The True Culprit Behind “Sue and Settle”

EPA’s recently announced directive ending “regulation through litigation,” otherwise known in many circles as “sue and settle,” aimed most of its ire at actions allegedly taken outside the typical administrative process “through backroom deals.”  Indeed, the “sue and settle” phenomenon has long been the bugaboo of many national advocacy groups.  The thought has been that the agency actually welcomed litigation brought by public interest groups with which the agency sympathized, only then to settle on extremely favorable terms, committing the government to policies that never would have been implemented, and paying the plaintiffs handsome attorneys’ fees to boot.

The reality of these cases is somewhat less conspiratorial.

Let’s start with a basic truth:  90+ percent of all civil cases settle.  Parties genuinely may be unable to resolve their dispute without a court telling them who wins or loses, but with rare exception, parties dislike having a judge (who may or may not have pertinent expertise) dictate what actions they have to take.  The same holds true for the government.  Any regulatory agency prefers creating its own rulemaking plan over having a court tell it how quickly it needs to act.

Another truth:  federal government agencies do not settle cases independently.  They all have strict oversight from their skilled counsel at the U.S. Department of Justice.  DOJ attorneys carefully review any proposed agreement to ensure that the settlement terms do not bind the agency to actions it otherwise would not have been compelled to take.  Theoretically, even if an agency “plotted” with an outside organization to have a case filed against it so that a favorable deal could be struck, DOJ is a vigilant steward of the government’s resources and will simply not permit the ink to dry on an over-reaching settlement.

More reality?  The rules concerning attorneys’ fees awards following settlements have been sealed largely by case law interpreting various statutory provisions making the payment of attorneys’ fees available in the first place.  Common law says that if a plaintiff successfully settles a case and obtains relief through the filing of its lawsuit, it is a “prevailing party” and eligible for fees.  It’s just a matter of how much.  Again, here’s where DOJ plays an important role.  The government’s lawyers hate seeing Uncle Sam pay huge fee awards.  Sure, the Judgment Fund represents a large available pot of money to pay fees outside an individual agency’s budget, but as a former DOJ lawyer, I can tell you we took pride in paying the absolute minimum.

One last painful truth: the vast majority of cases brought in the context of what could be called “sue and settle” are open and shut, no-doubt-about-it losers for the government.  They are largely brought because the agency has missed a deadline to issue a regulation or take a specific administrative action mandated by the legislature.  The deadline passes without the requisite action in place, and the agency is vulnerable to litigation without any real credible defense.  The agency could litigate to defeat and allow a court to tell it what to do and when, or it could figure out what it could reasonably accomplish on what schedule and settle.  Practical as salt.

Administrator Pruitt’s recent directive properly makes transparency through public disclosure a requirement of any future settlement or proposed consent decree.  Publishing notice of all proposed settlements and allowing a comment period is good government, pure and simple.  The new EPA policy is really no different from the procedure by which the agency publishes its regulatory agenda through the Office of Management and Budget.  The public deserves to know what an agency is planning to do with respect to its regulations and to have some idea about the schedule by which regulatory actions will be taken.

So why the hubbub? It’s probably because stakeholders on all sides of the controversy seem intent on ascribing bad motives to the entire litigation enterprise.  Plaintiff thinks (twirling his evil, curly moustache): “Aha!  I know how to get that agency to do what I want!  I’ll bring litigation reminding it of a deadline it already knows about, and can’t possibly meet!”  Agency responds (winking with both eyes so quickly, it could be mistaken for blinking): “Thanks, evil Plaintiff!  Without your complaint, I surely would have ignored the will of Congress indefinitely!”  Of course, no public interest or industry stakeholders behave this way.

Parties upset with the reality of litigation dictating administrative action should focus their attention squarely on Congress.  It is the legislature, after all, that routinely sets unrealistic regulatory deadlines, or passes mandates that in any reasonable world would take years of analysis, but must be done “12 months from the effective date of this statute.”  The result is inevitable.  Agencies miss deadlines (even with the best of intentions) and aggrieved parties sue.

EPA’s new policy most likely will not alter the trajectory of “sue and settle.”  It may, however, shed more light on the regulatory process.  In that way it could force Congress to consider more carefully its role in the seemingly never-ending cycle of legislate/litigate/regulate that is all too pervasive in the world of environmental law.


Autonomous Vehicles: Zoning, Land Use, and Infrastructure Issues to Consider Right Now

Illustration credit: Vintage illustration from article “Everywoman’s Magazine” Jan. 1956 illustration by H.B.Vestal Based on the film “People, Products and Progress-1975” produced by Chamber of Congress of the United States with the cooperation of industries and trade associations.

Autonomous vehicles are coming.  No one agrees on when they will be in widespread use, but everyone agrees that they are coming soon in some form.  Just like smart phones, ride-hailing services, social media, and other innovations of the past decade, autonomous vehicles will almost certainly dramatically change the way we live, work, and interact with each other.  They will also have major implications for zoning ordinances, land use policies, and infrastructure across the country that state and local governments, commercial property owners, developers, and society in general should start discussing sooner rather than later.

