Rule Background:  EPA proposes to reduce sulfur emissions and smog from motor vehicles by 2030 through a combination of vehicle and fuel requirements.  EPA submitted the rule for Office of Management and Budget (OMB) review on January 29, 2013, and OMB completed review on March 29; EPA released a typescript version of the signed rule that day.  The proposed rule seeks two goals:

• “harmonize” the rest of the United States with California’s Low Emission Vehicle program; and
• reduce the amount of sulfur in gasoline from 30 parts per million (ppm) to 10 ppm.

The auto industry has indicated support; the petroleum industry has signaled opposition.  Much of the rule is not surprising because of the long-standing California standards to which the rest of the nation would be harmonized.

Notice:  The Administrative Procedure Act (APA) (which is applied in this instance by the Clean Air Act (CAA) requires very little, but it does require that an agency provide “either the terms or substance of the proposed rule or a description of the subjects and issues involved.”  EPA publicly released something close to its proposed rule on March 29, 2013; the website typescript copy bore the distinct legend:

While we have taken steps to ensure the accuracy of this Internet version of the proposed rule, it is not the official version of the rule.  Please refer to the official version in a forthcoming Federal Register publication, ….  Once the official version of this document is published in the Federal Register, this version will be removed from the Internet and replaced with a link to the official version.

EPA has not, to our knowledge, provided a redline of changes between the website and Federal Register published text.  A good practice could be improved.

Docket:  EPA did not post the March 29 advance text of the proposed rule to the docket, which may be understandable given some provisions of the CAA that effectively require all supporting documents to be posted ahead of the proposed rule.  EPA has posted to the docket hundreds of supporting documents totaling many thousands of pages, including cross referenced studies and studies attached to previous dockets.  Indeed, EPA posts as much as possible to its docket – a good transparent practice.  The CAA’s good intentions, however, may need a little more discretion.

Actual Notice:  EPA’s website proposed rule posting creates a potential for actual notice of the content and this blog has supported such advance publication.  Federal Register publication, however, is the constructive default notice for those who do not read EPA’s website, this blog, or other interested media outlets.  The burden of showing a lack of notice is, at best, a difficult proposition, and it seems unlikely that EPA would argue that website posting is sufficient notice.  The proposed rule does note that two public meetings on the proposed rule have already been held, consistent with a previous Federal Register notice of those meetings, but that also cannot be construed to constitute public notice of the content or substance of the proposed rule.

Procedure:  The APA does not specify a hard and fast procedure for public comments:

After notice required by this section, the agency shall give interested persons an opportunity to participate in the rule making through submission of written data, views, or arguments with or without opportunity for oral presentation.

The CAA – to the extent that it supplants the APA and only to that extent – may provide more or less definitive requirements, or no requirements at all.  At the minimum, “an opportunity” to comment must be a meaningful opportunity to comment.

Default Comment Time:  Executive Order 13,563 recognizes a default 60-day public comment period.  While the Executive Order does not create a judicially enforceable law or a judicially cognizable industry standard, it does create a reasonable expectation on the part of the public that agencies will conform to that standard unless they explain why they have set a different public comment timeframe.  EPA has not done so, and should.

Too Short To Comment:  This blog has applauded EPA for the transparency evident in their practice of posting signed versions of draft proposed and final rules on their website – this best practice gives a fair leg up to those with the perspicacity to read EPA’s website on a daily basis and it favors those whose diligence is matched by online savvy.

Technical publication in the Federal Register after signature normally takes only a few days, but EPA and the Office of the Federal Register needed nearly two months to publish this proposed rule, with its many incorporations by reference, tables, etc. and just plain size.  EPA confirmed previously that technical issues slowed the publication and that is understandable.  That burden, however, should not be shifted to the public, as this short comment period shifts it.

EPA is resting on the cusp of a significant problem and taking a risk that it has provided sufficient advance notice and an opportunity for the public to comment on the proposed rule.  EPA has not disclosed, to this blog’s knowledge, its risk assessment among the hundreds of technical documents that it has rightly and transparently disclosed.  While EPA should be commended for its efforts (setting aside issues of the proposed rule substance), this is not enough and EPA is blurring the line of “public notice.”

Moreover, a technical requirement heightens the notice issue:  petitions for judicial review of a CAA final rule must be premised on an objection raised to the proposed rule with reasonable specificity during the public comment period.  Limiting the period for public comment, and the load of material that must be reviewed, adversely affects the ability of any potential litigant to recognize, understand, and preserve his or her objections for judicial review.

