The Nickel Report

The U.S. Supreme Court is not the only one keen on taking a closer look at deference to agency interpretations. Just as the Supreme Court will have an opportunity “to rein in a particularly aggressive use of agency deference” later this year, the House of Representatives is also set to take aim at judicial deference to agency interpretations through the recently proposed Regulatory Accountability Act (the Act) — a compilation of several earlier reform bills. A similar act was proposed last July and passed the House, but was ultimately not considered by the Senate. With the new incoming administration, however, the Act may have an increased chance of success.

Just before Christmas, the U.S. Environmental Protection Agency (EPA) released controversial regulations, titled Accidental Release Prevention Requirements: Risk Management Programs under the Clean Air Act; Prepublication Final Rule, that EPA states will “modernize” the Clean Air Act Section 112(r)(7) Risk Management Program (RMP) regulations. These 1990s-era regulations, covering about 12,500 facilities across the country, require that facilities storing certain amounts of specified chemicals develop risk management plans to prevent the accidental release of those substances into the air and mitigate impacts of accidental releases that do occur. EPA initiated these RMP rule revisions under the directive of President Obama’s August 1, 2013, Executive Order (EO) 13650, Improving Chemical Facility Safety and Security. After proposal on March 14, 2016, EPA received more than 44,000 comments, making rule issuance in just over six months’ time remarkable, especially given that the final rule and response to comments total about 600 pages.

Executive Branch agencies write vague rules.  Then they give them meaning through interpretation.  That meaning may change over time through re-interpretation.  Indeed, it is not hard to find examples of rules that meant one thing one day and the opposite the next.  See, e.g.,  Perez v. Mortgage Bankers Association, 135 S. Ct. 1199 (2015).  This is a problem for regulated entities that face penalties for failure to comply.  Reflecting such concerns, the deference doctrine has eroded slowly over the past two decades, with pronounced critical commentary from conservative Justices.  In October 2016, the Supreme Court granted review  in a case from the Fourth Circuit -- GG v. Gloucester County School Board (cert. granted Oct. 28, 2016)—where the court gave “controlling weight” to a staff interpretation of a Department of Labor (“DOL”) regulation.  In Gloucester County, the Court will have an opportunity to rein in a particularly aggressive use of agency deference.  Does this case presage more comprehensive review of the Court’s deference jurisprudence?  And what does it portend for the Trump Administration’s efforts to reverse Obama Administration regulatory priorities?

Recently, several of the environmental attorneys in our Washington office gathered together to sign holiday cards. During the festivities, the song “Hard Candy Christmas” by Dolly Parton played, leading to a spirited discussion of what did the words “a hard candy Christmas” mean? Was this type of Christmas good or bad? Was this song happy or sad?

On Monday, December 19, the US Environmental Protection Agency released its enforcement and compliance annual results for fiscal year 2016 (FY 2016). The results compile environmental enforcement statistics for the final year of the Obama administration.

As the presidential transition draws nearer, many have asked what the change in administration will mean for the enforcement of our nation’s environmental laws. The Environmental Protection Agency, Department of Interior, Army Corps of Engineers, US Coast Guard and other agencies are all tasked with enforcement responsibilities under the major federal environmental statutes. The future of environmental enforcement under the incoming Trump administration thus depends on the future of each of these agencies.

On October 21 and November 3, EPA Regions 3 and 9 denied petitions from eNGOs for the agency to use its “residual designation authority” (RDA) to expand the universe of stormwater discharges that are regulated by the Clean Water Act (CWA) in specific watersheds in Maryland and California. See 33 U.S.C. § 1342(p)(2)(E); 40 C.F.R. §§ 122.26(a)(1)(v), (a)(9)(i)(D). This was an important decision by EPA, and any resulting litigation could have significant implications for businesses or activities with significant swaths of impervious surfaces, from which stormwater discharges may occur.

On October 17, the federal District Court of the Northern District of West Virginia ruled in a lawsuit brought by Murray Energy that EPA had violated Clean Air Act § 321(a)’s requirement that the agency “conduct continuing evaluations of potential loss or shifts of employment” that may result from EPA air regulations. Judge John Preston Bailey, a nominee of President George W. Bush, found that “Congress unmistakably intended to track and monitor the effects of the Clean Air Act and its implementing regulations on employment in order to improve the legislative and regulatory processes,” and that job loss evaluations “may have the effect of convincing the EPA, Congress, and/or the American public to relax or alter EPA’s prior decisions.” At that time, Judge Bailey gave EPA just two weeks to come up with a plan to evaluate those impacts.