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

Monday Morning Regulatory Review – 3/25/13

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

The interplay of regulations and litigation came to the fore in a very busy last week, not just in the United States Supreme Court (SCOTUS)’s recent Decker logging road culverts pollution permit decision and the for-profit colleges litigation, but five other matters:

  • The Department of Justice (DOJ) called it quits in defending the Department of Health and Human Services (HHS) Food and Drug Administration (FDA) graphic warning cigarette labeling regulations; FDA will try again.
  • A coalition petitioned for review of the Environmental Protection Agency (EPA) particulate matter rule.
  • The Central Intelligence Agency (CIA), not particularly known as a regulatory powerhouse, won dismissal of a challenge to its Freedom of Information Act (FOIA) fee regulations.
  • The Office of Management and Budget (OMB) completed review of the Department of Homeland Security (DHS) (aka Transportation Security Administration (TSA)) air passenger screening proposed rules.
  • The Department of Labor (DOL) submitted to OMB revisions to the wage methodology for temporary nonagricultural employment visa program.

All of the rules in today’s post have been subjects of intense litigation – or, in the EPA’s particulate matter case, will be.

FDA Cigarette Labeling Rules:  The Food and Drug Administration (FDA) announced on March 19, 2013, that the Solicitor General would not seek review of R.J. Reynolds v. FDA in the United States Supreme Court (SCOTUS) and took its vacated cigarette labeling regulations back to the drawing board.  The letter, required by 28 U.S.C. § 530D(a)(1)(B)(ii) whenever the Administration declines to defend the constitutionality of an Act of Congress:

The court of appeals did not hold invalid the provisions of the Act directing FDA to promulgate graphic-warning regulations facially invalid.  Rather the court held that the particular graphic warnings adopted in FDA’s regulations violated the First Amendment, based on the record before FDA in the rulemaking proceedings, and it remanded the matter to the agency.  FDA therefore remains free to conduct new rulemaking proceedings under the Act, and it can address issues identified by the court of appeals and other relevant issues in such proceedings.  ….  In these circumstances, the Solicitor General has determined, after consultation with HHS and FDA, not to seek Supreme Court review of the First Amendment issues at the present time.

With that, the FDA goes back to square one.

EPA NAAQS PM:  The Utility Air Regulatory Group, PM NAAQS Coalition, and the Chamber of Commerce of the United States petitioned the United States Court of Appeals for the District of Columbia to review the Environmental Protection Agency (EPA) National Ambient Air Quality Standards for Particulate Matter final rule.  At the same time, the coalition asked EPA to reconsider the rule.

FOIA Fee Rules:  The United States District Court for the District of Columbia dismissed a challenge to the CIA’s FOIA fee interim final rule as “procedural” and not requiring advance notice and an opportunity for public comment under the Administrative Procedure Act (APA) in National Security Counselors v. CIA.

This decision may be unique and may be short-lived, for the demarcation of ‘who pays how much’ is a classic legislative rule though this case finds it not to be.

TSA Passenger Screening Rules:  OMB completed review of the TSA’s economically significant Passenger Screening Using Advanced Imaging Technology proposed rule.  The proposed rule – much more “passenger significant” than economically so – was required by the United States Court of Appeals for the District of Columbia Circuit decision in Electronic Privacy Information Center v. DHS.  The court directed TSA to conduct notice and comment rulemaking on the use of the much maligned advanced imaging technology (AIT) in the primary screening of passengers, but TSA has also announced that it is removing at least the most visually intrusive AIT machines from airports.  The proposed rule will be published in the Federal Register on March 26; public comments will be due June 24 – 90 days, not the usual 60 days.

Remember that the court “expect[ed] the agency to act promptly on remand to cure the defect in its promulgation” and did not bar TSA from using AIT pending the rulemaking because of the potential security downside in EPIC v. DHS (see For Profit Colleges 301).  21 months to publish a proposed rule really doesn’t seem to qualify as “promptly.”  Stay tuned for a fuzzy image.