EPA should extend the public comment period to at least July 22, 2013, the nominal 60-day period, and should seriously consider following the lead of other agencies of extending the comment period even further – by an additional 60 days given the huge amount of information that commenters must digest to provide effective comments.

FCC, Local Jurisdictions & Cell Towers:  Congress tried to balance competing federal (nationwide communications) and local (zoning regulation) concerns about siting cell towers in the Telecommunications Act of 1996 by setting parameters for local primacy, with antidiscrimination provisions, and a timing limitation.  The State or local government “shall act on any request for [build a cell tower] within a reasonable period of time after the request is duly filed….”  The Federal Communications Commission (FCC) adopted a rule setting a presumptive “reasonable period.”  The United States Court of Appeals for the Fifth Circuit held that the Chevron framework applied to the threshold question whether the FCC possessed statutory authority to adopt specific 90- and 150-day timeframes.  The Court granted certiorari to consider whether an agency’s interpretation of a statutory ambiguity that concerns the scope of its regulatory authority (that is, its jurisdiction) is entitled to deference under Chevron U.S.A. Inc. v. NRDC, Inc.

Chevron Deference:  Chevron holds that courts owe deference to an agency interpretation of their programmatic statutes in a familiar two-step process:

1. The court must determine, applying the ordinary tools of statutory construction, “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.”
2. But “if 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.”  If so, the court must defer to the agency’s interpretation and the court not decide the issue itself.

In this case, the relevant Act of Congress imposed five substantive limitations, only one of which was at issue:  the Act requires state or local governments to act on wireless or cell tower siting applications “within a reasonable period of time after the request is duly filed” and the issue is whether the FCC has “jurisdiction” to interpret that phrase, and is due deference.

SCOTUS Decision:  The Court, by Justice Scalia, noted that Chevron is based on a presumption of congressional intent (establishing intent is a separate issue):  prior cases have held that Congress’s ambiguity in a statute delegating rulemaking authority, “understood that the ambiguity would be resolved, first and foremost, by the agency, and desired the agency (rather than the courts) to possess whatever degree of discretion the ambiguity allows.

The Court rejected for agencies the “jurisdictional” distinctions that are applicable to statutes affecting judicial review and the courts.  Justice Scalia makes clear that under Chevron:

the distinction be­tween “jurisdictional” and “nonjurisdictional” interpreta­tions is a mirage.  No matter how it is framed, the question a court faces when confronted with an agency’s interpretation of a statute it administers is always, simply, whether the agency has stayed within the bounds of its statutory authority.

Judicial “jurisdictional” distinctions do not apply to agency administration of Congressional Acts:

Both [the agency’s] power to act and how they are to act is authoritatively prescribed by Congress, so that when they act improperly, no less than when they act beyond their jurisdiction, what they do is ultra vires. Because the question — whether framed as an incorrect application of agency authority or an assertion of author­ity not conferred — is always whether the agency has gone beyond what Congress has permitted it to do, there is no principled basis for carving out some arbitrary subset of such claims as “jurisdictional.”

Granting an agency deference over the interpretation of its jurisdiction simplifies, in Justice Scalia’s view, the decision on the first and only critical element:

In sum, judges should not waste their time in the mental acrobatics needed to decide whether an agency’s interpretation of a statutory provision is “jurisdictional” or “nonjurisdictional.”  Once those labels are sheared away, it becomes clear that the question in every case is, simply, whether the statutory text forecloses the agency’s assertion of authority, or not.

Concur:  Justice Breyer joined the majority’s judgment and “such portions of its opinion as are consistent with” his concurring opinion.  Although not necessary to a Court majority and decision, Justice Breyer’s view (particularly in administrative law) may persuade judges in future cases.

I say that the existence of statutory ambiguity is sometimes not enough to warrant the conclusion that Congress has left a deference-warranting gap for the agency to fill because our cases make clear that other, sometimes context specific, factors will on occasion prove relevant.

And he provides those very relevant factors, citing prior authority, including:

the interstitial nature of the legal question, the related expertise of the Agency, the importance of the question to administration of the statute, the complexity of that administration, and the careful consideration the Agency has given the question over a long period of time.

Justice Breyer illuminates further two key points:

The subject matter of the relevant provision — for instance, its distance from the agency’s ordinary statutory duties or its falling within the scope of another agency’s authority — has also proved relevant.

Moreover, the statute’s text, its context, the structure of the statutory scheme, and canons of textual construction are relevant in determining whether the statute is ambiguous and can be equally helpful in determining whether such ambiguity comes accompanied with agency authority to fill a gap with an interpretation that carries the force of law.

