Gamboa

dissenting.

The majority does something truly remarkable: It holds that a regulation which was valid when adopted became invalid because it wasn’t adjusted for inflation. There are many problems with this ruling, the most fundamental of which is that we have no jurisdiction to consider the issue. No action of the agency caused this regulation to lose its validity, but judicial review under the Administrative Procedure Act extends only to agency “action.” See 5 U.S.C. § 702 . The applicable substantive statute, moreover, gives us no standard against which to judge the legality of the agency’s non-action, but the APA forbids judicial review unless there is a meaningful legal standard. See 5 U.S.C. § 701 (a)(2); Heckler v. Chaney, 470 U.S. 821, 832 , 105 S.Ct. 1649, 1656 , 84 L.Ed.2d 714 (1985). Were the merits properly before us, we would have no choice but to uphold the regulation as a sensible application of what statutory guidance there is. Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 , 104 S.Ct. 2778 , 81 L.Ed.2d 694 (1984). Finally, the majority not only raises a direct conflict with every other circuit that has considered the issue, see Brown…

Paul M. Gamboa, on behalf of a certified class of low income people, appeals the district court’s grant of summary judgment in favor of defendants Donna Shalala, Secretary of Health and Human Services (“the Secretary”), and, in part, in favor of Winona Rubin, director of the Hawaii Department of Human Services (“DHS”). The district court upheld a $1500 automobile equity limit for recipients of Aid for Families with Dependent Children (“AFDC”), but found that Hawaii was incorrectly applying that limit to determine Medicaid eligibility for certain individuals. We have jurisdiction under 28 U.S.C. § 1291 . We affirm in part, reverse in part, and remand.

BACKGROUND

Paul Gamboa and members of the plaintiff class assert that the automobile equity limit set by the Secretary in 1982 is invalid. Plaintiffs contend that the $1500 limit was arbitrary and capricious when the Secretary issued it, and remains so because the Secretary has not adjusted the figure for inflation. The plaintiffs also argue that the Hawaii Department of Human Services improperly calculated the automobile equity allowed for certain recipients of Medicaid.

A. Facts and Prior Proceedings.

In November 1991,…