Opinion

	




          January 22, 1993                            UNITED STATES COURT OF APPEALS                                FOR THE FIRST CIRCUIT                              _________________________          No. 92-1539                            COMMONWEALTH OF MASSACHUSETTS,                            DEPARTMENT OF PUBLIC WELFARE,                                 Plaintiff, Appellant,                                          v.                          SECRETARY OF AGRICULTURE, ET AL.,                                Defendants, Appellees.                              _________________________                     APPEAL FROM THE UNITED STATES DISTRICT COURT                          FOR THE DISTRICT OF MASSACHUSETTS                     [Hon. William G. Young, U.S. District Judge]                                             ___________________                              _________________________                                Selya, Circuit Judge,                                       _____________                         Higginbotham,* Senior Circuit Judge,                                        ____________________                               and Cyr, Circuit Judge.                                        _____________                              _________________________               Douglas H.  Wilkins, Assistant  Attorney General, with  whom               ___________________          Scott Harshbarger, Attorney General, was on brief, for appellant.          _________________               Arvid  E. Roach, II, with whom Virginia G. Watkin, Thomas H.               ___________________            __________________  _________          Odom,  and Covington  &  Burling were  on  brief, for  States  of          ____       _____________________          Alabama,  California,  Florida,   Georgia,  Illinois,   Kentucky,          Louisiana, Nebraska, Ohio, Oklahoma, West Virginia and Wisconsin,          amici curiae.               Deborah Ruth Kant, Attorney,  Civil Division, United  States               _________________          Department  of Justice,  with  whom Stuart  M. Gerson,  Assistant                                              _________________          Attorney General, A. John Pappalardo, United States Attorney, and                            __________________          Barbara C. Biddle,  Attorney, Civil Division, were  on brief, for          _________________          appellees.                              _________________________                              _________________________          _______________          *Of the Third Circuit, sitting by designation.                    SELYA,  Circuit Judge.    In federal  fiscal year  (FY)                    SELYA,  Circuit Judge.                            _____________          1982, lasting  from October 1,  1981 through September  30, 1982,          the  Commonwealth  of Massachusetts  distributed food  stamps far          exceeding the margin of  error allowable under applicable federal          regulations.  Consequently, Food and Nutrition Service (FNS), the          branch of the United States Department of Agriculture responsible          for  overseeing  the  food  stamp  program,  imposed  a  punitive          sanction.                    Massachusetts unsuccessfully appealed  the sanction  to          the Food Stamp Appeal Board (the Board).  It then sought judicial          review in federal  district court.  See  7 U.S.C.   2023  (1982).                                              ___          The  court granted summary judgment in  favor of the defendants,1          albeit in two steps.   See Massachusetts v. United States, 737 F.                                 ___ _____________    _____________          Supp.  120 (D.  Mass. 1990)  (Massachusetts I);  Massachusetts v.                                        _______________    _____________          United States, 788 F.  Supp. 1267 (D. Mass. 1992)  (Massachusetts          _____________                                       _____________          II).          __                    Finding the penalty  hard to swallow, the  Commonwealth          serves  up a  gallimaufry  of issues  for appellate  mastication.          Although these issues  contain some food  for thought, they  lack          true  nutritive  value.   Consequently,  we  affirm the  judgment          below.          I.  FACTUAL PRELUDE          I.  FACTUAL PRELUDE                    Congress designed the Food Stamp  Act of 1964, Pub.  L.                                        ____________________               1The Commonwealth named a host  of federal defendants in its          suit, including the United  States, the Secretary of Agriculture,          the Department  of Agriculture, the Board, and  FNS.  For ease in          reference,  we treat the appeal as if the appellees were a single          entity.                                          2          No. 88-525, 78 Stat. 103 (1964), codified as amended, 7 U.S.C.                                              ___________________          2011-2030 (1982),  to provide low-income families  with access to          government-subsidized  foodstuffs.    Although the  coupons  were          actually disbursed  by the  participating states, FNS  paid fifty          percent  of the administrative  costs and one  hundred percent of          the  food  subsidy  costs.   In  time,  the  federal government's          generosity   produced   an  unfortunate   side   effect;  because          overpayments were charged  to the federal tab, states  had little          incentive  to  keep   distributions  in  line.     To  curb  this          profligacy, Congress eventually enacted a quality control program          (QCP) to ensure more accurate food stamp distribution.  The first          QCP took effect  in 1977.  Pub. L. No. 95-113,   16, 91 Stat. 976          (1977).                    From that point forward, Congress persistently tinkered          with the QCP's features.   During FY 1982, the  QCP required that          each state  survey a sample of  its food stamp cases  in order to          estimate  in what percentage of them it had distributed the wrong          number  of food stamps.  After receiving the states' tallies, FNS          would set a target error rate (the TER), take a subsample of each          state's  cases, recheck  them for  errors, and  employ regression          analysis  to blend the federal and state estimates of state error          rates into a single estimated error rate (the EER) for the state.          See 7 U.S.C.A.   2025(g) (West Supp. 1981); 94 Stat. 363  (1980);          ___          see also  7 C.F.R.    275.25(d)(6)  (1982).   If the state's  EER          ___ ____          surpassed the TER, as  determined by FNS, the  federal government                                          3          imposed a  monetary sanction.2    Such fines  were calculated  by          multiplying the  total dollar  value of state-issued  food stamps          for  the fiscal year times the difference between the state's EER          and  its TER.  See 7 C.F.R.    275.25(d)(3) (1982).  If, however,                         ___          the  state's EER  was below  five percent,  the state  received a          bonus:   the federal government increased its contribution to the          program's  administrative  costs  from  fifty  percent  to  sixty          percent.  See 7 C.F.R.   275.25(c)(2)(i) (1982).                    ___                    In  FY  1982,  FNS  set Massachusetts's  TER  at  14.88          percent.   