President Donald Trump has quickly marshalled the powers of the presidency to challenge President Barack Obama’s environmental legacy.
Trump has stated repeatedly, both during the campaign and since, that he plans to drastically cut environmental regulations. See, e.g., Timothy Cama & Devin Henry, Trump Outlines ‘America First’ Energy Plan, Hill (May 26, 2016), http://thehill.com/policy/energy-environment/281430-trump-outlines-america-first-energy-plan [http://perma.cc/3EUA-Z8YS].
Facing an increasingly intransigent Congress, the Obama Administration placed significant emphasis on rulemaking and other administrative actions to push its progressive agenda.
See Matthew Oakes et al., The Future of Administrative Law, 47 Envtl. L. Rep. 10,186, 10,189 (2017) (paraphrasing former Solicitor General Donald Verrilli as saying “[i]n a world in which Congress rarely passes new legislation to address pressing problems, and routinely fails to update obsolete regulatory schemes, it is reasonable to expect that the executive branch will try to do so”). In another context, Obama made this approach clear when he announced the Deferred Action for Childhood Arrivals (DACA) program. See Press Release, White House, Remarks by the President on Immigration (June 15, 2012), http://obamawhitehouse.archives.gov/the-press-office/2012/06/15/remarks-president-immigration [http://perma.cc/6QN9-S2K7] (providing deferred action from deportation and renewable work permits for immigrants who entered the United States as minors).
Whatever the merits of this approach,
Then-Dean Elena Kagan wrote about the legitimacy of presidential administration during times of divided government. See Elena Kagan, Presidential Administration, 114 Harv. L. Rev. 2245, 2311–12 (2001).
many of these actions are not safe from a new administration hostile to what it views as oppressive environmental regulation.
See Tracking Trump’s Campaign Promises, PolitiFact, http://www.politifact.com/
truth-o-meter/promises/trumpometer/browse/ [http://perma.cc/37FV-96H6] (last visited Oct. 11, 2017) (quoting Trump as promising to “cancel every needless job-killing regulation and put a moratorium on new regulations until our economy gets back on its feet” (internal quotation marks omitted)). But it remains to be seen how effectively the Trump Administration, faced with the prospect of waning deference to prior agency interpretations, can dismantle environmental agency actions taken under Obama. 5 See infra section I.A (describing recent attacks on Chevron). The purpose of this Comment is to consider the interaction between these trends in administrative law and the impact of those trends on Obama’s environmental legacy. This Comment ultimately shows that some of the core Obama-era environmental policies are more secure than the popular discourse suggests and provides guidance for litigators challenging Trump’s deregulatory agenda.
Trump and the Republican Congress seem especially hostile to environmental regulation. In his 2017 budget proposal submitted to Congress, Trump called for cutting thirty-one percent of EPA’s budget.
Office of Mgmt. & Budget, America First: A Budget Blueprint to Make America Great Again 41–42, http://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/
fy2018/2018_blueprint.pdf [http://perma.cc/2EYP-D7HJ] (last visited Oct. 11, 2017). This would have slashed all funding for the Clean Power Plan and international climate change programs, and cut 3,200 agency positions. 7 Id. The budget approved by Congress spared EPA from these cuts, at least for now. See Ari Natter & Jennifer A Dlouhy, EPA, Clean Energy Spared Trump’s Ax in $1.1 Trillion Budget Deal, Bloomberg (May 1, 2017), http://www.bloomberg.com/news/
perma.cc/39FV-DLMY]. A number of pending bills in Congress also seek to drastically undercut EPA’s regulatory authority. Most recently, Representative Gary Palmer introduced the Stopping EPA Overreach Act of 2017. 8 H.R. 637, 115th Cong. (2017). The bill would change the definition of “air pollutant” in the Clean Air Act to exclude carbon dioxide, which would halt all greenhouse gas regulation and invalidate the Clean Power Plan. 9 Id. § 3(a)(1). The bill would also restrict EPA’s authority to act on climate change in various other environmental statutes. Id. § 3(a)(2). The bill would also void the Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources, 81 Fed. Reg. 35,824 ( June 3, 2016) (to be codified at 40 C.F.R. pt. 60). Id. § 3(b).
The goal of this Comment is to consider how Trump’s deregulatory agenda, particularly with respect to environmental rules, may fare in judicial challenges if administrative law principles of deference are altered. 10 This Comment does not seek to answer the normative question of whether Chevron itself has merit, either from a policy perspective or a constitutional one. See infra section I.A.2 (addressing these arguments briefly). Chevron’s norm of deference to agency interpretations of statutes has recently come under fire from the Republican Congress, as well as now-Justice Gorsuch. 11 See infra notes 26–36. The Supreme Court is unlikely to overrule Chevron outright, but the shift of votes suggests that the Court may begin to apply a less robust form of Chevron deference. The remainder of the Comment proceeds as follows: Part I considers existing law on deregulation, including the Administrative Procedure Act’s (APA) arbitrary and capricious standard and the contours of the Chevron doctrine, to explain why undermining Chevron would have less impact on environmental deregulation than one might expect. Part II considers how the legislative and judicial challenges to Chevron would impact various environmental rules currently under fire from the Trump Administration.
I. Chevron, Arbitrary and Capricious Review, and Deregulation
Challenges to agency action, whether deregulatory or otherwise, typically revolve around two questions: whether the agency has interpreted its statute properly (a Chevron challenge), and whether the agency has acted in an arbitrary and capricious manner (an APA challenge). This Part begins by considering the Chevron doctrine and how it has faltered since its inception. Next, this Part examines the contours of arbitrary and capricious review as applied to regulatory change. Finally, this Part concludes by exploring the interaction between Chevron and arbitrary and capricious review. The Chevron question goes to how cemented Obama-era interpretations actually are; the arbitrary and capricious question could potentially stop the Trump Administration from using this interpretive malleability to deregulate.
A. Chevron Doctrine
1. Traditional Chevron Two Step. — Chevron’s two-step deference scheme provides a framework for courts to review an agency’s interpretation of a statute. Chevron itself considered whether the Reagan EPA properly interpreted the term “stationary source” in the Clean Air Act to encompass an entire plant rather than a single smokestack. 12 See Chevron U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 840 (1984). At step one, the question is “whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress.” 13 Id. at 842–43. At step two, if the court finds that “the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.” 14 Id. at 843. The framework described above suggests a more coherent version of Chevron than what often exists in practice. Many scholars have argued that the Court has applied Chevron inconsistently at best. See, e.g., Thomas W. Merrill, Judicial Deference to Executive Precedent, 101 Yale L.J. 969, 998 (1992). Courts also regularly conflate the two steps of Chevron. See Matthew C. Stephenson & Adrian Vermeule, Chevron Has Only One Step, 95 Va. L. Rev. 597, 598 (2009) (arguing that Chevron calls for “a single inquiry into the reasonableness of the agency’s statutory interpretation”). Finally, some have suggested that courts are truly applying Skidmore deference, see infra notes 98–101, but merely citing Chevron when the government wins the case. See Oakes et al., supra note 2, at 10,190. For the purpose of this Comment, however, it is useful to lay out the basic framework as articulated in Chevron itself. Importantly for present purposes, Chevron itself recognized that an agency could change its interpretation of a statute, so long as it picks from a menu of reasonable interpretations. 15 Chevron, 467 U.S. at 863–64 (“An initial agency interpretation is not instantly carved in stone. On the contrary, the agency, to engage in informed rulemaking, must consider varying interpretations and the wisdom of its policy on a continuing basis.”); see also Barnhart v. Walton, 535 U.S. 212, 226 (2002) (Scalia, J., concurring in part and concurring in the judgment) (noting that Chevron accepted “that [statutes have] a range of permissible interpretations, and that the agency is free to move from one to another”).
