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

Monday Morning Regulatory Review 3/6/17: Reconsidering WOTUS; Transgender Guidance Appeal Ignominious End & Proposed Rules to Delay Rules

Posted in Judicial Review & Remedies, Regulatory Process

dawn over the capitol aocThe current Administration continued its undoing of prior the Administration’s priorities, but with more finesse.  The definition of Waters of the United States that garnered so much attention during the last Administration was put on the sideline for an extended period last week, with ramifications for several court cases.  The direct challenge to the rescinded transgender student bathroom guidance ended with a whimper and the indirect challenge may soon follow.  And two proposed rules to delay substantial final rules deserve note for the justifiable shortness of public comment periods.

Reconsidering WOTUS:  The President of the United States (POTUS) last Tuesday directed the Environmental Protection Agency (EPA) and the Army Corps of Engineers – through Executive Order 13778, Restoring the Rule of Law, Federalism, and Economic Growth by Reviewing the “Waters of the United States” Rule – to reconsider their 2015 Clean Water Act:  Definition of “Waters of the United States” (WOTUS).  The Executive Order directs the EPA and the Engineers to:

publish for notice and comment a proposed rule rescinding or revising the rule, as appropriate and consistent with law,


consider interpreting the term ‘navigable waters,’ …, in a manner consistent with the opinion of Justice Antonin Scalia in Rapanos v. United States, ….

The extant rule attempted to implement Justice Kennedy’s concurring opinion (necessary to create a majority) focusing on a functional “significant nexus” test, as contrasted with the new Administration’s embrace of Justice Scalia’s far narrower dictionary defined view of the statute; the former has a far broader jurisdictional reach than the latter.  EPA and the Engineers today published their notice of intent in the Federal Register to “review that rule, and provide advanced notice of a forthcoming proposed rulemaking consistent with the Executive Order.”  The notice of intent argues the agencies’ jurisdiction to reconsider the rule but gives no timetable for a proposed rule.

The Executive Order, additionally, addresses the current litigation over the efficacy of the rule being reconsidered:

With respect to any litigation before the Federal courts related to the final rule listed in subsection (a) of this section, the Administrator and the Assistant Secretary shall promptly notify the Attorney General of the pending review … so that the Attorney General may, as he deems appropriate, inform any court of such review and take such measures as he deems appropriate concerning any such litigation pending the completion of further administrative proceedings related to the rule.

The direction addresses the consolidated challenges to the rule before the United States Court of Appeals for the Sixth Circuit, but that court has both stayed the rule and held briefing on the merits in abeyance pending disposition of the Sixth Circuit’s jurisdictional question before United States Supreme Court (SCOTUS) in National Association of Manufacturers v. Department of Defense.  The latter case will not be argued, if ever, before next Fall.  As the WOTUS rule appears on track to be reopened and amended, SCOTUS may dismiss its discretionary grant of review on the jurisdictional question.

►  This Executive Order is notable for increased legal acumen of previous orders, whether one approves or disapproves of the policy that it embodies.  The text reflects a more refined understanding of the regulatory process and judicial review of that process – directing the individual officers to take specific steps but respecting the discretion of those officers (whether delegated by statute or subject to direction by superior Executive authority).  The entire rule is in flux and the courts are unlikely to take any further action over the next few months.  Indeed, the pending stay and abeyance might remain in effect for a substantial period of time while the EPA and Engineers propose and finalize a new rule.  SCOTUS has months to decide whether to even schedule oral argument on a jurisdictional question that is likely to lose its regulatory footing.

Transgender Guidance Appeal Ignominious End:  The Department of Justice (DOJ) filed what it styled as an Unopposed Motion for Voluntary Dismissal of its appeal from the preliminary injunction against the now-rescinded Department of Education (ED) and DOJ “Dear Colleague” Letter interpreting sex to include gender self-identification.  The motion in Texas v. United States, filed with the United States Court of Appeals for the Fifth Circuit, stipulates terms agreed to by the parties and the court is expected to dismiss the appeal in short order.  The dismissal of the appeal includes a concomitant dismissal of the case in the district court with the natural result of vacating the preliminary injunction.  The clerk routinely entered dismissal by the Court of Appeals.

►  In short, the direct challenge to the efficacy of the guidance is no longer alive.  The indirect challenge through deference in a private action remains pending in SCOTUS in Gloucester County School Board v. GG at least until later Monday morning – but perhaps not much longer.  Although the parties seek to keep the litigation alive in filings with SCOTUS last week, the end may be near.

Proposed Rules to Delay Rules:  The Department of Labor (DOL) Employee Benefits Security Administration (EBSA) proposed to extend for 60 days the applicability date of its Definition of the Term “Fiduciary” rule under the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code of 1986 (IRC) and related prohibited transaction exemptions.  DOL requested comments on the proposal to extend the applicability dates for 60 days on or before March 17, 2017.  DOL requested comments on the reexamination described of the suite or rules and exemptions by April 17, 2017.

Separately, DOL’s Occupational Safety and Health Administration (OSHA) proposed to temporarily delay until May 20, 2017, the effective date of the Occupational Exposure to Beryllium final rule.  OSHA requests public comments on the proposed delayed effective date by March 13, 2017.

►  The key here is that DOL provides only a very short window for public comments that is commensurate with the scope of the proposed agency action.  The Administrative Procedure Act (APA) does not specify a minimum public comment period, although some specialized statutes supplant the APA with a specified minimum or default public comment period.  Ten days is too short for a public comment period on a substantive rule, APA or not, but not on a mere delay in an effective date or compliance date.