Judicial Challenges to Federal Agency Action

• Author: Joel Beauvais, Steven P. Croley, and Elana Nightingale Dawson
• Pages: 1-43

1

CHAPTER 1

Judicial Challenges to Federal

Agency Action

Joel Beauvais, Steven P. Croley, and Elana Nightingale Dawson

I. INTRODUCTION

Federal and state agency regulatory actions, and litigation challenging them, are

key drivers of environmental law and policy in the United States. Many of the most

important court decisions in environmental law—Massachusetts v. EPA, Chevron

U.S.A. v. Natural Resources Defense Council, Whitman v. American Trucking Ass’n, to

name a few—are the result of such suits. Decisions such as these set the rules of

the road for agency decision-making, with regard both to substantive implementa-

tion of environmental statutes and to the procedures agencies must follow. Indeed,

most major environmental regulatory decisions at the federal level are challenged

in court, and agency decisions accordingly are made with an eye to both past and

potential future litigation.

This chapter provides a high-level, practitioner-oriented overview of such lit-

igation, using a mix of landmark and recent court decisions to illustrate some of

the central issues. (Given the breadth of the subject matter, our treatment of these

issues is necessarily limited. Readers seeking a deeper exploration should refer

to appropriate treatises or handbooks on administrative and environmental law.)

We refer primarily to the major statutes administered by the U.S. Environmental

Protection Agency (EPA), but similar issues arise in connection with agency deci-

sions under conservation, natural resource management, and energy-related stat-

utes administered by other federal agencies. We dedicate the bulk of our analysis

to challenges to agency rulemaking, but also touch on issues related to permits,

guidance documents, and other agency actions.

Section II provides an overview of the types of agency regulatory actions com-

monly challenged in court. Section III identifies threshold issues for judicial chal-

lenges to agency action. Section IV summarizes the types of claims typically raised

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2 • Environmental Litigation

in suits challenging regulatory actions—both substantive and procedural—and the

standards of judicial review corresponding to those claims. Section V discusses

remedies available to successful challengers.

II. TYPES OF AGENCY REGULATORY ACTIONS

SUBJECT TO JUDICIAL CHALLENGE

We begin with a brief survey of the relevant procedural landscape. The Adminis-

trative Procedure Act (APA) defines a “rule” broadly as “an agency statement of

general or particular applicability and future effect designed to implement, inter-

pret, or prescribe law or policy or describing the organization, procedure, or prac-

tice requirements of an agency.”1 The term “rule” is typically understood to mean

an agency statement that governs a class of entities and situations, but the APA’s

reference to “particular applicability” contemplates that “rulemaking” can be used

to address individual entities or situations, such as the allocation of a license or

permit.

The APA and the case law draw a distinction between “legislative rules” and

“interpretative rules,” as well as policy statements and rules of agency procedure

or organization.2 A legislative rule involves the exercise of congressionally dele-

gated authority to make rules binding upon the agency or third parties, whereas

an interpretative rule reflects the agency’s reading of a statute but is not an exer-

cise of delegated authority and is not binding.3

The APA further distinguishes between “informal” and “formal” rulemaking.

Informal rulemaking is typically referred to as “notice and comment” rulemaking

because of the APA’s requirement that agencies provide public notice and an oppor-

tunity to comment on a proposed rule before it is finalized. Formal rulemaking—

which is required only in limited circumstances where Congress expressly provides

for rulemaking “on the record after opportunity for a hearing”—requires additional

trial-type proceedings similar to those required in certain agency adjudication.4

Most federal environmental regulations are legislative rules, and virtually all

of these are promulgated through informal notice-and-comment rulemaking. The

procedures for such rulemaking are governed either by the environmental stat-

ute under which the rule is issued, Section 553(b) of the APA (governing informal

rulemaking), or some combination thereof. Agencies occasionally issue interpre-

tive rules, but this is comparatively infrequent.

1. 5 U.S.C. §551(4) (2012).

