The regulation of drones took a step forward last week, but that step may be very tentative. The interrelationship between general petitions for rulemaking and specific requirements of programmatic statutes was the focus of a district court dismissal, albeit a temporary one. In the United States Court of Appeals for the District of Columbia Circuit, two oral arguments presented potentially significant precedent decisions for the coming year.
Drone Registration Prospects: The Department of Transportation (DOT)’s Federal Aviation Administration (FAA) submitted at least initial registration regulations for the burgeoning small Unmanned Aerial Systems (sUAS or drones) in a UAS Registration (RIN 2120-AK82) interim final rule (IFR) to the Office of Management and Budget (OMB) on December 1. Presumably, the IFR contains the FAA’s response to its advisory committee’s recommendations and response to the comments on registration requirements in its proposed rule, as well as compliance with the information collection requirements of the Paperwork Reduction Act (PRA). Consumers reportedly will purchase a potential 4 million small UASs or drones in 2015, with a high percentage in the next few weeks.
The FAA’s proposed rule addressed not only operation of unmanned aircraft systems, but also certification of operators, registration, and display of registration markings, including a broad PRA proposal. The registration proposal was substantially broader than the recommendations of the advisory task force – indeed, they might represent the polar extremes of complexity and burden, though both may underestimate the number of actual registrations.
► The key question at this point lies in the nature of the IFR submitted to OMB. The use of an IFR suggests perhaps a true interim nature – the FAA has proposed a rule and may be adopting an interim rule without closing the docket or the rulemaking. The more common IFR invokes a “good cause” exception to the Administrative Procedure Act (APA)’s advance notice and opportunity for public comment. Here, advance notice and public comment is complete, and the extensive registration proposal encompasses so much that any lesser registration requirement would be within the APA logical outgrowth doctrine. If the FAA is attempting to established registration by an IFR, however, changing a large-scale information collection could be difficult, particularly if additional elements are needed by not previously captured. OMB may complete review before the holiday drone gifts are given, thereby putting the giftees on notice of their responsibilities, at least to register, and perhaps and more importantly, to create an internal notice system for (e.g. Notice to Airman or NOTAM) for immediate notice of promulgated operation regulations or policies.
APA Petitions & A Sovereign Immunity Caution: The United States District Court for the District of Columbia last week dismissed Environmental Integrity Project v. EPA on the basis that plaintiffs has failed to show that the United States had waived its sovereign immunity for the suit. Plaintiffs complained that Environmental Protection Agency (EPA) failed to respond to their 2011 petition for rulemaking concerning ammonia gas pollution and asked the court to declare EPA’s failure to respond within a reasonable time violated the APA and to compel EPA to respond to the petition within 90 days. EPA, through the Department of Justice (DOJ), responded that the action fell under the more specific provisions of the Clean Air Act (CAA), including a requirement that a plaintiff notify the EPA at least 180 days prior to filing suit.
The district court, as always considering first its jurisdiction, framed the issue as whether Congress waived the United States’ sovereign immunity as to plaintiffs’ claim, and, if so, whether under the APA or the CAA, which includes the 180-day notice limitation. In this instance, the CAA citizen-suit provision provided plaintiffs with an adequate remedy for the alleged wrong – a limitation on the application of the APA. Thus, while the authority for the complaint arose under the APA’s rulemaking petition provision, the CAA limited the waiver of sovereign immunity with a 180-day advance notice requirement.
Plaintiffs signaled to the district court that they would serve EPA with the requisite 180-day notice letter and later refile their unreasonable delay complaint, and that will come back to the district court. Substantively, judicial review of an EPA denial of the petition lies in the United States Court of Appeals for the District of Columbia Circuit.
► As the district court acknowledged, whether the APA alone provides a waiver of sovereign immunity in this case is not an easy question. The CAA does not displace the APA requirement that an agency respond to petitions for rulemaking, but the CAA supplants the APA’s open-ended but default-only waiver of sovereign immunity with a specific requirement limiting its own waiver of sovereign immunity. The interplay of programmatic statutes and procedural statutes can be complicated and plaintiffs’ error was certainly reasonable. The error reinforces the need for counsel to take great care in interpreting multiple statutes.
D.C. Circuit Argument Docket: Not often does this blog focus on interim, speculative, and evanescent issues such as oral argument in a Court of Appeals – even the District of Columbia Circuit – but last week poses a slightly different set of circumstances. Two different D.C. Circuit panels heard critical cases last week, setting the stage for important regulatory decisions in the coming year.