Dissent:  Chief Justice Roberts (joined by Justices Kennedy and Alito) disagreed and succinctly expressed the disagreement:

A court should not defer to an agency until the court decides, on its own, that the agency is entitled to deference.  Courts defer to an agency’s interpretation of law when and because Congress has conferred on the agency interpretive authority over the question at issue.  An agency cannot exercise interpretive authority until it has it; the question whether an agency enjoys that authority must be decided by a court, without deference to the agency.

The dissent looks to the separation of powers problem inherent to deferring to an agency’s view of the contours of its own power:

The Court touches on a legitimate concern:  Chevron importantly guards against the Judiciary arrogating to itself policymaking properly left, under the separation of powers, to the Executive.  But there is another concern at play, no less firmly rooted in our constitutional structure.  That is the obligation of the Judiciary not only to confine itself to its proper role, but to ensure that the other branches do so as well.

The dissent holds to the structure of the question, agreeing that the Fifth Circuit correctly recognized that it could not apply Chevron deference to the FCC’s interpretation unless the agency possessed statutory authority to administer the reasonable time provision of the Act, but argues that the Fifth Circuit erred by granting Chevron deference to the FCC’s view on that antecedent question.

Rejecting Jurisdiction – Not Solving Issues:  The Court’s decision might be seen as expanding deference to an agency’s interpretation of its underlying statute, but only slightly or perhaps not at all.  Courts must still determine, often under the Administrative Procedure Act (APA), whether the agency has acted in accordance with the statute – but without the aid of a jurisdictional exception.  Agencies may, if they are capable, clarify ambiguity, apparently even ambiguity over common words, but their statements too must be clear and supported.  City of Arlington v. FCC eliminates a short-hand distinction but does not resolve issues generated by Chevron; rather it may complicate those issues.

The dissent points out, and the majority finds understandable, concern for the growth of agency power.  An agency naturally tends to expansively interpret its authority as a byproduct of political pressures to accomplish goals and bureaucratic pressures to respond, thereby expanding the regulatory portfolio.  City of Arlington does not help temper agency aggrandizement tendencies or require Congressional clarity.

Recess Appointments:  The United States Court of Appeals for the Third Circuit decision in NLRB v. New Vista Nursing and Rehabilitation (2-1) stuck down POTUS’ recess appointments to the NLRB on different reasoning and on a different timeframe than the D.C. Circuit’s opinion in Noel Canning v. NLRB.

The Third Circuit concluded that the NLRB panel lacked the requisite quorum of members to exercise the NLRB’s authority because one panel member was invalidly appointed during an intrasession break, agreeing with the result of the D.C. Circuit.  Alone this warranted vacating the NLRB’s orders:

In sum, the parties argue that “the Recess of the Senate” has one of three meanings: (1) intersession breaks; (2) intersession and intrasession breaks that last a non-negligible period, which has historically been ten days (“long intrasession breaks” hereinafter); or (3) any time in which the Senate is not open for business and is unavailable to provide its advice and consent.  We hold that “the Recess of the Senate” means only intersession breaks, and so we conclude that Member Becker’s appointment was invalid.

► The Third Circuit’s reasoning may differ from the D.C. Circuit reasoning, but the decision adds more pressure for the United States Supreme Court (SCOTUS) to grant the Solicitor General’s petition in NLRB v. Noel Canning.  Respondents are likely to cite New Vista as further support for their position that the D.C. Circuit decision was correct, whether the oppose certiorari or not.

► As noted previously, these cases raise a constitutional issue that could fully undercut the efficacy of a number of regulatory actions taken by the NLRB and other agencies.  Some will argue that these cases create a “constitutional crisis,” but they represent no more than the inherent breadth of reach in separation of powers cases.

Tummino Stay to the Second.  As expected, the Department of Justice (DOJ) has appealed the District Court’s decision in Tummino v. Hamburg, requiring the Department of Health and Human Services (HHS) Food and Drug Administration (FDA) to make emergency contraceptive Plan B available to teenagers without age limits, to the Second Circuit.  After the district court granted a temporary stay to permit the Second Circuit to act on a stay pending appeal, the Second Circuit ordered the motion referred, with any response, to a panel on May 28.

► Rapid action on the stay request may be followed by lengthier appellate timing.  Whether the Secretary of HHS had authority to make the final decision in light of non-regulatory delegations as contrasted with whether the District Court had authority to decide the case at all in light of complex statutory delegations and procedures commends extensive briefing.