The theory behind Chevron has been expressed in a number of ways. Chevron itself discussed one of the more fundamental ideas—that Congress has (explicitly or implicitly) delegated authority to the agency to interpret the provision at issue or fill any gaps. 16 Chevron, 467 U.S. at 843–44 (recognizing both implicit and explicit delegation and finding no functional difference between the two); see also Cass R. Sunstein, Beyond Marbury: The Executive’s Power to Say What the Law Is, 115 Yale L.J. 2580, 2590 (2006) (“Hence the most natural justification for deference is that certain grants of authority, in organic statutes such as the Clean Air Act, implicitly contain interpretive power as well.”). Justice Scalia often wrote that Chevron is premised on the realization that there may not be a single correct interpretation of a statute and that the proper exercise of judicial restraint is to allow the agency to make those policy decisions. 17 Barnhart, 535 U.S. at 226 (noting that Chevron allows agencies to “move from one [interpretation] to another”). The Court in Chevron also explicitly noted the expertise of an agency like EPA to implement a “technical and complex” regulatory scheme. 18 Chevron, 467 U.S. at 863, 856–66 (discussing expert agencies and the province of the Executive Branch to make competing policy decisions within the confines of the statute); see also Ronald J. Krotoszynski, Jr., Why Deference?: Implied Delegations, Agency Expertise, and the Misplaced Legacy of Skidmore, 54 Admin. L. Rev. 735, 750 (2002) (“Both Chevron and Mead fail to accord adequate weight to the expertise rationale for affording deference to agency interpretations of ambiguous texts.”). For an argument in favor of limiting the expertise rationale, see Merrill, supra note 14, at 1009. Whatever the core justification, the Supreme Court has remained (relatively) committed to Chevron since its decision over thirty years ago. 19 The Court has taken an expansive view of Chevron in a few areas. First, the Court in Brand X held that “[a] court’s prior judicial construction of a statute trumps an agency construction otherwise entitled to Chevron deference only if the prior court decision holds that its construction follows from the unambiguous terms of the statute and thus leaves no room for agency discretion.” Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 982 (2005) (emphasis added). That is, the original court decision must have found that its reading was the “only permissible reading of the statute,” not just “the best reading.” Id. at 984. Second, the Court held in City of Arlington v. FCC that “a court must defer under Chevron to an agency’s interpretation of a statutory ambiguity that concerns the scope of the agency’s statutory authority (that is, its jurisdiction).” 133 S. Ct. 1863, 1868 (2013).
2. Attacks on Chevron over the Years. — Despite its general acceptance, Chevron has faced criticism since its inception. Most of the critiques fall into two general categories: First, some scholars have claimed that Chevron requires judges to abdicate their role to “say what the law is.” 20 Marbury v. Madison, 5 U.S. (1 Cranch) 137, 177 (1803). Without claiming that Chevron is unconstitutional, Professor Thomas Merrill has argued that “Chevron seeks to resolve the central theoretical problems of the modern administrative state by adopting a dubious fiction of delegated authority and by reducing the role of the courts to a point that threatens to undermine the principal constitutional constraint on agency misbehavior.” 21 Merrill, supra note 14, at 994–98; see also Nicholas Quinn Rosenkranz, Federal Rules of Statutory Interpretation, 115 Harv. L. Rev. 2085, 2130–31 (2002) (noting “deep tension between nondelegation principles and Chevron” and suggesting that the doctrine “may well be wrongly decided as a matter of constitutional law”). While the Court has never recognized this view explicitly, Professor Merrill claims that this explains why the “Court often seems wary of the Chevron doctrine, applying it inconsistently at best.” 22 Merrill, supra note 14, at 998.
Second, scholars have also recognized tension between Chevron and the APA. Section 706 of the APA provides that “the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of agency action.” 23 5 U.S.C. § 706 (2012). Even at a first pass, the command that courts “interpret . . . statutory provisions” could easily be read to undercut Chevron’s conception of deference to reasonable agency interpretations of statutes. 24 See id.; see also Chevron U.S.A. Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 843 (1984). Despite this tension, recognized (and perhaps dubiously justified) by scholars over the years, 25 Professor Sunstein has grappled with this issue, and while he recognizes the tension, he explains Chevron as a pragmatic understanding “that assessments of policy are sometimes indispensable to statutory interpretation.” Sunstein, supra note 16, at 2587; see also Gillian E. Metzger, Foreword, Embracing Administrative Common Law, 80 Geo. Wash. L. Rev. 1293, 1300–01 (2012) (arguing that Chevron represents a form of administrative common law). there appears to be little pushback on this particular issue from the judiciary.
Chevron has also faced significant criticism from Congress and courts in recent years. The House of Representatives currently has a bill pending to overrule Chevron by requiring de novo review of constitutional and statutory provisions. 26 H.R. 76, 115th Cong. (2017). The House Subcommittee on Regulatory Reform, Commercial and Antitrust Law is also considering a bill that would require an automatic sixty-day stay of “high-impact rules.” 27 A “high-impact” rule is one that costs more than $1 billion annually. H.R. 3438, 114th Cong. (2016). Congress has not yet advanced these bills beyond the early stages.
Judicial attacks on Chevron have received more press with the nomination (and eventual confirmation) of Justice Gorsuch to the Supreme Court.
