277 F. Supp. 3d 1106
N.D. Cal.2017Background
- In November 2016 BLM issued the Waste Prevention, Production Subject to Royalties, and Resource Conservation Rule (the Rule), effective January 17, 2017, with some provisions phased in to a January 17, 2018 compliance date.
- Industry groups and several States sued in Wyoming challenging the Rule; the court denied a preliminary injunction before the Rule’s effective date.
- On June 15, 2017 the Bureau published a Federal Register Postponement Notice invoking 5 U.S.C. § 705 to postpone certain January 17, 2018 compliance dates, citing pending litigation and agency reconsideration, but did not provide notice-and-comment.
- California, New Mexico, and a coalition of conservation and tribal groups sued in the Northern District of California, alleging the Postponement Notice violated the APA (procedural and substantive defects); intervenors included industry groups and several States.
- The court treated the motions for summary judgment as timely (presenting legal issues not dependent on an administrative record) and found plaintiffs and conservation groups had standing.
- The court concluded the Postponement Notice unlawfully invoked § 705 after the Rule took effect, bypassed APA notice-and-comment, and was arbitrary for failing to consider the benefits of the Rule; it vacated the Postponement Notice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 705 permits an agency to postpone compliance dates after a rule's effective date | § 705 authorizes postponement only of a rule's effective date; it does not allow suspension of a promulgated rule without notice-and-comment | § 705’s “effective date” includes later-stated compliance dates; agencies must be able to preserve status quo pending review | Held for plaintiffs: § 705 does not authorize postponing compliance dates of an already-effective rule; Postponement Notice unlawful |
| Whether the Postponement Notice violated APA notice-and-comment (5 U.S.C. § 553) | Suspending an already-promulgated rule is a repeal/modification and requires notice-and-comment | § 705 postponement is not rulemaking and need not follow notice-and-comment; timely action requires flexibility | Held for plaintiffs: the action effectively repealed portions of the Rule and bypassed required notice-and-comment procedures |
| Whether the Bureau’s § 705 invocation met the statutory requirement that “justice so requires” (arbitrary and capricious) | The agency considered only industry compliance costs, ignored foregone benefits, and relied largely on reconsideration rather than pending judicial review | Agency argued it had multiple legitimate reasons (litigation and reconsideration) and that weighing four-factor injunction standards is impractical | Held for plaintiffs: agency failed to consider important aspects (benefits) and thus acted arbitrarily; did not satisfy “justice so requires” |
| Remedy: Vacatur of the Postponement Notice | Plaintiffs sought vacatur and declaratory relief | Defendants and intervenors urged remand without vacatur or delay due to disruption and reliance on the postponement | Held for plaintiffs: vacatur appropriate because agency errors were serious and disruptive consequences did not outweigh the need to correct unlawful action |
Key Cases Cited
- Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (arbitrary-and-capricious standard; agency must consider important aspects of problem)
- Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837 (agency deference framework under Chevron)
- United States v. Mead Corp., 533 U.S. 218 (limits of Chevron deference; when agency interpretations merit deference)
- FCC v. Fox Television Stations, Inc., 556 U.S. 502 (requirements when an agency changes policy; need for reasoned explanation)
- Organized Village of Kake v. U.S. Dep't of Agric., 795 F.3d 956 (agency change-of-course standard and need to address prior factual findings)
- Natural Res. Def. Council v. Envtl. Prot. Agency, 683 F.2d 752 (repeal of a final rule is rulemaking subject to notice-and-comment)