At the federal level, the fashioning of a regulatory framework to allow for the development and widespread adoption of autonomous vehicles is well under way.  Just last month, the House passed H.R. 3388, a bill with bipartisan support called the SELF DRIVE (Safely Ensuring Lives Future Development and Research In Vehicle Evolution) Act.  The bill’s primary objective is to provide for expanding autonomous vehicle testing on public roads, an obvious and crucial next step in refining the technology.  The Senate has also introduced companion legislation, S. 1887, the American Vision for Safer Transportation through Advancement of Revolutionary Technologies (AV START) Act.

These proposals come on the heels of multiple state-enacted laws and guidelines that have so far regulated the budding industry.  Under the SELF DRIVE legislation, the National Highway Traffic Safety Administration (NHTSA) would maintain its regulatory role in establishing standards and regulations for how vehicles are designed and perform, while the states would continue to oversee vehicle registration, licensing, and insurance requirements as they already do for regular vehicles.  The legislation gives the NHTSA two years to come up with safety rules and one year to assess the necessary performance standards.  It also permits a ramp up in the number of exemptions of certain standards that the NHTSA may grant for autonomous test vehicles, up to 100,000 in three years.  Such exemptions are necessary in the event that, for example, a manufacturer may want to design a vehicle without a steering wheel or pedals because the occupants are not expected to take control at any point.

As these proposals continue to develop at the state and federal levels, local governments need to consider how they can adjust their own zoning and land use policies in response to the coming of autonomous vehicles.  Those places that are successful in doing so will likely be the winners in adapting to autonomous vehicles and thereby maintaining a vibrant economy and high quality of life.  This is particularly true if the widespread assumption, informed by current urban trends in the age of ride-hailing services, is proved correct:  that most autonomous vehicles in cities will be owned jointly or operated in large fleets.

Local governments should focus their discussions on the following:

  1. Mandatory Parking – Most local zoning ordinances still mandate that a minimum amount of parking be provided for new projects.  However, autonomous vehicles could greatly increase the number of people who are simply dropped off at a building and therefore have no need for parking.  Future minimum parking requirements should have flexibility built into them—if they are not eliminated altogether—to avoid construction of additional parking that may eventually be largely obsolete.
  2. Conversion of Parking Lots and Structures – Zoning ordinances and land use policies must be ready to allow for the potential conversion of existing parking lots and structures in urban areas to other uses.  In many places, architects are already designing parking garages that can easily be converted to apartments, offices, or other uses in the future.  Conventional garages are more difficult to repurpose, but innovative designers have demonstrated the possibilities of giving new life to obsolete garages by transforming them into micro-housing unit communities, elevated parks, luxury homes, antique markets, apartments, and offices, among others.  Surface parking lots obviously allow for much easier conversion to other uses, such as urban park space.
  3. Curbside Management – With the use of autonomous vehicles, effective curbside management (i.e., designating where parking, loading, etc., are permitted) will only become more important in terms of providing adequate dropoff locations.  If done correctly, dropoff locations and pedestrian-only zones can be created that will both reduce vehicular congestion and create a better environment for pedestrians.
  4. Planning for Autonomous Vehicle Service Areas – Even if all of these autonomous vehicles are not parking in urban areas very often, they will definitely require service from time to time.  Jurisdictions should consider where to locate autonomous vehicle service areas, whether on the edge of town where real estate prices are lower or incorporated into mixed-use developments.  Existing service stations and garages in urban areas may also be natural places to locate autonomous service areas as well.
  5. Road Recapture – If the more aggressive predictions come true, the need for vehicular travel lanes could dramatically shrink over time with autonomous vehicles.  This will present opportunities for converting such lanes to bicycle or pedestrian ways or even more urban park space.  It will also be interesting to see how, as autonomous technology develops and improves, roadway geometry might change in terms of decreased lane width, site distance requirements, and road curvature.  All of these changes could provide even more opportunities for adapting portions of our roads to other uses.

This list is, of course, by no means exhaustive.  Many other issues should no doubt be added, and the relative significance of each item is uncertain.  No matter how quickly the impact of autonomous vehicles on our urban areas will be felt, the time to start contemplating and discussing these issues is now.

Cost-Benefit Analyses: Focus of the Next Wave of APA Litigation

Stop me if you’ve heard this one.

An engineer, a mathematician, and an economist find themselves stuck in a 30-foot-deep ditch.  Two of them start working away furiously—the engineer is scratching out plans to alter the slope of the ditch to allow them to climb to safety, and the mathematician is calculating the items of clothing needed to create a lifeline to the top of the ditch.  All the while, the economist is lounging comfortably in a corner.

“Why aren’t you helping us figure out a way to escape?” the others ask impatiently.

The economist barely lifts an eye in their direction and answers, “It’s easy; we just assume a 30-foot ladder!”

Don’t yell at me; some of my best friends are economists.  But this old joke perfectly summarizes the current state of environmental regulation that will be the subject of major litigation, assuming that the administration moves forward with repeal of major rules, including, among others, the Clean Power Plan and Waters of the United States regulations.  How does the government do its cost-benefit analyses that justify promulgating or (as is currently in vogue) repealing regulations?

Environmental, health, and safety rules often are tied up in the standards for the value of a human life (a decidedly awkward calculation) and estimates of how many lives could be saved or injuries prevented if that particular rule were in place.  These benefits are balanced against the expected costs associated with the regulated community’s efforts to comply with the rule.  Those figures get tied up in things like completion of paperwork, employee hours, or perhaps the investment in specific equipment or modification of existing facilities.