After the two sovereigns completed  their sampling and          resolved some mathematical bevues by negotiation, FNS figured the          EER  to be  roughly  16.35 percent  and,  accordingly, fined  the          Commonwealth $1,323,864.   The penalty survived  scrutiny by both          the Board and the district court.                    In  this  appeal,  Massachusetts makes  four  principal          claims:  (1)  that the  quality control provisions  on which  the          sanction rested were  no longer  in effect when  FNS imposed  the          sanction; (2) that FNS's sampling methodology was so biased as to          offend  the Food  Stamp Act; (3)  that FNS's  use of  too large a          sample skewed the results; and (4) that FNS erred in  refusing to          grant  a good-cause  waiver.   We  treat  these asseverations  in          sequence.          II.  LACK OF STATUTORY AUTHORITY          II.  LACK OF STATUTORY AUTHORITY                    Massachusetts and the amici join in urging that FNS had                                        ____________________               2We discuss  infra Part  IV the circumstances  in which  the                            _____          imposition of a monetary sanction might be waived.                                          4          no  authority  to levy  sanctions  for FY  1982  because Congress          repealed the QCP  effective October  1, 1982.   This claim  stems          from  passage of  the Omnibus  Budget Reconciliation  Act (OBRA),          Pub.  L. No. 97-253, 96 Stat. 763 (1982), enacted in September of          1982.   OBRA completely revamped the Food Stamp Act's approach to          quality   control.    The  legislation  repealed  the  previously          existing QCP and  fashioned a  new regimen  effective October  1,          1982 (the first  day of  FY 1983).   Massachusetts contends  that          this   legislative   legerdemain   undermined   FNS's   authority          thereafter to impose sanctions for FY 1982.3                    It is a hoary rule of the common law that the repeal of          a statute  eliminates any inchoate liability  for penalties under          the repealed statute.  See, e.g., United States v. Reisinger, 128                                 ___  ____  _____________    _________          U.S. 398, 401 (1888).  In order to ameliorate this rule, Congress          passed a general savings statute providing in pertinent part that          the "repeal of  any statute shall not have the  effect to release          or  extinguish  any penalty,  forfeiture,  or  liability incurred          under such statute . . . ."  1 U.S.C.   109 (1982).  On its face,          section 109 seems adequate to preserve the authority by which FNS          purposed to sanction the Commonwealth.                    In  an  effort to  escape  the  savings statute's  web,          Massachusetts  notes that  the QCP  allowed waivers  of liability                                        ____________________               3Since  we  can  find  no  indication  in  the  record  that          Massachusetts raised this issue before the Board, the point is at          least  arguably waived.    But, because  the  issue goes  to  the          Board's jurisdiction and because  the appellees have not advanced          a claim of waiver,  we choose to address it,  notwithstanding the          possible incidence of procedural default.                                          5          premised on subsequent corrective measures.  See, e.g., 7  C.F.R.                      __________                       ___  ____            275.25(d)(5)  (1982).   From this datum,  Massachusetts deduces          that it could not  have "incurred" liability until such  a waiver          was  denied    an event  which took place  well after  October 1,          1982.  The  court below  found this argument  unpersuasive.   See                                                                        ___          Massachusetts II, 788 F. Supp.  at 1269 n.3. So do we.   The mere          ________________          fact that Congress grants  an agent the power to  waive sanctions          does not  turn back the  clock and  eradicate the reality  of the          underlying violation.  Thus, we  do not believe Congress intended          that liability would  be deemed "incurred"  under federal law,  1          U.S.C.      109,   only  when   all  opportunities   for  special          dispensations had been exhausted and a previously imposed penalty          had  become irreversible.  See, e.g., Standard Oil Co. v. Federal                                     ___  ____  ________________    _______          Energy  Admin., 612  F.2d 1291,  1294 n.3  (Temp. Emer.  Ct. App.          ______________          1979)  (explaining why  costs  should be  deemed "incurred"  even          before the amount has become certain).  Rather, we think Congress          intended  that states incur liability for their food stamp errors          at the conclusion of the  six-month monitoring period, 7 U.S.C.A.            2025(g)(1)  (West Supp. 1981)    a period which, in  this case,          ended September 30, 1982.                    We have two main reasons for interpreting the interface          between the Food Stamp  Act and the savings statute in  this way.          In  the first place, it appears well established that the savings          statute  was designed to prevent  exactly the sort  of lapse that          Massachusetts argues occurred here.   See, e.g., Hamm v.  City of                                                ___  ____  ____     _______          Rock  Hill, 379 U.S. 306, 314 (1964) ("The federal saving statute          __________                                          6          . . . was meant to obviate mere technical abatement such as . . .          a  substitution of  a  new statute  with  a greater  schedule  of          penalties . .  . ."); United States v. Holley,  818 F.2d 351, 353                                _____________    ______          (5th Cir.  1987)  (similar).   Reading  the  savings  statute  to          release from liability any party who had not yet exhausted after-          the-fact remediation would hamper  the law's goal, contravene the          Supreme Court's  longstanding interpretation  of how the  statute          should  be applied,  and encourage  violators to  petition willy-          nilly for  discretionary administrative  relief in the  hope that          the statutory scheme might be changed betweentimes.                    In the second place, the statutory structure predicates          waiver on precedent liability.  See 7 U.S.C.A.   2025(g)(1) (West                                          ___          Supp. 1981) (providing that, under the Food Stamp Act's liability          program, an offending state shall pay the imposed fine unless the          Secretary determines that good  cause exists for waiver).   We do          not  think  Congress  placed the  cart  to  the  horse's rear  by          accident.  Had  Congress wished waiver considerations to  be part          and parcel  of a  liability determination,  it would  simply have          written the Food Stamp Act to premise liability on the absence of          those  factors that  allow  the granting  of good-cause  waivers.          Congress chose to structure the statute differently, however, and          we must honor its  bipartite design in our interpretation.   