For a broader look at how Justice Gorsuch’s views on Chevron could impact administrative law and environmental law broadly, see Philip J. McAndrews III, What SCOTUS Nominee Neil Gorsuch’s Interpretation of Chevron Could Mean for Environmental Administrative Law, Geo. Envtl. L. Rev. Online (Mar. 5, 2017), http://
gelr.org/2017/03/05/what-scotus-nominee-neil-gorsuchs-interpretation-of-chevron-could-mean-for-environmental-administrative-law/ [http://perma.cc/RR2C-DAY8]. Then-Judge Gorsuch wrote a concurring opinion in 2016 that questioned the basic constitutionality of Chevron. 29 Gutierrez-Brizuela v. Lynch, 834 F.3d 1142, 1152 (10th Cir. 2016) (Gorsuch, J., concurring) (“In this way, Chevron seems no less than a judge-made doctrine for the abdication of the judicial duty.”). He later claimed during his confirmation hearings that although he had reservations about Chevron, he would approach the issue with an open mind. 30 See Debra Cassens Weiss, Live Blog of Confirmation Hearings, Day 2: Gorsuch Condemns Attacks on the Judiciary, ABA J. (Mar. 21, 2017), http://www.abajournal.com/
news/article/confirmation_hearings_day_2_aba_will_present_gorsuch_rating_is_he_a_real_li [http://perma.cc/35XD-AW5E]. Importantly, Judge Gorsuch’s concurrence in Gutierrez-Brizuela specifically questioned the ability of agencies to reverse prior interpretations of statutes. 31 Gutierrez-Brizuela, 834 F.3d at 1152 (“Even if the people somehow manage to make it through this far unscathed, they must always remain alert to the possibility that the agency will reverse its current view 180 degrees anytime based merely on the shift of political winds and still prevail.”).
Now-Justice Gorsuch is not the only Supreme Court Justice to express reservations about Chevron. Justice Thomas has specifically questioned Chevron deference in concurring opinions. 32 E.g., Michigan v. EPA, 135 S. Ct. 2699, 2712 (2015) (Thomas, J., concurring) (arguing Chevron “is in tension with Article III’s Vesting Clause, which vests the judicial power exclusively in Article III courts, not administrative agencies”). Justice Breyer famously criticized Chevron prior to his appointment to the Court, 33 Stephen Breyer, Judicial Review of Questions of Law and Policy, 38 Admin. L. Rev. 363, 373 (1986) (criticizing Chevron as “seriously overbroad, counterproductive and sometimes senseless”). though he is generally seen as quite deferential to agencies. 34 Oakes et al., supra note 2, at 10,191. This suggests that support for Chevron as the proper rule of deference is not inevitably tied to deference to agency expertise generally. Id. Then-Dean Kagan also expressed skepticism of Chevron, 35 David J. Barron & Elena Kagan, Chevron’s Nondelegation Doctrine, 2001 Sup. Ct. Rev. 201, 242–44 (arguing Chevron should be limited to statutory delegates—the decisionmakers named by statute and confirmed by the Senate, rather than lower-level bureaucrats). though not to the same degree as some of her peers. Whether the Court will seriously reconsider Chevron remains to be seen, but it seems at least possible that the existing chinks in Chevron’s armor will get deeper and more pronounced. 36 See Oakes et al., supra note 2, at 10,189 (quoting Professor Richard Pierce as saying “I don’t think the Court’s going to overrule either Chevron or deference. . . I think what’s far more likely is we’re going to see a lot more qualifications of” Chevron and Auer).
Ultimately, it seems unlikely that Congress could muster the votes to require complete de novo review of agency statutory interpretation. 37 See H.R. 76, 115th Cong. (2017). And it seems somewhat unlikely that the Court would overrule Chevron explicitly. What does seem likely, or at least possible, is that the inclusion of now-Justice Gorsuch leads to a significantly less robust version of Chevron. 38 See Oakes et al., supra note 2, at 10,189–90. For instance, in an opinion written by Justice Scalia, the Court in City of Arlington v. FCC held 5-4 that agencies also receive Chevron deference for interpretations that go to their jurisdiction. 133 S. Ct. 1863, 1868–71 (2013). Questions like this may flip with Justice Gorsuch on the Court.
B. Arbitrary and Capricious Review and Deregulation
Any deregulatory action would also face a challenge under the APA’s arbitrary and capricious standard. Section 706(2)(A) of the APA provides that a “reviewing court shall . . . hold unlawful and set aside agency action, findings, and conclusions found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 39 5 U.S.C. § 706(2)(A) (2012). As a general matter, this is typically referred to as “hard look” review. 40 See John F. Manning, Constitutional Structure and Judicial Deference to Agency Interpretations of Agency Rules, 96 Colum. L. Rev. 612, 662–63 (1996) (describing the “so-called ‘hard-look’ doctrine, which provides that agency action is arbitrary and capricious if ‘the agency has not really taken a “hard look” at the salient problems, and has not genuinely engaged in reasoned decision-making’” (quoting Greater Bos. Television Corp. v. FCC, 444 F.2d 841, 851 (D.C. Cir. 1970))). As the Court wrote in State Farm:
The scope of review under the “arbitrary and capricious” standard is narrow and a court is not to substitute its judgment for that of the agency. Nevertheless, the agency must examine the relevant data and articulate a satisfactory explanation for its action including a “rational connection between the facts found and the choice made.” 41 Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins., 463 U.S. 29, 43 (1983) (quoting Burlington Truck Lines v. United States, 371 U.S. 156, 168 (1962)).
In State Farm, the Court engaged in a searching review of the record in holding that the National Highway Traffic Safety Administration (NHTSA) had failed to adequately explain its revocation of its passive restraint rule. 42 Id. at 51. Some might argue that the Court in State Farm applied an unusually searching form of review that is not compatible with Chevron or, for that matter, later cases like FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009). See Metzger, supra note 25, at 1299 n.22 (“To be sure, courts apply the arbitrary and capricious standard with varying degrees of rigor and invoke State Farm inconsistently.”); see also Charles Christopher Davis, The Supreme Court Makes It Harder to Contest Administrative Agency Policy Shifts in FCC v. Fox Television Stations, Inc., 62 Admin. L. Rev. 603, 614 (2010) (explaining that, in contrast to the Court’s approach in State Farm, “[j]udicial review in this area is now very deferential” after FCC v. Fox Television). For arguments that State Farm and Chevron can be read coherently, see Merrick B. Garland, Deregulation and Judicial Review, 98 Harv. L. Rev. 505, 549–53 (1985) (arguing that State Farm and Chevron can be “harmonized” based on Chevron’s focus on statutory purpose); Scott A. Keller, Depoliticizing Judicial Review of Agency Rulemaking, 84 Wash. L. Rev. 419, 450–51 (2009) (arguing that “Chevron actually involved a specific type of arbitrary and capricious review—review of an agency’s interpretation of a statute it administers,” which “revitalized the minimum rationality approach to arbitrary and capricious review in the context of agency statutory interpretation”). Professor Keller also argues that FCC v. Fox Television implicitly rejects much of the “hard-look” aspects of State Farm, further bringing the two doctrines into sync by reducing the degree to which courts second-guess substantive decisions of agencies. Id. at 452–57. State Farm instructs courts to apply the same arbitrary and capricious standard of review for rescinding regulations as for promulgating them in the first instance. 43 See State Farm, 463 U.S. at 46–57 (holding that NHTSA’s rescission of the passive restraint requirement as applied to airbags and seatbelts was arbitrary and capricious).
