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

Monday Morning Regulatory Review – 8/26/13: Recess Appointments; Food Safety; Sewage Sludge Incinerators; Crystalline Silica & H-2B Wage Methodology

Posted in Agency Authority, Judicial Review & Remedies, Regulatory Process

Summer recess is the time for judicial details and major regulatory actions.  This week, two more very different opinions arise in the National Labor Relations Board (NLRB) recess appointments scrum, more delay in the Food and Drug Administration (FDA) food safety regulations is denied, and a small element of the Environmental Protection Agency (EPA)’s sewage slug incinerator rule was remanded to the agency for a better explanation.  On the other hand, Office of Management and Budget (OMB) completed review on the Department of Labor (DOL)’s most major and significant Occupational Exposure to Crystalline Silica proposed rule, while DOL submitted to OMB a small, but telling H-2B Wage Methodology delay final rule.

Recess Appointments:  In a different twist, the United States Court of Appeals for the Eighth Circuit held that the validity of the NLRB recess appointments, and hence a quorum, was not jurisdictional in RELCO Locomotives v. NLRBRELCO’s attempt to raise the issue through a Federal Rule of Appellate Procedure 28(j) letter after oral argument, therefore, could not save the issue from the requirement of the National Labor Relations Act (NLRA) that issues must be presented and exhausted before the NLRB.

In still another twist, a district court summarily (relying on court of appeals recess appointments cases) found that the NLRB General Counsel, and the regional counsel, were improperly appointed and therefore dismissed a complaint to enforce filed by the NLRB, reports Jack Lambremont and Chip McWilliams at Littler’s Labor Relations Counsel.  The decision in Hooks v. Kitsap Tenant Support Services Inc. provides little discussion of the logic that leads from previous NLRB recess appointments cases to the regional attorney’s authority.

The complexity of bringing an administrative authority issue to court is again highlighted by cases tangential to the United States Supreme Court (SCOTUS) consideration of Noel Canning v. NLRBRELCO’s imposition of the statutory exhaustion requirement could derail the constitutional issue even if not part of the questions presented to SCOTUS if the question is jurisdictional, but if authority is jurisdictional, it may be raised at any time.  Constitutional issues of agency authority may exceed also an agency authority to decide and therefore exhaustion may be futile.  The Eighth Circuit’s decision raises significant unanswered issues of its own that require resolution before reaching the recess appointment question.

The district court’s lack of logic train in Kitsap leading to dismissal of the regional attorney’s suit leaves more questions than answers.  If the NLRB decides to appeal the dismissal to the United States Court of Appeals for the Ninth Circuit, the district court is likely to see the case remanded for that explanation.  In this instance, counsel’s briefs may not have been as helpful to the district court as hoped.

Sewage Sludge Incinerators:  In March 2011, the EPA established “maximum achievable control technology” (“MACT”) standards for two subcategories of sewage sludge incinerators by final rule under the Clean Air Act.   While the United States Court of Appeals for the District of Columbia Circuit agreed that EPA had authority to establish the standards in National Association of Clean Water Agencies v. EPA, the court faulted the EPA’s methodology, agreeing that in some respects EPA had not adequately established that its estimates and assumptions were reasonable.  The court remanded parts of the sewage sludge incinerator rule to EPA for further proceedings without vacating the current standards.

In previous cases, EPA identified the sources with the lowest emissions, then identified the primary emission control technology used by those sources, and then set the MACT floors based on sources that used that technology.  Here, EPA selected which sewage sludge incinerators to survey based on their control technology as a proxy, without first determining their emission levels relative to other sources.  Even then, EPA made assumptions in composing its survey, leading to results that were inadequate.  Not infrequently, the courts have found that EPA’s attempts to estimate performance to be lawful in theory, but EPA could not support the assumptions underlying its estimates with substantial evidence in practice.

Often the translation of estimates and assumptions, data and experience, into a tractable explanation is the real problem and that may be the real problem here.  EPA has the opportunity to clarify and explain (by preamble) how and why it reached certain conclusions, but the industry must comply with EPA’s past conclusions (rules) until then.  The result underscores the problem, and perhaps the futility, of the Allied-Signal doctrine of remanding without vacature, found in the ultimate footnote to the court’s opinion:

We do not, of course, mean to suggest that EPA is bound to reach the same conclusion upon reexamination of the record for purposes of explanation.  Should EPA find itself unable to support its conclusions, it is, of course, free to reach different ones.