As one example, the EPA re-evaluated how the WOTUS rule would affect wetlands.  The new administration determined that there would be $500 million less benefit from the rule’s expanded scope than the previous administration had calculated.  As another, the EPA crunched the numbers on the Clean Power Plan’s effect on health benefits and determined that the rule as created would have $34 billion fewer in health benefits than the prior administration had calculated.  By making different economic assumptions and taking different issues into consideration, the cost-benefit analysis looks vastly different from the analysis performed to promulgate these rules.

Environmental organizations have already announced their intention to challenge these revised benefit analyses as “arbitrary and capricious.”  Not unlike the stranded economist in the ditch, groups planning to challenge EPA’s cost-benefit analyses say the agency has simply assumed away large chunks of potential benefits in order to support the proposed regulatory repeals.  (EPA also estimated additional expected compliance costs, further supporting its position regarding the onerous nature of the proposed rules.)

Anticipated litigation will shed light on the economic analysis that often flies well under the radar during agency rulemaking.  During my time as agency general counsel, I had many confusing and frustrating discussions with OMB officers and internal agency economists.  While some benefits calculations were made using government-wide standards, such as the cost of a human life mentioned above, others, by contrast, were based on totally ad hoc analyses using a series of assumptions that resulted from a thought process that was clearly more art than science.  For example, in the last administrations, the USDOT issued a series of rules mandated by the MAP-21 transportation law designed to enhance public participation and transparency in infrastructure funding decisions.  You tell me:  What’s the monetary benefit of a more informed citizenry?  What calculation should we assign to greater faith in how and why the government is spending taxpayer dollars?  That was the point of the regulation and reflected express congressional intent, but I challenge you to pick a per capita number that can accurately capture the true benefit of those rules.

Environmental regulations are no different.  In the context of WOTUS, the preservation of wetlands could be calculated based on generally accepted appraisal standards by assigning a dollar value per acre of land that would be saved or preserved.  Beyond that, how should EPA or the Corps calculate the benefit of wetlands preserved in coastal areas in terms of those lands’ ability to enhance flood control or protection from storm surge?  Making that one assumption could literally change the agency’s cost-benefit analysis to the tune of billions of dollars.  The inclusion or exclusion of that assumption could serve to support political objectives on either end of the political spectrum.

I am not suggesting here that the discipline of cost-benefit analysis is per se arbitrary.  Agencies should attempt to reveal to the public (in understandable terms, but that’s another story) how their regulatory actions could impact the conduct of business and how successful they may be in achieving public health and safety objectives.  Upcoming litigation will test the extent of the executive branch’s discretion in preparing these calculations as justification for either extending or contracting regulatory oversight.  No matter which political party is in control, however, it seems clear that federal agencies will have to prove in court whether there’s really a 30-foot ladder in the ditch.

Supreme Court to Decide Whether District or Circuit Courts Have the First Crack at WOTUS

Since the WOTUS rule was promulgated in 2015, there has been much debate over its validity, promises by the current administration to repeal and replace the rule, and, on July 27, 2017, a notice of proposed rulemaking that would alter the current definition of “waters of the United States.”  But before the merits of the rule itself are considered and the rule’s fate is determined, the Supreme Court must decide a crucial preliminary question:  In any future challenges to the rule, which court first gets to decide?

Almost immediately after the rule was promulgated, 30 states filed 5 separate lawsuits.  Lawsuits were also brought by business groups, agricultural organizations, and numerous nonprofit organizations.  Cases were filed in 11 different district courts, injunctions were sought, and litigation chaos ensued.

On October 11, the Supreme Court will hear arguments in National Association of Manufacturers v. Department of Defense addressing the question of whether the Circuit Courts of Appeals or district courts should have original jurisdiction over petitions challenging the WOTUS rule.

The EPA and Army Corps of Engineers argue that such challenges should be heard in the Circuit Courts.  The agencies argue that the rule unambiguously falls within the text of the jurisdictional provision of the Clean Water Act (CWA), which grants original jurisdiction to Circuit Courts for challenges to “any effluent limitation or any other limitation” promulgated under Section 1311 of the CWA, challenges to the grant or denial of any National Pollutant Discharge Elimination System (NPDES) permit, and other enumerated types of cases.  First, the agencies claim the WOTUS rule is a “limitation” under Section 1311 of the CWA because it defines the geographic scope of the CWA.  Second, they argue that it is “functionally similar” to the denial of a NPDES permit and therefore should fall within Circuit Court jurisdiction based on prior precedent.

The agencies also essentially argue that practicality and common sense dictate that the Circuit Courts should have original jurisdiction.  As pointed out in the Department of Defense (DOD) brief, sending such challenges directly to Circuit Courts will result in faster, more uniform resolution of the WOTUS rule and similar future administrative rules with widespread national impact.  This, DOD explains, would be achieved by eliminating a layer of judicial review and ensuring that related agency actions are routed through the same judicial channels.

Conversely, the National Association of Manufacturers (NAM), along with several environmental groups, states, and state agencies, argues that such challenges should be decided at a more local level in the district courts.  NAM has a fairly strong textual argument.  After all, the disputed jurisdictional language of the CWA only specifically grants original Circuit Court jurisdiction over the creation of “any effluent limitation or any other limitation” and the grant or denial of a NPDES permit.  Based on a purely textual reading, the WOTUS rule doesn’t seem to be a “limitation” per se, nor is it a NPDES permit.  Moreover, NAM argues that if Congress had actually intended to grant jurisdiction to the Circuit Courts, it would have used much broader language, like it did when it drafted the jurisdictional provision of the Clean Air Act a mere three days later.

