The penultimate Monday of the year, when many federal workers are using rather than losing annual leave, is hardly the time to believe that the regulatory machine is slowing down. Quite to the contrary, after Congress has left town, both the courts and the agencies remain at full throttle. Judicial highlights of the past week include a district court order vacating Department of Labor (DOL) temporary non-agricultural worker visa regulations and dicta on the immigration executive action. Agency highlights include the new agency regulatory plans and a spate of executive and interagency review completions – perhaps the preamble to a tsunami of regulations in the Administration’s final two years. Among the first waves are new coal ash rules and the expected consolidation of grant-making regulations. At the same time, implementation of the FY2015 budget device required suspension of some trucking hours of service limitations. For the long-term minded, the Administrative Conference of the United States (ACUS) published new recommendations for portions of the administrative state.
H-2B Visa Regulation Vacated: As expected, the United States District Court for the Northern District of Florida stepped toward establishing an intercircuit conflict by vacating and permanently enjoining a DOL H-2B visa wage rule, finding on summary judgment that DOL lacked legislatively delegated authority, in Bayou Lawn & Landscape Services v. Perez. In short, the statute vested authority to grant H-2B visas in the Attorney General, later imperfectly transferred to the Secretary of Homeland Security (DHS), but required the Attorney General / DHS to consult with other relevant agencies; the agencies continued to interpret the statute as authorizing DOL to require that employers apply to DOL for a labor certification, which includes setting a wage floor to ensure that employers do not undermine the wage base. In 2012, DOL amended its regulations to significantly alter the manner in which the H-2B program would be administered.
The district court previously temporarily enjoined the regulation pending final disposition, and the United States Court of Appeals for the Eleventh Circuit affirmed that preliminary injunction – the district court’s new order is consistent with previous holdings. In other litigation, the Third Circuit has upheld DOL’s authority to promulgate H-2B regulations.
Last Thursday, the district court granted summary judgment, vacated the rule, and permanently enjoined DOL from enforcing the wage determination rule because Congress delegated regulatory authority to DHS, not DOL. The court’s decision was based on its review of the language of the Immigration and Nationality Act (INA)’s specific provisions, comparison of delegation language between the H-2A and H-2B program statutes, and the history of the INA’s authority migrating through different government agencies.
► This decision was expected, given the district court’s preliminary injunction, affirmed by the Eleventh Circuit, and sets up the potential for a direct intercircuit conflict when (not if) the Department of Justice (DOJ) appeals the vacature and permanent injunction. The court was not required to, and did not, address potential avenues for cross-delegation of regulatory authority because none were provided in the INA. The only administrative remedy would appear to be for DHS to adopt the H-2B regulations that DOL cannot. An intercircuit conflict now appears likely.
Immigration Executive Action Dicta: A confusing (or confused) action arose in a district court for the Western District of Pennsylvania scheduling order in the criminal case of United States v. Juarez-Escobar, but the order makes no final or appealable determination and affects no consequences other than to order further briefing. Nonetheless, the district court’s memorandum opinion rejects the Administration’s argument that President Obama’s “executive action,” through DHS’s memoranda, do not create any legal status for any alien, and only authorize a temporary exercise of prosecutorial discretion on a case-by-case basis for certain individuals:
President Obama’s November 20, 2014 Executive Action goes beyond prosecutorial discretion because: (a) it provides for a systematic and rigid process by which a broad group of individuals will be treated differently than others based upon arbitrary classifications, rather than case-by-case examination; and (b) it allows undocumented immigrants, who fall within these broad categories, to obtain substantive rights.
From the court’s analysis, it finds that the “Executive Action is unconstitutional because it violates the separation of powers and the Take Care Clause of the Constitution.”
► The court’s memorandum opinion has received a great deal of publicity, but in reality provides very little. Because the memorandum is not final or appealable, and makes no determination other than that the court needs more briefing, the opinion is little more than dicta, an “advisory” opinion, or judicial editorializing. There appears to be no necessity for the court to decide any of these constitutional issues to determine the individual defendant’s criminal sentence.
The only reason to note this case may be the disjunction between the court’s perception of the memoranda and its perception of the law that the memoranda violate. If anything, a “systematic and rigid” differentiation based on an “arbitrary classification” determining “substantive rights” provides the premise for finding that the memoranda violated the authority delegated by the INA, or should have been adopted as a substantive regulation and failure to do so violated the Administrative Procedure Act (APA) notice and comment requirements, statutory bases for decision that well precede any constitutional decision. Look forward to better and meaningful analyses from other opinions.
