Oil and Gas Lawyer Blog
The Senate hearings on Judge Brett Kavanaugh’s nomination to the Supreme Court have brought public attention to the role the Supreme Court, and courts in general, play in our trilateral system of government – a role that the public usually does not see in headlines other than when the Supreme Court considers hot-button social issues such as abortion and gun control. Most of the work done by courts flies under the radar and receives little public attention.
But a critical element in our system of government is its reliance on and belief in the “rule of law.” John Adams expressed this idea when he wrote that government should be a “government of laws and not of men.” It means that private citizens and government are accountable under the law; that laws be clear, just, publicized, and applied equally; that the process by which laws are enacted, administered and enforced are accessible, fair and efficient; and that justice is delivered timely by competent, ethical and independent representatives. Lawyers have an obligation to uphold the rule of law independent of and superseding their obligation to clients. Every person, including lawmakers, law enforcement officials and judges, is subject to the law. The authority of our courts is based on this principle.
The US Court of Appeals for the D.C. Circuit issued an opinion last month that illustrates the rule of law in the context of the political shift that took place after the election of President Trump. The case, Air Alliance Houston v. EPA, No. 17-155, was heard by a panel of three judges on that court, Judges Rogers, Wilkins, and Kavanaugh. Because of Judge Kavanaugh’s nomination to the Supreme Court, he did not participate in the opinion. The opinion was issued “Per Curiam,” meaning it was not signed by a particular judge but was issued “by the court” collectively.
The court’s decision in Air Alliance is not likely to make headlines except in legal circles, and the decision – 36 pages – makes good reading only for those interested in the minutiae of administrative law. The court was asked to review a rule (the “Delay Rule”) adopted by the EPA that delayed implementation of a rule the EPA had adopted before Trump’s election. The EPA’s Delay Rule was part of the Trump administration’s effort to roll back EPA regulations it considered unnecessary and onerous. The court held the Delay Rule invalid.
In today’s politically charged climate supporters of the current administration may see the court’s decision as that of a liberal court striking down reforms sought by the electorate, thwarting the will of the people. But a careful review and understanding of the court’s reasoning, I believe, illustrates the proper role of our courts in upholding the rule of law.
The rule that the EPA sought to delay is referred to in the opinion as the “Chemical Disaster Rule”. That rule was adopted by the EPA in 2017, after a series of accidents at industrial facilities handling hazardous chemicals, including the April 2013 explosion of a fertilizer plant in West, Texas that resulted in the deaths of fifteen people, including twelve first responders. The Chemical Disaster Rule was issued under authority of the Clean Air Act (CAA) and amendments to that Act passed by Congress in 1990. The authority of agencies like the EPA to issue regulations derives from acts of Congress, and agencies can act only pursuant to the authority granted by Congress. The plaintiffs challenging EPA’s Delay Rule argued that the rule was not authorized by Congress but in fact directly thwarted the will of Congress as expressed in the Clean Air Act’s 1990 amendments.
The court’s opinion is a careful analysis of the history of the Clean Air Act amendments of 1990, Congress’s intent in passing those amendments, the statute’s directives to the EPA to enact regulations carrying out the purpose of the law, and the passage of the Delay Rule. The court concluded that the EPA had no authority under the Clean Air Act to adopt the Delay Rule and that the EPA failed to give any justification for adopting the rule.
The 1990 CAA amendments addressed multiple high-profile chemical accidents that harmed workers. The law established a Chemical Safety Board to make recommendations to the EPA for regulations to address accidental releases of chemicals, and required the EPA to implement regulations “to provide, to the greatest extent practicable, for the prevention and detection of accidental releases of regulated substances and for response to such releases by the owners or operators of the sources of such release” and to require those operators to adopt and implement Risk Management Plans for emergency response when spills occurred. The law allowed the EPA to reconsider a regulation, once adopted, if a person raises an objection and “can demonstrate … that it was impracticable to raise such objection within” the comment and notice period required prior to adoption of the regulation; but the statute says that “such reconsideration shall not postpone the effectiveness of the rule.” The statute allows the EPA to delay effectiveness of the rule during such consideration only “for a period not to exceed three months.”
After the West, Texas explosion and other accidents in 2013, President Obama appointed a working group to study improving chemical facility safety and security. As a result of that group’s work, the EPA issued a proposed rule (the “Chemical Disaster Rule”) in March 2016 addressing accident prevention, post-accident investigations, emergency response coordination and disclosure of information about an event to the public. The EPA received thousands of comments to the proposed rule, and it issued a final rule on January 13, 2017. The EPA estimated the cost of compliance with the new rule at $131.2 million annually for the 12,500 facilities affected by the rule, and it estimated the annualized cost of on-site damages from chemical releases at $274.7 million per year.
After Trump became President and less than two weeks after issuance of the Chemical Disaster Rule, the EPA delayed the effective date of the Rule for one week (along with 29 other final EPA rules). On February 28, 2017, a coalition of industry groups and states petitioned for reconsideration of the Chemical Disaster Rule; the EPA then stayed the rule’s effective dates for ninety days. The EPA then issued a notice of proposed rulemaking to adopt a rule that would delay the effective date of the Chemical Disaster Rule for 20 months. That rule (the “Delay Rule”) was finalized on June 14, 2017. The plaintiffs then sued in the D.C. Court of Appeals to challenge the Delay Rule. After reviewing the applicable statutes, the court held that EPA had no statutory authority to adopt the Delay Rule. It ran contrary to the express statutory requirement that a rule adopted under the CAA 1990 amendments could be delayed for no more than ninety days. The court said that “EPA may not employ delay tactics to effectively repeal a final rule while sidestepping the statutorily mandated process for revising or repealing that rule on the merits.”
The court also held that the EPA offered no reasonable justification for adopting the Delay Rule and that its action was “arbitrary and capricious.” Courts have authority to review administrative regulations and to strike them down if their adoption was “arbitrary and capricious,” not based on facts and reason. An agency must explain the basis of the rule it has adopted, and the court found that EPA had not given adequate reasoning for adopting the Delay Rule.
The court also made clear that EPA can amend the Chemical Disaster Rule if it follows proper procedures and provides valid justification for doing so: “EPA retains authority … to substantively amend the programmatic requirements of the Chemical Disaster Rule, and pursuant to that authority, revise its effective and compliance dates, subject to arbitrary and capricious review.”
So the court in Air Alliance did, in my view, what a court should do: it required EPA to follow the law passed by Congress. It fulfilled its role of upholding the rule of law. The court explained its reasoning in great detail, for everyone to read. If EPA wants to change its rule, it must follow the proper procedures. Those procedures are important because they assure that public input is provided and the agency provides a reasoned basis for its decisions. In the meantime, it cannot delay implementation of the Chemical Disaster Rule, once adopted, for more than ninety days. If Congress wants to change the law, it of course can do that as well. The role of the court in this case was to assure that the executive branch carries out Congress’s legislative intent.