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Federal Regulations Advisor Insight and Commentary on U.S. Government Regulatory Affairs

Monday Morning Regulatory Review – 8/12/13

Posted in Executive - OMB Review, Judicial Review & Remedies, Regulatory Process

The Office of Management and Budget (OMB) completed review (ubiquitously consistent with change) on several sensitive significant rules last week, including the Environmental Protection Agency (EPA)’s proposed greenhouse gas reporting amendments and final renewable fuels volumes for 2013, as well as a proposal to fix an Patient Protection and Affordable Care Act problem for Members of Congress and their staffs.  Two recent decisions shed light on how (or not) to remove a rule that has been remanded by a court and the role of the Department of Justice (DOJ) in defending (or not) challenges to agency regulations.

Greenhouse Gas Reporting:  OMB’s Office of Information and Regulatory Affairs (OIRA) completed review of the Environmental Protection Agency (EPA)’s proposed second Greenhouse Gas Reporting Program: Amendments to Address Input to Emission Equation Issues to fine tune data reporting elements used as inputs to emission equations (for direct emitters).  EPA proposed amendments in 2010 and this is the second round of consideration of great importance to a wide range of reporting industries.  The proposed rule’s existence suggests the ongoing need to address improved methodologies and verification approaches that change reporting requirements.  EPA has previously noted a concern that data may cause substantial competitive harm if made publicly available and apparently is considering revisions.

Renewable Fuels:  OMB completed review and EPA released its final Renewable Fuel Standard (RFS) Volume Standards for 2013 to set the annual percentage standards for cellulosic biofuel, biomass-based diesel, advanced biofuel, and renewable fuels that apply to all motor vehicle gasoline and diesel produced or imported for the year.  One key is the actual availability and this final rule set levels that appear to more accurately reflect the actual availability of renewable fuels – a point subject to much discussion, debate, and concern.

Noted before and still relevant:  EPA makes its regulatory actions available in typescript form shortly after signature (when possible) to give the public as much information as possible.  These signature drafts may be subject to technical, conforming and other changes (sometimes substantial), but EPA’s practice is transparent and worthy of emulation by other agencies.

Obamacare for Congress:  OMB completed review and the Office of Personnel Management published a proposed Federal Employees Health Benefits Program: Members of Congress and Congressional Staff rule that would alter the way Members of Congress and their staffs are treated under the Patient Protection and Affordable Care Act (ACA).  Currently, Members of Congress and their staffs are eligible to enroll in the Federal Employee Health Benefit Program, but the ACA provided that Congress may use only health plans that are either “created under” the ACA, or “offered through an Exchange established under” the ACA.  This proposed rule attempts to finesse one of the problems created by the ACA by permitting the Members of Congress to effectively decide who is and is not covered by the statutory definitions.

OPM apparently does not want too many comments and only provided a 30-day comment period – due September 9, 2013.  This politically charged rule has been the subject of behind the scenes negotiation between Congress, OPM, and the White House because Congress is concerned that it may lose staff if the ACA is applied as it is written.

End of a Species or Three:  The United States District Court for the District of Columbia granted the Department of the Interior (DOI) Fish and Wildlife Service (FWS) summary judgment in Safari Club International v. Jewell, ending more than two decades of debate over the Endangered Species Act (ESA) status of three antelope species – the scimitar-horned oryx, dama gazelle, and addax – which have dwindled, if not disappeared, from their native North Africa.  FWS promulgated rules in 2005:  one listing the three antelope species as endangered and the other providing a blanket exemption for U.S. captive-bred herds – recognizing that the captive bred herds assisted with maintaining the existence of the species and possible reintroduction to native habitats.  In 2009, another judge of the court found the blanket exemption rule was invalid under the ESA – and remanded without vacature for reconsideration – prompting the FWS to issue a new rule removing the exception in 2012 (thereby requiring detailed permits).  The present cases challenge the 2005 listing rule and the 2012 removal.

The court here found that it need not supplement the administrative record of the 2012 rule with the 2005 rule because the FWS explicitly considered only the court’s 2009 decision vacating that rule and did not thereby consider (or reconsider) the 2005 rules.  Capitulation to vacature might be ministerial, but capitulation, as here only to remand, may pose some additional problems for the agency.  The argument failed that capitulation in this case was arbitrary and capricious failed here because the agency’s response, in the form of the Removal Rule, was “in response to a court order that found that the rule for these three species violated” the ESA and was consistent with the court’s 2009 decision.  There is still something “Ostrich like” in FWS capitulation.

Not the End:  The United States Court of Appeals for the Federal Circuit accepted a proffer by the Department of Justice (DOJ) on behalf of the Department of Veterans Affairs (DVA) that DVA would no longer apply a 2011 rule that it previously admitted was promulgated in violation of the Administrative Procedure Act (APA).  The rule altered substantive rights of veterans in the unique pro-claimant / beneficiary proceedings, but VA initially stated that the rule was a “clarification” that did not require advance notice and an opportunity for public comment.  DOJ, in candor noted by the court, previously refused to defend the rule.  Nonetheless, despite previous promises, DVA continued to apply the rule and DOJ now made promises that VA would remedy the problem.  DOJ, possibly caught between the court and an ineffective agency, avoided sanctions, but the court retained jurisdiction to ensure that DVA’s promises to rescind the rule and rectify the improper application of the rule were, in fact, kept.

The case history presents a not unfamiliar problem:  an agency that cannot keep its promises and DOJ shooting straight.  DOJ – professional litigators – will stand up to an agency that takes an indefensible position and do the right thing – if an argument is well presented.  Tip of the hat to DOJ; wag of the finger at DVA.