FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

CLARENCE I. PAULSEN, III, 

Petitioner-Appellee, No. 03-35337 v.  D.C. No. CHARLES A. DANIELS, Warden, of CV-99-01746-HA FCI Sheridan, Respondent-Appellant. 

JEFFREY D. PULLINS, 

Petitioner-Appellee, No. 03-35360 v.  D.C. No. CHARLES A. DANIELS, Warden, CV-00-00174-HA Respondent-Appellant. 

DENNIS W. BOHNER, 

Petitioner-Appellee, No. 03-35356 v.  D.C. No. CHARLES A. DANIELS, Warden, CV-99-01116-ALH Respondent-Appellant. 

RANDOLPH BROWN, 

Petitioner-Appellee, No. 03-35355 v.  D.C. No. CHARLES A. DANIELS, Warden, CV-01-01250-ALH Respondent-Appellant.  7585 7586 PAULSEN v. DANIELS

JEREMY E. JAMES, 

Petitioner-Appellee, No. 03-35354 v.  D.C. No. CHARLES A. DANIELS, Warden, CV-99-00872-ALH Respondent-Appellant. 

KARLOS LAMAR GRIER, 

Petitioner-Appellee, v. No. 03-35352 JOSEPH CRABTREE, Warden, Federal  D.C. No. Correction Instution, Sheridan, CV-98-01544-ALH

OR,

Respondent-Appellant. 

SHAWN ROBERT LEE, 

Petitioner-Appellee, No. 03-35351 v.  D.C. No.

ROBERT HOOD, CV-99-01747-HA

Respondent-Appellant. 

ADRIAN L. JOHNSON, 

Petitioner-Appellee, No. 03-35350 v.  D.C. No. CHARLES A. DANIELS, Warden, CV-99-00802-HA Respondent-Appellant.  PAULSEN v. DANIELS 7587

SABIL M. MUJAHID, 

Petitioner-Appellee, No. 03-35349 v.  D.C. No. CHARLES A. DANIELS, Warden, CV-99-00199-HA Respondent-Appellant. 

JACOB JONES, 

Petitioner-Appellee, No. 03-35347 v.  D.C. No. CHARLES A. DANIELS, Warden, CV-99-00518-ALH Respondent-Appellant. 

VINCENTE SUBIA, 

Petitioner-Appellee, No. 03-35346 v.  D.C. No. CHARLES A. DANIELS, Warden, CV-99-00011-ALH Respondent-Appellant. 

JASON ROBERT TUITE, 

Petitioner-Appellee, No. 03-35344 v.  D.C. No. ROBERT A. HOOD, Warden, CV-01-01259-ALH Respondent-Appellant.  7588 PAULSEN v. DANIELS

SEAN MOORE, 

Petitioner-Appellee, No. 03-35343 v.  D.C. No. CHARLES A. DANIELS, Warden, CV-99-00596-ALH Respondent-Appellant. 

EARL LEONARD, 

Petitioner-Appellee, No. 03-35341 v.  D.C. No. CHARLES A. DANIELS, Warden, CV-00-00888-ALH Respondent-Appellant. 

CHARLES R. NORGAARD, 

Petitioner-Appellee, No. 03-35340 v.  D.C. No. CHARLES A. DANIELS, Warden, CV-01-01094-HA Respondent-Appellant. 

ROBERT ALLEN FURNAS,  No. 03-35339 Petitioner-Appellee, v.  D.C. No.

CV-99-00795-HA

CHARLES A. DANIEL, Warden,

OPINION

Respondent-Appellant.  Appeal from the United States District Court for the District of Oregon Ancer L. Haggerty, District Judge, Presiding PAULSEN v. DANIELS 7589 Argued and Submitted April 11, 2005—San Francisco, California

Filed June 27, 2005

Before: Robert R. Beezer, Sidney R. Thomas, and William A. Fletcher, Circuit Judges.

Opinion by Judge Thomas; Concurrence by Judge Beezer PAULSEN v. DANIELS 7591

COUNSEL

Thomas M. Gannon, Department of Justice, Criminal Divi- sion, Washington, D.C., for the respondents-appellants.

Stephen R. Sady, Chief Deputy Federal Public Defender, Portland, Oregon, for the petitioners-appellees. 7592 PAULSEN v. DANIELS

OPINION

THOMAS, Circuit Judge:

We consider in this appeal whether the Bureau of Prisons (“Bureau”) violated the Administrative Procedure Act (“APA”) in adopting an interim regulation pertaining to an early release incentive program for federal prisoners who had successfully completed a substance abuse program. We con- clude that the district court correctly held that the Bureau vio- lated the APA, and that the petitioners were entitled to relief.

