The Supreme Court has held that the statute's mandate is sufficiently ambiguous to allow for agency construction. The agency's reading isn't contrary to the law. Agency adequately explained its decision to revise the rule.
The claim that the agency looked to the policy views of professional associations and federal statutes rather than the policies of the states states a legitimate concern, but since the state regulating bodies concede that one could practice within the state while taking either view of the question, the agency's decision wasn't arbitrary and capricious.
Where the agency states that it is changing its course on a certain issue, it need not address specific earlier conclusory determinations contrary to the new course.
Agency must offer a clearer definition of the nature of a program to ensure the mandated separation of programs. Panel takes judicial notice of the list of pending grant recipients, which is sufficient to establish irreparable harm to the states, given the loss of federal funding. Relief in the form of a preliminary injunction should be limited to the state plaintiff that established sufficient harm by affidavits.
CONCURRENCE/DISSENT:
Agency's program separation requirements not manifestly against the statute. Statute itself defines the contested term. Rulemaking wasn't arbitrary and capricious--there is no increased threshold for subsequent agency action relative to initial agency action. Attendant harms required where plaintiff claims injury from loss of federal funds. Public interest calculation of the injunction calculus should consider the decision of Congress.