Court Rejects BLM’s Efforts to Unbalance the Scales of Justice

Posted on November 6, 2017 by Seth Jaffe

Last month, Magistrate Judge Elizabeth Laporte granted summary judgment to plaintiffs and vacated the Bureau of Land Management’s notice that it was postponing certain compliance dates contained in the Obama BLM rule governing methane emissions on federal lands.  If you’re a DOJ lawyer, it’s pretty clear your case is a dog when the Court enters summary judgment against you before you’ve even answered the complaint.

The case is pretty simple and the outcome should not be a surprise.  BLM based its postponement of the compliance deadlines on § 705 of the APA, which authorizes agencies to “postpone the effective date” of regulations “when justice so requires.”  However, every court that has looked at the issue has concluded that the plain words of the APA apply only to the “effective date” of a regulation and not to any “compliance date” contained within the regulation.

It seems clearly right to me.  For Chevron geeks out there, I’ll note that the Court stated that, because the APA is a procedural statute as to which BLM has no particular expertise, its interpretation of the APA is not entitled to Chevron deference – a conclusion which also seems right to me.

What particularly caught my eye about the decision was the Court’s discussion of the phrase, “when justice so requires.”  In a belt and suspenders bit of analysis, the Court also made findings that justice did not require postponement.  BLM’s argument was that justice required the postponement because otherwise the regulated community would have to incur compliance costs.  However, as the Court noted, “the Bureau entirely failed to consider the benefits of the Rule, such as decreased resource waste, air pollution, and enhanced public revenues.”  Indeed:  

If the words “justice so requires” are to mean anything, they must satisfy the fundamental understanding of justice: that it requires an impartial look at the balance struck between the two sides of the scale, as the iconic statue of the blindfolded goddess of justice holding the scales aloft depicts. Merely to look at only one side of the scales, whether solely the costs or solely the benefits, flunks this basic requirement. As the Supreme Court squarely held, an agency cannot ignore “an important aspect of the problem.” Without considering both the costs and the benefits of postponement of the compliance dates, the Bureau’s decision failed to take this “important aspect” of the problem into account and was therefore arbitrary.

I think I detect a theme here.  Some of you will remember that Foley Hoag filed an amicus brief on behalf of the Union of Concerned Scientists, supporting the challenge to President Trump’s “2-for-1” Executive Order.  We made pretty much the same arguments in that case that Magistrate Judge Laporte made here – minus the reference to the scales of justice.

Unless SCOTUS gets rid of all agency deference, the Trump Administration is going to get some deference as it tries to eliminate environmental regulations wherever it can find them.  However, if it continues to do so while looking solely at the costs of the regulations to the business community, while ignoring the benefits of the regulations, it’s still going to have an uphill battle on its hands.

Does Chevron Ever Permit EPA to Rewrite a Statute? EPA’s Release Reporting Exemptions Are Struck Down

Posted on April 13, 2017 by Seth Jaffe

On Tuesday, the Court of Appeals for the District of Columbia vacated EPA’s final rule governing reporting of air releases from animal feeding operations.  The Court found that EPA had no statutory authority to exempt AFOs from the reporting regulations.

The decision is also important because it is another in a recent line of cases regarding the extent of agency authority to interpret statutes.  The issue was whether EPA had authority to exempt smaller AFOs from reporting requirements, on the ground that it could not:

foresee a situation where [it] would take any future response action as a result of such notification[s].

Although EPA did not explicitly justify its rule on de minimis grounds, the Court understood EPA to be making a de minimis argument and analyzed the rule in that context.  The Court concluded that EPA had not justified a de minimis exception, because:

an agency can’t use it to create an exception where application of the literal terms would “provide benefits, in the sense of furthering the regulatory objectives, but the agency concludes that the acknowledged benefits are exceeded by the costs.”

Here, the Court found that there were benefits to requiring reporting without a de minimis exception.  That was enough to vacate the rule.