Food Safety:  In a least surprising development in Center for Food Safety v. Hamburg, the parties have asked for more time to work out a timetable for the FDA to develop rules required by the Food Safety and Modernization Act.  The court’s order required the parties to confer and propose a schedule today, and the parties have requested an extension to June 10.  Also as expected, the plaintiffs believe that the schedule proposed by defendants does not comply with the court’s order; defendants believe their proposed schedule is reasonable; and neither is discussing the details.  They at least agree “in the interest of judicial economy” to request “more time to continue discussions in the hope of narrowing their differences.”

► The extension of the comment period on the first batch of FSMA proposed rules to September 16, 2013, cannot be retracted without affecting other interests not before the court, and complicates the negotiating process.

• Social Security Disability Adjudication
• Benefit-Cost Analysis at Independent Regulatory Agencies
• Science in the Administrative Process
• Administrative Record in Informal Agency Proceedings

ACUS is an independent federal agency dedicated to improving the administrative process through consensus-driven applied research, providing nonpartisan expert advice and recommendations for improvement of federal agency procedures.  ACUS’s plenary (or Assembly) membership is composed of approximately 100 of the most experienced and innovative federal officials, private practitioners, and academics in administrative law.

ACUS recommendations are considered authoritative and the consultants’ supporting studies are worth reading.*  ACUS Plenary Sessions are both open to the public and broadcast on the internet through the ACUS website.

* Except, perhaps, the last study, with the disclaimer that the author is the consultant to ACUS on that subject.

Cert. Unopposed?  Word has been heard but not verified that respondents in NLRB v. Noel Canning (U.S. No. 12-1281) will not oppose the Solicitor General’s petition for certiorari to review the United States Court of Appeals for the District of Columbia Circuit decision that the recess appointments of National Labor Relations Board (NLRB) members violated the Constitution.  No notation on SCOTUS’ docket to that effect has yet been found.  A decision not to oppose certiorari makes sense – the intercircuit conflict and importance of the issue all but assure that four Justices will want to review the decision.  At this point, 16 months’ of the NLRB’s work, and counting, is at stake.  The Consumer Financial Protection Bureau (CFPB) potentially suffers a fate worse than the NLRB if the United States Court of Appeals for the District of Columbia Circuit decision stands that three NLRB recess appointments were unconstitutional:  the whole CFPB might fall, including its extensive regulatory docket.

Electronic Filing:  The vagaries of electronic filing rarely arise in rulemaking, but failure occasionally happens and agencies must assess whether a comment was timely filed – and make a judgment about considering the comment even if it was not timely filed.  In a decision that would otherwise be off-topic, Judge Allegra of the Court of Federal Claims recently held the agency responsible for its own computer systems in a contract bid protest decision in which the agency computer servers failed to forward quotations to the proper mailbox, resulting in rejection.  Judge Allegra’s opinion illuminates issues that all regulatory agencies should consider, and particularly the program management office for Regulations.gov.

FDA Plan B Stay Denied, sort of:  In the latest episode of the Tummino v. Hamburg saga, Judge Korman denied a Department of Justice (DOJ) request for a stay pending appeal of his previous order requiring the Food and Drug Administration (FDA) to permit anyone to acquire evonorgestrel-based emergency contraceptives available over the counter and without point-of-sale or age restrictions.  This is not Plan B Step One, which the FDA recently approved for OTC sale with point of sale proof of age 15.  DOJ requested a stay from the district court pending appeal, and appealed to the United States Court of Appeals for the Second Circuit, on May 1, 2013.  Judge Korman excoriated DOJ and FDA at a lengthy hearing on May 7.  The district court gave DOJ until noon today to seek a stay from the Second Circuit, and granted a limited stay as a courtesy to the Second Circuit:

The motion for a stay pending the appeal is denied.  Indeed, in my view, the defendants’ appeal is frivolous and is taken for the purpose of delay.  Nevertheless, as a courtesy to the Court of Appeals, and to enable it to schedule the motion in the ordinary course, I grant a stay pending the hearing or submission of the defendants’ motion for a stay in the Court of Appeals on the condition that the motion for a stay be filed by noon on May 13, 2013.

Contraceptive Catchup:  Challenges to the Department of Health and Human Services (HHS) contraceptive / preventive care rule have been numerous and the regulatory issues (such as the effect of the advance notice of proposed rulemaking and the notice of proposed rulemaking on ripeness) hidden within the larger First Amendment and Religious Freedom Restoration Act issues require significant resources to track.  Fortunately, one scorecard lists 19 preliminary injunctions entered in cases brought by for-profit companies, while another 19 nonprofit cases have been dismissed; at least four nonprofit cases have been held in abeyance, including the D.C. Circuit duo.  Slowly these issues churn toward resolution.

