Regulatory practice events of the past week focused on judicial review and agency response. On one hand, the Administration lost a major skirmish in the tangled litigation over the regulatory definition of waters of the United States. On the other hand, two interim regulatory events illustrate the effect of judicial delayed vacatur orders and agency responsibility.
WOTUS Stayed Nationwide: The United States Court of Appeals for the Sixth Circuit stayed the Environmental Protection Agency (EPA) / Army Corps of Engineers’ Waters of the United States (WOTUS) rule nationwide. The stay is a significant loss for the Administration and one that may be unrecoverable. Context is critical:
- States and private parties sought review of the Clean Water Act (CWA) final rule in multiple district courts (complaint) and, as a protective measure in light of jurisdictional uncertainty, in multiple courts of appeal (petitions for review).
- The Department of Justice (DOJ) moved to dismiss the district court litigation arguing that only courts of appeal had jurisdiction to review this CWA rule, or to stay the district court litigation pending DOJ’s motion in the Judicial Panel on Multidistrict Litigation (JPMDL) to consolidate all district court litigation in the United States District Court for the District of Columbia.
- Many of DOJ’s motions were successful, but the District of North Dakota issued a preliminary injunction barring implementation of the rule in the 13 plaintiff States before it.
- JPMDL consolidated the petitions for review in the Sixth Circuit – a random selection among circuits in which petitions were filed.
- Petitioners sought dismissal of the petition for review in the Sixth Circuit, or a stay of the rule pending judicial review.
- JPMDL has heard but not decided whether to consolidate the district court cases.
The Sixth Circuit’s decision raises issues that require more detailed attention.
Jurisdiction: Every court must determine its jurisdiction even if the parties never raise the issue and this is normally the court’s first decision. The Sixth Circuit deferred the jurisdiction issue until ordered briefing was completed, but issued a stay. A dissent from the Sixth Circuit stay order focuses precisely on this jurisdictional issue and takes a reserved approach to structure judicial decisionmaking – jurisdiction first. On the other hand, the District of North Dakota found that it had jurisdiction and issued a preliminary injunction. When a party protects its right to judicial review by filing in multiple courts, a motion to dismiss their own petition is an unsurprising way of joining the jurisdictional issue. The Sixth Circuit could still find that it lacks jurisdiction, dismiss, and thereby vacate its stay.
Status Quo: The Sixth Circuit recognized a core problem with a rule that became effective in 37 States and other political subdivisions prior to its own decision on a stay:
What is the status quo? Petitioners ask us to stay enforcement of the Clean Water Rule that went into effect on August 28, 2015. They ask us to restore the status quo as it existed before the Rule went into effect. Respondents’ position is that the status quo is best preserved by leaving the Rule alone. Considering the pervasive nationwide impact of the new Rule on state and federal regulation of the nation’s waters, and the still open question whether, under the Clean Water Act, this litigation is properly pursued in this court or in the district courts, we conclude that petitioners have acted without undue delay and that the status quo at issue is the pre-Rule regime of federal-state collaboration that has been in place for several years, following the [United States Supreme Court (SCOTUS)]’s decision in Rapanos v. United States, ….
As noted previously in these posts, the status quo and the balancing of equities tend to shift when a rule becomes effective, but courts can be willing to stay a rule if the court does not possess sufficient information to adjudicate interim relief prior to a rule’s denominated effective date. Here the court reached back to recover a status quo.
Stay Elements: The Sixth Circuit reiterated the common four-part standard for issuing a stay or preliminary injunction (likelihood of success on the merits, irreparable harm, balancing of the equities, and the public interest), but took a sliding-scale view that the four elements “are not prerequisites that must be met, but interrelated considerations that must be balanced.” The panel asserts that petitioners “demonstrated a substantial possibility of success on the merits” that the rule was inconsistent with the Rapanos statutory interpretation, that the final rule specific jurisdictional distances (in feet from another defined jurisdictional basis) were not a logical outgrowth of the proposed rule, and that the administrative record contained no support for those jurisdictional distances making the rule arbitrary and capricious.
The other factors received a consolidated consideration:
There is no compelling showing that any of the petitioners will suffer immediate irreparable harm – in the form of interference with state sovereignty, or in unrecoverable expenditure of resources as they endeavor to comply with the new regime – if a stay is not issued pending determination of this court’s jurisdiction. But neither is there any indication that the integrity of the nation’s waters will suffer imminent injury if the new scheme is not immediately implemented and enforced.