It is worth noting the concurrence from Judge Janice Rogers Brown, who agreed that EPA had overstepped, but was concerned about the panel opinion’s summary of Chevron as being focused on whether the agency’s interpretation is “reasonable.”  Stoking the anti-Chevron flames, Judge Brown wrote to make clear that the “reasonableness” inquiry does not apply at step one of Chevron.  Ever-vigilant, she wants to be certain that courts do not abdicate their duty to state what the unambiguous language of a statute means.

I don’t have any problem with that.  Phase I of Chevron is an important bedrock principle.  If there’s no ambiguity, there’s no deference.  However, it’s worth noting that Judge Brown also stated that:

an Article III renaissance is emerging against the judicial abdication performed in Chevron’s name.

Notwithstanding the congressional discussion of this issue, I remain skeptical that any such “Article III renaissance” is occurring.  One concurrence from one appellate judge who happens to be named Gorsuch does not a renaissance make.

Of course, the really important part of Judge Brown’s concurrence was her citation to Luck Be a Lady, from Guys and Dolls, the greatest musical of all time.

RULES ARE (APPARENTLY) MADE TO BE FRACKED . . .

Posted on March 23, 2017 by William Session

The news flies fast and heavy from Washington almost daily on the fate of every manner of environmental program, rule or regulation. An exciting time to be an environmental lawyer. The latest entrant into the “what’s next” sweepstakes came from the Tenth Circuit just a few days ago.

The Court of Appeals sent a pointed inquiry to the newcomers at the Department of Justice about the future of the federal government’s (recent) historic efforts to curb hydraulic fracturing:

Given the recent change of Administration and the related personnel changes in the Department of Justice 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.

The DOJ’s response will very likely determine the fate of the Obama era Bureau of Land Management hydraulic-fracturing rule. That rule required drilling operators to follow “ . . . widely-accepted” best practices for preventing environmental or resource harm. 

In State of Wyoming et.al v. State of Utah et. al, that rule was set aside and its enforcement enjoined by a Wyoming district court in 2016. The district court set aside the rule, holding that the federal government had no authority to set the standards that federal lessees had to follow when extracting oil and gas from federally owned resources through hydraulic fracturing. The DOJ appealed and the Tenth Circuit subsequently instructed the district court to vacate its preliminary-injunction order.

The DOJ spearheaded the appeal of that ruling, asserting that the district court disregarded a central tenet of administrative law by substituting its own judgment for the government’s about the purview of the BLM’s regulatory reach. The DOJ argued that courts “must defer under Chevron to an agency’s interpretation of a statutory ambiguity that concerns the scope of the agency’s statutory authority.”

So the obvious question of the day is, will the new administration drop the appeal? The newly appointed Interior Secretary Ryan Zinke has stated publicly he supports fracking. With daily pronouncements from the White House about the surfeit of regulations strangling the economic engines of the country, it’s a good bet that the rule has seen its best and last days.

Perhaps more intriguing, should the appeal go forward, will be the somewhat conservative Tenth Circuit’s take on the now “institutional” Chevron deference embedded in countless appellate decisions over the last thirty-four years. As recently posted by ACOEL Fellow Chris Schraff, the views of Tenth Circuit veteran and Supreme Court nominee Judge Neil Gorsuch on the Chevron question could prove central to the concerns of some about the future of the administrative state,. 

For those who might not be familiar with Judge Gorsuch’s perspectives on the subject, review again his concurring opinion in Gutierrez-Brizuela v. Lynch. His concurring opinion in that case begins:

There’s an elephant in the room with us today. We have studiously attempted to work our way around it and even left it unremarked. But the fact is Chevron and Brand X permit executive bureaucracies to swallow huge amounts of core judicial and legislative power and concentrate federal power in a way that seems more than a little difficult to square with the Constitution of the framers’ design. Maybe the time has come to face the behemoth. . . .

And continues in clearly provocative terms:

Whatever the agency may be doing under Chevron, the problem remains that courts are not fulfilling their duty to interpret the law and declare invalid agency actions inconsistent with those interpretations in the cases and controversies that come before them. A duty expressly assigned to them by the APA and one often likely compelled by the Constitution itself. That’s a problem for the judiciary. And it is a problem for the people whose liberties may now be impaired not by an independent decisionmaker seeking to declare the law’s meaning as fairly as possible — the decisionmaker promised to them by law — but by an avowedly politicized administrative agent seeking to pursue whatever policy whim may rule the day. . .

