A recent Supreme Court decision involving court’s deference to federal agencies is already making waves in lower courts.
The high court on Monday issued an opinion in the case Encino Motorcars LLC v. Navarro, finding that a lower court had improperly deferred to the Labor Department under the so-called Chevron doctrine.
Days later, industry and environmental groups alike told lower courts that the decision bolstered their arguments in pending cases over mountaintop-mining permits and air pollution rules.
In the Encino opinion, the justices ruled that the Labor Department failed to properly explain why it changed course on a rule exempting some auto dealership employees from overtime compensation (E&ENews PM, June 20).
Under the Chevron doctrine, judges defer to agencies’ interpretations of the law if Congress was silent or ambiguous on an issue. Agencies are entitled to change existing policies, the court said, but they’re not entitled to deference if they fail to explain why they did so.
Two days after the Supreme Court opinion was issued, an attorney representing Arch Coal Inc. told a federal appeals court that the ruling helped industry’s case challenging U.S. EPA’s move to block a mountaintop-removal mining project in West Virginia.
The Supreme Court held that the overtime rule "was arbitrary and capricious and not entitled to deference because DOL failed to account for reliance interests implicated by its about-face," wrote Paul Clement, former solicitor general during the George W. Bush administration and the attorney representing Arch Coal in the case.
Arch subsidiary Mingo Logan Coal Co. is arguing to the U.S. Court of Appeals for the District of Columbia Circuit that EPA "failed to engage in reasoned decisionmaking" because it gave no weight to the company’s reliance on an Army Corps of Engineers dredge-and-fill permit that had been issued to the Spruce mining project. EPA vetoed that permit years later, and the agency has argued that it’s entitled to deference in court (Greenwire, Oct. 12, 2015).
But the Justice Department today sent its own letter to the appeals court saying the Encino decision cuts in its favor. Among other things, DOJ lawyer Matthew Littleton said EPA’s final determination didn’t overrule the agency’s previous position and that EPA had provided a reasoned explanation for its decision in light of the company’s reliance on the permit.
That case was argued before the D.C. Circuit in April, and a decision could be issued within the next year (Greenwire, April 11).
Environmentalists are also pointing to the Encino ruling in their arguments that EPA’s air pollution standards for boilers are too lax.
In two related cases before the D.C. Circuit, attorneys for Earthjustice and the Sierra Club told the court this week that the Supreme Court decision is relevant because "EPA failed to acknowledge or explain a departure from its interpretation" of Clean Air Act language when it set rules to clamp down on toxic emissions from large industrial boilers, process heaters and smaller boilers.
"Encino holds that where an agency changes its position without acknowledging the change, or fails to provide an adequate explanation for the change, the agency’s regulation is ‘arbitrary and capricious,’ ‘unlawful,’ and ‘does not receive Chevron deference in the interpretation of the relevant statute,’" the attorneys wrote.
The environmental attorneys sent one letter in the pending case, U.S. Sugar Corp. v. EPA, and another letter in the case American Forest & Paper Association v. EPA.
Those cases were argued last December, and opinions could be issued in the next few months (E&ENews PM, Dec. 3, 2015).