I

This appeal is the latest chapter in a series of cases con- cerning a program created by Congress for the purpose of supplying substance abuse treatment to prisoners. In 1990, faced with a burgeoning federal prison population incarcer- ated for drug-related offenses and evidence that prison sub- stance abuse treatment programs sharply reduce recidivism, Congress required the Bureau to “make available appropriate substance abuse treatment for each prisoner the Bureau deter- mines has a treatable condition of substance addiction or abuse.” Crime Control Act of 1990, Pub. L. 101-647, § 2903, 104 Stat. 4789, 4913 (codified as amended at 18 U.S.C. § 3621(b)). Concerned by an apparent lack of program inter- est, Congress amended the statute in 1994 to provide federal prisoners with incentives to complete a Bureau substance abuse treatment program by authorizing the reduction of incarceration for prisoners “convicted of a nonviolent offense” who successfully completed such a program. The incentive provision reads: “The period a prisoner convicted of a nonviolent offense remains in custody after successfully completing a treatment program may be reduced by the Bureau of Prisons, but such reduction may not be more than one year from the term the prisoner must otherwise serve.” Violent Crime Control and Law Enforcement Act of 1994, PAULSEN v. DANIELS 7593 Pub. L. 103-322, § 32001, 108 Stat. 1796, 1897 (codified at 18 U.S.C. § 3621(e)(2)(B)).

The Bureau published a regulation to implement the early release incentive one year later. The Bureau defined prisoners who had not been convicted of a nonviolent offense and thus were ineligible for early release as those prisoners who were currently incarcerated for committing a crime of violence as defined in 18 U.S.C. § 924(c)(3). 28 C.F.R. § 550.58 (1995); see 60 Fed. Reg. 27,692, at 27,695. Following the promulga- tion of the 1995 regulation, the Courts of Appeals reached dif- fering conclusions on the question of whether the Bureau had discretion to further define a crime of violence as an offense involving a firearm, and thus exclude from eligibility for the early release incentive those prisoners who were incarcerated for such offenses. See Lopez v. Davis, 531 U.S. 230, 234-35 (2001).

In light of the split among the Circuits, the Bureau promul- gated an interim regulation, which is the subject of this litiga- tion, on October 15, 1997 and made the regulation effective approximately one week prior, on October 9, 1997. 28 C.F.R. § 550.58(a)(1)(vi)(B) (1997); 62 Fed. Reg. 53,690. The 1997 interim regulation, like the one it superceded, made ineligible for the early release incentive those prisoners currently incar- cerated for an offense that involved the possession, use, or carrying of a firearm. 28 C.F.R. § 550.58(a)(1)(vi)(B). The 1997 interim regulation differs from the 1995 regulation by relying on “the discretion allotted to the Director of the Bureau of Prisons in granting a sentence reduction to exclude [enumerated categories of] inmates,” 62 Fed. Reg. at 53,690, rather than defining the statutory terms “prisoner convicted of a nonviolent offense” or “crime of violence.”

The commentary accompanying the 1997 interim regula- tion noted that the Bureau was “publishing this change as an interim rule in order to solicit public comment while continu- ing to provide consideration for early release to qualified 7594 PAULSEN v. DANIELS inmates.” 62 Fed. Reg. at 53,690. However, the effect of the implemented interim regulation was to deny program eligibil- ity to certain categories of inmates, including the petitioners. The commentary further provided that comments on the interim rule were due on December 15, 1997, and that the comments would be considered before final action was taken. Id.

On December 22, 2000, the Bureau replaced the 1997 interim regulation with a final regulation, which adopted the 1997 regulation without change. See 65 Fed. Reg. 80,745. The commentary accompanying the final regulation noted that the Bureau had received approximately 150 comments from indi- viduals and organizations, 138 of them identical. Id. at 80,747. The Bureau’s summary of those comments did not mention any challenge by any commenter to the procedural regularity of the 1997 regulation. See id. at 80,747-80,748.

