UPDATE: Court ruling could jeopardize Trump GHG, air rules

A US court ruling vacating a hotly disputed science transparency regulation may jeopardize the fate of several Trump administration air quality and greenhouse gas (GHG) rules because the agencies made them effective upon publication, regulatory and legal analysts say.

The US District Court for the District of Montana on 2 February overturned the US Environmental Protection Agency rule, remanding it for a rewrite to the agency at its request. EPA acknowledged, and the court agreed, that the prior administration wrote the rule using the agency's housekeeping authority, which was unlawful.

The decision to vacate the rule came less than a week after the court decided the EPA "unlawfully made the Final Rule effective immediately on publication in the Federal Register."

At issue was EPA's "Strengthening Transparency in Regulatory Science" rule, which was published 6 January and took effect the same day, limits the EPA's ability to write regulations that are underpinned by scientific research that cannot be reproduced or is based on underlying data that is not public.

The court said EPA gave no valid reason for not following the US Administrative Procedure Act (APA), which requires agencies provide "not less than 30 days" after publication to allow affected parties a chance to adjust and adapt to new regulations. The APA governs federal rulemaking procedures.

The 27 January decision, though limited to this particular rulemaking, could affect the outcomes of challenges filed over several other, so-called 11th-hour regulations that EPA under President Donald Trump rushed out before 20 January. These include GHG standards for the aviation sector, which took effect 11 January. Also, effective immediately upon publication were EPA's final decisions to maintain the national air quality standards for ozone, effective 31 December 2020, and for fine and coarse particulate matter (PM) on 18 January.

"I definitely think the court ruling could be influential in other challenges to the Trump EPA's regulations," Megan Houdeshel, a Dorsey and Whitney attorney specializing in Clean Air Act issues told IHS Markit.

At the same time, she anticipates "new rulemakings by the Biden administration and Congressional Review Act challenges to applicable rules."

A year ago, Andrew Wheeler, EPA administrator at the time, overruled the objections of agency staff when he decided to retain the 2012 standards for PM instead of strengthening them. He also decided to maintain the 2015 air quality standards for ground-level ozone, a chief component of smog, after what critics called a rushed review in a three-year period instead of the five years mandated by the Clean Air Act. EPA's decision on aviation GHG was based on standards recommended by the International Civil Aviation Organization. IHS Markit analysts have described those standards as "weak."

California Attorney General Xavier Becerra, a Democrat who awaits US Senate confirmation to take up his position as the new US Health and Human Services Secretary, has challenged these three rules in the US Court of Appeals for the District of Columbia Circuit. He also has filed challenges against similar actions taken by other federal agencies, notably the Department of Energy, which finalized weakened energy efficiency standards for appliances.

The nonprofit Environment Defense Fund, which challenged the EPA's science rule, said Wheeler tried an "end run" around the APA procedures in an effort to tie the hands of the incoming administration.

The EPA science rule marked a departure from the long-standing agency practice of historically relying on studies built on data that cannot legally or ethically be made public. The agency under the Trump administration said the rule was an attempt to increase transparency, but critics like the Environmental Defense Fund panned the rule as an attempt to hamstring EPA's ability to write tough new environmental rules.

Federal Court Chief Judge Brian Morris deemed EPA's actions to be "arbitrary, capricious and otherwise not in accordance with law" because the agency did not provide good cause to exempt the regulation from the APA's 30-day notice requirement. "EPA failed to demonstrate how delayed implementation would cause real harm to life, property, or public safety. EPA failed to describe the crisis of 'confidence' it sought to address. EPA failed to show a need for urgent implementation," Morris wrote.

John Cruden, who headed the Department of Justice's Environment, Natural Resources Division through June 2011, called the ruling significant.

"So far as I know this is the first case to discuss the good cause exception, which the Trump administration used to not meet the normal 30 days before a rule becomes effective after it is final in this and other of the 'last-minute' regulations," Cruden, now a principal with Beveridge & Diamond, told IHS Markit.

He said the Biden administration retains the ability to rescind or revise the science regulation if it follows the APA.

Likewise, Amit Narang, regulatory advocate with Public Citizen, a consumer advocacy nonprofit, said the court found EPA's rule to be "obviously unlawful."

"Since the other rules that were made immediately effective used the same good cause argument, there is ample reason to believe that other courts would also reach the same conclusion," Narang added.

President Joe Biden, however, may act before any court issues its decision on these regulations. On 20 January, Biden issued an executive order that took an additional step beyond just freezing all regulations pending publication, or postponing those that had had been published but had not taken effect.

"Should actions be identified that were undertaken before noon on January 20, 2021, to frustrate the purpose underlying this memorandum, I may modify or extend this memorandum, pursuant to the direction of the President, to request that agency heads consider taking steps to address those actions," Biden wrote.

Narang was surprised to see this language. "I have never seen this language in any regulatory freeze memo," he said, adding that it is customary for any incoming administration to pause any regulations in the rulemaking pipeline in order to catch up.

Regardless of whether the courts act first or Biden addresses the last-minute regulations, Houdeshel predicts "a rollercoaster ride on environmental regulations," while warning of "significant uncertainty for project development and permitting across the board."

--Updated story with the federal district court's ruling vacating the rule.

Posted 28 January 2021 by Amena Saiyid, Senior Climate and Energy Research Analyst