Even in State Farm, the Court “recognize[d] that ‘[r]egulatory agencies do not establish rules of conduct to last forever’ and that an agency must be given ample latitude to ‘adapt their rules and policies to the demands of changing circumstances.’” 44 Id. at 42 (second alteration in original) (citation omitted) (first quoting Am. Trucking Ass’ns, v. Atchison, Topeka & Sante Fe Ry., 387 U.S. 397, 416 (1967); then quoting In re Permian Basin Area Rate Cases, 390 U.S. 747, 784 (1968)). The Court further clarified (and perhaps weakened) this standard in FCC v. Fox Television Stations, Inc. 45 556 U.S. 502. The case involved an FCC order changing its longstanding policy not to take enforcement action for “fleeting expletives” on television and radio. Id. at 512. In FCC v. Fox Television, the Court clearly held that there is “no basis in the Administrative Procedure Act or in our opinions for a requirement that all agency change be subjected to more searching review.” 46 Id. at 514 (emphasis added). The Court went on to write that although an agency must
display awareness that it is changing position . . . it need not demonstrate to a court’s satisfaction that the reasons for the new policy are better than the reasons for the old one; it suffices that the new policy is permissible under the statute, that there are good reasons for it, and that the agency believes it to be better, which the conscious change of course adequately indicates. 47 Id. at 515.
Particularly relevant here, the Court went on to hold that an agency will often need to “provide a more detailed justification than what would suffice for a new policy created on a blank slate . . . when, for example, its new policy rests upon factual findings that contradict those which underlay its prior policy.” 48 Id. at 515–16 (requiring only “a reasoned explanation . . . for disregarding facts and circumstances that underlay or were engendered by the prior policy”). Despite language suggesting that FCC v. Fox Television was consistent with the Court’s approach in State Farm, most commenters have interpreted FCC v. Fox Television as weakening judicial review of regulatory changes. 49 See, e.g., Davis, supra note 42, at 614 (“The Court has now made clear that an administrative agency changing its policies should face little resistance from the Judiciary.”).
The Court’s decision in FCC v. Fox Television was sharply divided. Justice Breyer wrote in dissent that the agency must do more than simply be aware of its prior decision—it “must explain why it has come to the conclusion that it should now change direction.” 50 Fox Television, 556 U.S. at 550 (Breyer, J., dissenting). Justice Kennedy, concurring in the judgment, agreed with Justice Breyer that an “agency must explain why ‘it now reject[s] the considerations that led it to adopt that initial policy.’” 51 Id. at 535 (Kennedy, J., concurring in part and concurring in the judgment) (alteration in original) (quoting id. at 550 (Breyer, J., dissenting)). Justice Kennedy adopted part of Justice Breyer’s approach to changes in regulation but thought that the FCC decision, while not a “model for agency explanation,” was sufficient. Id. at 538. In practice, lower courts seem to have adopted Justice Scalia’s formulation described above and applied relatively deferential review to agency decisions to change regulatory policy. 52 See, e.g., Mingo Logan Coal Co. v. EPA, 829 F.3d 710, 726–27 (D.C. Cir. 2016) (finding EPA properly exercised its discretion under the Clean Water Act to change a section 404 permit decision based on new scientific evidence); Hermes Consol., LLC v. EPA, 787 F.3d 568, 576 (D.C. Cir. 2015) (finding EPA’s change in policy with respect to evaluating cost of compliance under a renewable fuels program was valid and “readily explained”); Nat’l Ass’n of Home Builders v. EPA, 682 F.3d 1032, 1036–39 (D.C. Cir. 2012) (upholding EPA’s elimination of an opt-out provision for owner-occupied housing under the Toxic Substances Control Act). This suggests that deregulation premised on evidentiary or policy considerations alone would face relatively limited scrutiny.
C. Interaction Between Chevron and the Arbitrary and Capricious Standard
The most difficult remaining issue is the interaction between the Supreme Court’s Chevron doctrine and the APA’s arbitrary and capricious standard. Given the way the two doctrines overlap, undermining one of them would undoubtedly affect the Trump Administration’s deregulatory agenda. Two guiding principles stem from this section, but the diversity of cases makes generalizations suspect.
First, courts typically use the arbitrary and capricious standard to review the evidentiary basis and reasoning of agency decisions 53 See Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins., 463 U.S. 29, 43 (1983) (preventing an agency from, for instance, “entirely fail[ing] to consider an important aspect of the problem”). In fact, the Court did not even cite Chevron in its most recent statement of the law in Fox Television, 556 U.S. at 502. This suggests that the Court perhaps intends the two doctrines to be analyzed separately. and apply Chevron to police agency interpretations of statutes. 54 See supra section I.A.1. But courts often conflate the analyses. The D.C. Circuit’s opinion in Arent v. Shalala provides a useful example. 55 70 F.3d 610 (D.C. Cir. 1995). Arent involved a challenge to regulations concerning nutritional labeling of raw produce and fish promulgated by the Food and Drug Administration. Id. at 612. Recognizing potential overlap, Chief Judge Harry Edwards wrote for the majority that arbitrary and capricious review, not Chevron, should apply. 56 Id. at 614–16. He argued that “Chevron is principally concerned with whether an agency has authority to act under a statute” or “discerning the boundaries of Congress’ delegation of authority.” 57 Id. at 615. The majority instead focused on arbitrary and capricious review, considering “whether the FDA’s discharge of that authority was reasonable.” 58 Id. at 616.
Second, while courts have tried to maintain some analytical clarity between the two doctrines, in Arent the D.C. Circuit recognized that “Chevron review and arbitrary and capricious review overlap at the margins.” 59 Id. at 615. Judge Wald’s concurrence perhaps best summarizes the overlap and distinctions. She recognized that “there are certainly situations where a challenge to an agency’s regulation will fall squarely within one rubric, rather than the other . For example, we might invalidate an agency’s decision under Chevron as inconsistent with its statutory mandate, even though we do not believe the decision reflects an arbitrary policy choice.” Id. at 620 (Wald, J., concurring) (citation omitted). However, Judge Wald noted that many cases will involve overlap between the two tests “because both standards require the reviewing court to ask whether the agency has considered all of the factors made relevant by the statute.” Id. In some sense, it is difficult to imagine how an agency’s unreasonable interpretation of a statute (on Chevron step two) is not also arbitrary and capricious. The Supreme Court itself has contributed to this confusion, implying that an inconsistent statutory interpretation would be grounds for arbitrary and capricious reversal. 60 Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 981 (2005) (“Unexplained inconsistency is, at most, a reason for holding an interpretation to be an arbitrary and capricious change from agency practice under the Administrative Procedure Act.”). Especially in cases involving changes in agency policy, courts at all levels have invoked Chevron and State Farm almost interchangeably. 61 See Encino Motorcars, LLC v. Navarro, 136 S. Ct. 2117, 2125–26 (2016) (citing both Chevron and State Farm for the proposition that agencies may change their interpretations of statutes as long as they justify the change); Rust v. Sullivan, 500 U.S. 173, 184–87 (1991) (same). In fact, challengers to agency action often make both arguments simultaneously. 62 Respondent EPA’s Initial Brief at 23, 44–46, West Virginia v. EPA, No. 15-1363 (D.C. Cir. filed Mar. 28, 2016) (making both Chevron and arbitrary and capricious arguments in defense of the Clean Power Plan). The two doctrines often seem to work together in deregulatory challenges, picking up each other’s slack and allowing the agency to justify a shift in policy. Given the perhaps unusually searching review in State Farm, one might reasonably argue that Chevron’s review of statutory interpretation and State Farm’s arbitrary and capricious review are inconsistent or even incompatible.