Despite NAM’s fairly strong textual argument, the agencies seem to have practicality on their side.  NAM argues that original Circuit Court jurisdiction will not result in increased judicial efficiency.  But it’s hard to see how requiring challenges to be brought in the 13 Circuit Courts within 120 days would not be more efficient than allowing cases to be originally decided in any of the 94 district courts over a longer period of time and then reviewing those decisions in Circuit Court.  NAM argues that such multi-district review will result in better legal decisions overall because the “doctrinal dialogue” that results from disagreements among the lower courts will lead to more thorough legal analysis on appeal.  However, it undermines this argument by pointing out later in its brief that many of the cases will likely be consolidated anyway.  In another amicus brief in support of NAM, it was argued that district court review is more practical because the WOTUS rule’s applicability depends on facts specific to each water feature.  While multi-court review may be beneficial in some respects, it certainly has costs—particularly delayed decision-making and a lack of uniformity.

The outcome of the case will likely come down to whether the Court finds that the practical benefits of a broad interpretation of the jurisdictional provision outweigh the benefit of sticking to a strict literal interpretation of the statute.  Regardless of how the Court decides, the long-term fate of WOTUS is far from certain in either district or circuit court.  Nevertheless, the Court’s decision will continue to have important impacts as similar administrative rules and jurisdictional issues arise in the future.


Self-Inflicted Wounds Hinder the Quest for Energy Dominance

Politicians overuse the catch-phrase “war on…” to describe actions alleged to be hostile toward a wide range of social institutions and public policy.  There have been declared wars on everything from drugs to marriage and Christmas.  The “war on” refrain now has been applied to all things related to domestic energy development.

To combat this war, federal agencies are rethinking and reforming approaches to the permitting and environmental review for actions such as coal leasing on public lands or approving oil and gas pipeline construction.  Unfortunately, as in any war, soldiers must be aware of their surroundings and the dangers of falling victim to friendly fire.  As several federal court decisions issued in the last month or so demonstrate, some casualties have already been suffered.

High on the list of evidence of the war on coal and all traditional energy development was guidance issued by the Obama administration’s Council on Environmental Quality describing how the downstream effects of greenhouse gas (GHG) emissions of mineral or oil and gas resources should be analyzed.  That guidance was quickly rescinded after the Inauguration.  Some officials forgot, however, that this particular war is fought on multiple fronts.  While executive orders and regulatory reform address actions by the federal bureaucracy, the judicial branch still has soldiers on the battlefield.

Public interest groups have filed a long series of legal challenges to a variety of federal decisions concerning the management of energy resources, including whether and how much public land should be made available for exploration, and how and where extracted energy resources should be transported.  These challenges have one thing in common – claims that the government did not adequately assess (or failed to assess at all) indirect downstream GHG emissions from using extracted energy resources.

The government’s defense against these allegations has been relatively consistent.  First, the long-term GHG emissions impacts from an individual decision are too speculative to enable an agency to make a reasonable assessment of impacts felt on a global scale.  Second, a decision not to make certain energy resources available (choosing the “no action” alternative) would have no impact on global GHG emissions, because resources from some other market would be used in place of the coal or oil and gas that would not be extracted.

In this summer’s first important ruling, a district court in Montana remanded for further review the Interior Department’s Office of Surface Mining and Enforcement environmental assessment of an individual application for a Mining Plan Modification.  Despite including a fairly lengthy description of climate issues and the potential for downstream impacts from GHG emissions resulting from the burning of coal that would be mined as a result of the proposed action, the agency concluded that “the state of climate change science does not allow any given level of emissions to be tied back to a quantifiable effect on climate change.”

The court found this conclusion to be arbitrary and capricious, agreeing with Plaintiffs that the agency should have conducted some level of quantitative analysis regarding potential emissions.  The absence of this analysis was highlighted by a detailed quantitative analysis of the coal lease’s monetary benefits, resulting from mining jobs, to coal sales revenue and royalties.  Attempting to quantify the benefits of the proposed action, but refusing to prepare a similar analysis of costs, in the court’s judgment, meant that the agency failed to take a “hard look” at the potential GHG impacts.

The D.C. Circuit reached the same conclusion with respect to a challenge to FERC’s environmental impact statement for construction of three new interstate natural-gas pipelines.  Like its Interior counterparts, FERC asserted that it would be impossible to know how many GHGs would be emitted as a result of the pipeline’s construction.  Was this analysis truly impossible, the court asked, when the agency had estimated how much gas the pipeline would transport?  The Commission could have used available government tools to make an emissions estimate per unit of energy generated by various types of downstream plants.  Since GHG emissions are a clear “indirect effect” of the proposed action, the court told the agency to either perform the analysis or explain why it could not have done so.

The Tenth Circuit issued yet another relevant decision last week, this one remanding the Bureau of Land Management’s approval of four coal leases in the Wyoming Powder River Basin.  The agency claimed that the “no action” alternative (failing to issue the leases) would not have any appreciable effect on overall GHG emissions.  Using what the court called the “perfect substitution” assumption, the BLM stated that if these particular leases did not proceed, utilities would find coal from other sources, therefore creating a net neutral quantity of GHG emissions.  Agreeing with the plaintiffs, the court’s review of the record found no analysis or data supporting that key assumption.  The court found that failing to disclose the basis for its rationale led to “an uninformed agency decision” and a lack of full public disclosure.