So, what do we in the environmental business expect the position of the federal government to be going forward? Is federal environment protectionism on its way out of the door? Will the EPA be judicially branded a “politicized administrative agent” by courts across the land and denied deference even if the Chevron doctrine survives? Will the courts and the public allow the progress on cleaner air, water and earth we have all witnessed—and even helped bring about over the last fifty years—to be . . . fracked?

The Conservative Case for Chevron Deference: Chapter 2

Posted on March 22, 2017 by Seth Jaffe

In January, I argued that conservative opposition to the Chevron doctrine seemed inconsistent with conservative ideology and I noted, at a practical level, that opposition to Chevron does not always yield the results conservative want.

gray wolf, Canis lupus, Gary Kramer, USFWS

Earlier this month, the Court of Appeals for the District of Columbia provided more evidence supporting my thesis.  The Court affirmed the decision of the Fish and Wildlife Service to delist the gray wolf as endangered in Wyoming, reversing a district court decision in so doing.  Part of the case turned on whether the FWS service could approve Wyoming’s management plan, even though the plan relied on non-regulatory provisions.  The Court of Appeals noted that the:

ESA provides no definition of “regulatory mechanisms,” and neither the district court nor appellees suggests why the Secretary’s interpretation is unreasonable.

Sounds like a case for Chevron deference to me – and it sounded that way to the Court as well.  When the Court combined Chevron deference to agency interpretation of the statutory language with traditional arbitrary and capricious review regarding the FWS’s scientific judgment – another area where deference to the agency is obviously not a left-wing plot – affirmance of the FWS delisting decision was the result.

Maybe I’ll make this a regular feature of this blog.  If I miss other cases making the conservative argument for Chevron, let me know.

Is Neil Gorsuch Poised To Obliterate Deference – or only Chevron/Auer Deference?

Posted on March 13, 2017 by Christopher R. Schraff

Recently, our ACOEL colleague Bob Percival penned an article in which he notes that Supreme Court nominee Judge Neil Gorsuch is a leading critic of Chevron (and Auer) deference , and suggests that Judge Gorsuch’s separation of powers concerns (and those of other opponents of Chevron/Auer deference) “…are really attacks on the constitutionality of the larger administrative state.”  But if Judge Gorsuch is confirmed and his views command a majority of the Court, is his skepticism about the viability of deference to agency interpretations likely to lead to a collapse of the modern administrative state?  Is Judge Gorsuch really little more than a judicial extension of Steve Bannon’s and the Alt-Right’s campaign to deconstruct the administrative state and roll back the federal government to a size more appropriate to 19th Century America?  I suspect not—and here’s why.

A reading of Judge Gorsuch’s opinions reveals a jurist who is not only an engaging writer, but who digs deep into the facts and details of each case before  applying the law in an appeal before him.  In one of the few environmental cases which Judge Gorsuch has authored, United States v. Magnesium Corp. of America, Judge Gorsuch duly applied Auer deference to uphold EPA’s interpretation of a RCRA regulation, observing that an agency’s interpretation of its own ambiguous regulation was entitled to deference. 

But in other contexts, Judge Gorsuch denied Chevron deference to agency decisions that directly implicate (some might say trample upon) individual liberties and rights.  Here’s an example:  In 2014, the 10th Circuit took up the case of Andrew Yellowbear, who had bludgeoned to death his 22-month-old-daughter, and was serving a life term in a Wyoming prison.  Mr. Yellowbear brought suit against the prison for refusing to allow him access to a sweat lodge to practice his Arapahoe religion, which he claimed violated his rights under the federal Religious Land Use and Institutionalized Persons Act of 2000.  Now one might think that Judge Gorsuch, conservative fellow that he appears to be on criminal matters, would give short shrift to Mr. Yellowbear’s claims.  But that is not what happened.  