What is of greater concern to us, in balancing the harms, is the burden – potentially visited nationwide on governmental bodies, state and federal, as well as private parties – and the impact on the public in general, implicated by the Rule’s effective redrawing of jurisdictional lines over certain of the nation’s waters. Given that the definitions of “navigable waters” and “waters of the United States” have been clouded by uncertainty, in spite of (or exacerbated by) a series of Supreme Court decisions over the last thirty years, we appreciate the need for the new Rule. …. In one sense, the clarification that the new Rule strives to achieve is long overdue. We also accept that respondent agencies have conscientiously endeavored, within their technical expertise and experience, and based on reliable peer-reviewed science, to promulgate new standards to protect water quality that conform to the Supreme Court’s guidance. Yet, the sheer breadth of the ripple effects caused by the Rule’s definitional changes counsels strongly in favor of maintaining the status quo for the time being.
From this the panel orders a stay to permit a more deliberate determination of the issues until further ordered by the court.
► The nationwide stay is a major setback for the agencies – they may take no action to implement the new rules until a judgment becomes final or the court otherwise relieves the stay. Three points: one judgmental, one significant, and one technical:
The panel decision, made somewhat in haste but not much, is not as convincing as the North Dakota stay decision, which the panel cites. Indeed, the panel seems to take a very relaxed attitude toward elements that SCOTUS has demanded by clear. Nonetheless, the stay will remain in place until further order of the court and that may require a year or more – perhaps into the next Administration.
The conflicting motions actually make sense when both sides forum or venue shop and jurisdictional questions are raised – and both are forum shopping. Venue shopping is normal – the process of seeking a favorable venue based on differences in legal interpretations is a natural element of a litigation decision tree. Unfortunately for the agencies, shopping for a court of appeals decision has now resulted in the very stay that DOJ sought to avoid in its own forum shopping and in its opposition to the stay in North Dakota. The issues are hardly settled and both courts could ultimately decide (conflictingly) that they lack jurisdiction. Avoiding that potential may be one reason why JPMDL might consolidate the district court litigation in the Southern District of Ohio, i.e. within the Sixth Circuit.
Technically (and quite arcane), the nationwide stay requires some ministerial action –retrenchment of the electronic Code of Federal Regulations (eCFR) to its pre-June 29 version of each of the affected sections. The traditional published CFR revision commits to print as of July 1, 2015, and contains both the pre- and post-promulgated versions. Readers must to take care with which version they read.
Vacatur Remedies – Shepherds Wages or Optional Practical Training: The Office of Management and Budget (OMB) completed review last Friday of a Department of Labor (DOL) final rule establishing procedures for setting wages of foreign shepherds: Temporary Agricultural Employment of H-2A Foreign Workers in the Herding or Production of Livestock on the Open Range in the United States. This specialty rule is part of a broader Immigration and Nationality Act (INA) temporary foreign worker visa program that allows employers to hire foreign workers when there are not enough qualified and available American workers to fill open jobs. The rule responds to a United States Court of Appeals for the District of Columbia Circuit decision that DOL improperly set shepherd’s wage floors through interpretative rules that are exempt from Administrative Procedure Act (APA) notice and comment requirements when DOL should have adopted legislative rules because the wage setting was a substantive regulatory change. On remand, the district court ordered DOL to promulgate a final rule by November 1, 2015, with an effective date no later than 30 days after publication. The district court ordered vacatur of that the interpretive rules upon the effective date of the legislative rules. The rule has not yet been filed with the Office of the Federal Register, but DOL has some time.
On the other hand, the Department of Homeland Security (DHS) submitted a proposed revision of optional practical training regulations to OMB at the beginning of the month. The draft proposed Improving and Expanding Training Opportunities for F-1 Nonimmigrant Students with STEM Degrees and Expanding Cap-Gap Relief for All F-1 Students With Pending H-1B Petitions responds to the United States District Court for the District of Columbia decision. The district court in August vacated a 2008 interim final rule because DHS failed to establish good cause to promulgate the interim final rule without advance notice and an opportunity for public comment. The district court stayed the vacatur until February 12, 2016, and a remanded the rule to DHS for further proceedings – under that (to misuse a phrase) hanging sword of Damocles that the rule will be vacated without further action unless DHS completes a proper rulemaking.
► Both remands require the agencies to respond to the court’s orders, but the Shepherds remand detailed the agency actions and specific interim dates, while the STEM remand simply sets the date on which the rule will be vacated and leaves to the agency the details of promulgating an APA-valid rule by that date. Although both require a time-limited response, merely delaying the vacatur order to a date certain and leaving responsibility for fulfilling the APA process to the agency seems to better respect both the rulemaking process and the agencies’ substantive decisionmaking. Like Occam’s Razor, the simpler remand and date certain vacatur is likely the better solution.
The post Monday Morning Regulatory Review – 10/12/15: WOTUS Stayed Nationwide & Vacatur Remedies – Shepherds Wages or Optional Practical Training appeared first on Federal Regulations Advisor.