These will not be the only opinions addressing this issue—many similar claims are in the litigation pipeline.

Why are these wounds “self-inflicted”?  In each case, the decision-maker could have included in the record some data, using widely available analytical tools, to address the question of downstream effects of GHG emissions.  None of the ultimate conclusions would have changed.  The only difference would be that those conclusions would have some basis in fact, and the public could see the agency’s rationale.  This additional work would not be burdensome; it could be done in a matter of days and summarized in a few pages.  The odds of costly delays to administrative actions supporting domestic energy development would be substantially lowered, as the government would invariably prevail in any future litigation over the adequacy of those sorts of analyses.

Sometimes the key to winning a war is making rational decisions over which smaller battles should be waged, and which ones should be avoided.  With respect to the analysis of the downstream effects of GHG emissions, courts around the country are sending a clear signal to the federal government:  a “war” waged to avoid analysis of the downstream effects of GHG emissions may not be worth fighting.



Writing an EIS Like a College Application

Ask most parents with children who have recently gone through the college application process to identify the most frustrating part of the entire enterprise, and they will likely say helping their kids with the essays and short answers.  On certain applications my two children completed, responses to questions like: “Tell us what makes you different from all the other high school graduates who want to attend” were limited to the size of a tweet.  Not a word count – a character count.

I understand the motivations on the part of beleaguered admissions staff.  Some schools receive tens of thousands of applications, and there is no reasonable way that they could read lengthier submissions, never mind trying to distinguish from those the qualities of one student from another.  So the colleges shorten the permitted responses.  The computer application form literally prevents one extra word or character from being entered.

The U.S. Department of the Interior has now adopted this trend and applied it to NEPA.  In a Departmental Order (Number 3355) issued on August 31, the Deputy Secretary established strict page and time limits for any Environmental Impact Statement for which the agency takes the lead.  Most EISs need to be completed within one year (not even the two-year goal announced by the President’s recent Executive Order) and must be no more than 150 pages (or 300 pages for “unusually complex projects”).  Environmental assessments will also get page limits, to be determined by the end of September by the various DOI bureau heads.

There is policy precedent for this draconian approach.  The Council on Environmental Quality’s own regulations suggests page limits for EISs and EAs, goals that may have been adhered to early in NEPA’s history, but have long since been viewed as aspirational, not mandatory.  Interior has seized upon those recommendations in light of the agency’s internal NEPA streamlining review and the administration’s EO aimed at identifying and preventing impediments to the efficient completion of environmental review and permitting for major infrastructure projects.

Can this new agency order work?  Let me answer using my own self-imposed word limit of 1:  no.

Page limits have their place.  Courts impose them on lawyers to force advocates to get right to the main point of their arguments.  For the most part, that process works.  I probably don’t need to cite five cases for the same principle of law or offer “in the alternative” arguments that don’t have a realistic chance of being accepted.

But preparing an EA or an EIS is simply different.  While the Interior Order correctly states that the goal of NEPA is to promote the adoption of sound decisions, not the generation of paperwork, some decisions are just more complicated than others.  Some proposed actions present difficult trade-offs between potential benefits and environmental impacts.  Some natural resources issues involve consideration of trends and data that must be confronted in order to make a “sound decision.”

The range of the Interior Department’s agenda demonstrates this challenge perfectly.  The planning decisions for development of mineral resources across wide stretches of federal land or the offshore development of traditional and renewable energy literally cover hundreds of square miles, and will impact some of this country’s most sensitive resources.  Some of those EISs generate tens of thousands of public comments (admittedly not all of them equally insightful or helpful) that require consideration and thoughtful responses.  Other Interior NEPA decisions aren’t as difficult.  An oil and gas project that has gone through a thorough EIS should not have to produce another equally complex or lengthy document just to obtain future permits on that project, such as a drilling approval, for example.

Yet, an arbitrary page limit strikes me as self-defeating.  College admissions officers may have reduced the burden of reading all those applications, but their process does not seem to benefit greatly from reading thousands of tweet-sized answers with students extolling their virtues in lingo and cliché.  An applicant who can concisely and persuasively summarize their thoughts should rise to the top of the pile – regardless of whether their essay is a few words or even sentences over the limit.

Similarly, NEPA consultants should definitely strive for brevity and clarity when preparing an EIS.  The industry certainly doesn’t benefit from a Charles Dickens approach where they get paid by the word.  (“It is a far, far, better mitigation measure that I propose, than I have ever proposed before.”)  Rather than the imposition of a page limit, the federal government should guide those preparing NEPA documents to simply focus on what matters.  Making a fair and justified cut between those resources that are truly at issue and those that aren’t as a result of any specific proposed action can and should substantially reduce the length of EISs.  Using plain language and effective graphics can also fulfill NEPA’s promise of improved public participation.

In the end, arbitrary page limits will simply invite more litigation and challenges to the adequacy of an agency’s environmental analysis.  Skeptics of the administration’s streamlining goals will be further emboldened to sue first and ask questions later.  Shorter can be better at times, but for the most part, better is better, even if it needs to be covered in a few more pages.