The petitioners are a group of sixteen prisoners or former prisoners who were convicted of various offenses involving the carrying, possession, or use of firearms, and who were sentenced to terms of imprisonment, at least in part, at the Federal Correctional Institution in Sheridan, Oregon (“FCI Sheridan”). Between December 1997 and October 2000, while the petitioners were serving their terms of imprisonment at FCI Sheridan, they were informed that they were eligible to participate in the Bureau’s in-prison substance abuse treat- ment program. The petitioners were further informed that because their offenses involved the carrying, possession, or use of firearms, they were not eligible for early release under the Bureau’s 1997 interim regulation. Between December 1998 and August 2001, the petitioners filed for habeas corpus relief under 28 U.S.C. § 2241, asserting that they were cate- gorically eligible for a sentence reduction for participation in the treatment program under 18 U.S.C. § 3621(e).

After we issued our decision in Bowen v. Hood, 202 F.3d 1211 (9th Cir. 2000) — in which we held that the Bureau, in PAULSEN v. DANIELS 7595 its 1997 interim regulation, validly exercised its discretion in making prisoners who were convicted of an offense involving the carrying, possession, or use of a firearm ineligible for the early release incentive — the petitioners moved for leave to amend their habeas petitions to add a claim challenging the procedural regularity of the 1997 regulation. The United States District Court for the District of Oregon denied the motions and dismissed the petitions. See Gavis v. Hood, 2001 WL 34039136 (D. Or. 2001). We reversed the district court in Grier v. Hood, 46 Fed. Appx. 433, 440 (9th Cir. 2002), holding that the petitioners should have been allowed to amend their habeas petitions pursuant to Fed. R. Civ. P. 15(b), as allowing such amendments would not be futile.

In Bohner v. Daniels, 243 F. Supp.2d 1171 (D. Or. 2003), the district court on remand considered the petition of Dennis W. Bohner and held that the Bureau’s 1997 regulation vio- lated section 553(b) and (d) of the APA,1 the APA violations 1 5 U.S.C. § 553 provides, in relevant part: (b) General notice of proposed rule making shall be published in the Federal Register, unless persons subject thereto are named and either personally served or otherwise have actual notice thereof in accordance with law. The notice shall include— (1) a statement of the time, place, and nature of public rule making proceedings; (2) reference to the legal authority under which the rule is proposed; and (3) either the terms or substance of the proposed rule or a description of the subjects and issues involved. Except when notice or hearing is required by statute, this subsec- tion does not apply— (A) to interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice; or (B) when the agency for good cause finds (and incorpo- rates the finding and a brief statement of reasons therefor in the rules issued) that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest. 7596 PAULSEN v. DANIELS were not harmless under 5 U.S.C. § 706, and therefore the regulation was invalid. Id. at 1175-77. The district court granted the petitioner’s motion to amend his habeas petition and granted his petition for a writ of habeas corpus. Id. at 1179. Following the reasoning in Bohner, the district court ordered habeas relief for the remainder of the petitioners. These timely appeals followed. In December 2003, we ordered the appeals in the cases of all sixteen petitioners con- solidated.

II

A

[1] The Bureau plainly violated the APA in its promulga- tion of the 1997 interim regulation. The APA requires agen- cies to follow certain procedures when it decides to issue a rule, including: (1) publishing notice of the proposed rule- making in the Federal Register, 5 U.S.C. § 553(b); (2) provid- ing a period for interested persons to comment on the proposed rule, which comments will be considered by the agency prior to adopting the rule, id. at § 553(c); and (3) pub- lishing the adopted rule not less than thirty days before its effective date, with certain exceptions that are not applicable here, id. at § 553(d).

... (d) The required publication or service of a substantive rule shall be made not less than 30 days before its effective date, except— (1) a substantive rule which grants or recognizes an exemption or relieves a restriction; (2) interpretative rules and statements of policy; or (3) as otherwise provided by the agency for good cause found and published with the rule. PAULSEN v. DANIELS 7597 [2] “In enacting the APA, Congress made a judgment that notions of fairness and informed administrative decisionmak- ing require that agency decisions be made only after affording interested persons notice and an opportunity to comment.” Chrysler Corp. v. Brown, 441 U.S. 281, 316 (1979); see also Riverbend Farms, Inc. v. Madigan, 958 F.2d 1479, 1485 (9th Cir. 1992) (“[T]he notice and comment requirements . . . are designed to ensure public participation in rulemaking.”). It is antithetical to the structure and purpose of the APA for an agency to implement a rule first, and then seek comment later. The district court correctly concluded that the Bureau violated § 553(b) and (d). Bohner, 243 F. Supp.2d at 1175.2

