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

Monday Morning Regulatory Review – 3/13/17: Unified Agenda Data Call; Rare Earth Magnet Exit; Regulatory Defense Jitters & Disapproval Resolutions

Posted in Judicial Review & Remedies, Regulatory Flexibility & Small Business, Regulatory Process

dawn over the capitol aocThe Administration attempts to move toward a normal flow in the regulatory process as the docket thaws ever so slightly and it instructs agencies on the process of establishing their regulatory agendas.  Old regulations, however, sometimes die ignominious deaths, such as removal from the Code of Federal Regulations after vacatur, while others fate is so unsure that the courts must ask for guidance, while others continue to fall to Congressional joint resolutions of disapproval.

Unified Agenda Data Call:  The Office of Management and Budget (OMB) Office of Information and Regulatory Affairs (OIRA) issued its Spring 2017 Data Call for the Unified Agenda of Federal Regulatory and Deregulatory Actions (UA) to federal agencies last Monday.  These annual instructions for fulfilling the Unified Agenda requirements of the Regulatory Flexibility Act (RFA) expand to include fulfilling the directives of numerous Executive Orders, not only from the current Administration, but from past Administrations as well.  The data call reflects two key points from OMB’s previous interim guidance on implementing Executive Order 13771, Reducing Regulation and Controlling Regulatory Costs (with corrections):

  • The total incremental costs of any new significant regulatory actions issued between noon on January 20, 2017, and September 30, 2017, shall, to the extent permitted by law, be fully offset as of September 30, 2017; and
  • Agencies should, for each new significant regulatory action that imposes costs and that an agency plans to issue on or before September 30, 2017, identify two existing regulatory actions the agency plans to eliminate or propose for elimination on or before September 30, 2017.

The submissions are due March 31, 2017, and the agenda is due for publication in April.

►  Many questions remain and much discussion is likely between OIRA’s desk officers and agency regulatory managers.  Some public answers would be helpful to questions about the continuing use of the social cost of carbon (SCC) as a benefit value, and what constitutes an “existing regulatory action” in the context of a regulation that may amend different sections of different parts of the Code of Federal Regulations, and what constitutes “two” offsetting regulatory actions.  OMB continues to stand behind its general OMB Circular A-4, Regulatory Analysis (Sept. 17, 2003), but has not addressed in more detail the metrics that it uses.  SCC appears to have disappeared from the active White House / OMB website, but that is not particularly helpful.  Recognizing that the acting Administrator of OIRA has little maneuvering room, more questions for an Administration that is not yet firmly on the ground must await the nomination and Senate confirmation of a political appointee.  It may not be fair to expect much from a new Unified Agenda, but this UA presents the first substantial opportunity (and challenge) for the Administration to make clear its regulatory policy.

Rare Earth Magnet Exit:  The Consumer Product Safety Commission (CPSC) ended its quest to regulate small rare earth magnets – colloquially (and probably trademarked) “Buckyballs” – with a nondiscretionary final rule removing from the Code of Federal Regulations those provisions that were vacated by the United States Court of Appeals for the Tenth Circuit in Zen Magnets v. CPSC.  The vacatur in Zen Magnets was based on CPSC’s analytical failures by not reflecting the downward trend in injuries caused by CPSC’s own extra-rule efforts and a benefits analysis that was speculative at best.  The final rule adopts the Administrative Procedure Act (APA)’s exception to advance notice and an opportunity for public comment:

This rule is not subject to the requirement to provide notice and an opportunity for public comment because it falls under the good cause exception at 5 U.S.C. 553(b)(B).  The good cause exception is satisfied when notice and comment is “impracticable, unnecessary, or contrary to the public interest.”  Id. This rule is an administrative step that implements the court’s order vacating the magnet set rule. Additionally, because this rule implements a court order already in effect, the Commission has good cause to waive the 30-day effective date under 5 U.S.C. 553(d)(3).

The CPSC does not, however, say more in explaining which of the basis for excepting the final rule from advance notice and an opportunity for public comment.