Administration’s New Streamlining Executive Order – Does It Move the Needle?

The release of the administration’s latest Executive Order on permit and NEPA streamlining has been overshadowed by recent events.  Whatever positive momentum the EO could have created for the long-overdue focus on infrastructure was undeniably quickly lost.  However, it is still a worthwhile exercise to review any opportunities for progress that may be reflected in the various policy statements and administrative goals articulated in the EO.

In sum, the EO’s aspirational goals have merit – you won’t find many truly substantive objections to the goal of completing NEPA reviews for “major infrastructure projects” within an average of two years.  The EO has in this way incorporated Common Good’s “Two Years, Not Ten Years” report, previously reviewed on these pages, into formal administration policy.  It’s a fine goal, but the more relevant question remains:  How does the federal government hope to achieve that objective?

Here is where the EO, no matter how laudable in theory, falls short.  Virtually all of the recommended actions assigned to federal agencies are things they either (a) have the authority to do or (b) are already doing.

The most specific regulatory mandate (as much as can be done through an EO) calls for all agency decisions related to a major infrastructure project to be reflected in one Record of Decision (ROD).  Moreover, the EO states that any permitting decisions necessary for the proposed action are to be completed within 90 days of the issuance of the ROD by the lead federal agency.  For example, the Bureau of Land Management is the lead agency for review of a renewable energy proposal on federal land.  The project also requires a Section 404 permit from the Army Corps of Engineers.  The Corps must now sign off on the ROD, thereby incorporating by reference all NEPA analysis for its decision-making process into the underlying EIS, and then issue (or, in theory, decline to issue!) its permit within 90 days of the ROD.

That’s a best practice already being observed in most cases – certainly with the large-scale projects I reviewed at USDOT, and something I insist upon now in the private sector when I represent developers involved in a wide variety of infrastructure.  There are simply no statutory or regulatory hurdles preventing that practice from being employed.  It’s a wise statement of policy, but definitely not new.

The other most tangible administrative mandate stresses the need to track and score each agency’s performance related to project review and approval.  In other words, the EO supports the use of the past administration’s “dashboard” approach to increasing transparency for the general public and putting pressure on the agencies responsible for project approvals.  Like previous transportation infrastructure statutes, the EO also emphasizes a process by which agencies may be penalized for not living up to the timetable milestones.  What those penalties would be and how they would be enforced are questions that go unanswered.  Most likely, they will never be answered because no penalties will ever be imposed.

The EO also adopts the previous administration’s “Smart from the Start” approach, by appointing the Departments of Agriculture and Interior as the lead agencies to identify and designate energy corridors on federal lands in an effort to further expedite development of energy infrastructure projects.  While this approach may have been used previously in the context of wind and solar projects, look for it to be expanded to traditional energy development as well.

I maintain that the most important aspects of the EO can be found by reading between the lines.  First, it is plainly obvious that this EO was reviewed and considered carefully by experienced hands in federal project reviews:  the two-year goals have clear escape hatches that take a variety of contingencies into account, and many provisions have careful, even cautious language, concerning enforcement of streamlining goals. These are qualities that have not been present in most of this administration’s EOs.  Second, the EO strongly suggests future strong leadership roles for both the Federal Permitting Improvement Steering Council and the Council on Environmental Quality.  We will likely see future guidance coming out of one or both entities to promote best practices across the federal government.  Of course, this places a heightened priority on naming political appointees for those bodies to give direction to the already excellent staff already housed there.

Finally, in light of this week’s devastating flooding impacts from Hurricane/Tropical Storm Harvey, one other provision of the EO must be addressed – the repeal of the January 2015 EO 13690.  This EO mandated that projects funded by taxpayer dollars should be planned with a full understanding of both flooding risks and resilience strategies to protect proposed development.  Communities in and around Houston and the Texas and Louisiana coast are now faced with the need to rebuild literally billions of dollars of infrastructure assets.  The scope of the disaster and the apparent frequency of drastic flooding events in that region may likely place additional pressure on the administration to reconsider revocation of EO 13690 or, at a minimum, to incorporate those sorts of objectives in any new infrastructure policies.  Look for any infrastructure legislation to include this sort of language, potentially from both Democratic and Republican representatives.

While the new EO may not be truly innovative, given that Congress now faces an enormously full plate with budgetary and other controversies, it is possible that implementation of the EO may take on even greater importance in the near term, as the legislative process moves slowly, if at all.

When Regulatory Policy Sounds Like an Ad

Ask anyone in my family, and they’ll tell you to hide my cellphone when I’m watching late-night TV.  I absolutely love advertisements for products promising better this or faster that, and with unbelievably low prices in three convenient payments to boot.  As a result of my purchases, I have enjoyed juicier chicken, fresher vegetables, and easier kitchen clean-up.

This week in D.C. federal district court, arguments will be presented on a challenge to the Trump administration’s version of a regulatory infomercial – Executive Order (EO) 13771, telling agencies that they have to repeal or eliminate two existing regulations for every new one that they propose to make final.  Sort of like a “Buy One Get Two Free” deal, but without the steak knives.

The Executive Order goes further, by allowing agencies to promulgate only regulations that have combined incremental costs that do not exceed a certain cost cap, once the cost savings of the rescinded regulations is taken into account.