B

[3] Although the Bureau does not seriously contest that it violated the APA in promulgating the 1997 interim rule, it argues that the petitioners lack standing to challenge the rule. “To satisfy the injury in fact requirement, a [petitioner] assert- ing a procedural injury must show that ‘the procedures in question are designed to protect some threatened concrete interest of his that is the ultimate basis of his standing.’ ” Cantrell v. City of Long Beach, 241 F.3d 674, 679 (9th Cir. 2001) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 573 n.8 (1992)). The Bureau argues that petitioners cannot demonstrate that they suffered an injury in fact, contending that petitioners’ only concrete interest was in receiving advance notice of the Bureau’s promulgation of the interim rule and having an opportunity to comment on the rule before it was applied to them. The Bureau argues that this require- ment was satisfied because each petitioner had at least thirty days notice between when the 1997 regulation was made effective and when the regulation was applied to him. 2 Although in oral argument Daniels seemed to question whether the APA was violated, Daniels did not raise this issue in his opening brief; therefore, Daniels has waived this issue. See United States v. Kama, 394 F.3d 1236, 1238 (9th Cir. 2005) (“Generally, an issue is waived when the appellant does not specifically and distinctly argue the issue in his or her opening brief.”). 7598 PAULSEN v. DANIELS [4] The Bureau’s 1997 interim regulation was made effec- tive prior to its publication in the Federal Register. Although the Bureau solicited comments, those comments were not taken into account before the 1997 interim regulation was made effective; rather, these comments were considered prior the promulgation of the 2000 final regulation. These proce- dural violations of the APA threatened petitioners’ concrete interest to have the public participate in the rulemaking that made them ineligible for a sentence reduction. The effect of the regulation was to deny them sentence reduction. The peti- tioners clearly have sustained an injury in fact affording them standing to file their habeas petitions.3

C

[5] The Bureau contends that its violations of the APA’s notice and comment requirements were harmless because no petitioner was advised of his ineligibility for early release under the 1997 interim regulation until after a reasonable advance notice-and-comment period would have expired, had the Bureau complied with the APA. The APA requires us to take “due account” of the harmless error rule. See 5 U.S.C. § 706; Riverbend, 958 F.2d at 1487. However, as we stated in Riverbend, we:

must exercise great caution in applying the harmless 3 The Bureau also contends that we lack jurisdiction over petitioner Boh- ner’s appeal because he is now serving a term of supervised release out- side the District of Oregon. The Bureau is mistaken. “[J]urisdiction attaches on the initial filing for habeas corpus relief, and it is not destroyed by a transfer of the petitioner and the accompanying custodial change.” Francis v. Rison, 894 F.2d 353, 354 (9th Cir. 1990) (quoting Santillanes v. United States Parole Comm’n, 754 F.2d 887, 888 (10th Cir. 1985)) (internal quotations marks omitted). The Bureau also argues that Bohner’s case is moot. However, it concedes the possibility that Bohner’s term of supervised release might be reduced or modified as a result of the deci- sion; therefore, this case is not moot as to Bohner. Gunderson v. Hood, 268 F.3d 1149, 1153 (9th Cir. 2001). PAULSEN v. DANIELS 7599 error rule in the administrative rulemaking context. The reason is apparent: Harmless error is more read- ily abused there than in the civil or criminal trial context. An agency is not required to adopt a rule that conforms in any way to the comments presented to it. So long as it explains its reasons, it may adopt a rule that all commentators think is stupid or unnec- essary. Thus, if the harmless error rule were to look solely to result, an agency could always claim that it would have adopted the same rule even if it had complied with the APA procedures. To avoid gutting the APA’s procedural requirements, harmless error analysis in administrative rulemaking must therefore focus on the process as well as the result. We have held that the failure to provide notice and comment is harmless only where the agency’s mistake “clearly had no bearing on the procedure used or the sub- stance of decision reached.”

958 F.2d at 1487 (quoting Sagebrush Rebellion, Inc. v. Hodel, 790 F.2d 760, 764-65 (9th Cir. 1986)).

[6] Here, the Bureau’s mistake clearly had a bearing on the procedure used. The Bureau’s violation of the APA was not merely technical; the Bureau failed to provide the required notice-and-comment period before effectuating the 1997 interim regulation, thereby precluding public participation in the rulemaking. Therefore, the situation here is not similar to situations that were before us in Idaho Farm Bureau Federa- tion v. Babbitt, 58 F.3d 1392 (9th Cir. 1995), Riverbend, or Sagebrush Rebellion, in which we found harmless error.