TWIC Reader Extension:  The Department of Homeland Security (DHS)’s United States Coast Guard extended the comment period for the Transportation Worker Identification Credential (TWIC) — Reader Requirements for 30 days on May 10, 2013, until June 20, 2013.  This extension of the comment period responds to requests for more time to review the proposed rule and associated analyses.

EPA Tier 3:  The Environmental Protection Agency (EPA) has not yet published its Tier 3 proposed rule and the Office of the Federal Register has not filed the proposed rule on public inspection, even though the EPA administrator signed the rule, and EPA posted a typescript copy (with caveats) on its website, on March 29, 2013.  Some lengthy and complicated rules may take more than the usual amount of time for technical review and to be uploaded for publication, and this rule, EPA has confirmed, is such a rule.  Expect publication next week.

3rd OMB Anniversary:  The EPA’s proposed Chemicals of Concern rule reached its third anniversary in Office of Management and Budget (OMB) Office of Information and Regulatory Affairs (OIRA) review this week.  The proposed rule would add a category of eight phthalates, a category of polybrominated diphenyl ethers (PBDEs), and bisphenol A (BPA) to a list of chemical substances that EPA finds present or may present an unreasonable risk of injury to human health or the environment under the Toxic Substances Control Act (TSCA).  PBDEs are common to many soft vinyl coverings and bisphenol A is common to plastics of all kinds (e.g. water bottles and food containers) – and have been the subject of long debate.  The proposed rule was submitted for OMB review on May 12, 2010, and was the subject of numerous OMB meetings; the mystery is why the proposed rule simply has not been withdrawn.

… and no new word on the food safety regulations litigation negotiations … next week.

Rule Background:  The NRLB rule began with a 1993 petition for rulemaking, but the NLRB only proposed a responsive rule in 2010.  The succinctly describes the rule (omitting citations for the sake of readability):

The final rule provides that “[a]ll employers subject to the NLRA must post notices to employees, in conspicuous places, informing them of their NLRA rights, together with Board contact information and information concerning basic enforcement procedures, in [specific prescribed] language ….  In addition, employers who customarily communicate with their employees electronically must publish the Board’s notice on their intranet or internet sites.  ….  The required poster … must be at least 11 inches by 17 inches and in a type size and format the Board prescribes.  ….  The poster informs employees of their right to form, join, or assist a union; to bargain collectively through representatives of their choosing; to discuss wages, benefits, and other terms and conditions of employment with fellow employees or a union; to take action to improve working conditions; to strike and picket; or to choose not to engage in any of these activities.  ….  The poster also recites more specific employee rights the Board derived from judicial and Board interpretations of the Act.  The poster states, for example, that it is “illegal” for an employer to prohibit employees “from wearing union hats, buttons, t-shirts, and pins in the workplace” or to “[s]py on or videotape peaceful union activities and gatherings or pretend to do so.”  The poster also states that it is “illegal” for a union to “[t]hreaten or coerce [an employee] in order to gain …. support for the union” or to “[r]efuse to process a grievance because [the employee] ha[s] criticized union officials or . . . [is] not a member of the union.”

The NLRB would enforce the rule by providing that failure to post the notice was an unfair labor practice.  Additionally, the rule provided that the NLRB may suspend the running of the six-month limitations period for filing any unfair-labor-practice charge “unless the employee has received actual or constructive notice that the conduct complained of is unlawful.”  Finally, the NLRB would consider an employer’s “knowing and willful refusal to comply with the requirement to post the employee notice as evidence of unlawful motive in a case in which motive is an issue.”

Procedural Background:  The plaintiffs sued in the United States District Court for the District of Columbia.  On cross-motions for summary judgment, the district court ruled that the Board had no authority to make a “blanket advance determination that a failure to post will always constitute an unfair labor practice.”  The district court also invalidated the tolling of limitations period if the employer failed to post the notice because tolling depended on equitable considerations that had to be determined on a case-by-case basis.  The district court, however, held that the NLRB would have promulgated the posting requirement even if two of the three means of enforcing that rule were invalid.  Everyone appealed.

A month later, the United States District Court for the District of South Carolina held that the NLRB lacked authority to promulgate the rule.  An appeal in that case is now pending before the Fourth Circuit.

During briefing in the D.C. Circuit, the issue of enforcement arose and the Court of Appeals enjoined enforcement of the rule pending its ruling.

Public Inspection & Noel Canning:  The court provided guidance on a point of administrative law as it dispatched the issue of whether its decision in Noel Canning v. NLRB that the NLRB’s recess appointments were unconstitutional controlled this case.  The court noted that the critical sequence of events:

• August 22, 2011 – NLRB Chairman signed final rule, effecting adoption.
• August 25, 2011 – Final rule filed for public inspection by the Office of the Federal Register.
• August 27, 2011 – last constitutional Board member’s term expired (assumed without deciding).
• August 30, 2011 – Final rule published in the Federal Register.

