Two agencies spiced up the normal August vacation interlude guaranteed litigation for years to come: The Environmental Protection Agency (EPA) promulgated the Clean Power Plan final rules and the Securities and Exchange Commission (SEC) promulgated the Pay Ratio Disclosure final rule. Both rules are expected to become litigation posters.
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Clean Power: As expected, the President of the United States (POTUS) and EPA, in what is considered to be a critical regulation to the legacy of this Presidency, released a leviathan of the Clean Air Act (CAA) regulation targeting electric power generators last Monday. The Clean Power Plan actually consists of three different actions – two final rules and one ominous proposal:
- Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units final rule;
- Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources: Electric Utility Generating Units final rule; and
- Federal Plan Requirements for Greenhouse Gas Emissions from Electric Utility Generating Units Constructed on or Before January 8, 2014; Model Trading Rules; Amendments to Framework Regulations proposed rule.
The existing generators carbon rule establishes final emission guidelines for states to follow in developing plans to reduce greenhouse gas (GHG) emissions from existing fossil fuel-fired electric power plants. The final rule sets (1) carbon dioxide (CO2) emission performance rates for the principal types of fossil fuel driven generators, (2) State-specific CO2 goals reflecting those emission performance rates, and (3) guidelines for state plans to implement the CO2 emission performance rates, which may be accomplished by meeting the State goals. The proposed rule would (if finalized) apply if States declined or failed to implement the carbon rule to EPA’s satisfaction. The new generators rule applies to future or “modified” existing generators.
► Even after a week, it is difficult to assess the totality of the regulatory effort. Taken together, the final rules alone total more than 2,000 typescript pages, without addressing any of the technical or impact documents. What is clear is that the Clean Power litigation will eclipse the Waters of the United States litigation already being chronicled in these posts. A coalition of States lead by West Virginia and at least the National Mining Association have already asked EPA to stay the existing generators rule under the Administrative Procedure Act (APA). The issues presented portend the core of litigation to come – ranging from impaired State sovereignty to statutory authorization to arbitrary and capricious decisionmaking. The stay request to the agency is required before requesting a stay from a United States Court of Appeals for the District of Columbia Circuit, where this litigation will land. Something that is not clear is whether the court of appeals can or could resolve the plethora of suits expected before this President leaves office, adding another wrinkle to an already complicated process.
Pay Disclosure: The SEC adopted a Pay Ratio Disclosure rule under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). The final rule requires disclosure of the median of the annual total compensation of all employees of a publicly traded company (excluding the chief executive officer), the annual total compensation of that chief executive officer, and the ratio between the two compensations. Dodd-Frank mandated a rule and the pay elements, so litigation will attack both the statute and its implementation through this regulation. Although the rule focuses on providing a company’s shareholders with information (better to determine, the SEC says, the CEO’s pay), the information is publicly disclosed by the manner in which the SEC requires it to be provided to the shareholders – the proxy statement. The rule will become effective 60 days after publication in the Federal Register, but does not mandate compliance until a company’s first full fiscal year after January 1, 2017.
► The rule has drawn both the support and ire of many. Here again, the rule is destined for litigation, as have prior SEC “disclosure” rules that, at bottom, seek to alter conduct through public opprobrium. Issues of “forced speech” under the First Amendment to the United States Constitution are likely. While the SEC focuses on the flexibilities that it has adopted, these too are likely to be subject to attack.
The post Monday Morning Regulatory Review – 8/10/15: Clean Power & Pay Disclosure appeared first on Federal Regulations Advisor.