National Association of Home Builders v. U.S. EPA

Jun 22: In the U.S. Court of Appeals, D.C. Circuit, Case No. 10-1183. On Petition for Review of a Final Rule of the Environmental Protection Agency. The case involves the 2008 rule issued by the U.S. EPA regulating renovation and remodeling activities that create health hazards arising from lead paint. The rule contained an "opt-out" provision, which exempted owner-occupied housing from the rule's requirements if the homeowner certified that no pregnant women or young children lived there. In 2010, EPA amended the rule to eliminate the opt-out provision.

 

    The National Association of Home Builders (NAHB) and other trade associations petitioned for review of the amended rule on two grounds: (1) that the decision to abandon the opt-out provision was arbitrary and capricious, in violation of the Administrative Procedure Act (APA); and (2) that EPA failed to convene a panel of representatives of small businesses before issuing the new rule, in violation of the Regulatory Flexibility Act. The Appeals Court ruled, "Because we conclude that EPA's decision was not arbitrary or capricious, and because we lack jurisdiction to entertain the petitioners' second challenge, we deny the petition for review."

 

    NAHB argued that it was arbitrary and capricious for EPA to change its mind about the opt-out provision. In 2008, they said, EPA "provided a reasoned basis for its approach that was consistent with congressional intent." In contrast, they said, "EPA has provided no justification for its decision to reverse course . . . that is grounded in any information or experience that was not available to the Agency when it included the Opt Out Provision in the original rule."

 

    The Appeals Court said, "This kind of argument is largely foreclosed by FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009), in which the Supreme Court declared 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.'" The Appeals Court said further, "In light of Fox, we must reject the petitioners' contention that, 'because the Rule eliminates a provision that was consistent with congressional intent, the Court should not defer to EPA in making such a decision.' The fact that the original opt-out provision was consistent with congressional intent is irrelevant as long as the amended rule is also 'permissible under the statute.'" The Appeals Court also ruled that EPA satisfied the core requirement that Fox makes clear that an agency must meet when changing course: it must "provide reasoned explanation for its action," which "would ordinarily demand that it display awareness that it is changing position."

 

    On the second issue, the Appeals Court indicates that the small business advocacy review panel requirement "is a purely procedural device, a process by which interested parties can present their views to the agency. . . And courts may not, under the guise of the APA's arbitrary-and-capricious review standard, impose procedural requirements that the APA's procedural provisions. . .do not themselves impose."

 

    Access the complete opinion (click here). [#Toxics, #CADC]

 

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