The general rule is that promulgation takes place when the final regulations are filed with the Office of the Federal Register – the technical term for release on public inspection when the world is presumed by statute to know its contents – regardless of when the regulations are published in the Federal Register.  The court also pointed out the ambiguity of the term “promulgated” in the Federal Register Act’s multiple usages.  Thus,

“Our judgment is that the time of filing with the Office of the Federal Register is the appropriate time for determining whether the Board had a valid quorum.  That the Board may have lost a quorum before its rule was published did not render its rule invalid.

NLRA Violations:  The Court of Appeals proceeded to find that all three enforcement provisions of the posting rule violated provisions of the NLRA.  The court first dispatched the posting requirement on the statutory basis that it violated enforcement provisions:

We … conclude that the Board’s rule violates [NLRA] § 8(c) because it makes an employer’s failure to post the Board’s notice an unfair labor practice, and because it treats such a failure as evidence of anti-union animus in cases involving, for example, unlawfully motivated firings or refusals to hire — in other words, because it treats such a failure as evidence of an unfair labor practice.

Equitable Tolling:  Moreover, the court agreed with the district court that the tolling of the NRLA’s filing limitation for unfair labor practice charges violated the statute.  The district court noted that the tolling rule “substantially amends the statute of limitations that Congress expressly set out in the statute” and therefore “exceeds [the NLRB’s] statutory authority” under a plain meaning / no ambiguity standard, and without any deference to the agency’s interpretation.  In considering an agency’s “equitable tolling” of a statutory limitation,

The key to interpreting a limitations statute and to determining the intent of Congress is whether the particular exception to a particular statute of limitations was generally recognized when Congress enacted the statute.  It is not enough that courts engaged in some sort of “equitable tolling” at the time Congress passed the limitations statute.  “[D]ifferent types of equitable tolling . . . have been recognized at different times ….”  ….  What matters is whether a particular basis for suspending the running of the statute of limitations had received judicial recognition when the statute became law.  ….  After all, “Congress cannot intend to incorporate, by silence, various forms of equitable tolling that were not generally-recognized in the common law at the time of enactment.”

Thus, if a particular exception was generally recognized when Congress enacted the statute of limitations, a court may presume that Congress intended the same equitable exception to apply to the statute.  If, on the other hand, the exception was not generally recognized at that time, a court could not presume that Congress intended it to suspend the running of the statutory period.

The court is applying a highly specific way of getting to the principles that Congress is presumed to know the law when it acts and acts on that law – courts will not lightly engraft new agency interpretations to old statutes.  “The short of the matter is that the Board has not invoked any authority suggesting that the 1947 Congress intended to allow [the filing statute of limitations in NLRA] § 10(b) to be modified in the manner of the Board’s tolling rule.”

Severability:  With all three enforcement mechanisms unusable, the court considered the viability of the entirety of the rule.  Applying familiar tests was not difficult:

“Severance and affirmance of a portion of an administrative regulation is improper if there is ‘substantial doubt’ that the agency would have adopted the severed portion on its own.”  ….  If a reviewing court severed the regulation in that situation, it would be performing a function left to the agency.  …. Here we know that the Board would not have issued a posting rule that depended solely on voluntary compliance. We know this because the Board rejected that regulatory option in the preamble to its final rule.  ….  Subpart A [the actual posting rule\ must therefore fall along with the rest of the Board’s posting rule.

Application:  Much of the court’s decision is the application of common rules to the specific regulations, but lawyers routinely debate which rules apply.  While the NLRA poses very specific rules to the substance of labor law and collective bargaining, the general provisions of administrative law continue to govern.  This may be near the last gasp for the NLRB’s posting rule, but it is not yet the rule’s agonal breach.

Credit Cards & Income:  The CFPB promulgated a final rule to remove the requirement that credit card issuers consider the applicant’s independent ability of applicants who are 21 or older to pay the prospective indebtedness, and permits issuers to consider income and assets to which such consumers have a reasonable expectation of access.  Technically, the rule brings Regulation Z into closer harmony with the Truth in Lending Act as to age, but introduces a new contour to the credit risk analysis of income and assets to which such consumers have a reasonable expectation of access in its official interpretations. In effect, the final rule permits issuers to consider a wider range of “relationships” that might be accessed to collect the indebtedness, but increases complexity and risk.  Whether issuers will undertake the more complicated analysis, and assume the higher risks, remains to be seen.