To many scholars, the upshot of this comingling of doctrines is that the courts are, in the end, engaging in reasonableness analysis of agency action. 63 See, e.g., Elizabeth V. Foote, Statutory Interpretation or Public Administration: How Chevron Misconceives the Function of Agencies and Why It Matters, 59 Admin. L. Rev. 673, 710 (2007) (“In recent years, some lower federal courts seem to stretch the inquiry into the reasonableness of an agency’s ‘construction of a statute’ under step two of Chevron into something similar to an arbitrary and capricious test.”); Ronald M. Levin, The Anatomy of Chevron: Step Two Reconsidered, 72 Chi.-Kent L. Rev. 1253, 1263–77 (1997) (discussing conflation of Chevron step two and the arbitrary and capricious standard). Chevron and arbitrary and capricious review work together to give agencies fairly broad authority to change statutory implementation strategy, 64 This is highlighted by the Federal Register notice for reconsideration of the Clean Power Plan, which intertwines Chevron and arbitrary and capricious cases. See Review of the Clean Power Plan, 82 Fed. Reg. 16,329 (proposed Apr. 4, 2017) (to be codified at 40 C.F.R. pt. 60). EPA made essentially the same legal argument in its proposal to repeal the Clean Power Plan. See Repeal of Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 82 Fed. Reg. 48,035, 48,039 (proposed Oct. 16, 2017) (to be codified at 40 C.F.R. pt. 60) (stating that “EPA has inherent authority to reconsider, repeal, or revise past decisions to the extent permitted by law so long as the Agency provides a reasoned explanation”). perhaps even based on political changes within an administration. 65 This precise issue is still contested. See Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins., 463 U.S. 29, 59 (1983) (Rehnquist, J., concurring in part and dissenting in part) (“A change in administration brought about by the people casting their votes is a perfectly reasonable basis for an executive agency’s reappraisal of the costs and benefits of its programs and regulations.”); see also FCC v. Fox Television Stations, Inc., 556 U.S. 502, 523 (2009) (recognizing that “the precise policy change at issue here was spurred by significant political pressure from Congress”). If the Court undermines Chevron, the Trump Administration’s ability to quickly shift among reasonable interpretations of a statute would fall apart. But the following analysis shows that the degree to which this matters practically depends on whether a policy is based primarily on statutory interpretation or on evidence and reasoning. 66 The notion that courts are ultimately engaging in some form of reasonableness analysis for regulatory change does not resolve the remaining ambiguity in Chevron itself, nor does it address the potential inconsistency between State Farm and Chevron. This Comment does not seek to present a unifying theory of the Chevron doctrine, much less a perfect way of understanding the two doctrines together. But the guiding principles described above present the most workable structure for analyzing the obstacles to the environmental deregulation that the Trump Administration appears poised to implement. This is true even to the extent that courts are ultimately analyzing agency actions for reasonableness. To the extent that a regulatory change involves fact-gathering, Obama-era environmental policies may prove much more durable than one might expect.
II. Changing Chevron and Trump’s Deregulatory Agenda
The Trump Administration has made its environmental policy clear—it plans to attempt swift, across-the-board deregulation by reconsidering most of the Obama Administration’s environmental rules. Rolling back the Court’s Chevron doctrine would undoubtedly impact the Trump Administration’s ability to accomplish these regulatory goals, but the impact of undermining Chevron is complicated by two factors: first, Chevron’s interaction with the Court’s arbitrary and capricious jurisprudence for regulatory changes; and second, uncertainty surrounding what would fill the void left by Chevron. This section considers the durability of individual rulemakings that appear to be in the Trump Administration’s crosshairs. While this section focuses on the statutory interpretation question, it is worth keeping in mind that any of these deregulatory measures would also face an arbitrary and capricious challenge under State Farm and FCC v. Fox Television. 67 This Comment does not focus closely on arbitrary and capricious challenges for a few reasons. First, Chevron appears vulnerable on multiple fronts, but the general APA standard does not. Second, arbitrary and capricious challenges are much more fact-based—a thorough analysis of the evidentiary basis and reasoning of each rule is not possible here. Finally, in the wake of FCC v. Fox Television, courts have taken a relaxed approach to reviewing regulatory change—at the very least, they are not applying any form of heightened review for regulatory shifts. See supra note 52 and accompanying text.
In March 2017, Trump issued Executive Order 13,783, which provides a comprehensive view of precisely how the Trump Administration plans to alter Obama’s environmental rulemaking legacy. This Part first considers a potential challenge to the Obama Administration’s Endangerment Finding, which the Trump Administration did not target in the Executive Order.
According to recent reporting, it appears that EPA Administrator Scott Pruitt “successfully argued against including language revoking the agency’s 2009 ‘endangerment finding’” because the “legal hurdles to overturning the finding were massive, and the administration would be setting itself up for a lengthy court battle.” Andrew Restuccia & Alex Guillén, Pruitt Takes Fire from Conservatives in Climate Showdown, Politico (Mar. 28, 2017), http://www.politico.com/story/2017/03/pruitt-climate-change-236572 [http://
perma.cc/DF99-VHRQ]. It remains to be seen whether the Administration will remain on this path. Next, this Part considers the Executive Order’s directive to EPA to review the Clean Power Plan. 69 Exec. Order No. 13,783, Promoting Energy Independence and Economic Growth, 82 Fed. Reg. 16,093, 16,095 (Mar. 31, 2017). The Order also called for the Attorney General to seek a stay of the pending D.C. Circuit litigation on the Clean Power Plan, which was granted. See Per Curiam Order, West Virginia v. EPA, No. 15-1363 (D.C. Cir. Apr. 28, 2017). The Order also calls for reconsideration of EPA’s Methane Rule and Bureau of Land Management’s Methane Waste Rule. 82 Fed. Reg. at 16,096. The Order also “disbands the Interagency Working Group on the Social Cost of Carbon and rescinds the federal estimates for the social cost of carbon, methane, and nitrous oxide.” Trump Issues Executive Order on Climate Change, Sabin Ctr. for Climate Change Law (Mar. 28, 2017), http://columbiaclimatelaw.com/climate-deregulation-tracker/trump-issues-executive-
order-on-climate-change/ [http://perma.cc/YZ98-PQWE]. It also “revokes the Council on Environmental Quality (CEQ)’s guidance on climate change and National Environmental Policy Act (NEPA) reviews” and ends the moratorium on federal coal leasing. Id. Finally, this Part will address the Trump Administration’s reconsideration of the midterm review of the light-duty fuel economy standards, which is widely considered the most important U.S. program targeting climate change. 70 See infra section II.C.