In Idaho Farm Bureau, we held that the Fish and Wildlife Service’s (“FWS”) failure to abide by the Endangered Species Act (“ESA”) and give actual notice of the proposed regulation — the listing of the Bruneau Hot Springs Snail as an endan- gered species under the ESA — to the Commissioner of one county in which the Springs Snail was believed to inhabit was 7600 PAULSEN v. DANIELS a harmless error under the APA. Id. at 1405. The failure to provide actual notice to the Commissioner was harmless because, although the Commissioner did not receive actual notice, he was aware of the proposed regulation, as demon- strated by his presenting a petition opposing the listing and testifying at the public hearings on the matter. Id. Therefore, the FWS’s procedural violation had no bearing on the proce- dure used, rendering the FWS’s mistake harmless.

In Riverbend, we considered the claim of a group of domestic handlers of navel oranges who challenged the proce- dure used by the Secretary of Agriculture to regulate the navel orange market. 958 F.2d at 1482-83. We determined that the Secretary’s rulemaking failed to satisfy the APA’s require- ments because (1) the Secretary did not demonstrate good cause for failing to give sufficient notice in the Federal Regis- ter of the weekly Naval Orange Administrative Committee (“NOAC”) meetings in which NOAC settles on what recom- mendation to give to the Secretary for the following week’s volume restrictions; and (2) the Secretary failed to allow the public to comment by means other than personal participation at the NOAC meetings. Id. at 1487. We provided the follow- ing explanation as to why the Secretary’s error was harmless:

all parties before us knew the ground rules: that there would be an annual position paper setting proposed weekly volume restrictions; that the NOAC would meet every Tuesday during the season; that the start- ing point for debate at those Tuesday meetings would be the figure listed for that week in the annual position paper (or in the NOAC’s updated versions of it); that there would be opportunity for public comment at the Tuesday meetings; and that the final volume restrictions would be issued by the Secretary soon afterwards. This system of regulation existed for decades without challenge; it was only after some handlers ran into trouble with the Department of Agriculture that, in looking for an escape, they came PAULSEN v. DANIELS 7601 up with this challenge. While they are right that the Secretary must comply with some of the APA’s technical requirements, their belated challenge is evidence of the lack of prejudice resulting from the Secretary’s failure to do so in the past thirty-five years.

Id. at 1487-88 (footnotes omitted).

In Sagebrush Rebellion, we determined that the notice pro- vided by the Secretary of the Interior concerning the proposed withdrawal of the Snake River Birds of Prey National Conser- vation Area from the operation of the public and mining laws was technically deficient under the Federal Land Policy and Management Act of 1976, drawing on the standard for suffi- ciency of notice of rulemaking under the APA. 790 F.2d at 764. Nonetheless, we decided that the notice’s failure to state that the lands might be withdrawn by administrative action, which would limit the withdrawal to a maximum of twenty years, rather than by congressional action, which would be in perpetuity, did not prejudice the public’s ability to participate in the decision-making process. Id. at 764-65. We noted that “[t]he same public that would comment on a proposed admin- istrative withdrawal would in all likelihood comment on a congressional withdrawal, since the impact of both actions on all concerned persons would be identical for a substantial period of time at least.” Id. at 765 (footnote omitted). In addi- tion, the hearings provided the public with the opportunity to comment on both administrative and congressional with- drawal. Id. Therefore, we held that the procedures used were unaffected by the notice’s deficiency. Id.

[7] The distinction between Idaho Farm Bureau, River- bend, Sagebrush Rebellion and the situation we consider here is quite clear, and it is this distinction that makes the differ- ence between a procedural violation of the APA that is harm- less and one that is not. Whereas in the three aforementioned cases, interested parties received some notice that sufficiently 7602 PAULSEN v. DANIELS enabled them to participate in the rulemaking process before the relevant agency adopted the rule, here, petitioners were given no such opportunity. In fact, the petitioners received no notice of any kind until after the Bureau made the 1997 interim rule effective. That petitioners had an opportunity to protest an already-effective rule prior to the time it was applied to each of them does not render the APA violation harmless. See Chrysler, 441 U.S. at 313-16; Riverbend, 958 F.2d at 1485, 1487. Thus, here, the Bureau’s mistake had a bearing on the procedure used, and this mistake was not harmless.