See,                                                                       ___          e.g.,  Ingersoll-Rand  Co.  v.  McClendon, 111  S.  Ct.  478, 482          ____   ___________________      _________          (1990); Greenwood Trust Co.  v. Massachusetts, 971 F.2d 818,  824                  ___________________     _____________          (1st Cir. 1992), cert. denied, 61 U.S.L.W. 3478 (U.S. 1993).                           _____ ______                    We  note, too, that  legislative statements surrounding                                          7          the  1982 repeal of the QCP, while admittedly less than pellucid,          indicate no  discernable intent to exonerate  states for pre-1983          administrative  errors.   Quite  the opposite:   the  legislative          history suggests  Congress intended to increase  the certainty of          penalties beginning  with FY  1983.   See S.  Rep. No.  504, 97th                                                ___          Cong., 2d Sess. 70-71, reprinted in 1982 U.S.C.C.A.N. 1641, 1708-                                 _________ __          09:                    [T]he . . . major flaw in the existing system                    [is  that] [t]he  current penalty  . .  . has                    proven difficult to apply in practice because                    of the relatively large amounts involved and,                    as a result,  the Secretary has  [frequently]                    chosen  to   waive  its  application.     The                    sanctions established [by the new  statute] .                    . . should not  be waived except when unusual                    circumstances intervene.          Given this purpose,  it seems unlikely that Congress intended the          1982 repeal  to preclude  enforcement of the  earlier regulations          for 1981  and 1982  in instances  where  good-cause reviews  were          imminent or ongoing, but had not yet been decided.                    For these reasons,  we reject the Commonwealth's  claim          that FNS  lacked statutory authority  to impose the  sanctions in          question.          III.  STATISTICAL METHODOLOGY          III.  STATISTICAL METHODOLOGY                    Having   confirmed  the   vitality   of  the   sanction          provision,  we turn  next  to  the Commonwealth's  double-jointed          challenge  to  the  statistical methodology  that  FNS  employed.          Before  reaching Massachusetts's  two  substantive arguments,  we          think  it  is  useful to  explicate  the  applicable standard  of          judicial review.                                          8                               A.  Standard of Review.                               A.  Standard of Review.                                   __________________                    The Food Stamp Act provides for de novo review of final                                                    __ ____          administrative determinations in  the district court.4   However,          this    searching   standard    is   restricted    to   liability          determinations.   See Broad St. Food Mkt., Inc. v. United States,                            ___ _________________________    _____________          720 F.2d 217, 220 (1st Cir. 1983); Collazo v.  United States, 668                                             _______     _____________          F.2d 60,  65 (1st Cir. 1981).  It does  not spill over to penalty          determinations.  See Kulkin  v. Bergland, 626 F.2d 181,  184 (1st                           ___ ______     ________          Cir.   1980)   (holding  that,   under   the   Food  Stamp   Act,          "administrative  remedies  or sanctions  are  subject  to a  very          limited  judicial review").   A court scrutinizing administrative          remedies or sanctions imposed  under the Food Stamp Act  may only          overturn  those  actions that  appear  arbitrary, capricious,  or          contrary to law.  See  Haskell v. United States Dep't of  Agric.,                            ___  _______    ______________________________          930 F.2d 816, 820 (10th Cir. 1991); Woodard v. United States, 725                                              _______    _____________          F.2d 1072, 1077-78  (6th Cir. 1984); Broad St., 720  F.2d at 219-                                               _________          21; Hough  v. United States  Dep't of Agric.,  707 F.2d  866, 869              _____     ______________________________          (5th Cir. 1983); Kulkin, 626 F.2d at 184-85.                           ______                    To be  sure, both  Broad  St. and  Kulkin involved  (1)                                       __________      ______                                        ____________________               4The statute provides in pertinent part:                    [A] State  agency .  . . may  obtain judicial                    review    [of    a    final    administrative                    determination] by filing a  complaint against                    the United States in  the United States court                    for the  district in  which it resides  or is                    engaged in business  . . . .  The  suit . . .                    shall  be a  trial de  novo by  the court  in                    which  the court shall determine the validity                    ofthe questionedadministrativeaction inissue.          7 U.S.C.   2023(a) (1982).                                          9          factual findings  anent the culpability of food  store owners who          accepted food  stamps as  compensation for prohibited  goods, and          (2) determinations  about what sanctions were  condign, given the          identities of  the violators  and the  nature of the  violations.          See Broad St., 720 F.2d  at 219; Kulkin, 626 F.2d at 182-83.  The          ___ _________                    ______          question  in the  instant case  is more  complex because  the two          parts of the calculus   liability and sanctions   are imbricated:          FNS's determination  that  Massachusetts's EER  was  unacceptably          high essentially determined both the Commonwealth's liability and                                      ____          the  amount  of  the   resultant  sanction.    See  7   C.F.R.                                                            ___          275.25(d)(3) (1982) (explicated supra pp. 3-4).                                          _____                    Notwithstanding  this  conflation   of  liability   and          remediation,  a  reviewing court's  path  remains  clear.   Where          liability  is  at issue,  section  2023(a)  requires that  courts          review administrative determinations de  novo.  If this statutory                                               __  ____          bedrock is to  endure, inexorably mixed  issues of liability  and          sanctions  must  likewise be  assessed de  novo,  even if  such a                                                 __  ____          penetrating standard  of judicial review intrudes  to some extent          into agency decisionmaking in the sanctions area.  Thus,  insofar          as the Commonwealth's assignments of error implicate the validity          of  the EER  and, therefore,  the amount  of the  penalty levied,          plenary review is indicated.                    We are quick to remark, however, that de novo review in                                                          __ ____          cases  of this genre does not give  courts an entirely free hand.          