November 01, 2016

Change in administrations, change in course? What the next president could do to vacate or reform Obama’s Clean Power Plan (Part 2 of 2)

Thomas A. Lorenzen and Sherrie A. Armstrong

On September 27, 2016, more than a dozen lawyers and ten D.C. Circuit judges debated the legality of U.S. Environmental Protection Agency’s (EPA’s) signature climate change rule, the Clean Power Plan. That rule aims to cut carbon dioxide emissions from existing fossil fuel-fired power plants by requiring steep reductions in and replacing that generation with power from low- or zero-emitting sources. A decision is not expected until sometime in 2017, and the case is likely headed to the U.S. Supreme Court, which in early 2016 granted an extraordinary stay pending review.

Whatever the judicial outcome, Congress and the executive branch also have tools for voiding or amending the Clean Power Plan. As we discussed in the last issue of Trends, legislative action is possible but unlikely to succeed. Lorenzen & Armstrong, Change in administrations, change in course? The staying power of Obama’s Clean Power Plan and possible avenues for change (Part 1 of 2), Trends Sept/Oct, Vol. 48, No. 1. Though the president has many powers, even the president cannot erase the Clean Power Plan through executive fiat. In the second part of this series, we explore the actions a new administration could take to withdraw or amend the rule.

Vacating the rule by executive action

A new administration could admit error and seek vacatur of the rule, but such a strategy is unlikely to succeed. The Obama administration attempted this with respect to a surface mining rule issued in the final days of the Bush administration, 73 Fed. Reg. 75,814 (Dec. 12, 2008). The rule took effect days before President Obama’s inauguration and was promptly challenged by environmental groups. The Interior Department took the unusual step of filing a motion to remand and vacate the rule because Secretary Salazar had determined OSM had failed to engage in Endangered Species Act consultation. An industry intervenor was the only party in the case to oppose vacatur.

The district court agreed vacatur was not appropriate absent a merits ruling, significant new evidence, or all parties’ agreement. Nat’l Parks Conservation Ass’n v. Salazar, 1:09-cv-00115 (Aug. 12, 2009). The court held that, under those circumstances, vacatur would “wrongfully permit the Federal defendants to bypass established statutory procedures for repealing an agency rule” under the Administrative Procedure Act (APA). Id., slip op. at 4–5.

It is not clear there is a vehicle for a similar motion before the D.C. Circuit or before the U.S. Supreme Court. The environmental and state intervenors in support of the rule also would undoubtedly oppose such a tactic, making that strategy unlikely to succeed.

Refusal to defend or enforce the rule

Short of seeking vacatur, a new president could instruct the Department of Justice to decline to continue to defend the rule, as President Obama did in the case involving the constitutionality of the Defense of Marriage Act (DOMA). Such an action would inform the reviewing court of the new administration’s policy position but may not have much practical effect as states and other groups supporting the Clean Power Plan could continue to defend the rule. In short, the rule could be upheld by the courts, notwithstanding the executive branch’s decision not to defend it.

A new president could also encourage EPA to exercise its enforcement discretion and refuse to enforce the state plan deadlines and other requirements imposed by the Clean Power Plan. Although day-to-day control of EPA is vested in the EPA administrator, the president could appoint a new administrator who would be amenable to that approach (subject to Senate confirmation) and could remove an administrator who is not abiding by the president’s policy choices.

Even if the agency chose not to defend or enforce the rule, it would still remain in full legal effect, giving any person the ability to bring a Clean Air Act citizen suit under section 304(a) against EPA or alleged violators to enforce the rule’s provisions.

A new rulemaking

The most effective way a new administration could revoke or revise the Clean Power Plan is through a new rulemaking, although that is a lengthy and resource-intensive process. Under the APA and the Clean Air Act, a legislative rule having the force and effect of law must be issued through notice-and-comment proceedings.

A new rulemaking requires development of a new proposed rule and a record of scientific, economic, and other supporting information, which can take considerable time. Once a new rule is proposed, the public notice-and-comment period typically takes three to six months, followed by the agency’s preparation of a final rule, with any necessary revisions, and development of the agency’s responses to public comments. The agency also would engage with stakeholders and perform a legal and policy review of the rule during that time.

All told, the rulemaking could easily take two years to complete and maybe more. In our previous example of the Bush-era surface mining rule, which was ultimately vacated in February 2014 on summary judgment, a new proposed rule did not issue until July 2015, and the rule is yet to be finalized.

During the pendency of a rulemaking, the Clean Power Plan would remain in effect and be enforceable by EPA or through citizens’ suits. And, like the Clean Power Plan, any new rule would be subject to legal challenge. To prevail, EPA would have to establish that revocation of the rule is not contrary to the Clean Air Act, revocation was reasonable, and revocation would not endanger public health or welfare.

There is a very limited exception to the general notice-and-comment requirements that allows repeal of a regulation under APA section 553(b) where an agency finds good cause that notice and comment procedures are impracticable, unnecessary, or contrary to the public interest. That exception is typically invoked only for emergency situations involving substantial endangerment to public health and is narrowly construed by the courts. EPA is unlikely to employ such an approach in this context; it would also likely not survive judicial scrutiny.

Revocation of a duly-issued rule through subsequent rulemaking is neither easy nor quick, and judicial invalidation of any new rule replacing the Clean Power Plan with something less stringent remains a considerable threat. A new administration also would typically need to consider whether business decisions have already been made in response to the Clean Power Plan, but that may not be relevant in light of the Supreme Court stay.

In short, revocation of the Clean Power Plan by a new administration is possible, and more easily accomplished than through congressional action, but by no means certain.

Further reading
Change in administrations, change in course? The staying power of Obama’s Clean Power Plan and possible avenues for change (Part 1 of 2)

Thomas A. Lorenzen and Sherrie A. Armstrong

Thomas A. Lorenzen is a partner in the Environment and Natural Resources Group at Crowell & Moring LLP, and Sherrie A. Armstrong is an associate with Thomas Combs & Spann PLLC.