Highlights from last week in regulatory practice include commencement of litigation over the Administration’s Clean Power Plan in an unusual form while the usual form continued in judicial review of the Administration’s Waters of the United States (WOTUS) final rule. Application of “good cause” exceptions to Administrative Procedure Act (APA) requirements led one district court in two different but understandable directions.
Clean Power Plan Litigation Preview: On August 15, a group of State attorneys general filed an emergency petition for an extraordinary writ of mandamus seeking to delay the effective date of the Environmental Protection Agency (EPA)’s existing electric generating unit (EGU) rule of the Clean Power Plan pending judicial review of the rule. Petitioners argue in the United States Court of Appeals for the District of Columbia Circuit that the draft typescript of the final rule states a hard date for submission of initial State plans of September 6, 2016, not a fixed time following and depending on the date of publication in the Federal Register. In light of that already declining window, the 15 States sought a stay of the effective date of the final rule under the All Writs Act, not the APA, at least partly because the final rule has not been published and the 60-day window for judicial review has not yet opened. Some press reports have suggested that EPA may not publish the rule until December. The States note that EPA declined their request for a stay in the time requested and argue that EPA has tactically delayed publication of released rules in the past.
On the other hand, 16 other States and some cities noted recently their intent to oppose the request. The Department of Justice (DOJ), of course, will oppose the request.
► Unique and unusual, mandamus would be the appropriate mechanism for this early assault on the rule, and it portends the vigor with which petitioners intend to pursue vacatur, but also may be short-lived if EPA publishes the final rule. Some delay is not unexpected, but tactical delay in publication is not acceptable. Whether or when the court of appeals will act on the extraordinary motion is not clear.
A second unusual aspect of the petition lies in the assertion that it is “related” to cases already lost – the attacks on the proposed rule that the D.C. Circuit unsurprisingly ruled were premature, wanting a final agency action. A cynical view might be that petitions sought the same panel – the reason for designating a case as potentially related – but that merits panel would not likely review this procedural motion. Curious.
WOTUS Litigation Update: Preliminary litigation on EPA and the Engineers’ Clean Water Rule: Definition of “Waters of the United States” (WOTUS) continued to congeal last week. On August 14, the Judicial Panel on Multidistrict Litigation (JPMDL) scheduled a hearing on October 2, 2015, on DOJ’s motion to consolidate ten challenges to the WOTUS rule from eight district courts. At least two district courts continued to consider motions for preliminary injunctions, including the Southern District of Georgia, which held a hearing on August 12. Absent a preliminary injunction, the new definition will go into effect on August 28, and the court advised that it would issue a ruling prior to that date.
JPMDL previously consolidated all petitions for review filed in various courts of appeal in the United States Court of Appeals for the Sixth Circuit by random selection from among the venued circuits. A threshold question remains whether the court of appeals has original jurisdiction to entertain the petitions – or if review of the final rule lies in the district courts under the APA.
► The dockets suggest that some district courts may rule on motions for preliminary injunctions despite DOJ’s argument that the cases should first be consolidated, likely before the rule becomes effective. And a consolidation decision will not come at, or immediately, but soon after, JPMDL holds argument. Much is still speculative.
STEM Extension Vacatur Stay: The United States District Court for the District of Columbia vacated, but stayed vacatur, of a 2008 Department of Homeland Security (DHS) rule extending optional practical training (OPT) opportunities for scientific, technology, engineering, and mathematics (STEM) foreign students by 17 months, in Washington Alliance of Technology Workers v. DHS. The effect was to allow STEM holders an additional 17 months of work authorization.
DHS issued the rule without advance notice and an opportunity for public comment “[t]o avoid a loss of skilled students through the next round of H-1B filings in April 2008.” DHS did not identify which of the APA’s “impracticable, unnecessary, or contrary to the public interest” provision was applicable, but identified its excuse for “emergency situations, or where ‘the delay created by the notice and comment requirements would result in serious damage to important interests,’” citing dated and perhaps no longer valid precedent. DHS concluded that it had good cause to issue the rule without notice and comment because:
[t]he ability of U.S. high-tech employers to retain skilled technical workers . . . would be seriously damaged if the extension of the maximum OPT period to twenty-nine months for F-1 students who have received a degree in science, technology, engineering, or mathematics is not implemented early this spring, before F-1 students complete their studies and, without this rule in place and effective, would be required to leave the United States.