Where, as here, the issues before the court  are legal in nature,          de novo review of an administrative matter does not mean that the          __ ____                                          10          district  court must  devise an  entirely new  regulatory scheme.          Rather, in  respect to  liability issues,  the court  must ensure          that the agency has  followed its own regulations and  that those          regulations  do not  exceed the  scope of  the  agency's mandate.          With  these precepts in  mind, we now  address the Commonwealth's          statistical arguments.5                                B.  Statistical Bias.                                B.  Statistical Bias.                                    ________________                    In order  to estimate Massachusetts's food  stamp error          rate  and thereby  determine  what  (if  any) sanction  might  be          appropriate,  FNS sampled  194  of the  Commonwealth's cases  for          compliance.  Massachusetts and the amici urge that the appellees'          sampling  methodology  is  unlawful  because the  risk  of  error          inherent in FNS's approximation is not evenly  shared between the          state  and the  federal  government.   Because FNS's  statistical          method  effectively  determines the  Commonwealth's  liability as          well as the amount of  the sanction to be imposed, our  review of          the statistical bias claim is plenary.                    We  start with  the  obvious:    FNS's sampling  is  no          different than any  other statistical sampling in  that it cannot          produce results that reflect the actual error rate  with unerring          accuracy.   Thus, whatever  sampling technique  is used, the  EER                                        ____________________               5Because  the court  of appeals  and the district  court are          constrained  to  apply exactly  the  same  standards of  judicial          review  in these situations, we cede no deference to the district          court's views.   See Lloyd v. Georgia  Gulf Corp., 961 F.2d 1190,                           ___ _____    ___________________          1193  (5th Cir. 1992); Terry A. Lambert Plumbing, Inc. v. Western                                 _______________________________    _______          Sec. Bank, 934 F.2d 976, 979 (8th Cir. 1991).          _________                                          11          will sometimes underestimate and sometimes overestimate a state's          actual  error  rate.    Massachusetts  recognizes  this  fact  of          statistical life but  complains that  it must foot  the bill  for          overestimations  by paying sanctions although if underestimations          occur it reaps no corresponding benefit (e.g., credits that could                                                   ____          be  used to  offset  future penalties).    As  a matter  of  pure          mathematics,  the Commonwealth's  theory appears  to  hold water.          Under  the federal scheme, the  risk of error  causes the penalty          provision to weigh more heavily on the states than on the federal          government.6  Nonetheless,  we do not  see how this  circumstance          renders the scheme unlawful.                    The  Food Stamp Act provides that a state is liable for          "the dollar value  equivalent of the State agency's payment error          rate, as determined by  the Secretary," to the extent  it exceeds          the  higher of  the  national payment  rate  or the  state  error          payment  rate  minus the  national rate  of  error reduction.   7          U.S.C.A.    2025(g) (West Supp.  1981).   There are  a number  of          mechanisms by which FNS could implement this statutory directive,          each with incumbent advantages and disadvantages.   Massachusetts          suggests  that   this   court's   right   to   review   liability          determinations  de novo leaves us free  to rethink the regulatory                          __ ____          choice among these various options.                    We  do not agree.  The power of plenary judicial review                                        ____________________               6Of course, the states  profit from a similar bias  when FNS          awards  bonuses for  lower error  rates.   In that  instance, the          federal government bears the  cost of underestimating state error          rates but gains no offsetting advantage from overestimates.                                          12          does not obviate the devoir of persuasion in a food stamp case in          which  a  plaintiff challenges  the  validity  of the  regulatory          mosaic.   See Kulkin, 626 F.2d at 183.   To carry its burden, the                    ___ ______          plaintiff must still  show that the  federal agency exceeded  its          statutory or constitutional authority.  An attempt to make such a          showing  must  frankly  recognize  that  the  art  of  regulation          involves line-drawing.  When Congress entrusts an agency with the          responsibility for  drawing lines, and the  agency exercises that          authority  in a reasonable way,  neither the fact  that there are          other possible places  at which the line  could be drawn  nor the          fact  that the administrative  scheme might  occasionally operate          unfairly   from  a   particular   participant's  perspective   is          sufficient, standing alone,  to undermine the  scheme's legality.          See  Knebel v. Hein,  429 U.S. 288, 294  (1977) (holding that the          ___  ______    ____          availability of  more equitable  food stamp regulations  does not          render  the  Secretary's particular  regulatory  scheme invalid);          Louisiana  v. Black, 694 F.2d 430, 431-32 (5th Cir. 1982) (same);          _________     _____          see  also  Chevron  U.S.A.  Inc.  v.  Natural  Resources  Defense          ___  ____  _____________________      ___________________________          Council, Inc., 467 U.S. 837, 843 n.11 (1984) ("The court need not          _____________          conclude  that  the  agency  construction was  the  only  one  it          permissibly  could have adopted  . . .  to uphold [it] .  . . .")          (collecting cases); Mourning v.  Family Publications Serv., Inc.,                              ________     _______________________________          411  U.S. 356, 371  (1973) ("That  some other  remedial provision          might be preferable is irrelevant.").  In other words, so long as          the administrative scheme  is a  valid exercise  of the  agency's                                           _____          authority, whether or  not a perfect exercise of  that authority,                                       _______                                          13          the courts must honor it.  See Sprandel v. Secretary  of HHS, 838                                     ___ ________    _________________          F.2d  23, 27 (1st Cir.  1988) (per curiam)  (observing that where          administrative line-drawing is  involved, "there  are no  perfect          solutions").                    These  principles are dispositive  here.  Massachusetts          argues,  in effect, that a system  of credits and debits for each          state would be  preferable to, and  fairer than, the  statistical          methodology selected  by FNS.   