Uncertainty over EPA Environmental Regulation Roll-Backs and Legal Challenges



Roll Backs_image 1As initially covered in the Spring 2017 issue of Environmental Quarterly (New Administration Takes Initial Steps to Reduce Environmental Regulatory Burden), and as summarized in Table 1, the Trump Administration has targeted five major environmental regulations for delay, relaxation, or elimination. Following recent Presidential Executive Orders (EOs) and agency policy changes directed by U.S.  Environmental Protection Agency (EPA) Administrator Scott Pruitt, EPA has announced several delays and "roll-backs" of environmental regulations. In most cases, the rule changes  proposed by EPA under Pruitt have been met with legal challenges. A coalition of environmental activists and public advocates submitted legal filings with the appellate court asserting that the environment will be adversely impacted by many of the proposed regulatory roll-backs. Following legal review, the court may either accept or reject each EPA-proposed rule change. If the decision by the appellate court is unacceptable to an impacted party (such as EPA, industry, or environmental advocates), that party can request a final decision by appealing to the U.S. Supreme Court.

The Legal Challenge Process

For the rule changes addressed in this article, all but one of the legal challenges have been filed in the United States Court of Appeals for the District of Columbia Circuit, commonly referred to as the D.C. Circuit. The D.C. Circuit is one of the 13 appellate courts that have jurisdiction below the U.S. Supreme Court. Appellate courts do not use a jury and the D.C. Circuit hears appeals of decisions of federal administrative agencies, such as EPA. Any appeals to appellate court decisions must be made to the Supreme Court. Currently, the D.C. Circuit Chief Judge is Merrick B. Garland (former Supreme Court nominee under President Obama).

The Waters of the US (WOTUS) case is the only one of the five regulations covered in this article that was not reviewed by the D.C. Circuit. Instead, the WOTUS challenge was filed in the 6th Circuit, which represents districts from Michigan, Ohio, Kentucky, and Tennessee. However, the U.S. Supreme Court is slated to review the jurisdiction of the 6th Circuit in its recent decision regarding WOTUS.

For each legal challenge, the appellate court will review arguments. To summarize, the court will generally respond to a legal filing in one of the following ways:  

  • Issue a stay of EPA's rule changes (and thus the original rulemaking will proceed regardless of the Executive Order  or regulatory roll-back), or
  • Clarify that the roll-back is compliant with the law and therefore the roll-back remains in place, or
  • Issue a stay for specified provisions of the EPA's proposed roll-back.

In some cases, due to the court's schedule and the date that the legal challenge was filed, no court action has yet been taken; therefore, at the time this article is being published, the status of either the original rule and/or the roll-back remains unknown. This leaves industry with uncertainty on how, and if, it should proceed with compliance activities.

Rulemaking Basics

After the appellate court issues a decision regarding any regulatory roll-back legal challenges submitted to the court, the formal rulemaking processes must be completed by EPA. As an example, if the D.C. District court sets aside (vacates) all or part of a rule, then EPA must formally remove the vacated requirements from the regulation. To complete the changes, typically EPA must restart the rulemaking process from the beginning by issuing a new proposed rule in the Federal Register that will be potentially subject to public review and comment. A simplified version of the rulemaking process is provided below.

  1. EPA proposes rule changes via Federal Register publication of a Proposed Rule.
  2. EPA establishes a public comment period allowing state agency, public, and industry participation. Written  comments are submitted electronically following the instructions provided in the Federal Register in the Proposed Rule.
  3. Upon review of the comments, EPA publishes a Final Rule in the Federal Register. Although EPA typically addresses responses to public comments in the Final Rule preamble, EPA is not explicitly required to revise the rule based on received comments.
  4. Depending on the scope of the rule, the rule changes generally will be effective 30 to 60 days after publication of the Final Rule in the Federal Register.
  5. After a regulation is completed and has been printed in the Federal Register as a Final Rule, it is codified when it is added to the Code of Federal Regulations (CFR).
  6. After the rule is published and finalized, EPA can issue policy guidance documents and interpretative memos to provide additional clarifications on the rule requirements and scope.

Status of Recent Regulatory Roll-Backs and Legal Challenges

Table 1 summarizes some of the key regulations targeted by the new Administration, subsequent legal challenges, and the current status of the rule. Key highlights from Table 1 are noted below.

  • EPA has withdrawn its delay of the 2015 Ozone National Ambient Air Quality Standard (NAAQS), and the implementation of the standard is proceeding as originally scheduled.
  • The Clean Power Plan (CPP) has been revoked.
  • The status of the following rules has not been finalized at this time: WOTUS, New Source Performance Standards (NSPS) Subpart OOOOa (which impacts oil and gas production operations), and Risk Management Plan (RMP)amendments, which impact chemical plant safety.

To summarize, the status of the 2015 Ozone NAAQS standard and the CPP are known, such that Industry can safely assume that the 2015 Ozone Standard will be required and the CPP rules will be revoked.  However, the status of three of the five regulations discussed in this article is uncertain.

Roll Backs_Table 1

  • Although expansion of the WOTUS rule has been stayed by the 6th Circuit and the rulemaking process is underway, if the Supreme Court rejects the 6th Circuit jurisdiction over the WOTUS, then possibly the expanded WOTUS definition will be effective. (Note that the Supreme Court has chosen not to review the legal validity of the expanded WOTUS regulatory definition.)
  • Although the 90-day stay of NSPS Subpart OOOOa has been revoked by the appellate court, EPA has appealed the court decision. At this time, this NSPS rule remains in effect.
  • Regarding the Risk Management Plan (RMP) regulation amendments, although EPA issued an administrative stay from the January 2017 effective date of the regulation until February 2019, a legal challenge has been filed to reject the delay and, up until now, no response from the court has been provided. Industry is therefore currently in doubt of the rule's legal status.

Roll Backs_image 2

In conclusion, President Trump's commitment to rolling back some Obama-era regulations and increasing regulatory certainty for industry has, at least in the short term, increased uncertainty with respect to applicability and compliance requirements. Potentially affected facilities must stay alert-waiting for legal proceedings to unfold, but not neglecting currently applicable requirements.