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

Monday Morning Regulatory Review – 11/23/15: Immigration Executive Action Petition; Electric MATS Appropriate and Necessary Finding; Pollutant Good Neighbors; Airport Passenger Screening; & Unified Agenda Expectations

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

dawn over the capitol aocThe Administration, unsurprisingly but nonetheless most significantly, petitioned the United States Supreme Court (SCOTUS) to review the continuing preliminary injunction against part of the Department of Homeland Security (DHS) not-a-regulation immigration executive action. On the other hand, the Environmental Protection Agency (EPA) responded to a not-yet remand and a remand of different rules. DHS took a further step in trying to resolve the regulatory problem of advanced imaging technology in airport screening. Finally, all of this has or may appear in the “book of expectations” in the latest Unified Agenda.

Immigration Executive Action Petition: The Department of Justice (DOJ) petitioned SCOTUS last Friday to review the United States Court of Appeals for the Fifth Circuit’s decision affirming a preliminarily enjoining DHS’s implementation of the DHS memorandum granting benefits to certain parents of minor citizens and lawful permanent residents. The Solicitor General presented three questions in United States v. Texas (No. 15-674):

Whether a State that voluntarily provides a subsidy to all aliens with deferred action has Article III standing and a justiciable cause of action under the Administrative Procedure Act (APA), …, to challenge the Guidance because it will lead to more aliens having deferred action.

Whether the Guidance is arbitrary and capricious or otherwise not in accordance with law.

Whether the Guidance was subject to the APA’s notice-and-comment procedures.

Respondents are due to provide SCOTUS with their own version of the questions presented and argument why certiorari should not be granted by December 21. The case could be ready for review by the Justices at their conferences on January 8, 15, or 22. Normally, petitions for certiorari granted in January are the last cases argued and decided in the Term, but SCOTUS may abbreviate any of the briefing or argument schedules and decide the case when it chooses.

► Bear in mind always the posture of this case: review of affirmation of a preliminary injunction. No court has entered a final order. Here the courts have made only a preliminary determination that Texas not only has standing but also will imminently suffer irreparable harm.

The petition also presents a few problems. In addition to an obvious loading of the questions, the Government continues to confuse (or perhaps to obfuscate the distinction between) forbearance from removing individual aliens from the United States with affirmatively granting a benefit to a class of aliens. The former is clearly an exercise of prosecutorial discretion as the latter is a quintessentially regulatory action. Part of Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) involves the DHS’s decision at least temporarily not to prosecute removal of a class of low-priority removable aliens, but Texas and the other plaintiffs has not challenged DHS’s prosecutorial priorities. And neither the preliminary injunction nor compliance with the APA requires DHS to remove any alien or alter its enforcement priorities.

Moreover, the petition argues that the Fifth Circuit erred by enjoining a program that is “of great importance to federal law enforcement, to many States, and to millions of families with longstanding and close connections with this country.” Such an argument infers that if the individuals have an interest in the program that purported from the outset and in clear, if boilerplate, language that it created no legally enforceable rights. This begs the question of how the states that must absorb costs imposed by the program by their pre-existing laws have any less irreparable harm let alone “standing.”

The Solicitor General’s hyperbole is troubling: “It will force millions of people – who are not removal priorities under criteria the court conceded are valid, and who are parents of U.S. citizens and permanent residents – to continue to work off the books, without the option of lawful employment to provide for their families.” The argument seems to suggest that the program unilaterally does grant a substantive benefit under the Immigration and Nationality Act (INA). Some, but not necessarily all, these issues may ultimately be resolved – preliminarily.

Electric MATS Appropriate and Necessary Finding: The Office of Management and Budget (OMB) completed review and EPA released an advance copy of its Supplemental Finding that it is Appropriate and Necessary to Regulate Hazardous Air Pollutants from Coal- and Oil-Fired Electric Utility Steam Generating Units. Although the document “looks like” a proposed rule, it is a notice with a request for public comments within 45 days after publication in the Federal Register.

SCOTUS last June decided, in Michigan v. EPA, that the EPA interpreted the Clean Air Act (CAA) unreasonably when it deemed cost irrelevant to the statutory decision of whether regulating power plants was “appropriate and necessary.” EPA’s December 2000 “appropriate and necessary” finding – a statutory predicate for EPA’s 2012 regulation to limit mercury and other toxic air pollutants (MATS) from coal-fired power plants – was invalid because EPA did not consider costs to be a relevant factor in making the finding. EPA did conduct a benefit / cost analysis for the rule. EPA now seeks public comments on its proposal to declare, in a post-hoc rationalization, that it would have reached the same conclusion if it had completed the analysis before making the “appropriate and necessary” finding rather than after it began the regulatory process.

SCOTUS did not vacate the rule, however, but reversed the judgment of the United States Court of Appeals for the District of Columbia Circuit and remanded the cases to the D.C. Circuit for further proceedings consistent with SCOTUS’s opinion. The D.C. Circuit, in turn, has been considering motions for future governance of the litigation. EPA took the view that its only task on remand should be to consider cost as part of the “appropriate and necessary” finding in light of SCOTUS’s decision, and that if EPA reaffirms that finding on remand, there is no reason for EPA or the court of appeals to revisit any other portions of the rule. Last Friday the court ordered oral argument on Friday, December 4, and the court does not appear to have yet remanded to EPA.

