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

Monday Morning Regulatory Review – 4/17/17: Animal Waste Exception Flushed; Ozone on Hold & Review Docket Nap

Posted in Judicial Process, Regulatory Process

dawn over the capitol aocAll relatively quiet on the regulatory front – but that could be deceptive.  One notable decision vacated a rule adopted in the waning days of the Bush Administration in 2008.  Many pending cases are being held in abeyance pending review and reconsideration by the present Administration – the latest being a challenge to the national standard for ozone, but no word on the Clean Power Plan (CPP).  The regulatory docket at OMB awaits filling – and the review and reconsideration will amply fill that docket.

Animal Waste Exception Flushed:  The United States Court of Appeals for the District of Columbia Circuit last Tuesday, in Waterkeeper Alliance v. EPA, vacated a 2008 Environmental Protection Agency (EPA) final rule that excepted farms from reporting animal waste under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) and the Emergency Planning and Community Right-to-Know Act of 1986 (EPCRA).  CERCLA and EPCRA require parties to notify authorities when large quantities of hazardous materials (such as ammonia or hydrogen sulfide) are released into the environment.  The 2008 final rule generally exempted farms from CERCLA and EPCRA reporting requirements for air releases of hazardous pollutants from animal waste, reasoning that reporting was unnecessary because, in most case, enforcement response was impractical and unlikely.  The final rule, however, retained reporting from large concentrated animal feeding operations (CAFOs) under EPCRA, which contains a public-disclosure provision not found in CERCLA.  Both agricultural interests and environmentalists sued.

First, the panel rejected the notion that the de minimis doctrine permitted EPA to exclude farms from the reporting and disclosure requirements.  In light of the record, the panel found that reporting was not “nearly as useless as the EPA makes them out to be.”  The court did not address the question of whether the reports’ costs outweigh their benefits and EPA had estimated that the reporting elimination would eliminate approximately 1,290,000 burden hours and associated costs by approximately $60,800,000 over the ten-year period beginning in 2009, and reduce government burdens (federal, State, and local) by approximately 161,000 hours and $8,110,000 over the same period.  Thus, new reports will be required to the United States Coast Guard (USCG) National Reporting Center (there is a reason for this particular central point of contact – water).  The EPA has classified ammonia and hydrogen sulfide as both CERCLA and EPCRA reportable substances and set the reportable quantity for each at 100 pounds per day.  “There appears to have been no clear resolution of the best way to measure these releases, which after all do not come conveniently out of a smokestack” although an annual report may suffice by showing an estimated “continuous and stable in quantity and rate” subject to changes of statistical significance.

Second, the court rejected the notion that EPA could create a new exemption to the reporting requirements based on Congress’ creation of other exemptions.  In short, the panel rejected the notion that EPA had provided a reasonable interpretation of even an ambiguous statute, but does not appear to have reached whether the statute was ambiguous or otherwise plainly requiring.  The court vacated the 2008 rule entirely and never reached the producers arguments.

►  The opinion raises several practical issues.  The vacatur of the 2008 rule is not self-executing and EPA will necessarily (without further judicial review) remove the provisions from the Code of Federal Regulations that were added by the 2008 final rule, such as the definitions of farm and animal waste, and the exemption ceilings.  But the court decision does not itself serve as notice to those affected, so EPA will need to provide that notice – and at least guidance on how to report the dirty little process.  Introducing the new requirements for farm reporting previously avoided will require also that EPA submit a revised Paperwork Reduction Act (PRA) request for approval to the Office of Management and Budget (OMB), together with a revised analysis of burden hours and costs.

The court did not consider in the opinion whether to remand without vacatur under Allied-Signal’s balancing of whether the agency could correct its errors against the harm imposed by vacatur.  The opinion is not premised upon a statutory failure that cannot be corrected that mandates vacatur (such as want of jurisdiction).  While no fan of the notion under the APA, it still behooves a court to address its doctrinal options.  The opinion is likely to cause much consternation.

Ozone on Hold:  A panel of the D.C. Circuit removed from its oral argument schedule the Murray Energy v. EPA challenge to EPA’s Review of the National Ambient Air Quality Standards for Ozone – a final rule that reduced the “NAAQS” for Ozone to 70 parts per billion (ppb).  The panel granted the EPA’s motion to hold the litigation in abeyance pending further order of the court while EPA reviews the rule in a summary order last Tuesday.  The panel ordered status reports every 90 days and further directed the parties to file motions to govern further proceedings within 90 days of EPA’s decision.

►  The number of cases held in abeyance pending review by the Trump Administration and a decision whether to defend or to revise the prior Administration’s rules continues to grow.  Not yet decided is the most substantial of all – the West Virginia v. EPA challenge to EPA’s Clean Power Plan (CPP) that was argued en banc last September and which is already subject to a United States Supreme Court (SCOTUS) stay.  The net effect of the orders, of course, is to keep accepted pressure on the agencies to conclude review.

Review Docket Nap:  A quick review illuminates only nine regulatory actions pending OMB Office of Information and Regulatory Affairs (OIRA) executive and interagency review – seven statutorily required annual funding parameter rules by Department of Health and Human Services (HHS) Centers for Medicare and Medicaid Services (CMS), one by the Department of Transportation, and one by the National Archives and Records Administration (NARA) (pertaining to Presidential records).

►  Executive Order 13771 may simply have quelled agencies’ regulatory fervor, but many regulations subject to litigation and now being reconsidered will soon come back for review.  The docket is slow to refill, but that was the Executive Order’s intent.

Expect more … soon.