Buschmann v. Schweiker, 676 F.2d 352 (9th Cir. 1982), demonstrates the correctness of this conclusion, and more- over, requires us to hold that the Bureau’s error was not harm- less. In Buschmann, we determined that the Secretary of the Department of Health, Education and Welfare failed to con- form to the procedures required by section 553(b) and (d) of the APA when proposing an amendment to a regulation con- cerning the valuation of support and maintenance in house- hold situations that affected certain individuals’ eligibility for Social Security Income benefits. Id. at 356. The Secretary did not give thirty-day advance notice of or provide an opportu- nity for the public to comment on the proposed amendment prior to its effective date. Id. We concluded that this error was not harmless and held that the interim amendment was invalid. Id. at 358. Buschmann provides the critical analysis for our inquiry and leads to the inevitable determination that the APA violation was not harmless in this case.

D

[8] Given that the Bureau violated the APA, and that the violation was not harmless, we turn to the question of remedy. “Ordinarily when a regulation is not promulgated in compli- ance with the APA, the regulation is invalid.” Idaho Farm Bureau, 58 F.3d at 1405; see W.C. v. Bowen, 807 F.2d 1502, 1505 (9th Cir. 1987), amended by, 819 F.2d 237 (9th Cir. PAULSEN v. DANIELS 7603 1987); Buschmann, 676 F.2d at 355-56; Western Oil & Gas Ass’n v. EPA, 633 F.2d 803, 813 (9th Cir. 1980); see also Grier, 46 Fed. Appx. at 439 n.2. On occasion, we have deter- mined that equity requires an invalid rule to stay in place while “a strict reconstruction of procedural rights” and “a reenactment of the deliberative process with correct provision for the petitioners’ participation” is achieved. Western Oil, 633 F.2d at 813.

[9] This is not one of those occasions because such a recon- struction is impossible. See Idaho Farm Bureau, 58 F.3d at 1405-06 (holding that equity demands the designation of the Springs Snail as an endangered species be left in place while FWS remedies its procedural error in order to prevent the potential extinction of the Springs Snail); Western Oil, 633 F.2d at 813 (leaving in effect the challenged designation — that designated certain geographical areas in California as failing to meet federal air quality standards — during reenact- ment of the deliberative process “to avoid thwarting in an unnecessary way the operation of the Clean Air Act in the State of California during the time the deliberative process is reenacted”). The district court correctly concluded that the proper remedy was to hold the Bureau’s 1997 interim regula- tion invalid.

[10] The effect of invalidating an agency rule is to reinstate the rule previously in force. Action on Smoking & Health v. Civil Aeronautics Bd., 713 F.2d 795, 797 (D.C. Cir. 1983). Because the rule previously in force, the 1995 regulation, erroneously interpreted 18 U.S.C. § 3621(e)(2)(B), see Dow- ney, 100 F.3d at 668, the applicable rule is the final rule that was effectuated on December 22, 2000. The subsequent enactment of the final rule can only have prospective effect. Georgetown Univ. Hosp. v. Bowen, 821 F.2d 750, 758 (D.C. Cir. 1987), aff’d on other grounds, 488 U.S. 204 (1988). Therefore, the 1997 interim regulation is invalid as to those persons disqualified by it prior to the issuance of the final rule. 7604 PAULSEN v. DANIELS

III

In sum, the district court was entirely correct in its conclu- sion. We affirm the judgments of the district court in the con- solidated cases granting the habeas corpus petitions.

AFFIRMED.

BEEZER, Circuit Judge, concurring:

I concur in the opinion of the court. The last time this con- solidated appeal was before us, I wrote separately to observe a tension in our case law over the application of the Adminis- trative Procedures Act (“APA”) to a Bureau of Prison’s Pro- gram Statement. See Grier v. Hood, 46 Fed. Appx. 433, 440 (9th Cir. 2002) (Beezer, J., concurring). I write separately once again to note that this tension remains unresolved.

I

This court’s invalidation of the Bureau’s 1997 interim regu- lation marks the culmination of a series of challenges to the Bureau’s actions that year concerning prisoner eligibility for an early release program. The Bureau detailed the eligibility criteria for this program in two separate documents, issued within a week of each other in 1997. See Gunderson v. Hood, 268 F.3d 1149, 1151 (9th Cir. 2001). The documents con- sisted of an interim regulation and a new Program Statement. Prisoners have been arguing with the Bureau over the validity of these documents, which the government on appeal refers to collectively as the “1997 interim rule,” ever since.

