Federal Government, Supreme Court

Monday Morning Regulatory Review – 6/1/15: Final Waters Of The United States; Proposed RFS Returns; SCOTUS In June; & Immigration Executive Action Non-Action

This week’s review focuses on two significant environmental regulations by the Environmental Protection Agency (EPA)

By Leland E. Beck  
on

Ed note: This post originally appeared on Federal Regulations Advisor: Insight and Commentary on U.S. Government Regulatory Affairs.

This week’s review focuses on two significant environmental regulations by the Environmental Protection Agency (EPA): preliminary release of a final definition of “waters of the United States” and release of a proposed rule to establish multiple years of volume requirements for renewable fuels, at least in part in response to a proposed consent decree. On the litigation side, the United States Supreme Court (SCOTUS) administrative law decisions will highlight the remainder of June. On the other hand, SCOTUS will not soon see a request to review the Administration’s immigration executive action.

Final Waters of the United States: The EPA and the Army Corps of Engineers’ release of a draft final Clean Water Rule: Definition of “Waters of the United States” on Wednesday, accompanied by a new barrage of public relations efforts. Generally, the Clean Water Act (CWA) prohibits discharge of any pollutant from a point source into navigable waters unless a permit was obtained, but provides little definition, and applies to a range of regulatory programs, including National Pollutant Discharge Elimination System (NPDES) permits, discharge of dredged or fill material permits, and oil spill prevention and response programs.

Some base controlling features (e.g. navigable waters) of the final rule are readily ascertainable, but substantial controversy surrounds the “significant nexus” judicial illumination that the agencies seek to transform into regulatory specifications for “tributaries,” “adjacent” waters, and a residual jurisdictional adjudication. “Adjacent” will not mean “adjacent” is that term is generally understood (physical and contiguous, not functional), but includes “neighboring” waters that are not contiguous and significantly distant. Distance, moreover, appears to obliquely refer (at least in the preamble) to the contentious contours of the 100 year flood plain determined by the Department of Homeland Security (DHS)’s Federal Emergency Management Agency (FEMA) for flood insurance purposes – but that consistency is not assured in the regulatory text. Even further, the agencies have retained significant jurisdictional adjudication that renders the “definition” a misnomer – case specific decisions by the agencies that could include substantial additional waters – thus requiring permitting – that are even less readily ascertainable. The final rule does specifically exclude some physical features, such as wastewater treatment facilities, some ditches, “prior converted cropland,” artificially created bodies, and “puddles.”

The draft final rule has not (obviously) been filed for public inspection with the Office of the Federal Register (OFR) and a publication date has not been set. When that happens, an additional two-week delay of the beginning of the process of judicial review will occur and a 60-day implementation date will be set in motion. The agencies’ response to public comments is not in the draft final rule – the agencies aver that their response to the million public comments will be contained in a separate document – not yet filed on the docket.

► Do not underestimate the difficulty of establishing a definition for so slippery a substance as the waters of the United States. The agencies argue that the final rule will reduce the number of agency jurisdictional determinations and the final rule covers less than the current regulations. The agencies argue also that the rule provides a clearer definition. The rule is better, but not enough. The problem is the vastness of the agency to be determined jurisdiction – an adjudication (whether a final agency action or otherwise) that imposes a substantial burden and risk upon landowners who may have little indication that the burden or risk exists. The final rule is merely a transition from the agencies to the courts – both industry and environmental advocates have expressed dissatisfaction and many will seek judicial review.

Proposed RFS Returns: The EPA released years’ worth of proposed Renewable Fuel Standardsunder the Clean Air Act (CAA) – for 2014, 2015, and 2016, and some for 2017 – on Friday. The proposed rule responds, in part, to a proposed consent decree in litigation challenging EPA’s past failure to timely propound standards for blending ethanol into fossil fuels. The proposed rule recognizes the fait accompli of 2014, and proposes to coordinate that reality with the current and future requirements. The proposed rule sets the overdue 2014 requirements at the actual level of production – 15.93 billion gallons of biofuel – increasing that total to 16.3 billion gallons for 2015, and 17.4 billion gallons in 2016, still well below that 2016 statutory requirement of 22.25 billion gallons. The proposed rule recognizes that the statutory levels for past and current years are simply unachievable.

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► Whether EPA has sufficiently balanced Congressional intent with real-world circumstances will yet again generate a plethora of public comments, and probably more litigation. A final rule (according to the consent decree) is due in November.

SCOTUS in June: June marks the beginning of the end of the SCOTUS 2014 Term and decision time for some of significant administrative law cases. To whet the appetite, four cases that SCOTUS will decide (some as early as 10:00 AM today) and (slightly revised) questions presented are:

Kerry v. Din – the consular non-reviewability case:

  1. Whether a Department of State (DOS) consular officer’s refusal to grant a visa to a United States citizen’s alien spouse impinges upon a constitutionally protected interest of the citizen.
  2. Whether the United States citizen can challenge a visa refusal in federal court and require DOS to state a statutory basis for the refusal.

King v. Burwell – the Obamacare (Patient Protection and Affordable Care Act or PPACA) interpretation case:

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Whether the Internal Revenue Service (IRS) may promulgate regulations extending tax-credit subsidies to coverage purchased through exchanges established by the federal government under a provision of the PPACA permitting tax credits for coverage purchased through exchanges “established by the States.”

Horne v. Department of Agriculture – the regulatory takings case that calls into question the validity of Department of Agriculture (DOA) food marketing regulations (in this case, raisons):

  1. Whether the government’s “categorical duty” to pay just compensation when it “physically takes possession of an interest in property” applies to personal property.
  2. If so, whether the government may avoid paying compensation by reserving to the property owner a contingent interest in a portion of the value of the property set at the agency’s discretion.
  3. Whether a regulatory requirement to relinquish specific, identifiable property as a “condition” on permission to engage in commerce effects a per se taking.

Michigan / Utility Air Regulatory Group / National Mining Association v. EPA: the CAA cost problem:

Whether the EPA unreasonably refused to consider costs in determining whether it is appropriate to regulate hazardous air pollutants emitted by electric utilities.

Immigration Executive Action Non-Action: As noted previously, the United States Court of Appeals for the Fifth Circuit last Tuesday denied a Department of Justice (DOJ) motion to stay the district court preliminary injunction. The extant preliminary injunction continued to prevent DHS from implementing the Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) for want of compliance with the notice and comment rulemaking requirements of the Administrative Procedure Act (APA). Unfortunately, the precise ruling requires reiteration because many editorialists have erroneously suggested that the Fifth Circuit upheld the preliminary injunction – the Fifth Circuit has scheduled argument on the merits of the preliminary injunction for July 10. News outlets reported also that the DOJ has decided not to seek SCOTUS review of the denial of a stay.

► DOJ gave no reasoning for this decision not to seek SCOTUS review, but SCOTUS is highly unlikely to grant a stay (let alone grant certiorari and full review) based on the Court of Appeals actual decision to deny a motion for a stay, the record as it stands, and the procedural posture of the case. Texas v. United States is still in a highly tentative posture and the decisions thus far are procedural. Admittedly, each procedural denial incrementally reinforces the likelihood that the plaintiffs will succeed, ultimately, on the merits and the program will not be implemented, but there is no final decision yet to review.

Additionally, DHS, enjoined from implementing DAPA for over three months, has not taken public steps (including the Spring 2015 Unified Agenda) toward proposing for public comment and promulgating a rule to implement DAPA. Such a move would necessarily signal that DHS believes it could vitiate the preliminary injunction and force the second, unaddressed question in Texas v. United States, substantive legislative authority to establish criteria, and silence undercuts that very argument.

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