Of all the legislative and policy initiatives laid out by the new administration, regulatory reform has probably advanced more quickly, and with more consequence, than any other.  As we’ve written here, this aggressive posture delaying or rescinding literally dozens of rules across the federal government has triggered numerous cases brought by public interest groups and states under the Administrative Procedure Act (APA).  While those challenges tend to focus on arcane APA requirements of notice and comment or the justification supporting any agency action, the “two for one” Executive Order case cuts more directly to certain fundamental constitutional principles.

In Public Citizen, Inc., et al., v. Trump, the judge will be confronted with the basic definition of executive authority requiring the President to “take Care that the Laws be faithfully executed.”  Of course, the Constitution grants solely to Congress the authority to make those laws.  The Plaintiffs assert that numerous Supreme Court cases expressly limit executive authority to act only within the strictures set by Congress.  Perhaps the most memorable recent example of a decision reinforcing this conclusion was the 1998 Court decision ruling that the Line Item Veto Act was unconstitutional because it allowed the President to amend acts of Congress (in that instance, the budget) by vetoing parts of them.

The Executive Order runs afoul of this constitutional provision, Plaintiffs argue, because there is no direct congressional authorization allowing the executive to make this regulatory “one time only, order now” offer.  Certain statutes have been passed ordering agencies to issue regulations to address one problem or another.  Withholding or delaying action on those regulations until other (likely unrelated) regulations are repealed would improperly substitute the executive agency’s judgment for that of Congress.

“Nonsense,” says the government in its summary judgment briefing.  The President and his delegates in the federal agencies take the costs and benefits of regulations into account all the time, and that authority has never been challenged.  In addition, both Democratic and Republican administrations have routinely ordered a review of old and outdated regulations that should be repealed.  Beyond the President’s inherent authority to manage the executive branch, the government argues that the EO itself states that it applies only “to the extent permitted by law,” so if a particular statute requires regulatory action to be taken, nothing in the EO would alter that obligation.

From a constitutional perspective, the government probably has the better argument here.  In the abstract, the executive branch is granted broad authority to issue rules that implement the will of Congress.  Repealing or updating regulations would appear to be central to that authority.  If Congress passes a law telling the President to issue a regulation and the pertinent agency refuses, that inaction could be properly challenged.  But simply mandating that the agency consider the costs and benefits of its regulatory actions would not appear to be an abuse of executive power or a violation of the separation of powers.  (All of this assumes that Plaintiffs can show actual harm from issuance of the EO, giving them standing to be in court.)

The strength of Plaintiffs’ arguments lies less with the facial constitutional challenge raised in the pending case than it does with how the EO will be applied in the context of a specific final rule.  For example, the U.S. Department of Transportation wants to issue a final safety rule dealing with autonomous vehicles.  There’s no doubt such a rule will cost millions, if not billions, to implement over time.  What two rules would the DOT choose to repeal, and would the agency also calculate the potential safety risks if those rules were no longer in place?  For a significant rule like one addressing driverless cars, where in the world would the DOT find other rules to repeal that would come anywhere near the incremental cost of that single proposal?

It makes sense that environmental and other public interest groups would take offense at the EO and the subsequent implementation guidance issued by the Office of Management & Budget.  The administration’s two for one regulatory policy appears to mandate agency decision-making that could be viewed as divorced from case-specific analysis supporting an individual rule.  Once any federal agency repeals rules pursuant to the EO, that action will likely be subject to an “arbitrary and capricious” APA challenge.  From my perspective, the court will likely find that the President has authority to take these costs into account when finalizing specific rules.  But the Plaintiffs may ultimately be able to get their money back (minus shipping and handling, of course) if, when that authority is applied to a specific regulation, the EO fails to live up to its promises.


Environmental Regulation and the Return to Regular Order

Senator John McCain made a dramatic return to the floor of the United States Senate this week following his brain cancer diagnosis.  With the scar and stiches from his recent surgery still healing, McCain took to the floor to implore his colleagues to consider using the Senate’s long-standing procedures to find a solution to the legislative body’s quagmire over healthcare.  In parliamentary parlance, he pleaded for “a return to regular order.”

He received genuine and heartfelt applause, but not a return to regular order.

The departure from legislative norms permeates all aspects of our current political landscape; environmental law is no exception.  As we’ve noted, in the midst of its consideration of various agency appropriations bills, the House is considering a rider that would exempt the proposed repeal of the 2015 Waters of the United States (WOTUS) final rule from review under the Administrative Procedure Act.  As of this writing, that rider remains in the current funding package.

When I first noticed reporting on the WOTUS rider, I ruminated that such a measure may be unprecedented in recent memory, especially considering that the draft rule attempting to clarify the definition of Clean Water Act jurisdiction attracted 1 million comments.  Could they really do that?

In short, yes.  Not only has Congress used the precise appropriations rider language previously – there has also been recent litigation over the constitutionality of that sort of measure.

Here’s the language in question.  It permits EPA and the Corps to “withdraw the Waters of the United States rule without regard to any provision of statute or regulation that establishes a requirement for such withdrawal.”  That’s an exemption wide enough to drive a truck through.  One would think Congress would use such language judiciously.  My initial instincts were incorrect.  Thanks to one of our outstanding summer associates, we uncovered at least nine riders addressing administrative agency action, mostly dealing with the listing or delisting of species under the Endangered Species Act.

