On January 9, 2012, the District Court for the District of Columbia vacated the EPA’s May 18, 2011 “Delay Notice” that stayed effectiveness of a rule limiting emissions from industrial, commercial, and institutional boilers and another rule limiting emissions from commercial and industrial solid waste incinerators. These rules have had a long litigation history. The EPA had been ordered to promulgate these two rules in a previous case and finalized them on February 21, 2011. They were to become effective on May 20, 2011. Shortly after promulgation, the EPA announced that it was initiating the administrative reconsideration process for the two rules. Petitions challenging the new rules were also filed in the D.C. Circuit by the Sierra Club and others.
On May 18, 2011—two days before the rules’ effective date—the EPA issued its “Delay Notice” staying the effectiveness of the rules until either the administrative review process was completed or the D.C. Circuit litigation ended. The EPA issued the “Delay Notice” under the Administrative Procedures Act (“APA”) and not the Clean Air Act. The Sierra Club filed suit in the District Court for the District or Columbia challenging the Delay Notice.
The court first addressed whether it had jurisdiction to hear the case or whether the cause fell within the exclusive jurisdiction of the D.C. Circuit. The court held that because the Delay Notice was issued under the APA and did not amend or rescind a rule it had subject-matter jurisdiction under 28 U.S.C. § 1331 which empowers district courts to hear federal questions.
The Sierra Club challenged the delay on three grounds: (1) that the EPA did not allow for notice and comment; (2) that the EPA lacked authority to issue the Delay Notice; and (3) that the EPA failed to provide adequate justification for the Delay Notice. The court found against Sierra Club on the first two challenges holding that EPA has the authority to issue a stay during pending litigation under Section 705 of the APA and that notice and comment were not required because the Delay Notice was not substantive rulemaking.
The court did find for Sierra Club on its third challenge. The court held that the EPA must employ the four-part test used by courts when issuing preliminary injunctions. The EPA did not even attempt to justify the stay based on the preliminary injunction test (a break from the EPA’s own precedent) and thus the court found that the decision to stay the effective date of the rules was arbitrary and capricious. Additionally, the court found the EPA’s stay improper because the Delay Notice cited the pending administrative reconsideration as the reason for the stay. Thus the court found that the stay was not issued because of pending litigation as required by the APA. The court vacated the Delay Notice and remanded it to the EPA for further proceedings. Existing sources will have to comply with the rules by March of 2014.