The district court reviewed DHS’s good cause determination and the administrative record evidence supporting that determination without any deference because the APA is a general statute as to which DHS has no expertise. The district court reiterated the long-standing precedent that a good cause exception “is to be narrowly construed and only reluctantly countenanced.” The court found that the record did not establish the economic consequences of failing to promulgate the rule immediately and the three reports cited by DHS addressed the importance of STEM workers to the U.S. economy only in very general terms. Moreover, the court found the issue to be “old hat” – stemming from a statutory change in 2004, not a contemporaneous problem beyond DHS’s control.
The court applied the well-established Allied-Signal precedent that a vacatur depends on the seriousness of the deficiencies in the rule (and thus the extent of doubt whether the agency chose correctly) and the disruptive consequences of an interim judicial change that may itself be changed by remanded rulemaking. While the first test posed little problem, the court recognized that immediate vacatur would not only disrupt the program, but the thousands of individuals who currently hold STEM extensions. Accordingly, the court vacated the 17-month STEM extension described in the 2008 Rule, stayed the vacatur until February 12, 2016, and remanded the rule to DHS for further proceedings consistent with its opinion.
► Two key points are worth noting:
DHS failed to establish that any economic emergency existed in an administrative record closed over six years ago; indeed, DOJ cited non-record material that did not help. Good cause exceptions require a minimal statement in the rule preamble, but also require a well thought out supporting record. Here neither appeared convincing.
The court here accepted DOJ’s proposal (in part) to stay vacatur because of the disruptive effects of immediate vacatur on third parties – and this may end up being a pyrrhic victory for all parties. DHS must now respond to the remand within six months, a daunting task, but may result in precisely the same rule in final form. While it may be justified, the stay leaves little incentive for DHS to comply with the APA in the future.
Delayed Effective Date: Another judge of the same court upheld a good cause exception to the APA delayed effective date requirement in a narrow decision in Black v. Pritzker. Based on a treaty and implementing and delegating statute, the Department of Commerce (DOC) National Oceanic and Atmospheric Administration (NOAA)
- proposed a rule and requested public comments on June 1, 2009, and
- promulgated a final rule on August 4, 2009,
- prohibiting certain fishing activities between August 3, and September 30, 2009.
NOAA issued notices of violations to a number of vessels for activity during this 2009 prohibition period. Plaintiffs moved to dismiss the administrative violation prior to September 5, 2009, arguing that the NOAA reasons for excepting the regulation from the APA 30-day delay between the publication and effective date were arbitrary and capricious. The Administrative Law Judge denied the motion (lack of authority to vitiate a superior’s actions), the Administrator affirmed some relevant penalties, and the plaintiffs raised the APA regulatory issue anew in district court in contesting civil monetary penalties (among other issues not of interest here).
NOAA argued “good cause” for excepting the rule from the minimum effective date delay because the rule would then only become effective for half of the 2009 prohibition period, frustrating its obligations under the treaty, and that the treaty requirements that lead to the prohibitions were not promulgated as international standards until December of 2008. Plaintiffs argued that NOAA dragged its feet and added post-hoc rationalizations to its exception.
“Good cause” here is different from good cause to except from APA’s notice and comment requirements – both serve notice purposes but the public comments process imposes more refined requirements for exception. As the court noted, NOAA specifically noticed each of the plaintiffs of the proposed rule and specifically notified them that the final rule could be made final effective August 1, and, indeed, was the same for all relevant purposes.
► NOAA clearly needed to act quickly to conform with the underlying requirements, attempted to mitigate any surprise, and the limited affected industry was on notice. Black presents discrete issues at the margin of APA exceptions, and agencies should not read this limited case as precedent for any broad propositions.
The post Monday Morning Regulatory Review – 8/17/15: Clean Power Plan Litigation Preview; WOTUS Litigation Update; STEM Extension Vacatur Stay & Delayed Effective Date appeared first on Federal Regulations Advisor.