Agency Regulatory Plans & OMB Completions: The array of agencies published their regulatory plans in today’s Federal Register. The Introduction to the Regulatory Plan and the Unified Agenda of Federal Regulatory and Deregulatory Actions provides a composite of the agencies’ regulatory plans and each agency separately has published its regulatory plans in 25 separate parts.
► The regulatory plans may provide a window into each agency’s thinking, but must be read with the caution that any plan is subject to change and may not survive the first contact with the reality of an immediate crisis or recognition of a new or different need. Even with that caution, the regulatory plans deserve attention by anyone affected by agency regulations, and that covers everyone.
In complement with the regulatory plans, the Office of Management and Budget (OMB) completed more than a dozen regulatory reviews, leaving no doubt that the regulatory machine continues to hum. Over the past month, OMB has completed 57 reviews, including 14 economically significant reviews. The range from pre-rule to economically significant final rule (noted above) defies any single category except that all were of sufficient importance to warrant an executive and/or interagency review. A few of these rules or proposed rules present substantial problems – including at least one misreading of the “good cause” exception to the APA’s notice and comment requirement – and regulated or interested parties need to be aware that any rule that undergoes OMB review may affect them in a significant way.
► OMB has substantially reduced its docket and opened the door to substantially more regulatory reviews. Expect a shift in the quantity and quality of regulations – toward embedding the Administration’s policies for the long term.
EPA Coal Ash Rules: The Environmental Protection Agency (EPA) released its much anticipated economically significant Hazardous and Solid Waste Management System; Disposal of Coal Combustion Residuals from Electric Utilities final rule on Friday. The final rule regulates coal combustion residuals (CCRs) from coal-fired electric power plants by clarifying requirements for landfills and surface impoundments under the Resource Conservation and Recovery Act (RCRA), the primary statute for regulating solid waste, including location restrictions, design and operating criteria, groundwater monitoring and corrective action, closure requirements and post closure care, and recordkeeping, notification, and internet posting requirements. The final rule will become effective 180 days after publication in the Federal Register. The rule was promulgated in light of litigation – in this case, a summary judgment and consent decree – that required the Administrator of EPA to sign the final rule by December 19.
► Bearing in mind that coal ash has been produced and disposed for over a century, the new rule was bound to have an exhilarating economic impact: to take a snapshot (present value / 3% discount rate), the total costs are expected to be $23.2 billion, as contrasted with total monetized benefits of $8.55 billion, or a net cost of $14.650 billion. Nonetheless, the general and trade press have focused on what some activists feel are the rules deficiencies – not enough regulation. Litigation is not only foreseeable, but likely.
Uniform Grant Rules: On the other hand, the principle officers of OMB and the major agencies inked a massive interim final rule consolidating grants management accounting requirements in the Federal Awarding Agency Regulatory Implementation of Office of Management and Budget’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, published in last Friday’s Federal Register. OMB originally published the underlying guidance on Dec. 26, 2013, rewriting eight OMB Circulars into one document, and the “common rule” adopted here implements the practices; the end result is the product of a multi-year effort by the non-regulatory cross-agency Council on Financial Assistance Reform (COFAR).
► The reform is purely an “administrative” regulation – it deals with cost accounting – but the impact on the $600 billion awarded annually by United States government agencies could be quite substantial. Despite the agencies’ valiant efforts, however, some inconsistency is bound to occur, such as the application of the APA’s exceptions to notice and comment rulemaking that are invoked, as supplanted by other statutes. As applied going forward, grantees may find their burdens significantly lighter because of this effort, and focused more on the substance than the administrative process.
Trucker Hours of Service: The Department of Transportation (DOT)’s Federal Motor Carrier Safety Administration (FMCSA) suspended the enforcement of current versions of a truck driver’s restart of the 60- or 70-hour limitations of the deeply divisive and hotly litigated Hours of Service (HOS) rules in today’s Federal Register. The latest change implemented a direct suspension of the rules in the just enacted Consolidated and Further Continuing Appropriations Act, 2015, for a finite period and depending on a finite action by DOT.
► FMCSA’s notice might be considered discretionary – but it is a best practice that all agencies should follow: Notice should be published whenever the requirements of regulations are suspended, enjoined, vacated, etc.
ACUS Recommendations: Last, but hardly least for many more regulatory actions to place last week that didn’t make the cut, ACUS published three recommendations from the December 4 – 5, 2014, plenary session that are worth reading:
- 2014–5: Retrospective Review of Agency Rules;
- 2014–6: Petitions for Rulemaking; and
- 2014–7: Best Practices for Using Video Teleconferencing for Hearings.
The consultants’ reports that formed the base for ACUS’s consideration of these recommendations can be easily accessed on ACUS website.