The first challenges to the 1997 interim rule were on sub- stantive grounds. Prisoners argued that the Bureau exceeded its discretion in establishing certain early release require- ments. We held that the 1997 actions were a proper use of the PAULSEN v. DANIELS 7605 Bureau’s discretion. Bowen v. Hood, 202 F.3d 1211, 1220 (9th Cir. 2000). The Supreme Court agreed. See Lopez v. Davis, 531 U.S. 230, 238 (2001).

Prisoners next challenged the procedural validity of the interim rule. The first challenge occurred in Grassi v. Hood, 251 F.3d 1218 (9th Cir. 2001). We construed the petitioner in Grassi as contesting whether the 1997 interim regulation complied with APA procedural requirements. Id. at 1221. We declined, however, to decide that issue because the petitioner failed to also challenge the procedural validity of the 1997 Program Statement, an “independent document[ ]” that, as relevant here, separately excluded from the early release pro- gram the same class of prisoners described in the interim reg- ulation. Id. We held that the petitioner was not entitled to relief because the interim regulation’s compliance with the APA had “no effect” on the “continuing validity” of the Pro- gram Statement. Id. at 1221-22.

Given this result, it is perhaps not surprising that the 1997 Program Statement itself next became the subject of an APA challenge. We held in Gunderson v. Hood, 268 F.3d 1149, 1155 (9th Cir. 2001), that the 1997 Program Statement need not comply with the APA because it was merely interpreting a substantive regulation (the 1997 interim regulation) that was subject to the APA. Far from reading the Program Statement as a separate authority capable of outlining a policy for dis- qualifying prisoners independent of the interim regulation, we concluded that the Program Statement “did no more than clar- ify or explain existing law.” Id. (internal quotation marks and citation omitted). We again denied relief to the prisoner.

II

These prior cases set the stage for the present lawsuit. The goal of the current petitioners, like that of the petitioners in Grassi and Gunderson, is to invalidate the application of the 7606 PAULSEN v. DANIELS 1997 Bureau policy to their prison sentences.1 The difference, of course, between the previous challenges and this one is that here we hold in favor of the petitioners. But I note that in so holding, we once again avoid addressing the tension between Grassi and Gunderson. In particular, we do not explain how invalidating the interim regulation qualifies these petitioners for relief when, under Gunderson, the Program Statement is not itself subject to the APA procedural requirements and, under Grassi, remains an adequate basis for excluding prison- ers from the early release program, independent of the interim regulation. See 46 Fed. Appx. at 441 (Beezer, J., concurring).

There is a simple answer to this question, at least as far as the cases before us are concerned: no one on appeal chal- lenges the district court’s conclusion that “the program state- ment[ ] may not be used to deny petitioner[s] early release.” Bohner v. Daniels, 243 F. Supp. 2d 1171, 1179 (D. Or. 2003).2 I remain unconvinced that the language in Grassi supports this conclusion, but recognize that any other solution may be even more at odds with either Grassi or Gunderson. More importantly, by not contesting this point of the district court’s holding, the government appears to concede that Grassi does 1 As noted in the opinion of the court, the 1997 policy was not the agen- cy’s first attempt to disqualify from the early release program prisoners incarcerated for crimes involving the possession of a firearm. But it was the first regulation held to be a substantively valid basis for excluding this class of prisoners. See Bowen, 202 F.3d at 1217 (discussing Davis v. Crab- tree, 109 F.3d 566 (9th Cir. 1997); Downey v. Crabtree, 100 F.3d 662, 670 (9th Cir. 1996)). It is this fact that makes the procedural challenge here so important to the current petitioners. 2 The court reasoned that for the 1997 Program Statement to be capable of independently barring relief to petitioners as per Grassi, the Program Statement must be treated as a “legislative rule,” which would require compliance with APA procedures. See Bohner, 243 F. Supp. 2d at 1178- 79. The Bureau’s failure to follow these procedures prevented it from rely- ing on this argument. Alternatively, under Gunderson, if it was not neces- sary for the Program Statement to comply with the APA, it must be because the Program Statement is dependent on the validity of the interim regulation that gives it legitimacy. See id. PAULSEN v. DANIELS 7607 not prevent us from granting relief to the petitioners. I see no reason to take issue with such a concession.