A. Endangerment Finding
In the wake of Massachusetts v. EPA, 71 The Supreme Court in Massachusetts v. EPA held that greenhouse gases were “air pollutants” subject to Clean Air Act regulation. 549 U.S. 497, 532 (2007). EPA issued its Endangerment Finding under the Clean Air Act, 72 Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act, 74 Fed. Reg. 66,496, 66,523 (Dec. 15, 2009) (codified at 40 C.F.R. ch. 1). which determined that greenhouse gases may “reasonably be anticipated to endanger public health or welfare.” 73 Id. at 66,515; see also 42 U.S.C. § 7521(a)(1) (2012). Following years of litigation, the bulk of the Endangerment Finding and accompanying rules were upheld in Coalition for Responsible Regulation v. EPA. 74 684 F.3d 102 (D.C. Cir. 2012). A portion of the series of rules was appealed to the Supreme Court and struck down, but the Supreme Court did not grant cert on the arbitrary and capricious or core statutory interpretation questions relevant to the Endangerment Finding. See Util. Air Regulatory Grp. v. EPA, 134 S. Ct. 2427, 2438 (2014). As the following analysis shows, the Endangerment Finding would likely survive an attempt at deregulation even without Chevron. 75 At least for now the Trump Administration seems to agree, but clamoring among the Republican base could shift the winds on this issue. See Restuccia & Guillén, supra note 68.
Challengers to the Endangerment Finding made statutory interpretation and arbitrary and capricious arguments, as they have against many environmental rules. 76 Coal. for Responsible Regulation, 684 F.3d at 117. EPA’s core finding, one that environmentalists sought for years, was that greenhouse gases may “reasonably be anticipated to endanger public health or welfare” within the meaning of the Clean Air Act. 77 42 U.S.C. § 7521(a)(1). One might assume, then, that the focus of the litigation would turn on the meaning of the statute. But the bulk of industry challenge to the rule centered on the adequacy of the record evidence supporting EPA’s determination. 78 See Coal. for Responsible Regulation, 684 F.3d at 117 (describing various industry arguments). The only statutory interpretation question was whether EPA properly refused to consider “policy concerns and regulatory consequences,” or whether it was limited to a “science-based judgment.” 79 Id. The D.C. Circuit not only sided with EPA on this point—it appears to have decided the issue on Chevron step one. The Court wrote that “[t]he plain language of § 202(a)(1) of that Act does not leave room for EPA to consider” regulatory consequences. 80 Id. at 119. Even under modern Chevron doctrine, EPA cannot reconsider its interpretation of the Clean Air Act. 81 Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 982 (2005) (“A court’s prior judicial construction of a statute trumps an agency construction otherwise entitled to Chevron deference only if the prior court decision holds that its construction follows from the unambiguous terms of the statute and thus leaves no room for agency discretion.”).
On the arbitrary and capricious challenge, the D.C. Circuit fully upheld EPA’s scientific judgment against all industry challenges. 82 Coal. for Responsible Regulation, 684 F.3d at 119–26 (rejecting, among other things, a challenge “to both the type of evidence upon which EPA relied and EPA’s decision to make an Endangerment Finding in light of what Industry Petitioners view as significant scientific uncertainty”). Although FCC v. Fox Television opens some door for reconsideration, the incredible amount of scientific evidence marshalled in the Endangerment Finding makes this unlikely. Even under Justice Scalia’s relaxed requirement that an agency display awareness of its regulatory change, it is hard to imagine how Administrator Pruitt’s EPA could justify departing from the vast weight of scientific evidence. This is only bolstered by the D.C. Circuit’s finding that such evidence was credible, especially given that EPA cannot consider policy or regulatory issues in reconsidering the Endangerment Finding. 83 Id. at 119.
B. Clean Power Plan
Following the Endangerment Finding, EPA began rulemaking to regulate greenhouse gas emissions.
The D.C. Circuit has explained that the Endangerment Finding “triggered an affirmative statutory obligation to regulate greenhouse gases.” See Per Curiam Order at 2, West Virginia v. EPA, No. 15-1363 (D.C. Cir. Aug. 8, 2017).
This culminated in the Clean Power Plan (CPP).
The CPP, promulgated as Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 80 Fed. Reg. 64,662 (Oct. 23, 2015) (to be codified at 40 C.F.R. pt. 60), regulates greenhouse gas emissions at existing power plants under section 111(d) of the Clean Air Act. See 42 U.S.C. § 7411(d) (2012). EPA also promulgated New Source Performance Standards and New Source Methane Standards, but this Comment does not focus on these rules in detail. See Oil and Natural Gas Sector: Emission Standards for New, Reconstructed, and Modified Sources, 81 Fed. Reg. 35,824 (June 3, 2016) (to be codified at 40 C.F.R. pt. 60); Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources: Electric Utility Generating Units, 80 Fed. Reg. 64,510 (Oct. 23, 2015) (to be codified at 40 C.F.R. pts. 60, 70, 71, 98).
Pursuant to Executive Order 13,783, EPA is reconsidering the CPP,
See Review of the Clean Power Plan, 82 Fed. Reg. 16,329 (proposed Apr. 4, 2017) (to be codified at 40 C.F.R. pt. 60); see also Review of the 2016 Oil and Gas New Source Performance Standards for New, Reconstructed, and Modified Sources, 82 Fed. Reg. 16,331 (proposed Apr. 4, 2017) (to be codified at 40 C.F.R. pt. 60); Review of the Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources: Electric Generating Units, 82 Fed. Reg. 16,330 (proposed Apr. 4, 2017) (to be codified at 40 C.F.R. pt. 60). The wording of the three notices, apart from the procedural history, is essentially identical.
and the D.C. Circuit recently granted the government’s motion to reconsider the rule and halt the litigation.
The per curiam order issued on April 28, 2017 holds the consolidated cases in abeyance, requires EPA to file status reports every thirty days, and orders briefing on whether to remand to EPA for reconsideration. See Per Curiam Order at 2, West Virginia v. EPA, No. 15-1363 (Apr. 28, 2017).
On October 16, 2017, EPA unsurprisingly announced its intention to repeal the CPP outright.
Repeal of Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 82 Fed. Reg. 48,035 (proposed Oct. 16, 2017) (to be codified at 40 C.F.R. pt. 60).