►  CPSC’s explanatory gap is not hard to fill and the CPSC should have done so itself:  The final rule reflects the legal effect of a court’s final judgment.  Advance notice and an opportunity for public comment is therefore unnecessary because the CPSC has no choice – the action is ministerial and nondiscretionary – and public comments could not change the result.  Advance notice and an opportunity for public comment is not impracticable – it is simply a waste of time.  Advance notice and an opportunity for public comment is not contrary to the public interest – indeed, advance notice and an opportunity for public comment is the public interest – here it is futile.  Agencies should say what they mean and not hide behind statutory regurgitation.  Perhaps CPSC was afraid of getting it wrong, but fear is not good cause for any action.

Regulatory Defense Jitters:  The Tenth Circuit last week voiced its unease, in an order in State of Wyoming v. Zinke, about hearing an appeal from a district court order setting aside the Department of the Interior (DOI) Bureau of Land Management (BLM) Oil and Gas; Hydraulic Fracturing on Federal and Indian Lands final rule.  The district court stayed the rule pending filing of the administrative record, preliminarily enjoined the rule pending final judgment, and, ultimately, vacated the rule because the court found that Congress had not delegated authority to DOI to promulgate the rule.  Briefing of DOI’s appeal from the district court judgment setting aside the rule is all but complete and oral argument is scheduled for later this month.  The Tenth Circuit previously declined to stay proceedings, but it now seeks assurance on what position the Administration will take:

Given the recent change of Administration and the related personnel changes in the Department of Justice [(DOJ)] and the Department of Interior, the Court is concerned that the briefing filed by the Federal Appellants in these cases may no longer reflect the position of the Federal Appellants.

By statement filed electronically on or before March 15, 2017, the Federal Appellants are asked to confirm whether their position on the issues presented remain the same, or have now changed.  If the Federal Appellants have changed their position, the Court would entertain motions for supplement briefing by the parties.

►  Not much of a surprise – the schedule rather dictates that the Court of Appeals prompt DOJ to file something or live with its prior position.  No court would be pleased to find an appellant’s position changed during oral argument.  Note the last sentence of the order – if DOJ changes position (likely), to the point of abandoning its appeal from the district court order setting aside the rule, further briefing may well be needed.  Appellant-intervenors (environmental advocacy groups) may oppose dismissal and seek to take up the cudgels abandoned by DOJ, but without the United States and its agency defending the rule, the court would be left with dubious remedies if the appellant-intervenors actually succeed in reversing the district court judgment.  A decision that Congress delegated authority to the agency when the agency declines to prosecute enforcement of a rule implementing that authority might be little more than advisory, but these are murky issues.

Disapproval Resolutions:  Congress continued to disapprove of the prior Administration’s regulations under the Congressional Review Act (CRA) last week.  The Senate agreed to four more joint resolutions previously approved by the House of Representatives:

  • J. Res. 57, voiding the Department of Education (ED)’s Elementary and Secondary Education Act of 1965, as Amended by the Every Student Succeeds Act—Accountability and State Plans final rule published on November 29, 2016;
  • J. Res. 58, voiding ED’s Teacher Preparation Issues final rule published on October 31, 2016;
  • J. Res. 44, voiding DOI / BLM’s Resource Management Planning final rule published December 12, 2016; and
  • J. Res. 37, voiding the Department of Defense (DOD), General Services Administration (GSA), and National Aeronautics and Space Administration (NASA) joint Federal Acquisition Regulation; Fair Pay and Safe Workplaces final rule published August 25, 2016.

The Senate action clears the enrolled resolutions for Presidential signature, which is expected.

►  The volume of disapprovals will eventually recede and, for the time being, each joint resolution of disapproval deserves no more than passing mention even if the effect is significant on each substantive area of regulation.  Although rumbles have been heard about the enforceability of regulations that agencies never submitted to Congress under the CRA and the efficacy of narrow joint resolutions in the complex promulgation of some regulations (such as the joint Fair Play and Safe Workplaces (or “blacklist”) rule, judicial review has yet to surface.

Programming Note:  Due to planned travel, the Federal Regulations Advisor will likely not publish a Monday Morning Regulatory Review next week.  The Monday Morning Regulatory Review will be back on March 27.