Dodd-Frank Divestiture:  In NetCoalition v. SEC (II), the D.C. Circuit found that the Dodd-Frank Act had divested it of jurisdiction over certain actions by the SEC.  In NetCoalition v. SEC (I), the court vacated and remanded an SEC order approving a New York Stock Exchange (NYSE) change to one of its market data fee rules as arbitrary and capricious because the SEC’s reasoning was deficient.  During remand, Congress enacted Dodd-Frank Act and removed the requirement that the SEC approve a change in an exchange’s market data fee rules before such change became effective; now the SEC can only suspend such a rule that would otherwise be effective.  That change also divested the D.C. Circuit of jurisdiction, so the court holds.  Whether other avenues of judicial review remain available is a separate question to be answered, but that avenue is now closed.

Benefits, Costs, & Unfunded Mandates:  OMB’s release of its 2013 Draft Report to Congress on the Benefits and Costs of Federal Regulations and Agency Compliance with the Unfunded Mandates Reform Act under the Regulatory-Right-to-Know Act came with little fanfare.  The statutorily required report consistently estimates higher benefits than costs – and that is a given in the nature of the regulatory decision-making process.  Perhaps no one should be surprised.  The analysis is important but the caveat is telling:

It is important to emphasize that the estimates used here have significant limitations.  In some cases, quantification or monetization is not feasible.  When agencies have not quantified or monetized the benefits or costs of regulations, or have not quantified or monetized important effects, it is generally because of conceptual and empirical challenges, including an absence of relevant information.  Many rules have benefits or costs that cannot be quantified or monetized in light of existing information, and the aggregate estimates presented here do not capture those non-monetized benefits and costs.  In some cases, quantification of various effects is highly speculative.

Guesstimates sometimes matter.

Politico’s Kathryn Smith reports:

In a court filing, the federal government asked for a stay so that the FDA would not be forced to comply with that decision immediately, and argued that the court didn’t have the authority to control the FDA’s decision.

“This court lacks subject matter jurisdiction to review any aspect of [the manufacturer’s application], including the HHS Secretary’s December 2011 directive to the FDA Commissioner to issue a complete response letter that rejected that SNDA. A district court does not have jurisdiction to review such agency action,” the DOJ states in a court filing.

Expect much more litigation on core authority and administrative law issues.

FDA’s approval of Teva’s application is separate from the Tummino litigation.  After the Tummino I decision that the Bush Administration politically interfered with FDA’s decision, and after the Obama Administration denied a citizen petition in 2011 (the decision subject of Tummino II).  Teva’s application was pending with the FDA for three years before Tummino II was decided.

Tummino II held that the HHS violated its own delegations and failed to explain its departure from established policy to overrule the FDA, an arbitrary and capricious act.  The approval comes days before the Tummino II deadline for FDA to make Plan B One Step be made available “over the counter” to a person of any age.

Today’s FDA press release (not the Department of Health and Human Services (HHS)) merely announces that the FDA has approved Teva’s application – and that may be all that the Administrative Procedure Act (APA) requires absent a contest of that application.  In response to an inquiry, FDA reiterated the key points:

Teva’s application to market Plan B One-Step for women 15 years of age and older was pending with the agency prior to Judge Korman’s ruling.  FDA’s approval of Teva’s current application for Plan B One-Step is independent of that litigation and this decision is not intended to address the judge’s ruling.  The Department of Justice is considering next steps in the litigation.

The reasoning for an age of 15 remains to be seen – from FDA or DOJ, but it will be in defense of the new age of 15 if further litigation is pressed.  Given early press reports of dissatisfaction by some advocates, expect a “Tummino III” but that is in DOJ’s court.

In the courts, the United States Court of Appeals for the District of Columbia Circuit dismissed a challenged to the Securities and Exchange Commission (SEC) mineral extraction rule, but the litigation will go forward in the District Court.  At the United States Supreme Court (SCOTUS), the Solicitor General petitioned for review of the D.C. Circuit’s recess appointments decision, adding to his administrative law docket already occupied by the EPA’s cross-state air pollution rule.

OIRA Nominee:  President Obama (POTUS) nominated Howard Shelanski, the director of the Federal Trade Commission (FTC)’s Bureau of Economics, to be administrator of the OMB Office of Information and Regulatory Affairs on April 25, 2013.  Shelanski, an economist and law professor, once clerked for United States Supreme Court (SCOTUS) Justice Antonin Scalia.