This section considers the new Administration’s ability to reconsider, and ultimately repeal, the CPP.
It appears that Democratic-leaning states will defend the CPP. See Press Release, State of Cal. Dep’t of Justice, Attorney General Becerra, Along with Broad Coalition, Prepared to Defend America’s Clean Power Plan, State of Cal. Dep’t of Justice (Mar. 28, 2017), http://oag.ca.gov/news/press-releases/attorney-general-becerra-along-broad-coalition-
Administrator Pruitt’s EPA has already previewed its legal argument supporting its authority to revoke the regulations. In its Federal Register notice stating its intention to reconsider the CPP, EPA cited FCC v. Fox Television and Chevron for the proposition that agencies have a free hand in updating regulations so long as they provide a reasoned explanation for doing so. 90 Review of the Clean Power Plan, 82 Fed. Reg. at 16,330. EPA made a similar argument in its proposal to repeal the CPP entirely. See Repeal of Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 82 Fed. Reg. at 48,039. EPA correctly noted that courts allow agencies to change their interpretations “in response to . . . a change in administrations.” 91 Review of the Clean Power Plan, 82 Fed. Reg. at 16,330 (internal quotation marks omitted) (quoting Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 981 (2005)). Chevron deference clearly applies to changes in administrative interpretation—Chevron itself involved just that. See Brand X, 545 U.S. at 981. This combination of arguments from the Court’s Chevron and arbitrary and capricious cases was expected, but it highlights the difficulty in untangling the two analyses. 92 See supra section I.C (describing the conflation of the two doctrines).
The first relevant question for present purposes is whether the litigation surrounding these rules focused on statutory interpretation or arbitrary and capricious issues. Challenges to the CPP were already well underway prior to EPA’s reconsideration,
The Supreme Court stayed the CPP pending the outcome of litigation, West Virginia v. EPA, 136 S. Ct. 1000, 1000 (2016) (mem.), and the D.C. Circuit held oral arguments on September 27, 2016.
and the briefs from the litigation provide insight into the focus of the litigation and how supporters of these rules would counter reconsideration. The original challenge filed by opponents of the CPP, not surprisingly, raised both challenges, claiming that the CPP is “in excess of the agency’s statutory authority . . . and otherwise is arbitrary, capricious, an abuse of discretion and not in accordance with law.”
Petition for Review at 2, West Virginia v. EPA, No. 15-1363 (D.C. Cir. filed Oct. 23, 2015).
But the petitioner’s brief in the D.C. Circuit focuses primarily on EPA’s interpretation of sections 111(d) and 112, which gives EPA authority to regulate existing stationary sources.
The challengers primarily argued that EPA’s “generation shifting” approach violated the language of section 111(d) and that section 112’s exclusion foreclosed EPA’s interpretation. See Opening Brief of Petitioners on Core Legal Issues at 29–74, West Virginia v. EPA, No. 15-1363 (D.C. Cir. filed Feb. 19, 2016). The petitioners also made statutory federalism and constitutional commandeering claims. Id. at 74–86.
This suggests that EPA’s attempt to revoke the CPP, would be grounded in reinterpreting § 111(d) in light of new policy considerations. EPA all but confirmed its intention to do just that in its proposal to revoke the CPP.
See Repeal of Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 82 Fed. Reg. 48,035, 48,036 (proposed Oct. 16, 2017) (to be codified at 40 C.F.R. pt. 60) (stating that after reviewing the CPP, “EPA proposes a change in the legal interpretation as applied to section 111(d) of the Clean Air Act” based on “the CAA’s text, context, structure, purpose, and legislative history, as well as with the Agency’s historical understanding and exercise of its statutory authority”).
Of course, any deregulatory action by the Trump Administration’s EPA would also be challenged as arbitrary and capricious.
EPA attempted to cement its evidentiary position just before Obama left office, which could aid challengers to any deregulatory action in an arbitrary and capricious challenge. See Denial of Reconsideration and Administrative Stay of the Emission Guidelines for Greenhouse Gas Emissions and Compliance Times for Electric Utility Generating Units, 82 Fed. Reg. 4864, 4864 (Jan. 17, 2017); see also EPA, Basis for Denial of Petitions to Reconsider and Petitions to Stay the CAA Section 111(d) Emission Guidelines for Greenhouse Gas Emissions and Compliance Times for Electric Utility Generating Units 3 (2017), http://www.courthousenews.com/wp-content/uploads/
2017/01/epa_ghg.pdf [http://perma.cc/NAH2-2WNN] (providing additional details on the denial of petitions for reconsideration). But the original litigation briefs and EPA’s Federal Register notices suggest that changing the CPP would involve a drastic shift in statutory interpretation.
The CPP litigation—which is primed to involve a vulnerable Chevron step-two question—makes it important to imagine the consequences of a relaxed Chevron. If Chevron is diminished (but Congress does not demand complete de novo review
A bill currently pending in the House Subcommittee on Regulatory Reform, Commercial and Antitrust Law, would require de novo review for “all relevant questions of law, including the interpretation of constitutional and statutory provisions, and rules made by agencies.” H.R. 76, 115th Cong. (2017).
), one could easily imagine a return to the Court’s Skidmore approach. Chevron’s predecessor, the often-derided Skidmore doctrine, also considers the reasonableness of an agency’s interpretation, but in a more searching fashion.
Skidmore v. Swift & Co., 323 U.S. 134 (1944). Justice Jackson’s Skidmore opinion provides that:
“We consider that the rulings, interpretations and opinions of the Administrator under this Act, while not controlling upon the courts by reason of their authority, do constitute a body of experience and informed judgment to which courts and litigants may properly resort for guidance. The weight of such a judgment in a particular case will depend upon the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.”
Id. at 140.
Skidmore is often seen as a more searching form of judicial review, when compared to Chevron, by focusing on reasonableness. The shift away from Skidmore toward Chevron was later seen as a way of giving space to agencies to choose among reasonable interpretations of a statute. Justice Scalia made this point, and justified the shift away from Skidmore, in his concurrence in Barnhart v. Walton, 535 U.S. 212, 226–27 (2002) (Scalia, J., concurring in part and concurring in the judgment). There, he argued that any consideration of consistency with prior agency action in the majority opinion “is an anachronism—a relic of the pre-Chevron days, when there was thought to be only one ‘correct’ interpretation of a statutory text.” Id. at 226. Instead, he argued that “once it is accepted, as it was in Chevron, that there is a range of permissible interpretations, and that the agency is free to move from one to another, so long as the most recent interpretation is reasonable its antiquity should make no difference.” Id. This suggests that Chevron was designed as a more flexible form of judicial review intended to provide more leeway to agencies to shift among reasonable interpretations of a statute for policy reasons. Some have suggested that in reality, courts are “applying Skidmore, and if the government wins, then they cite Chevron.” Oakes et al., supra note 2, at 10,190 (quoting Professor Richard Pierce). But Skidmore’s list of factors plainly considers an agency interpretation’s “consistency with earlier and later pronouncements.” 100 Skidmore, 323 U.S. at 140. Indeed, one of now-Justice Gorsuch’s chief complaints about Chevron is the ability of agencies to reverse course on statutory interpretation questions. See Gutierrez-Brizuela v. Lynch, 834 F.3d 1142, 1152 (10th Cir. 2016) (Gorsuch, J., concurring). Given that EPA would have to completely reverse course on its interpretation of the Clean Air Act, a return to Skidmore would likely doom a complete repeal of the CPP. Of course, Skidmore includes other factors, including “the thoroughness evident in [the agency’s] consideration, the validity of its reasoning, . . . and all those factors which give it power to persuade, if lacking power to control.” 101 Skidmore, 323 U.S. at 140. A very thorough EPA process could still revoke the CPP, but doing so would certainly be much more difficult without a robust version of Chevron.
