Legal battle highlights 'revolutionary' nature of Trump directive for regulatory rollbacks

February 01, 2018
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The legal challenge to President Trump’s deregulatory program is marked by starkly divergent views, with the challengers calling Trump’s plan unconstitutional and the administration arguing its actions fall squarely in the mainstream of past presidential actions.

Trump's order “is revolutionary because it does not just instruct agencies to 'consider factors' that may be consistent with statutes granting them rulemaking power; it imposes a sweeping prohibition on rulemaking absent compliance with repeal and cost-offset obligations that cannot be squared with any extant statutory authority.” writes a coalition of public interest groups in a recent brief filed in federal district court challenging Trump's deregulation order.

The Justice Department on behalf of the White House has argued that Trump's order is a normal progression by an incoming administration to manage the rulemaking process.

“Plaintiffs would have this court ignore an unbroken 40-year history of Executive Orders directing agencies to consider factors, such as cost, unless expressly forbidden by Congress in a governing statute,” writes DOJ in its brief opposing the coalition's request for an immediate ruling by the court. “Both history and precedent confirm that Executive Order 13771, the latest in this unbroken chain, is a valid exercise of the President’s Article II powers,” according to DOJ.

The arguments being laid out in the case are reflective of a broader debate triggered by Trump's deregulation push, including the proposed first-time use of a “regulatory budget” in setting agency priorities.

Critics say Trump's requirement that agencies eliminate two existing regulations before issuing a new rule would dramatically shift the federal check-and-balance in favor of the executive branch by undermining congressional authority and statutory requirements. Proponents say Trump's executive order is an attempt to manage accumulative costs from outdated requirements and overzealous regulators.

At issue is Trump's Executive Order 13771 issued on Jan. 20, 2017 on “reducing regulation and controlling regulatory costs.” A coalition of public advocacy groups led by Public Citizen filed suit in federal district court in a dispute that is expected to wind up before the U.S. Court of Appeals for the District of Columbia and possibly the Supreme Court.

Trump's EO 13771 and a subsequent order, EO 13777, are at the core of the administration's deregulation agenda, with federal agencies tasked to identify regulations for eventual elimination through the rulemaking and withdrawal process laid out by the Administrative Procedure Act.

The fate of that effort could hinge on the outcome of the litigation, with Public Citizen and others urging the court to issue an immediate ruling to block implementation of EO 13771. Plaintiffs in the case include the Natural Resources Defense Council, Earthjustice and the Communications Workers of America.

“The Executive Order achieves its deregulatory purpose by purporting fundamentally to change laws governing agency rulemaking,” according to the coalition in its brief filed in July urging the court to issue a “summary judgment” in the case.

“Under the Order, the President and the Office of Management and Budget (OMB) require an agency, as a condition of issuing one new rule, to repeal two or more rules, and to offset the new rule’s costs by eliminating existing costs through repeals,” the groups say. “These requirements have no basis, express or implied, in any statute delegating rulemaking authority to federal agencies. Congress could enact statutes reflecting the policy arguments submitted by defendants’ amici, but Congress has not done so, and the question here is not about policy. The question here is whether the President has authority unilaterally to impose on federal agencies the new rulemaking criteria embodied in the Executive Order’s 1-in, 2-out and cost-offset requirements.”

The group concludes Trump does not have that authority and, therefore, his deregulation order “is unconstitutional and must be set aside.”

DOJ on behalf of the White House has asked the district court to “dismiss” the case and to reject the coalition's request for an immediate decision, arguing the Trump order is no different in basis than an initiative by former President Clinton to impose cost considerations on regulators.

The Trump administration also argues its regulatory agenda is similar to other cost-management efforts in other industrialized nations.

“This regulatory initiative follows successful regulatory reform offset efforts in Australia, the United Kingdom, and Canada,” DOJ states in its brief filed in June in opposition to the coalition's request for summary judgment. “Executive Order 13771 draws from these models to further advance a longstanding goal, spanning many Presidential administrations, of seeking to reduce regulatory burdens,” according to DOJ.

Trump's effort on regulatory costs “builds on similar efforts by prior administrations, including, most significantly, Executive Order 12866…, which President Clinton signed in 1993, and which has remained in effect for over 23 years,” according to DOJ.