2. See 5 U.S.C. §553(b)(3)(A) (2012) (stating that APA’s notice-and-comment requirements do not

apply to “interpretative rules, general statements of policy, or rules of agency organization, procedure,

or practice”).

3. See, e.g., Nat’l Mining Ass’n v. McCarthy, 758 F.3d 243, 251–52 (D.C. Cir. 2014); Nat’l Ass’n of Home

Builders v. U.S. Army Corps of Eng’rs, 417 F.3d 1272, 1285 (D.C. Cir. 2005); Am. Mining Cong. v. Mine

Safety & Health Admin., 995 F.2d 1106, 1112 (D.C. Cir. 1993).

4. 5 U.S.C. § 553(c) (2012) (“When rules are required by statute to be made on the record after

opportunity for an agency hearing, sections 556 and 557 of this title apply instead of this subsection.”).

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Judicial Challenges to Federal Agency Action • 3

Agencies also frequently issue “guidance” documents, which may be styled as

policy statements, policy memoranda, manuals, advisories, Q&A documents, and

so forth, as a means of policymaking. Unlike legislative rules, true guidance doc-

uments are not legally binding on the agency or other entities. Rather, they are

intended to provide stakeholders and the public with information on agency views

regarding statutory or regulatory interpretations, policies, or technical or proce-

dural issues, and can play an important role in influencing behavior.5 Guidance

is not subject to the APA’s notice-and-comment requirements, but agencies often

do take comments on proposed guidance before issuing it in final form. Noting

the growing impact of guidance, the White House Office of Management and Bud-

get in 2007 issued a policy memorandum establishing policies and procedures for

the development, issuance, and use of “significant” guidance documents by federal

agencies—including notice-and-comment procedures for such documents.6

Disputes sometimes arise as to whether a purported guidance document con-

stitutes a legislative rule in disguise. In National Mining Ass’n v. McCarthy, for exam-

ple, industry plaintiffs challenged an EPA guidance memorandum addressing Clean

Water Act permitting for coal mines, arguing in part that the memorandum was

a legislative rule promulgated without notice and comment.7 After acknowledging

that distinguishing legislative rules, interpretive rules, and general statements of

policy “turns out to be quite difficult and confused,” the D.C. Circuit held that the

EPA memorandum was not a legislative rule because it had no binding effect on

regulated entities or state permitting authorities and because the memorandum

made clear that it did not impose legally binding requirements.8 In Appalachian

Power Co. v. EPA, by contrast, the D.C. Circuit held that a Clean Air Act permitting

memorandum characterized as “guidance” was a de facto legislative rule, “reflect-

ing a settled agency position which has legal consequences” for state permitting

agencies and regulated entities.9 And in Iowa League of Cities v. EPA, the Eighth

Circuit held that two letters sent by EPA to a U.S. senator addressing certain Clean

Water Act regulatory issues constituted de facto legislative rules issued without

notice and comment, on the grounds that the letters had a binding effect on regu-

lated entities.10

In addition to rulemaking and guidance, environmental agencies also engage

in adjudication, defined by the APA as an “agency process for the formulation of

an order,” which is “a final disposition ... of an agency in a matter other than rule

making but including licensing.”11 Formal adjudication under the APA involves a

5. See, e.g.,

U.S. GOV’T ACCOUNTABILITY OFFICE

, GAO-15-368,

REGULATORY GUIDANCE PROCESSES; SELECTED

DEPARTMENTS COULD STRENGTHEN INTERNAL CONTROL AND DISSEMINATION PRACTICES

7–8 (2015).

6. Final Bulletin for Agency Good Guidance Practices, 72 Fed. Reg. 3432 (Off. of Mgmt. & Budget

Jan. 25, 2007).

7. 758 F.3d 243 (D.C. Cir. 2014).

8. 753 F.3d at 251–52.

9. 208 F.3d 1015, 1021–23 (D.C. Cir. 2000).

10. 711 F.3d 844, 863–65 (8th Cir. 2013).

11. 5 U.S.C. §551(6), (7) (2012).

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