EPA is soliciting comment on a proposed supplemental finding that consideration of cost does not alter the agency’s previous conclusion that regulation of the power industry for hazardous materials is “appropriate and necessary.”

► EPA’s unilateral action appears to be an attempt at a fait accompli – proposing a new finding in an attempt to argue that remand only is needed, if at all. This unsanctioned proposed finding makes sense from EPA’s perspective, but does not address the critical point that the finding is a predicate fact to the rulemaking. The proposed supplemental finding appears to be a post hoc justification of its prior position, not a consideration of the relevant factors unbiased by its prior failure.

If the D.C. Circuit vacates the finding and the 2012 regulation, then the supplemental finding may be of little use. The proposed supplemental finding relies on data from 2011 and projections into the first year of application, 2015, but does not appear to attempt to even confirm that base projections were correct, i.e. 2015 facts. The proposed supplemental finding relies on stale facts and old analysis, and an unknown degree to which the baseline has shifted over those four years. Moreover, the court might consider EPA’s premature actions to be impertinent and therefore be less likely to order a simple remand that the proposed supplemental finding could resolve.

Finally, EPA released a “legal memorandum” in support of its position. The proposed supplemental finding refers to the memorandum extensively. A legal memorandum as a supporting document (as contrasted with a legal analysis within the primary document) raises an odd specter of an agency selectively waiving privilege relating to legal advice. To avoid any such appearance of impropriety, EPA should have simply included the text within its primary document. Nonetheless, and substantively more important, the release allows the profession to comment on EPA’s legal analysis.

Pollutant Good Neighbors: The EPA also released a typescript of its Cross-State Air Pollution Rule (CSAPR) or “good neighbor” or “interstate transport” proposed rule update on Tuesday. The long and painful process leading to the proposed rule includes SCOTUS reversal of a D.C. Circuit decision, and remanding to the D.C. Circuit. In the latest chapter of EME Homer City Generation, L.P. v. EPA, the D.C. Circuit remanded the rule without vacatur for EPA to reconsider specific emissions budgets:

  • phase two nitrous oxide (NOx) ozone-season emissions budgets of 11 states, holding that those budgets over-control with respect to the downwind air quality problems to which those states were linked for the 1997 ozone NAAQS, and
  • sulfur oxide (SO2) annual emissions budgets for four states.

The court instructed EPA to act “promptly” in addressing its remand.

► EPA has succeeded at least temporally: EPA submitted a proposed rule for OMB review on September 29, little more than three months after the D.C. Circuit opinion, and OMB completed review the economically significant rule on November 15, 2015. Commenters will have the opportunity to argue whether EPA’s response is substantively convincing in comments filed after publication in the Federal Register.

Airport Passenger Screening: Not quite so quickly, DHS submitted a Transportation Security Administration (TSA) Passenger Screening Using Advanced Imaging Technology final rule for OMB review on November 19. The final rule addresses the United States Court of Appeals for the District of Columbia Circuit decision in Electronic Privacy Information Center v. Department of Homeland Security that DHS and TSA erred in failing to conduct notice and comment rulemaking on the use of AIT in the primary screening of passengers. The timing of the final rule addresses a petition for mandamus and a recent D.C. Circuit order prompting that TSA “submit a schedule for the expeditious issuance of a final rule within a reasonable time.” TSA published a proposal rule on March 26, 2013, to specify that screening and inspection of an individual conducted to control access to the sterile area of an airport or to an aircraft may include the use of advanced imaging technology (AIT), aka whole body imaging, as a screening method, not just magnetometers.

► Even the proposed rule, two years after the D.C. Circuit requiring it and more than two years ago, addresses “old” technology. A final rule premised on that proposed rule is likely to reflect broader technological choices as a predictive process and a broader scope may, if properly handled, comport with the APA’s logical outgrowth limitations of the proposed rule.

Unified Agenda Expectations: OMB released the Fall 2015 Unified Agenda of Federal Regulatory and Deregulatory Actions on Thursday, November 19. As usual, OMB focuses on not only the implementation of the Regulatory Flexibility Act (RFA), but also implementation of the relevant Executive Orders. Of particular note is the ongoing institutionalization of retrospective review. The Unified Agenda is always worth a review, but with a large caveat that is often missed: The Unified Agenda is best understood as a snapshot of expectations at some point in the recent past, not a ukase of actual events to come by the agency, OMB, or the Administration.

► True to form, advocates immediately decried changes in planning schedules that they perceived to be adverse to their position, wants, and desires. These puerile complaints and protests reflect a lack of understanding of the Unified Agenda or experience in managing an agency. Many intervening facts, events, and changes in the law will alter the Unified Agenda planning schedule, add new regulatory actions, and eliminate obsolete or deprioritized regulatory actions. Agencies have also stretched timetables to later make the case that they have done a good job of beating the stated expectations. Read expectations with caution – the Unified Agenda is not a cookbook.