Open Internet Neutrality / Utility: Arguments stretched over three hours as the D.C. Circuit considered multiple issues raised by a dozen petitions for review challenging the efficacy of the Federal Communications Commission (FCC)’s Protecting and Promoting the Open Internet in U.S. Telecom Association v. FCC (D.C. Cir. No. 15-1063, and consolidated cases). Making no pretense that any one title adequately or accurately describes the rule (or the one the FCC selected), this blog looks to the substance of the major issues presented.
First, the court must consider whether the FCC has statutory authority to reclassify broadband internet access services from information services to regulated telecommunications common carrier or “utility” and whether the FCC’s change in approach was procedurally efficacious. This largest issue could doom the entire regulation.
Second, the court must consider whether the FCC lawfully reclassified mobile broadband services as common carrier services. While this issue may be limited to mobile (e.g. smartphone) aspects, that is the fastest growing aspect of internet service. Finding that the FCC lacked authority or procedurally faulted in this reclassification could significantly impair any rule that seeks to regulate the internet as a composite whole as the FCC sought.
Along with these fundamental “contrary to statutory authority” issues, petitioners raised also APA issues such as whether the FCC provided notice and comment of its fundamental approach in reclassification for public comment, and whether the FCC’s reclassification of mobile broadband was a logical outgrowth of the proposed rule.
Third, the court must consider whether the FCC conduct rules violate the First Amendment to the United States Constitution. Some petitioners argue that, as broadband providers, they are “speakers” engaged in and transmitting commercial speech by developing their own content or services online (e.g., news websites) and political speech by refusing to carry content with which they disagree. They argue that the FCC conduct rules violate their First Amendment rights by stripping them of control over which speech they transmit and how they transmit it. Success on this argument would not require vacature of the entire rule, but only the content-related rules, because the FCC specifically adopted a severability scheme. Commercial speech regulation has become a common issue before the D.C. Circuit.
► Whenever the court of appeals decides the plethora of issues raised in these cases, expect a major shift in the internet as we know it. The rule is effective but practicalities limit the FCC’s pursuit until the court decides these petitions. The court is likely to establish further precedent in deciding the underlying APA procedural issues.
Utility MACT: Last summer, in Michigan v. EPA, the United States Supreme Court (SCOTUS) held that the EPA erred in failing to consider costs in deciding whether to regulate fossil-fuel-fired, steam-driven electric generating units under the CAA, rather than only later in issuing pollutant-specific standards. SCOTUS remanded the case to the D.C. Circuit for further proceedings consistent with SCOTUS’ opinion. Subsequently, EPA released its Supplemental Finding that it is Appropriate and Necessary to Regulate Hazardous Air Pollutants from Coal- and Oil-Fired Electric Utility Steam Generating Units and request public comment on its proposed cost-determination notice. In noting the latter, this blog expressed skepticism about whether EPA was jumping the gun on the D.C. Circuit’s decision on remand and prejudging the issue.
At oral argument on implementation of the SCOTUS remand last Friday in White Stallion Energy Center v. EPA (D.C. Cir. No. 12-1100, and consolidated cases), industry sought vacatur of the rule, while the EPA sought mere remand, explaining that it expected to complete the require cost analysis by next April. Underlying all of this debate is a rule that industry predicts will cost more than $9.6 billion per year and ultimately be reflected in the consumers’ ratebase.
► EPA has suggested that it expects to reach the same general conclusions after cost consideration is included at the threshold decision. At the same time, at least one of the judges on the panel asked whether anything vacating the rule would really change anything. A healthy dose of skepticism suggests consideration of three points: (1) consumers should prepare to pay for the rule; (2) EPA might have already made up its mind and remand was futile ab initio, good faith, bad faith, or no faith at all; and (3) remand without vacatur appears ever more likely a hollow remedy. Once again, one must ask whether the D.C. Circuit’s Allied-Signal doctrine to permit remand without vacatur complies with the APA requirement that a court “hold unlawful and set aside agency action, findings, and conclusions found to be … not in accordance with law.”
The post Monday Morning Regulatory Review – 12/7/15: Drone Registration Prospects: APA Petitions & A Sovereign Immunity Caution; and D.C. Circuit Argument Docket appeared first on Federal Regulations Advisor.