Whether  or not  this is  so, the          Commonwealth has not demonstrated that the system selected by FNS          is an irrational one,  that it is arbitrarily conceived,  that it          is  profoundly flawed, or that it operates in a wholly capricious          manner.   Congress  directed  that  the  error  rate  was  to  be          "determined  by the Secretary," 7  U.S.C.A.   2025(g) (West Supp.          1981), and  the Secretary implemented this  directive through the          application  of what  all  parties agree  is routine  statistical          sampling.  The  enabling statute itself  sets out the  arithmetic          mechanism for determining the sanction, given the error rate; the          Secretary has followed this  command, albeit without refining his          statistical  estimates.   The  Secretary might,  as Massachusetts          advocates,  have  installed   a  more  intricate   and  sensitive          statistical  system,  but doing  so  would  not necessarily  have          represented an  improvement.  The proposed  alternatives would by          all  accounts be more  complicated to  administer and  could well          prove less of a deterrent to administrative errors.                    In terms of our analogy, the line drawn  by FNS, as the          Secretary's designee, seems to have been plotted sensibly, if not                                          14          with  perfect  precision;  that  is, FNS  chose  a  configuration          consistent  with  statutory  imperatives   and  well  within  the          universe  of  plausible approaches.   Because  the administrative          scheme did not exceed  the agency's statutory discretion, summary          judgment was properly granted on this issue.  See Valley Citizens                                                        ___ _______________          for a Safe  Env't v. Aldridge, 886 F.2d 458,  469 (1st Cir. 1989)          _________________    ________          (finding that reasonableness of  agency action supported  summary          judgment); Kulkin,  626 F.2d  at 183 (upholding  summary judgment                     ______          where  the  disputed facts  were  immaterial  to the  plaintiff's          ultimate burden at trial).                                  C.  Oversampling.                                  C.  Oversampling.                                      ____________                    The Commonwealth also asserts that FNS violated its own          regulations  when it took a subsample comprised of 194 food stamp          cases (as  opposed  to the  180  cases specified  in 7  C.F.R.             275.3(c)(1)  (1982)).   The  district  court,  while noting  that          Massachusetts  had  not raised  the issue  before the  Board, see                                                                        ___          Massachusetts I, 737 F. Supp. at 122 n.3, reached  the merits and          _______________          ruled that the  regulations, while mentioning 180  cases, did not          set a maximum  subsample size.  Id. at 127.  For our part, we see                                          ___          no   reason  to   delve  behind  the   Commonwealth's  procedural          default.7     Accordingly,   we  hold   that   Massachusetts,  by                                        ____________________               7Our inquiry  into procedural  default has been  hindered by          the  Commonwealth's failure to follow  Fed. R. App.  P. 30(d) and          include  an  index   in  its  appendix   of  excerpts  from   the          administrative  record.   This  failure is  exacerbated by  other          shortcomings in  the main appendix:   various pages  are missing,          illegible,  and/or out  of  sequence.    It  is,  of  course,  an          appellant's obligation  "to provide  this court with  an appendix          sufficient  to support its points  on appeal."   United States v.                                                           _____________          One  Motor Yacht  Named Mercury,  527 F.2d  1112, 1113  (1st Cir.          _______________________________                                          15          neglecting to raise this claim before the Board, waived any right          to object to the sample size.8                    In the usual administrative law case, a court ought not          to consider points  which were not  seasonably raised before  the          agency.  See United States v. L. A. Tucker Truck Lines, Inc., 344                   ___ _____________    ______________________________          U.S. 33,  37 (1952)  (discussing the  "general  rule that  courts          should  not  topple  over  administrative  decisions  unless  the          administrative body . . . has erred against objection made at the          time appropriate  under its  practice"); Khalaf v.  Immigration &                                                   ______     _____________          Naturalization  Serv.,   909  F.2d  589,  592   (1st  Cir.  1990)          _____________________          (explaining  that  issues  not  raised  before an  administrative          appeal  board cannot  be  adjudicated in  the course  of judicial          review); Removatron Int'l  Corp. v. FTC,  884 F.2d 1489,  1493-94                   _______________________    ___          (1st Cir. 1989); Colin K.  v. Schmidt, 715 F.2d 1, 5-6  (1st Cir.                           ________     _______          1983).                    The   doctrine   of    procedural   default   in    the          administrative context is analogous  to the established rule that          appellate courts  will not  entertain arguments which  could have                                        ____________________          1975).  When, as now, an appellant shirks this duty, it must bear          the  onus  of  any  insufficiencies  in  the  record  on  appeal,          including inadequacies in the appendix.               8The parties have  characterized the Commonwealth's  failure          to raise the oversampling  issue as an "exhaustion" problem.   We          do  not view  it in  that light.   Administrative  exhaustion and          waiver can be  concurrent concepts  at times, see  IV Kenneth  C.                                                        ___          Davis, Administrative  Law Treatise    26:7 (1983), but  they are                 ____________________________          not  synonymous here.  Because the Board's decision was final and          reviewable by  the district court, we  believe that Massachusetts          exhausted its  administrative remedies.   See,  e.g., Athehortua-                                                    ___   ____  ___________          Vanegas  v. Immigration & Naturalization Serv., 876 F.2d 238, 240          _______     __________________________________          (1st Cir. 1989).                                          16          been, but  were  not, raised  in  the trial  court.   See,  e.g.,                                                                ___   ____          Clauson v. Smith, 823  F.2d 660, 666 (1st Cir.  1987) (collecting          _______    _____          cases).  As in the trial court/appellate court analogy, requiring          parties to develop their  arguments in the administrative setting          before seeking judicial review serves several salutary  purposes.          We  list three  such purposes  that have  direct bearing  in this          instance.                    