Supreme Court of the United States

“ That court determined that the FDIC had made two legal errors in adjudicating petitioner’s case. But instead of remanding the matter back to the agency, the Sixth Circuit conducted its own review of the record and concluded that substantial evidence supported the agency’s decision.
That was error. It is “a simple but fundamental rule of administrative law” that reviewing courts “must judge the propriety of [agency] action solely by the grounds invoked by the agency.” ”

“ Berryhill, 587 U. S. ___, ___ (2019) (slip op., at 15) (“Fundamental principles of administrative law ... teach that a federal court generally goes astray if it decides a question that has been delegated to an agency if that agency has not first had a chance to address the question”) .
As both petitioner and the Solicitor General representing respondent agree, the Sixth Circuit should have followed the ordinary remand rule here. That court concluded the FDIC Board had made two legal errors in its opinion. ”

“ Petitioner could be held responsible only for “part” of that harm, the court explained, because “ [t] he Bank probably would have incurred some loss no matter what Calcutt did.” Id., at 331. Finally, none of the investigative, auditing, and legal expenses incurred in dealing with the Nielson Entities could qualify as harms to the Bank, because those expenses occurred as part of the Bank’s “normal business.” Ibid.
Despite identifying these legal errors in the Board’s analysis, the Sixth Circuit nevertheless affirmed the Board’s decision by a 2-to-1 vote. ”