In Yellowbear v. Lampert, Judge Gorsuch, writing for a unanimous court, struck down the prison’s efforts (and arguments) to deny Mr. Yellowbear his religious practice.  In rejecting the prison’s poorly documented claims of a “compelling governmental interest,” Judge Gorsuch wrote:  “the deference this court must extend the experience and expertise of prison administrators does not extend so far that prison officials may declare a compelling governmental interest by fiat.”

Now that decision hardly seems to presage the dismantling of the administrative state, but does suggest the administrative state had better show it deserves deference. 

Judge Gorsuch’s concurring opinion in Guitierrez-Brizuela v. Lynch offers a window into his views on the limits and shortcomings of Chevron deference.  Among other things, Judge Gorsuch suggests that the Chevron/Auer doctrines already may have no applicability with respect to agency interpretations of criminal statutes—of which we have many in the environmental law field.  Even more to the point, Judge Gorsuch questions how Chevron/Auer deference  squares with the judicial review provisions of the Administrative Procedure Act, 5 U.S.C. (“…the reviewing court shall decide all questions of law, interpret constitutional and statutory provisions and determine the meaning or applicability of the terms of an agency action.”).  Judge Gorsuch questions whether Chevron, in effect, overrides the APA.

But don’t simply focus on Judge Gorsuch’s concurring opinion:  look to the facts of the case, and to an earlier Gorsuch opinion. Guitierrez-Brizuela involved an attempt by the Board of Immigration Appeals (BIA) to retroactively apply a decision of the 10th Circuit deferring to BIA’s reconciliation of two statutory provisions of immigration law.  In Padilla-Caldera v. Holder, the 10th Circuit had upheld BIA’s interpretation of the immigration law on Chevron deference grounds, notwithstanding that BIA’s interpretation effectively overruled an earlier 10th Circuit decision interpreting those same laws.   

But in Guitierrez-Brizuela, BIA sought to accord retroactive application of the Padilla-Caldera decision in order to deport an illegal alien.  Judge Gorsuch, writing for a unanimous 10th Circuit panel, concluded that the BIA cannot use Chevron deference principles to retroactively impose their interpretation of immigration law upon an illegal alien to deport him—not the kind of result which would endear Judge Gorsuch to the Alt-Right.

What resonates in Judge Gorsuch’s opinions is a reluctance to unconditionally embrace Chevron/Auer deference in order to allow administrative agencies to trample on individual liberties and rights.  Is that such a bad thing?  And Judge Gorsuch is not calling for an end to deference.  He acknowledges that some form of deference should be given to administrative agencies, as he notes in Guitierrez-Brizuela:  “Of course, courts could and would consult agency views and apply the agency’s interpretation when it accords with the best reading of a statute.” 

But more fundamentally, will a reconsideration—and even a repudiation—of Chevron/Auer deference signal the end of the modern administrative state?  The administrative state survived and grew comfortably for more than fifty years before Chevron was decided. 

My guess is that, if the Supreme Court revisits the question of Chevron/Auer deference when (and if) Justice Gorsuch joins the Court, and if his views carry the day, we are likely to return to Skidmore deference, or to a flexible rule of deference of the kind outlined in United States v. Mead Corp, here the degree of deference varies according to an agency’s care, consistency, formality, expertness and the persuasiveness of the agency’s position.

That hardly signals the end of the administrative state as we know it.

The Conservative Case For Chevron Deference

Posted on January 30, 2017 by Seth Jaffe

With GOP control of Congress and the White House, conservatives appear to have Chevron deference in their crosshairs.  Put simply, I don’t get it.  There are at least two good reasons why conservatives should prefer Chevron deference to no deference.

First, the alternative is for courts to decide all questions of agency authority.  But haven’t conservatives railed against unelected judges for years?  Bureaucrats are unelected, but at least they work for the elected President.  Isn’t EPA more likely to be responsive to President Trump than federal judges would be?

Second, the EDFs and NRDCs of this world would laugh hysterically at the notion that they have more sway with EPA than the regulated community.  Anyone ever heard of “Regulatory Capture”?