If so, what of the industry’s intervening compliance?

Food Safety No End:  A brief chapter in the FDA Food Safety Modernization Act saga finds the agency seeking more delay in two rules with little realistic argument, and the district court finding little basis for granting such relief from a prior order and judgment in Center for Food Safety v. Hamburg.  FDA sought relief from the court’s final judgment and more time to develop the intentional adulteration / contamination and sanitary transport rules.  The court found little merit in the FDA contentions that it is unable to complete the proposed intentional adulteration and sanitary transport rules by November 30, 2013, because of the complexity of the issues, the amount of work required, and other reasons it previously argued in its motion for summary judgment – i.e. nothing new – but given plaintiffs’ agreement to extend the deadline for publication of the proposed sanitary transport rule 60 days, to January 31, 2014, the court agreed to amend the order and judgment to that extent.  The sanitary transport proposed rule seems to have an even longer track and no hope of being published by the end of November (unless FDA defaults to a minimum and minimal performance rule).  Judicial orders and reality may soon clash because it is unlikely that FDA can meet the deadlines – order or not.

Crystalline Silica:  OMB completed perhaps the fifth-longest regulation review pending on its docket, and the Department of Labor (DOL) Occupational Safety and Health Administration (OSHA) released the 757-page Occupational Exposure to Crystalline Silica proposed rule.  DOL submitted the proposed rule on Valentine’s Day, 2011, and OMB completed review 921 days later, consistent with change, but the subject of this major, economically significant rule is immense:  Silicon is the second most common element in the Earth’s crust (oxygen is number one).  Together they make up approximately 75% of the Earth – and commonly form a crystalline structure that is one of the oldest and most common occupational hazards.  Managing respirable crystalline silica, therefore, is an immense issue for all industries, but affects construction more than most.  OSHA proposes a new permissible exposure limit (PEL), calculated as an 8-hour time-weighted average, of 50 micrograms of respirable crystalline silica per cubic meter of air (50 µg/m3).

OSHA estimated the proposed rule would require 2,585,164 burden hours under the Paperwork Reduction Act alone, at an estimated cost of $273,504,281.  OSHA further estimated that the proposed rule would prevent 688 fatalities and 1,585 silica-related illnesses annually once it is fully effective, a discounted monetized incremental benefit of $5.3 billion annually, with at an estimated incremental cost of $637 million annually, or a net benefit of $4.6 billion annually. OSHA notes that these estimates are for “informational purposes only” and were not used as a decision basis on the choice of a permissible exposure limit (PEL) or of other requirements for the proposed rule.

OSHA believes it is precluded from considering economic analysis by the Supreme Court’s decision in American Textile Manufacturers Institute v. Donovan, but Congress’s pre-eminent value on assuring a safe and healthful working environment, was limited by the feasibility of achieving such an environment.  The issue of economic feasibility remains a value that OSHA must consider and to that limited extent an issue potentially for judicial review at the minimal substantial evidence test: “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”  OSHA’s conclusion that it “may not use benefit-cost analysis” seems to overstate the limitation of its authority.

Updating decades-old regulatory methodology will be difficult, costly and contentious, so the 2½ years of OMB is not really surprising.  OSHA will provide 90 days for public comment, although requests for a longer period to analyze the efficacy of the proposed rule under the “to the extent feasible, on the basis of the best available evidence” standard should be expected, followed by another lengthy analysis.  As Congress set the standard, Congress may need to rethink it.

Wage Methodology Delay:  DOL submitted its draft final Wage Methodology for the Temporary Nonagricultural Employment H-2B Program to OMB on August 20, 2013.  DOL proposed an indefinite delayed effective date (by proposed rule) of a previously finalized and enjoined rule on July 23, 2013, with comments due quickly on August 9, 2013 – and very few comments have been posted on Regulations.gov.  DOL’s rationale was simply that a Congressional appropriation rider prohibited them from acting and that rider has ossified in the “continuing” provisions of each subsequent appropriation or continuing resolution.  This state of affairs is unlikely to change, so DOL is eliminating the need to issue new notices to delay the effective date each time a new appropriation or continuing resolution carries the rider forward.  Some of the commenters do not appear to grasp that reality.