Revisiting the Impact of Judicial Review on Agency Rulemakings:

An Empirical Investigation

Wendy Wagner

University of Texas School of Law

Interest Group Engagement in EPA’s Air Toxic Emission Standards (N=90).

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90

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1 2 3 4

State of Rulemaking

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Public Interest Groups

Industry

preNPRM comment petitions litigation to judgment

Fate of Litigated Cases over HAPs rules

Basis for Challenge (step 1 vs. step 2)

Fate of Litigated Cases over HAPs rules

Agency Repair of Remanded Rules

2Years since remand. Only National Lime was repromulgated as a final rule.

10864

National LimeArteva

Mossville

1. Sierra Club2. NRDC (PR)

Interest Group Engagement in EPA’s Air Toxic Emission Standards (N=90).

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10

20

30

40

50

60

70

80

90

100

1 2 3 4

State of Rulemaking

Nu

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Public Interest Groups

Industry

preNPRM comment petitions litigation to judgment

Pre-proposed rule engagement by interest groups

N=90 (EPA air toxic rules) in Wagner, Barnes, & Peters (forthcoming 2011)

Notice and Comment Activity for all 90 Air Toxic Rules

Interest Group Engagement in EPA’s Air Toxic Emission Standards (N=90).

0

10

20

30

40

50

60

70

80

90

100

1 2 3 4

State of Rulemaking

Nu

mb

er o

f R

ule

s

Public Interest Groups

Industry

preNPRM comment petitions litigation to judgment

Fate of Litigated Cases over HAPs rules

Judicial Review Reality (?)

HAPS ruleswith diverseInterest group engagement

HAPS ruleswith monolithicInterest group engagement

Fits “interest group representation model

Fits traditional model

Example of the Traditional Model?HAPS rule for polymer manufacturers

1. No public interest participation in the rulemaking.

2. Industry (individually and in associations) engaged in * more than 450 contacts before the proposed rule was even published.* submitted 36 industry comments (one state commmented)

3. In response to comments, EPA made 20 changes that further weakened the rule and rejected only six comments. No significant comments were made urging strengthening of the rule.

4. EPA made two rounds of revisions weakening the rule in response to petitions for reconsideration.

5. Still unhappy, two individual industry petitioners appealed the rule to the D.C. Circuit, arguing that the EPA arbitrarily failed to consider the excessive costs of the monitoring requirements. In Arteva v. EPA, the D.C. Circuit concluded that EPA's rule was arbitrary and the rule was vacated and remanded to the agency in 2004. The rule has not been repaired and a proposed revised rule has not been issued.

EPA’s Effort to Repair Remanded Cement Kiln Rule

Received over 1000 comments

Received at least 1 petition for reconsideration

Received over 3000 comments

Normative ViewOf Role of RegulatoryAgencies

* Advance Public Interest (ballast against politics)* Technical Experts

Corresponding Institutional Design

* Solicit input from affected parties * Affected parties deploy courts to check deviation from statute or facts

Normative ViewOf Role of RegulatoryAgencies

* Advance Public Interest (ballast against politics)* Technical Experts

Corresponding Institutional Design

* Solicit input from affected parties (pluralism)* Courts deployed by affected parties to check deviation from statute or facts

Reality

or

Air Toxic Emission Standards

– Required in 1990 Amendments to Clean Air Act

– EPA sets emissions limits based on the best (12%) achievable reductions for 100+ categories of industry

– Each rule includes emission standards; monitoring; recordkeeping; & compliance deadlines.

Questions

1. Does a diverse set of affected parties engage in the rules?

2. Do the courts’ rulings matter to the agency?

3. Are there unintended costs that fall from judicial review?

Questions

1. Does a diverse set of affected parties engage in the rules?

2. Do the courts’ rulings matter to the agency?

3. Are there unintended costs that fall from judicial review?

Agency Repair of Remanded Rules

2

Years between remand and promulgation of revised rule(rules remanded in red have not been repromulgated)

10864

National LimeArteva

Mossville

1. Sierra Club2. NRDC (PR)

"Rule of Law" constraints imposed on EPA’s HAPS emission standards by the case law

1. “No control” standard for individual hazardous substances is not an option under the statute; EPA must set emission limits for all HAPs.