The argument in support of Chevron was made cogently by Ed McTiernan in a recent blog post, but the strength of the argument was really brought home by the decision this past week in Catskill Mountains Chapter of Trout Unlimited v. EPA, in which the 2nd Circuit Court of Appeals – to fairly wide surprise – reversed a district court decision that had struck down EPA’s “water transfer” rule.  

The rule was much favored by the regulated community, but there were very good jurisprudential reasons to affirm the District Court.  Indeed, the decision was 2-1 and even the majority opinion repeatedly noted that, were it writing on a blank slate, it might well prefer an interpretation that would strike down the rule.

Why, then, did the Appeals Court reverse the District Court and affirm the rule?  Chevron deference, of course.

Conservatives, be careful what you wish for.

If Congress Wants to Limit EPA’s Discretion, Perhaps It Should Do a Better Job Legislating

Posted on June 5, 2015 by Seth Jaffe

Earlier this week, the D.C. Circuit Court of Appeals rejected both industry and environmental group petitions challenging EPA’s determination of what is a solid waste in the context of Clean Air Act standards for incinerators and other combustion units.  It wasn’t actually a difficult case, but it does provide a lesson for Congress.  When the technical nature of EPA’s decisions was layered on top of the fundamental deference given EPA’s interpretation of the statute under Chevron, the petitioners were never going to prevail:

We afford great deference to EPA’s determinations based on technical matters within its area of expertise.

Scrap_Tires

The crux of the environmental petitioners’ case was that certain of the materials, such as scrap tires, exempted by EPA from the definition of solid waste, are unambiguously “discarded” within the meaning of RCRA, so that EPA did not have discretion to exempt them.  Unfortunately, as the Court noted:

the term “discarded” is “marked by the kind of ambiguity demanding resolution by the agency’s delegated lawmaking powers.”

In other words, given the current state of decrepitude of the non-delegation doctrine, when Congress enacts legislation using words as vague as “discarded”, it is essentially telling EPA to figure out what Congress meant to say.  And when EPA does figure out what Congress meant to say, the Courts are not going to disturb EPA’s interpretation.

For those in Congress who don’t like the way EPA implements statutes for which it is responsible, they might learn a lesson from Pogo.

News Flash: Courts Still Defer to an Agency’s Interpretation of Its Own Rules

Posted on March 10, 2015 by Seth Jaffe

The Supreme Court on Tuesday ruled that, when an agency revises its interpretive rules, it need not go through notice-and-comment rulemaking.  Although the decision, in Perez v. Mortgage Bankers Association, required the court to reverse a long-held line of D.C. Circuit cases, the decision was not difficult; it was, in fact, unanimous.  In short, the Administrative Procedures Act:

states that unless “notice or hearing is required by statute,” the Act’s notice-and-comment requirement “does not apply … to interpretative rules.”

It carves out no exception for revisions to interpretive rules.  Game over.

The truly interesting part of the case was in the concurring opinions.  Both Justices Scalia and Thomas, effectively joined by Justice Alito, argued that Supreme Court decisions giving deference to agencies’ interpretation of their own rules have no constitutional foundation and should be overruled.

This is not the first time that they have made these arguments.  As I noted previously, in Decker v. Northwest Environmental Defense Center, Chief Justice Roberts also suggested that it might be time to revisit what is generally known as Auer deference.  It is notable in Perez that the Chief Justice joined the Court’s opinion.  Absent a change in the make-up of the Court, I don’t see it revisiting Auer any time soon.

Otherwise, the most notable part of the case is a statement from Justice Thomas that, to me, already wins the metaphor of the year prize.  Justice Thomas’s argument against Auer deference, while couched in constitutional terms, is really a screed (parts of which I sympathize with) against the growth of rulemaking and the modern administrative state.  He laments the use of interpretive rules and the decline of formal notice-and-comment rulemaking, and the protections that are required:

Yeti-590x330

Today, however, formal rulemaking is the Yeti of administrative law. There are isolated sightings of it in the ratemaking context, but elsewhere it proves elusive.

True dat. It just doesn't justify abandoning Auer deference in my book.