EPA's deregulatory agenda tees up new legal battles over limits of APA

January 26, 2018
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Editor's Note: This article was originally published January 5, 2018, on InsideEPA.com.

EPA's aggressive deregulatory agenda to undo Obama-era policies through stays, reconsiderations, rewrites and repeals of regulations dating back years is teeing up legal battles that pose major new tests for the limits of the Administrative Procedure Act's (APA) restrictions on how agencies make and undo their rules.

Depending on how courts rule in APA litigation over the Trump administration's rollbacks of Obama-era rules, it could set new precedents either expanding exemptions from the law or underscoring existing limits on agency's discretion in its rulemaking efforts. Those decisions could affect all parts of the rulemaking process, from the need for and duration of comment periods on proposed rules, to stays of rules, and the steps EPA must take in finalizing policies.

Environmentalists, Democratic-led states and other groups that oppose the Trump administration's agenda have charged that EPA is largely violating the APA by refusing to allow for meaningful public comments on deregulatory actions, or in some cases any comment at all, in an effort to complete its rollbacks as quickly as possible. They have filed APA suits over some deregulatory actions, and are vowing similar litigation over other rollbacks.

"We are looking at breakneck speeds here, in a way we've never seen before in the regulatory process. It's questionable how transparent and inclusive you can be when you're rushing toward a goal you already set at the beginning," says one environmentalist of claims that EPA is testing the limits of the APA with its agenda.

The APA requires notice and comment on any proposal to enact a new rule or revise or rescind an existing one, and says those comments must be meaningfully considered when the agency finalizes the proposal -- which has led courts to rule that regulators must not approach rulemaking with "an unalterably closed mind."

Trump opponents are claiming that a host of EPA's actions violate one or both principles, rendering them "arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law" under the APA.

Those arguments extend to stays on enforcing rules that were scheduled to take effect during 2017, new regulations crafted by the Trump administration, and ostensibly informal policy letters that environmentalists and other critics say are being applied as if they were binding rules.

For example, the arguments also apply to EPA Administrator Scott Pruitt's controversial new policy that bars recipients of agency grants from serving as science advisers, which was established with a memo.

Environmental groups and several former agency advisers are suing over the grants restriction on the grounds that it breaks with established regulatory and statutory mandates for managing conflicts of interest. Under the APA, an agency can only repeal or modify a binding rule through notice-and-comment rulemaking.

Similarly, EPA is facing legal threats from environmentalists to stop using its proposed framework for reviewing "new" chemicals under the revised Toxic Substances Control Act until it has considered public comments. Groups that oppose the plan say EPA had already begun acting on elements of its proposal even during its 15-day window for public comments, which they call a circumvention of the rulemaking process.

In many cases, environmentalists and others say the agency's alleged procedural corner-cutting is multiplying the chance that rollbacks of Obama-era policies will be rejected by courts, because of the risk that judges will agree with a deregulatory action on the merits but strike it down as procedurally flawed.

"One thing I find remarkable about Pruitt's assault on our safeguards is the unnecessary legal risks EPA is taking. Pruitt could [have] accomplished some of what he wants to do without trying to shortcut basic administrative processes . . . It would just take slightly longer," says a second environmentalist.

In addition to Obama-era rules it has already proposed repealing, including the landmark Clean Power Plan that set standards for greenhouse gases from existing power plants and the Clean Water Act (CWA) jurisdiction rule, EPA has halted implementation of rules governing water releases, air emissions and facility safety standards, among others -- and at each step has faced claims that its stays conflict with the APA.

In many cases, the agency has argued that it can put already-enacted rules on hold without notice and comment to avoid "regulatory uncertainty" while it considers revising the policy, on the grounds that as long as a rule is not currently being implemented, staying it merely preserves the "status quo" rather than a substantive change requiring an APA rulemaking.

The agency's most significant defeat on that issue has been in the U.S. Court of Appeals for the District of Columbia case Clean Air Council, et al., v. EPA, where a divided three-judge panel voted 2-1 to scrap a stay of the Obama-era new source performance standards (NSPS) for methane emissions from oil and gas operations pending reconsideration of the rule.

States and environmental groups opposing other stays have broadly cited the Clean Air Council decision to support their arguments, and to block the agency's ongoing effort to stay the NSPS through other means.

Meanwhile since the CWA does not authorize stays of existing rules pending reconsideration, EPA has turned to a more obscure provision of the APA to justify halting rules under that statute. The agency invoked APA section 705, which allows agencies to stay rules pending judicial review "when justice so requires," to suspend some deadlines in the 2015 CWA effluent limitation guidelines (ELG) for power plants, which has set off a court battle over whether the use of section 705 requires notice and comment, and how far the agency must go to prove that "justice requires" a stay.

EPA has since withdrawn the section 705 ELG stay in favor of one crafted through notice and comment, but environmentalists are still pressing for a court ruling on the subject, especially after a federal magistrate judge in California struck down similar stays on Department of the Interior policies for resource extraction on federal lands.

Many of the Trump EPA's proposed rules and guidances have come with unusually brief or limited comment periods, including some where the agency has explicitly warned commenters it will not consider the merits of the Obama-era policies it plans to rescind or halt, nor the prior regulations that are being reinstated -- which critics have charged is enough to render the repeal actions unlawful.

For instance, the joint proposal from EPA and the Army Corps of Engineers to withdraw the 2015 CWA jurisdiction rule warns stakeholders that the agencies are not "soliciting comment on the specific content" of the pre-2015 rules they seek to reinstate -- which the Natural Resources Defense Council charged in its comments runs afoul of even the deferential standards for a new administration to reverse existing policies for "good reasons."

"The agencies here do not even meet that basic threshold of reasoned decision-making: they do not claim the pre-Clean Water Rule regulations are 'better' policy than the Clean Water Rule; indeed, they acknowledge they do not intend to consider the matter," the environmentalists argue.

NRDC and other groups are also citing public statements from Pruitt and President Donald Trump where they have said the Obama-era CWA rule is unlawful as evidence that they have a "closed mind" on whether it should be repealed -- rendering the public-comment process meaningless and the rulemaking unlawful.

A victory for environmentalists on that count could set a marker that Trump opponents could use to oppose other rollbacks of rules that Trump and Pruitt railed against in their past roles as a presidential candidate and Oklahoma attorney general, respectively.

In at least one case, the agency faces a potential lawsuit solely over how it handled a comment period -- namely, the deadline for input on its guide to states on crafting permit programs for coal ash disposal. Earthjustice attorney Lisa Evans raised the threat of litigation after, she says, agency officials verbally agreed to extend the 30-day comment period, only to reverse that decision just hours before the original deadline arrived on Sept. 14.

"Lest there be any doubt that EPA is no longer interested in public input, the manner in which EPA has handled the public comment period in this proceeding makes that clear. In short, EPA granted and, at the last moment, reversed itself and denied an extension of the comment period -- leaving the public interest community only a few hours to prepare and file comments before tonight's deadline," reads a comment letter filed by the Labadie Environmental Organization in response to the agency's sudden announcement that the comment docket would close. -- David LaRoss