DOL Nonimmigrant Wage Rules:  DOL transmitted to OMB a Wage Methodology for the Temporary Nonagricultural Employment H-2B Program final rule on March 21, 2013 – the latest step in a torturous regulatory, judicial and legislative process.  Theoretically, the rule would ensure that there is no adverse effect from the employment of foreign workers on United States workers by requiring employers to pay a prevailing wage to alien H-2B workers and thereby protect U.S. workers from wage decline.  DOL asserts the final rule is not economically significant – but it clearly is legally and policy significant.

The 2011 H-2B prevailing wage calculation methodology rule was set aside in 2011, and further attempts to implement that rule have been frustrated by appropriations and continuing resolution (CR) provisions.  Public Law 112-74, § 110, currently in force, provides that none of the amounts that it makes available may be used to implement the 2011 rule and specifically cites to the rule’s publication.  DOL has delayed the effective date of the 2011 rule until March 27, 2013, in light of that provision.  DOL will need to address delay again because the provision is continued in the final appropriation (H.R. 933, § 1101, pending POTUS’ signature) to fund the government through the end of the fiscal year.

Apparently, DOL believes that a new final rule, presumably addressing the failures of the vacated rule, will clear the way for some implementation.  Meanwhile, the Wall Street Journal reports that the same type of issue has stalled Hill discussions about a comprehensive immigration reform.  If past is prologue, the funding limitation will not go away until the rule is substantively changed to something more palatable.  Waiting for clarity or Godot.

  • I definitely agree with your skepticism regarding the “prompt” nature of a 21-month rulemaking process after EPIC v. DHS, 653 F.3d 1 (D.C. Cir. 2011). I also doubt the lasting viability of the D.D.C.’s ruling on CIA’s amended FOIA fee regulations, based on the DC Circuit’s earlier ruling in EPIC v. DHS. At first glance, it seems to be yet another decision demonstrating a frustrating inability to grasp the distinction between the various categories of “rules.” Oddly enough, the district court relied in part on EPIC v. DHS, which makes me wonder how they could have missed the DC Circuit’s warnings that the “procedural rule” category should be narrowly construed, and limited to agency statements that do “not impose new substantive burdens” or “alter the rights or interests of parties, although [they] may alter the manner in which the parties present themselves or their viewpoints to the agency.” 653 F.3d at 6-7, citing Aulenback v. Fed. Hwy. Admin., 103 F.3d 156, 169 (D.C. Cir. 1997); United States v. Picciotto, 875 F.2d 345, 347 (D.C. Cir. 1989); Batterton v. Marshall, 648 F.2d 694, 707 (D.C. Cir. 1980). Procedural rules simply deal “with the method of operation utilized by the [agency] in the dispatch of its business,” and should not set new substantive standards. Batterton, 648 F.2d at 707 n. 70, quoting Kessler v. FCC, 326 F.2d 673, 680 (D.C. Cir. 1963).

    Thus, procedural rules would include agency documents controlling the internal processing of license applications, procedures accelerating the processing of applications for abandoning railroad lines or accelerating the processing of discrimination charges, Batterton, 648 F.2d at 708, and agency documents governing routine inspection procedures, Dep’t of Labor v. Kast Metals Corp., 744 F.2d 1145, 1151-56. (5th Cir. 1984). But the procedural rule category would not include “formalized criteria adopted . . . to determine whether claims for relief are meritorious,” modified approval procedures for food stamp applicants, or “new specifications for the kinds of clinical investigations deemed necessary to establish the effectiveness of drug products prior to FDA approval. Batterton, 648 F.2d at 707-708. Likewise, new agency procedures for reviewing claims that affected claimants’ substantive rights are not procedural rules. Military Order of Purple Heart v Sec’y of Veterans Affairs, 580 F.3d 1293, 1296 (Fed. Cir. 2009).

    In this case, the CIA’s FOIA fee rules seem much more like formalized criteria that determine affected requesters’ substantive rights to fee waivers (which directly affect their financial interests) rather than purely internal rules for processing or prioritizing agency business. I doubt the DC Circuit would uphold this, but then again, it’s the CIA, so who knows…