The Nickel Report

As is almost always the case following a change in administration, many EPA policies and interpretations are being reviewed and, depending on your point of view, either appropriately reconsidered or “rolled back.” Front and center in this debate is the practical reality that such reviews take time, including in some cases the time necessary to comply with procedural requirements for notice and comment rulemaking. The extent to which the EPA can take the time it believes is necessary is currently playing out in courts across the country, which are grappling with questions of the degree to which the EPA can postpone regulatory compliance deadlines or delay statutorily required actions while it conducts that review.

Some of these cases have arisen as a direct result of actions undertaken by the new administration to delay deadlines for compliance by regulated parties while the EPA conducts reconsideration. For example, in July, the DC Circuit vacated the EPA’s June 2017 administrative stay of provisions of a 2016 revision to rules addressing methane emissions from oil and natural gas facilities. The decision in Clean Air Council, et al v. E. Pruitt, et al., No. 17-1145, turned on the panel’s reading of Clean Air Act (CAA) §307(d)(7)(B), which authorizes such stays without rulemaking under certain circumstances. Under the court’s opinion, the EPA’s authority to administratively stay a rule for three months pending its reconsideration is limited to those circumstances in which the EPA is statutorily compelled to conduct that proceeding. Of course, determining whether that criterion has been satisfied is easier said than done, since those questions often are litigated. Notably, Judge Brown (who recently announced her intent to retire) dissented on the grounds that the stay was not a final action subject to review, and two judges on the full court joined her in voting to grant the EPA’s motion to rehear the case, although their reasoning may have been different from Judge Brown’s.

In a more recent case, the DC Circuit is considering the extent to which the EPA can postpone the effectiveness of a rule through rulemaking. In Air Alliance Houston, et al. v. EPA, No. 17-1155, the petitioners challenge a June 2017 final rule delaying for 20 months the effective date of a 2016 rule imposing new requirements for Risk Management Programs to prevent accidental chemical releases. On August 30, the court denied petitioners’ motion to either stay or summarily vacate the rule, finding that they had not satisfied the high hurdle for such relief. As a result, the challenges, including petitioners’ argument that the rule is an end run around the limited administrative stay provision in CAA §307(d)(7)(B), will be litigated in full, with briefing likely to occur over the next four months.

Not all of the recent cases affecting the timing of the EPA’s review of its policies and interpretations have arisen as a direct result of the new administration’s actions. By way of example, last spring, the EPA announced its intention to review the prior administration’s action mandating revision of the State Implementation Plans (SIPs) for 36 states to remove provisions addressing emissions during periods of startup, shutdown and malfunction (SSM)—referred to as the SSM SIP Call. The announcement came in the context of a request to hold in abeyance a judicial challenge to that action by both states and the sources they regulate. That review process was not subject to any statutory or judicial deadline for completion, although the EPA is subject to statutory deadlines to act on states’ submissions in response to the prior administration’s SSM SIP call as long as it is in place.

Unfortunately, those are not the only carryover SIP submittal deadlines the new administration faces. As a result of the prior administration’s failure to meet its own deadlines to act on some states’ submissions related to ozone, the EPA was sued by several non-governmental organizations (NGOs) in the Northern District of California. Center for Biological Diversity v. Scott Pruitt, 16-cv-05492-JSW. In the resulting consent agreement, inked in the period between the presidential election and inauguration and entered by the judge January 19, 2017, the old administration bound the new administration to act on fifteen SIP submittals. Among those is a requirement to act by September 29, 2017 on a 2015 submittal by the State of Delaware.

Delaware is one of the states subject to the SSM SIP call. Its 2015 ozone submittal, which pre-dated the SSM SIP Call, raises some of the same issues that the EPA is reviewing in its broader review of the SSM SIP Call. As a result, the EPA determined that it could not meet the deadline imposed on it by the prior administration with respect to Delaware without also concluding at least part of its broader review of that action, which it was not ready to do. When the NGO plaintiffs refused to agree to any modification of that provision in the consent decree—presumably hoping to force the EPA to conclude its review of the SSM SIP Call—the EPA sought relief from the court. The NGO plaintiffs opposed the relief, arguing, in part, that there has been no change in circumstance that would warrant modification of the consent decree because the change in administration was something the parties anticipated.

The judge agreed and on August 31 entered an order denying the new administration’s request for relief and ordering the EPA to take final action on Delaware’s 2015 submittal in 90 days (which, as it turns out, does provide the EPA an additional 59 days from the original September 29 deadline). The court’s logic is far from clear in that it suggests (consistent with the NGO’s statement) that because the EPA knew about the change in administration at the time it agreed to the deadline, it could have (and should have) anticipated there also might be a policy review that might warrant more time. Of course, the new administration had not taken office and did not have a seat at that table.

Arguably, the EPA still has a number of options, although completion of a new notice and comment rulemaking on the SSM SIP Call within the forced 90-day timeframe likely would set a new speed record. The NGO petitioners (and the court) suggested one option that would be controversial: the EPA could disapprove the submittal on the grounds that it is inconsistent with the SSM SIP Call. Then, if the EPA, upon conclusion of its review of the SSM SIP Call on its own timetable, determined that the SIP Call should be withdrawn, the EPA could exercise authority under CAA 110(k)(6)—often referred to as the “error correction” provision—to revise the disapproval. The Obama administration proposed to do something similar in 2014 with respect to an Alabama SIP revision approved by the Bush administration in 2008, 79 Fed. Reg. 8645, but the EPA never finalized that proposal.

We will have to wait and see how the EPA decides to proceed in light of the constraints of this judicial deadline.