First,  when  the  administrative agency  is  given  an          opportunity to  address a  party's objections,  it can  apply its          expertise, exercise  its informed  discretion, and create  a more          finely tuned record for judicial review.  By way of illustration,          if Massachusetts had appropriately raised the oversampling  issue          in  this case, we would now have  the benefit of both the Board's          interpretation  of the  applicable  regulations  and  its  expert          opinion concerning  the ultimate  effect of the  augmented sample          size.     Though  different  administrative  conclusions  deserve          different degrees  of deference,  it is essential  to the  proper          development of  administrative  law that  courts  exercise  their          function of judicial review on a well-rounded record.  See McKart                                                                 ___ ______          v.  United  States, 395  U.S. 185,  194  (1969); see  also Valley              ______________                               ___  ____ ______          Citizens,  886 F.2d at 469  (observing that "the  place to attack          ________          standard  methodology, at least in  the first instance, is before          the agency, not before a reviewing court").                    A second reason for applying strict rules of procedural          default  in the  administrative  context is  to promote  judicial          economy.    A  claim  seasonably  presented  to  the  appropriate                                          17          administrative  body has  an appreciable chance  of being  put to          rest,  or  at least  narrowed,  before  it depletes  the  heavily          burdened  resources of  the federal  courts.   Massachusetts, the          amici, and the  court below all  relate previous instances  where          there  were problems  with  sample sizes  and, consequently,  the          Board overturned  FNS sanctions.  See, e.g., Massachusetts I, 737                                            ___  ____  _______________          F. Supp. at 122.  Thus, raising the issue before  the Board might          well have led to its resolution, once and for all.                    Finally,  enforcing  procedural default  solidifies the          agency's autonomy  by allowing it the opportunity  to monitor its          own mistakes and by ensuring that regulated parties do not simply          turn  to the  courts as  a tribunal  of first  resort.   A double          whammy would  result if  Article III  judges encouraged such  end          runs  by demonstrating a  willingness to  hear all  challenges to          regulatory action regardless of  whether the parties raised those          challenges before the  affected agency:   power would drain  from          the agencies  and administrative appeals would  flood the federal          courts.                     To be  sure, there are  exceptional circumstances under          which  a court might dispense with the raise-or-waive rule in the          administrative  law context.    Cf., e.g.,  United  States v.  La                                          ___  ____   ______________     __          Guardia, 902 F.2d  1010, 1012-13 (1st Cir. 1990) (explaining why,          _______          in  a  criminal case,  the court  of  appeals would  exercise its          discretion to  review a particular constitutional  claim that had          not been  raised  in the  trial  court).   As a  general  matter,          however,  courts will  not entertain  an  issue that  the parties                                          18          failed  to raise  in the proper  administrative venue  unless the          issue is jurisdictional in nature or some other compelling reason          exists.  See  Tucker Truck Lines, 344 U.S. at  38; Rana v. United                   ___  __________________                   ____    ______          States,  812  F.2d  887, 889-90  &  n.2  (4th  Cir. 1987).    The          ______          Commonwealth tenders no such justification here.                    Whether FNS appropriately  followed its own regulations          in regard to  sampling, and  the effect and  consequences of  any          failure  to  do  so,  are  matters  which  in  no  way  implicate          jurisdictional concerns.  On the  contrary, they present the sort          of problems routinely within the Board's purview and at the heart          of its  expertise.   The Commonwealth  has advanced  no palatable          excuse  for failing to raise the oversampling issue at the proper          time  and in  the proper  forum.   Under these  circumstances, we          cannot  justify  any  relaxation  of  the  customary rule.    The          Commonwealth waived the oversampling issue.9          IV.  GOOD-CAUSE WAIVERS          IV.  GOOD-CAUSE WAIVERS                    Massachusetts argues  that it  was entitled to  a good-          cause  waiver as  a matter of  right and that  the district court          erred in summarily rejecting its beseechment.  We do not agree.                    Unlike  questions of  statistical propriety,  see supra                                                                  ___ _____          Part III, the  matter of  a good-cause waiver  is not  imbricated                                        ____________________               9Incident to  this procedural default  is the Commonwealth's          quest for  reversal on the ground  of inconsistent administrative          positions.   But  here, the  Commonwealth is  hoist with  its own          petard.    It did  not bring  the  oversampling issue  before the          Board,  thus depriving  the Board  of the  chance to  explore the          issue in a  zoetic context informed  by both case-specific  facts          and  administrative  precedents.   Because  we  cannot judge  the          Board's  consistency on an issue  it did not  adjudicate, we deem          this related claim to be waived as well.                                          19          with a fundamental determination  of liability but relates solely          to FNS's  determination of the  appropriate sanction.   Thus, the          Food Stamp  Act's  provision  for  de novo  review  of  liability                                             __ ____          findings  does  not apply.10    Instead,  we  review  the  waiver          denial to see whether it  was arbitrary, capricious, or  contrary          to law.  Broad St., 720 F.2d at 220; Kulkin, 626 F.2d at 184.  In                   _________                   ______          so doing, we recognize that an administrative agency enjoys great          latitude  to   interpret  its   own  rules  as   long  as   those          interpretations  are  reasonable.   See  Martin  v.  Occupational                                              ___  ______      ____________          Safety  & Health  Rev. Comm'n,  111 S.  Ct. 1170,  1175-76 (1991)          _____________________________          (explaining that an "agency's construction of its own regulations          is entitled  to substantial  deference") (quoting Lyng  v. Payne,                                                            ____     _____          476  U.S. 926, 939 (1986)); accord Udall  v. Tallman, 380 U.S. 1,                                      ______ _____     _______          16-17  (1965); Federal  Labor  Relations Auth.  v. United  States                         _______________________________     ______________          Dep't  of the  Navy, 941  F.2d 49,  59 (1st  Cir. 1991);  Dunn v.          ___________________                                       ____          Secretary of United States Dep't of Agric., 921 F.2d 365, 366-67,          __________________________________________          369 (1st Cir. 1990).                                        ____________________               10Indeed,  the legislative  history  reveals  that  Congress          explicitly   rejected   the   de  novo   judicial   review   that                                        __  ____          Massachusetts would have us indulge on this issue:                         Every State against which  the Secretary                    asserted a claim would have the right to seek                    administrative  and  judicial  review of  the                    claim  in  accordance  with   the  procedures                    contained in section 14 of the Act.   None of                    these procedures would  be applicable to  the                    Secretary's review of the  State's contention                    that  it had  good cause  for its  failure to                    meet the appropriate level of error.          H.R. Rep. No. 788,  96th Cong., 2d Sess. 74  (1980), reprinted in                                                               _________ __          1980 U.S.C.C.A.N. 843, 907.                                          20                    It is in the Secretary's realm to grant or deny a good-          cause  waiver.11   See 7  U.S.C.A.    2025(g) (West  Supp. 1981).                             ___          To obtain  such a waiver, a  state must show, at  a bare minimum,          that  one  of   the  following  events  occurred:    (1)  natural          disasters, civil disorders, labor unrest, or other  circumstances          beyond   the  state's   control,   adversely  affecting   program          operations;  (2) significant  caseload  growth;  (3)  legislative          changes    adversely    affecting    program   management;    (4)          misapplication  of federal  policy with  erroneous approval  from          FNS; or  (5) exemplary efforts to  reduce the error rate.   See 7                                                                      ___          C.F.R.   275.25(d)(5)(A)-(G).   Whereas a threshold showing along          these  lines may  qualify a  state for  a good-cause  waiver, the          Secretary  can  still deny  the waiver  if  he finds  the state's          showing insufficient  either because other factors overshadow the          applicant's  compendium  of  exculpatory  factors  or  because  a          particular  event  or  events  listed  by  the  applicant  cannot          withstand objective scrutiny.12  Id.                                           ___                    Massachusetts  sought  a  good-cause  waiver  on  three          grounds, viz., caseload growth, changes in federal laws, and good                                        ____________________               11The  Secretary has  delegated this  power to  FNS.   See 7                                                                      ___          C.F.R.   275.25(d)(5) (1982).               12The regulations also provide  for an "automatic" waiver in          certain limited  circumstances.   See 7 C.F.R.    275.25(d)(5)(G)                                            ___          (1982).  In  order to receive  such a waiver,  a state must  have          implemented an FNS-approved corrective  action program in the six          months before  the period during  which the excessive  error rate          materialized, and must meet  specially reduced target error rates          thereafter.  The record does not indicate that Massachusetts ever          claimed  eligibility for  an  automatic waiver  applicable to  FY          1982.                                          21          faith efforts to  reduce its error rate.   FNS denied the waiver.          In so doing, it took much of the wind from Massachusetts's sails.          Specifically, FNS explained  that Massachusetts's caseload growth          was  not  a sufficient  excusatory  fact because  the  figure was          bloated  by   one-time  social  security   "cash-ins";  that  new          legislation was not a factor because the state had four months to          adapt  to changes in the law; and that Massachusetts's efforts to          reduce errors  were anything but "exemplary."   Additionally, FNS          brought an  independent set of considerations  to bear, stressing          the  Commonwealth's steady  history  of failing  to meet  program          deadlines  and requirements.    The Board  approved the  agency's          decision to withhold  a waiver  on this ground  and the  district          court affirmed by summary judgment.                    Massachusetts  and FNS  attempt to  rejoin  this point-          counterpoint  before us.  Our  role in this  setting, however, is          not  to weigh the factual  averments and assess,  on balance, the          merits of a waiver.  Rather, "[i]f the court upholds the agency's          finding  of violation,  the  court's only  remaining  task is  to          examine  the  sanction imposed  in  light  of the  administrative          record  to   judge  whether  the  agency   properly  applied  its          regulations  . . . ."   Broad St.,  720 F.2d at 220.   In fine, a                                  _________          reviewing court may only  overturn agency sanction determinations          that  are arbitrary  and capricious,  see id.,  which is  to say,                                                ___ ___          "unwarranted  in law  . .  . or  without justification  in fact."          Butz  v. Glover Livestock Comm'n Co., 411 U.S. 182, 185-86 (1973)          ____     ___________________________          (citation omitted); accord Collazo, 668 F.2d at 65.                              ______ _______                                          22                    In the  posture of this case,  the idiosyncratic nature          of summary judgment practice gives  a slightly different twist to          the   operation   of   the  familiar   "arbitrary-and-capricious"          standard.    Because we  are  scrutinizing  the district  court's          disposition of  a motion filed  under Fed.  R. Civ. P.  56(c), we          must approach the  record "in  the light most  hospitable to  the          party  opposing  summary   judgment,  indulging  all   reasonable          inferences in  that party's  favor."  Griggs-Ryan  v. Smith,  904                                                ___________     _____          F.2d 112,  115 (1st Cir. 1990).   In order to prevail, therefore,          the  Commonwealth  must persuade  us  that the  record  evinces a          genuine dispute over  some material fact.   Emphasizing the items          set  forth in  support of  its waiver  application, Massachusetts          says  that  such  a  dispute  existed.    But,  this  perspective          overlooks the relevant point:   the real question is  not whether          the  facts set  forth in  support of  the waiver  application are          disputed,  but, rather,  whether the  administrative record,  now          closed,  reflects  a sufficient  dispute  concerning  the factual          predicate on  which FNS relied in denying the waiver to support a          finding that the  agency acted arbitrarily  or capriciously.   