Perhaps the subject matter of the various ESA riders indicates why they flew mostly under the radar.  The listing and delisting of the gray wolf in Wyoming and neighboring states was (and remains) extremely controversial there, but that action has nowhere near the notoriety of the WOTUS rule.  The similarities between the exemption precedents go beyond just the legislative language.  As with WOTUS, there was active litigation pending over the agency rules dealing with protection of the wolf when the rider was introduced and passed.

Section 1713 of the Department of Defense Appropriations Act of 2011 directed the Interior Secretary to reissue a final rule that removed ESA protections from the gray wolf species outside of Wyoming.  The rule had been challenged in district court and vacated.  While appeals were under way, Congress tucked in the appropriations rider including the “without regard to any provision” language.  Public interest groups promptly challenged the constitutionality of the rider, arguing that it violated separation of powers by directing a court what to do in pending litigation.

The public interest groups lost.  In Alliance for the Wild Rockies v. Salazar, Judge Donald Molloy reluctantly upheld the exemption statute.  In a fairly remarkable opinion, the judge lamented that “if I were not constrained by what I believe is binding precedent…, I would hold Section 1713 is unconstitutional because it violates the Separation of Powers doctrine articulated by the Supreme Court.”  The judge stated that the rider “sacrifices the spirit of the ESA to appease a vocal political faction,” but in a noble act of judicial restraint, went on to say that “the wisdom of that choice is not now before this Court.”  The Ninth Circuit upheld his ruling. Just last year, a similar constitutional challenge repeated itself in the D.C. Circuit over ESA protections that affect African antelopes, with the same result.

Current debate over the WOTUS rider reflects the philosophical struggle evident in Judge Molloy’s opinion.  One representative argued that the provision “allows the executive branch to act unilaterally” and that the House should let the agencies deal with the rule in the courts, rather than in a spending bill.  Others favoring the rider repeated concerns over the breadth of regulation of waters by the EPA.  Despite objections, it seems likely that the WOTUS rider will survive in any final funding bill.

More and more, we see the legislative branch seeking to impose results on the executive branch, even in the face of pending judicial action.  If a majority of the legislature supports a certain administrative action as a political matter, what better way to ensure certain results than to prevent the judiciary from ever addressing the legality of agency action?  The delineation of the separations of power is more blurry every day.

APA review is frustrating.  Rules take years to promulgate, only to face protracted litigation.  But Congress should contemplate potential damage to “small d” democratic institutions as it weighs APA exemptions.  “Regular order” gives voice to millions of citizens impacted by regulation, not just 535 representatives on Capitol Hill.  It’s a concept worth fighting for.

Now THAT’S Streamlining!

It is a welcome day when headlines focused on infrastructure make the front page.  Of course, they provide inspiration for the blog.  They also take my attention off, well, everything else.

Today’s headline was certainly an eye-catcher:  “Elon Musk says he has ‘verbal’ government approval for hyperloop.”  Anyone spellbound by the possibility of the hyperloop technology would sit up and take notice.  But yours truly, fascinated by both innovative infrastructure projects and methods to permit that innovation more quickly, definitely raised my standing desk to read the article.

“Verbal approval???”  That Mr. Musk had a conversation with someone (unidentified) and that someone from some office (also unidentified) provided some form of government agreement (what kind?) to promote the underground tunneling necessary for the theoretical 29-minute trip between Washington, DC and New York City is intriguing to say the least.

This news came on the heels of the administrations’ latest Executive Order, this one announcing the formation of an infrastructure Advisory Council.  According to the EO, this Council “shall study the scope and effectiveness of, and make findings and recommendations to the President regarding, Federal Government funding, support, and delivery of infrastructure projects in several sectors (long list ensues)… and other such sectors as determined by the Council.”  If the hyperloop team has information concerning how it was able to obtain this verbal approval, I am certain this new Advisory Council would be all ears.

Amazingly, White House officials did not dismiss the idea of verbal assent out of hand.  As a member of a homeowner’s association who has to get approval in writing for the color of any stain I would apply to my aging deck, the notion of a verbal approval for boring a system of tunnels deep under some of our most populous cities (never mind the various entry/exit points necessary to hop off the loop) is liberating.

Such a process would clearly redefine an environmental impact statement – it could simply be someone’s statement!

In all seriousness, this exciting news story highlights the true tension between innovation and regulation.  Advocates of autonomous driving technology are forging ahead at lightning speed, even as safety regulations struggle to catch up or at least stay out of the way.  Drone technology has revolutionized the concept of aerial delivery, even as aviation experts attempt to balance that new form of traffic with existing uses of airspace.  Even now seemingly quaint advances like high-speed rail systems must address fairly typical land use and natural resources concerns.

As much as fans of expedited project approval might applaud the idea of a quick “yeah, go ahead and do that,” the messy part of infrastructure approval – reaching out to affected stakeholders – remains essential.  Inviting the opinions from potential “NIMBYs” may seem counter-productive, but it also informs and, in many instance, improves the underlying project.

The President’s new Advisory Council, the relatively new Federal Permitting Improvement Steering Council, the Council on Environmental Quality, and any other entity now tasked with finding a way to incorporate streamlining into routine project delivery might envy the “verbal approval” model.  It seems more than possible, however, to encourage private sector ingenuity and at the same time employ public disclosure and approval processes to educate even the current and future Thomas Edisons of the world.