C. Midterm Evaluation of Light-Duty Vehicle Emissions Standards
Corporate Average Fuel Economy (CAFE) standards remain the most significant U.S. policy combatting climate change, requiring fleets of new vehicles to increase fuel efficiency over time. 102 See EPA, Final Determination on the Appropriateness of the Model Year 2022–2025 Light-Duty Vehicle Greenhouse Gas Emissions Standards Under the Midterm Evaluation 5–6 (2017) [hereinafter Obama EPA Midterm Review] (on file with the Columbia Law Review). EPA and the NHTSA share authority to set the standards, the most recent of which were released through a negotiated process with the industry in 2012. 103 40 C.F.R. § 86.1818-12 (2016). The most recent rule called for EPA to conduct a midterm review process by April 1, 2018 to determine whether the standards remained technically feasible and economically desirable. 104 Id. § 86.1818-12(h). Apparently in an effort to cement these rules from reconsideration, the Obama Administration conducted this midterm review over a year early, releasing it just days before Trump took office. 105 See Obama EPA Midterm Review, supra note 102, at 1 (explaining EPA’s decision to release the midterm review early). There is a threshold question of whether the midterm review should receive Chevron deference at all under Meadessentially limits Chevron to “adjudication or notice-and-comment rulemaking,” or those actions that are not “far removed . . . from notice-and-comment process.” United States v. Mead Corp., 533 U.S. 218 (2001). Given the publication and public comment process, the midterm review almost certainly qualifies for Chevron. Despite this, Administrator Pruitt quickly notified the public that EPA planned to reconsider the midterm review, threatening one of the most important rules that reduces greenhouse gases. 106 Notice of Intention to Reconsider the Final Determination of the Mid-Term Evaluation of Greenhouse Gas Emissions Standards for Model Year 2022–2025 Light Duty Vehicles, 82 Fed. Reg. 14,671 (Mar. 22, 2017). In July 2017, NHTSA announced its intent to prepare an Environmental Impact Statement (EIS) (in accordance with the National Environmental Policy Act) to analyze the environmental effects of changing the CAFE Standards. NHTSA invited comments to “determin[e] the scope of considerations to be addressed in the EIS and for identifying any significant environmental matters related to the proposed action.” See Notice of Intent to Prepare an Environmental Impact Statement for Model Year 2022–2025 Corporate Average Fuel Economy Standards, 82 Fed. Reg. 34,740 (July 26, 2017). This past summer, EPA and the Department of Transportation recently announced the opening of the public comment period on this issue. See Request for Comment on Reconsideration of the Final Determination of the Mid-Term Evaluation of Greenhouse Gas Emissions Standards for Model Year 2022–2025 Light-Duty Vehicles; Request for Comment on Model Year 2021 Greenhouse Gas Emissions Standards, 82 Fed. Reg. 39,551 (Aug. 21, 2017). These are merely the first steps in what will likely be a protracted regulatory process.
The core question, then, is whether undermining Chevron would have any impact on Administrator Pruitt’s ability to reconsider the light-duty emissions standards. Ultimately, a less-robust Chevron would likely have little impact on the outcome of the litigation. The documents released by the Obama Administration’s EPA as part of the midterm review reveal that, while EPA relies on section 202(a)(1) for the authority to set CAFE standards, this is fundamentally an evidentiary question most amenable to arbitrary and capricious review. 107 Obama EPA Midterm Review, supra note 102, at 2 (explaining the statutory basis under section 202(a)(1) and detailing EPA’s Midterm Review considerations). Although the most recent CAFE standards were not challenged in court, litigation from 2008 against the Bush Administration’s EPA confirms that the core issue does not hinge on statutory interpretation. 108 See Ctr. for Biological Diversity v. Nat’l Highway Traffic Safety Admin., 538 F.3d 1172, 1198–203 (9th Cir. 2008) (finding that NHTSA’s decision not to monetize the climate change benefits of increasing CAFE standards was arbitrary and capricious).
EPA’s midterm review Final Determination lists a series of factors it must consider in making the determination, 109 Obama EPA Midterm Review, supra note 102, at 2 (including “availability and effectiveness of technology, . . . cost on the producers or purchasers of new motor vehicles[,] . . . [and] feasibility and practicability of the standards,” among other considerations). but these factors come from the 2012 rule, not the statute itself. 110 Id.; see also 40 C.F.R. § 86.1818-12(h)(1) (2016). With no challenge to the original rule on the horizon, the real question is whether EPA adequately applied the standards and can support its decision under arbitrary and capricious review. The Ninth Circuit decision from 2008 suggests that it would be arbitrary and capricious not to consider climate change benefit in its reasoning, 111 See Ctr. for Biological Diversity, 538 F.3d at 1198–203. and EPA would certainly have to “display awareness” of the prior evidence supporting its decision. 112 FCC v. Fox Television Stations, Inc., 556 U.S. 502, 514–15 (2009). But the midterm review is ultimately the kind of policy conclusion that cases like FCC v. Fox Television allow agencies to reconsider, even without Chevron’s deference to statutory interpretation changes. Although it is often difficult to tease out the statutory interpretation questions from the arbitrary and capricious issues, 113 See supra section I.C (describing tension between the two doctrines). Chevron would likely not play a substantial role in litigation from either side.
The Trump Administration’s environmental policy is clear—it plans to swiftly reconsider nearly all of the Obama Administration’s efforts to combat climate change. Reconsidering Chevron’s norm of deference to statutory interpretation questions would represent a sea change in administrative law, and it would undoubtedly undercut the Trump Administration’s ability to change certain parts of the Obama Administration’s climate policy. But this Comment shows that the conflation of Chevron and the Supreme Court’s arbitrary and capricious doctrine would reorient many deregulatory challenges into arbitrary and capricious cases, unless the agency action rested purely on statutory interpretation. This suggests that, while important in some deregulatory actions, a change in Chevron’s deference model would have less impact on environmental deregulation than one might expect.