We          explain briefly.                    On a motion for summary judgment, a fact is material if          it  "might affect  the outcome  of the  suit under  the governing          law"; a dispute is  "genuine" if a reasonable jury  could resolve          it in favor of the nonmoving  party.  United States v. One Parcel                                                _____________    __________          of Real Property, Etc., 960 F.2d 200, 204 (1st Cir. 1992) (citing          ______________________          Anderson v.  Liberty  Lobby, Inc.,  477  U.S. 242,  248  (1986)).          ________     ____________________                                          23          Because the law  allows FNS to exercise discretion  as long as it          has minimally  adequate justification in  fact for doing  so, the          facts  material to the propriety of summary judgment on the good-          cause  waiver question  are those  facts that  relate  to whether          FNS's denial of the waiver was arbitrary and capricious   not the          facts on which a plea for issuance of a waiver might have rested.          See Villanueva v. Wellesley College, 930 F.2d 124, 129 (1st Cir.)          ___ __________    _________________          (noting that  an appellate tribunal must  review summary judgment          in  light of  the plaintiff's  ultimate burden  at trial),  cert.                                                                      _____          denied, 112 S.  Ct. 181 (1991).  In a nutshell, then, a bona fide          ______          skirmish  over the  veracity  and importance  of ancillary  facts          which the Commonwealth thinks support its waiver application does          not  egest the  possibility of  summary judgment,  for it  is the          basis underlying the  agency's denial  of a waiver  upon which  a          reviewing court must focus.  See Town of Norfolk v. United States                                       ___ _______________    _____________          Army  Corps  of  Eng'rs, 968  F.2d  1438,  1448  (1st Cir.  1992)          _______________________          (upholding  a grant of summary judgment  on the basis that, if an          agency   determination   is    "reasonably   supported   by   the          administrative record, [a reviewing court's] inquiry must  end");          see  also  Villanueva,  930  F.2d at  131  (ruling  that  summary          ___  ____  __________          judgment is proper when a plaintiff disputes some facts, but does          not  adduce  sufficient  evidence  from  which  the  trier  could          conclude that the defendant failed  to meet the applicable  legal          standard).                    The district court noted that the  facts upon which the          Commonwealth relied, "though qualifying it for consideration  for                                          24          a waiver,  and indeed  possibly  warranting a  waiver, [did]  not          entitle it  to a waiver as a matter of right."  Massachusetts II,                                                          ________________          788 F.  Supp. at 1275.  We  agree with this assessment.   We add,          moreover,  that, as  this court  has recognized  for  many years,          simply rearguing the merits of an agency's discretionary decision          will not forestall summary judgment on such an issue.  See, e.g.,                                                                 ___  ____          Concerned  Citizens on I-190 v. Secretary of Transp., 641 F.2d 1,          ____________________________    ____________________          7 (1st Cir. 1981).  Although  we, like the district court, assume          for  argument's  sake that  the  subsidiary  facts on  which  the          Commonwealth's  waiver  application rested  are true,  the record          nevertheless reveals  that FNS  weighed these facts  against, and          eventually based  its denial  on, other uncontested  facts (e.g.,                                                                      ____          the  contribution  of  Social  Security  "cash-ins"  to  caseload          growth, the superior performance of  other states under much  the          same  circumstances,  and  Massachusetts's checkered  history  of          noncompliance  with food  stamp program  directives).   Regarding          this latter  set of subsidiary  facts, there is no  dispute.  See                                                                        ___          Massachusetts II, 788 F. Supp. at 1274.          ________________                    Let  us be  perfectly clear.   We  do not  suggest that          courts should  rubber-stamp agency  decisions under the  guise of          "arbitrary-and-capricious"  review.    Had  FNS,  in  this  case,          rejected the waiver  application on a ground that its regulations          did  not  contemplate,  or without  considering  the  applicant's          stated  basis   for  relief,  or  in  reliance  on  a  manifestly          inadequate  factual showing, there might well be room for a court          to  find the  agency's actions  arbitrary  and capricious.   But,                                          25          nothing  of the kind transpired here.  Rather, the record reveals          a  situation in  which  FNS carefully  considered  the whole  and          declined   rationally, if not inevitably   to grant discretionary          relief.                    In the final analysis, Congress elected to delegate the          discretion to  award or withhold good-cause waivers of food stamp          penalties to the Secretary    not to the federal courts.   Where,          as here,  the legislature has conferred  generous discretion upon          an agency, a reviewing  court must contemplate the administrative          record  with  due  regard  for  that  discretion  and  gauge  the          reasonableness of agency  action in  that light.   Given the  low          quantum   of   factual   justification   necessary   to   deny  a          discretionary waiver under section 2025(g), we are constrained to          conclude that, since FNS's denial of the waiver  was based upon a          plausible and  essentially uncontested set of  reasons documented          in  the  record and  consistent  with  existing regulations,  the          district court correctly ruled in its favor, notwithstanding that          the case was at the summary judgment stage.  See Valley Citizens,                                                       ___ _______________          886 F.2d at 469; see also Citizens to Preserve Overton Park, Inc.                           ___ ____ _______________________________________          v. Volpe,  401 U.S. 402, 416 (1971)  ("The Court is not empowered             _____          to substitute its judgment for that of the agency.").          V.  CONCLUSION          V.  CONCLUSION                    We   need   go   no  further.      The   Commonwealth's          asseverational  array  announces an  abundance  of  red meat  and          strong drink; yet, its table is spread with far less hearty fare.          Because  appellant's arguments  afford  scant sustenance  for its                                          26          position, the disputed sanction must stand.  On the record before          it, the district court  did not err in entering  summary judgment          in favor of the Secretary.          Affirmed.          Affirmed          ________                                          27