► Reaction from participants in the regulatory process followed the expected pattern based on whether the reactor perceived that Shelanski would be more or less attuned to the reactor’s position.  OIRA is currently being run by its Deputy Administrator, a long-time career economist, who will probably be delighted to hand over the reins.  The new Administrator will face the daily fodder of administrative, regulatory, and litigation issues in this blog.

HHS Disproportionate Share:  HHS submitted the Disproportionate Share Hospital Payment Reduction proposed rule to OMB on April 23, 2013.  The proposed rule would establish the statutory aggregate reductions to State Medicaid disproportionate share (or safety net — DSH) hospital allotments from fiscal years 2014 through 2020 under the Patient Protection and Affordable Care Act beginning October 1, 2013.  The annual reduction amounts would be implemented using a methodology determined by the Secretary.  Affordable Care Act requires aggregate reductions to DSH allotments beginning in FY 2014 (October 1, 2013).

► The DHS calculus, and many changes in it, has been litigated ad infinitum by hospitals for many years and the planned reductions are likely to exacerbate that litigation.

TSA Fees:  The TSA published a final rule in the Federal Register on April 25, 2013, removing its fees for security review of commercial driver licenses (CDLs) and transportation worker identification credentials (TWICs) from the Code of Federal Regulations.  TSA states that future changes in the fees would be announced only through Federal Register Notices – not subject to advance notice and an opportunity for the public to comment.  TSA thus follows a pattern used by the Department of Justice (DOJ) Federal Bureau of Investigation (FBI) in setting fingerprint check fees only by notice, not rule.

► The rule leaves the question of whether directly establishing the content of a fee requirement requires notice and comment rulemaking under the Administrative Procedure Act (APA) – the payment of the exact fee (premised on an activity based costing of the program requirements) is a threshold eligibility standard.  Normally such fee methodology and fees are established by notice and comment rulemaking, and this departure may prompt judicial review.  OMB does not appear to have been reviewed the final rule despite significant legal and policy (including fiscal and budget) issues.

EPA Steam Generator Reconsideration:  EPA finalized reconsideration of certain technical issues under its Coal- and Oil-Fired Electric Utility Steam Generating Units and Standards of Performance for Fossil-Fuel-Fired Electric Utility, Industrial-Commercial-Institutional, and Small Industrial-Commercial-Institutional Steam Generating Units, but left some new source start up and shut down issues unresolved.  Reconsideration is a required step to exhaust the hybrid rulemaking process under the Clean Air Act (CAA).  Litigation challenging the Mercury and Air Toxics National Emission Standards for Hazardous Air Pollutants standards (or MATS NESHAP for those who like to provoke the D.C. Circuit) imposed on electric generating plants can now proceed.

DHS / Labor H-2B:  Also likely is further litigation over the efficacy of the DHS / Department of Labor (DOL) joint final rule attempt to reestablish the unskilled labor visa program, noted previously, that was published in the Federal Register on April 24, 2013.

SCOTUS Petitions:  The Solicitor General (aka the “10th Justice” because of the esteem with which the Office is held) filed the expected petition for certiorari seeking review of the D.C. Circuit decision holding three National Labor Relations Board (NLRB) recess appointments were unconstitutional, now styled as NLRB v. Noel Canning.  This high-risk, unavoidable case may affect one NLRB rule – and many Consumer Financial Protection Bureau (CFPB) rules – and will likely to garner four Justices’ votes to grant the petition.  It would be extraordinary for SCOTUS to hear this case before October.

The Solicitor General last month petitioned SCOTUS to hear and decide EPA v. EME Homer City Generation, L.P., a D.C. Circuit decision vacating the EPA’s cross-state air pollution rule.  Some responses have been filed, but the last response is not due until May 29, so it is possible that the Court will grant the petition this term and set it for argument in the fall.

Extraction Disclosures:  The D.C. Circuit dismissed the petition in American Petroleum Institute v. SEC for want of jurisdiction to initially determine the validity of the SEC’s Dodd-Frank mineral extraction, not the “conflict mineral,” rules.  The mineral extraction rule requires publicly traded companies to disclose payment to a government (foreign or the United States) “made to further the commercial development of oil, natural gas or minerals,” including taxes, royalties, fees, bonuses and “other material benefits.”  API claims the rule violates companies’ First Amendment rights, challenges the SEC’s cost-benefit analysis, and asserts the result will be foreign state-owned companies gaining an advantage because they cannot be covered by the rule.  Petitioners filed in both the D.C. Circuit and district court (American Petroleum Institute v. SEC, D.D.C. No. 1:12-cv-01668) and the case now takes primacy in the district court, which previously stayed proceedings pending the D.C. Circuit’s decision.