2. EPA must measure "actual emissions" from best performers to set emission standards. Achievability (i.e., can all firms meet those limits) is not a consideration under the terms of the statute.

3. Variability cannot be benchmarked against the low performers to determine industry capabilities.

4. Compliance extensions cannot be granted by EPA outside of statutory deadlines.

5. EPA cannot create a low-risk exemption for major sources under Section 112.

6. Non-technological mechanisms for control need to be included in EPA’s analysis of firms’ capabilities for emissions reductions. EPA cannot consider only technological mechanisms of control and ignore other methods of limiting HAPs emissions, such as changing inputs.

7. EPA cannot substitute work practice standards for emission standards without satisfying the statutory criteria.

"Rule of Law" constraints imposed on EPA’s HAPS emission standards by the case law

1. “No control” standard for individual hazardous substances is not an option under the statute; EPA must set emission limits for all HAPs.

2. EPA must measure "actual emissions" from best performers to set emission standards. Achievability (i.e., can all firms meet those limits) is not a consideration under the terms of the statute.

3. Variability cannot be benchmarked against the low performers to determine industry capabilities.

4. Compliance extensions cannot be granted by EPA outside of statutory deadlines.

5. EPA cannot create a low-risk exemption for major sources under Section 112.

6. Non-technological mechanisms for control need to be included in EPA’s analysis of firms’ capabilities for emissions reductions. EPA cannot consider only technological mechanisms of control and ignore other methods of limiting HAPs emissions, such as changing inputs.

7. EPA cannot substitute work practice standards for emission standards without satisfying the statutory criteria.

From EPA, “Plywood and Composite Wood Products MACT and Turbines MACT: Using Risk to Delist Certain Subcategories - Briefing for Administrator Levitt,” EPA-HQ-OAR-2003-0048-0207 (logged in 9/28/2004), available at http://www.regulations.gov/#!documentDetail;D=EPA-HQ-OAR-2003-0048-0207.

Questions

1. Does a diverse set of affected parties engage in the rules?

2. Do the courts’ rulings matter to the agency?

3. Are there unintended costs that fall from judicial review?

Costs Expended in Rule Settlement

Involved 24 discrete changes

Public Interest Involvement in EPA’s Air Toxic Rules

Judicial Review Reality (?)

HAPS ruleswith diverseInterest group engagement

HAPS ruleswith monolithicInterest group engagement

Fits “interest group representation model

Fits traditional model

Example of the Traditional Model?HAPS rule for polymer manufacturers

1. No public interest participation in the rulemaking.

2. Industry (individually and in associations) engaged in * more than 450 contacts before the proposed rule was even published.* submitted 36 industry comments (one state commmented)

3. In response to comments, EPA made 20 changes that further weakened the rule and rejected only six comments. No significant comments were made urging strengthening of the rule.

4. EPA made two rounds of revisions weakening the rule in response to petitions for reconsideration.

5. Still unhappy, two individual industry petitioners appealed the rule to the D.C. Circuit, arguing that the EPA arbitrarily failed to consider the excessive costs of the monitoring requirements. In Arteva v. EPA, the D.C. Circuit concluded that EPA's rule was arbitrary and the rule was vacated and remanded to the agency in 2004. No changes have been made

Possible Reforms

Interim (low risk)

1. Greater public interest group strategizing

2. Shore up remedies

3. Track engagement by affected parties at all stages

Blueprint-level (if future research confirms problems)

1. Pluralistic gap fillers built into architecture

2. Penalize nonacquiescence

3. Tweak judicial review to focus on process as well as substance

Possible Reforms

Interim (low risk)1. Greater public interest group strategizing2. Shore up remedies 3. Track engagement by affected parties at all

stages

Blueprint-level (if future research confirms problems)1. Pluralistic gap fillers built into architecture2. Penalize nonacquiescence3. Tweak judicial review to focus on process as well

as substance4. Limit ex parte contacts